Going in the wrong direction on research universities

Michigan spent most of the 20th century building a world class system of higher education – both universities and community colleges. That system is now at the top of the list of the assets Michigan has to grow its economy. It is vital to developing the concentration of talent we need to be successful in a knowledge-based economy. That is particularly true of our major research universities.

We can’t emphasize enough, in a knowledge-based economy, the strategic importance of our major research universities. One can make a strong case that the most productive state and local economic growth policies over the past several decades have been public investments in research universities in Austin, San Diego and North Carolina’s Research Triangle. The payoff in each case has been huge.

Across the planet nations and regions are trying to replicate what we have – top notch research universities. Why? Because they understand the best research universities are essential engines of economic growth. This is widely understood by both political and business leadership nearly everywhere on the planet. (For example watch this excellent video from the Board on Higher Education and Workforce of The National Academies.) Here, business leadership gets it, but not our state’s political leaders.

Quite simply, in an increasingly knowledge-based economy, you want to be the place where new knowledge is being created. And that increasingly is in and around world class research universities. Bill Gates said it best in a presentation to the National Council of State Legislatures:

…. take the two big leading industries, industries around biology and medicine, that’s one, and industries around computer technology, that’s two. The job creation and the success for those industries have been overwhelmingly in the locations where there is a great university. There’s an almost perfect correlation between the number of jobs in a region and the strength of the universities. And, that will continue, whether it’s new fields like nanotechnology, or those two fields I mentioned, on the ongoing strength that they’ll have. And so for this country, we have to have the best universities.

Michigan’s three major research universities – University of Michigan/Ann Arbor, Michigan State University and Wayne State University – have combined annual revenues of about $8 billion and 50,000 employees. A powerful economic engine without any spinoffs. But there are major spinoffs. New enterprises that come from commercializing new knowledge; a greatly expanded pool of human capital; and helping create the kind of community that attracts talent from across the planet. Where talent concentrates so comes knowledge-based enterprises from across the planet as well. It is that combination that makes world class research universities such powerful economic engines.

Makes one wonder what planet our state’s political leadership is living on. Rather than the big new public investments in research unviersites occurring across the planet, the state enacted record cuts a year ago on top of a decade of cuts. This year the Legislature passed a budget with a paltry $36 million increase in state spending for all 15 public universities compared to the $1 billion increase advocated by Business Leaders for Michigan. Making matters worse, they allocated the smallest increases to the three major research universities. The non-research universities received increases ranging from  2.2 – 8.2%. For the research universities 0.7 – 1.6%.

On top of this disinvestment is the harassment from Lansing of our major research universities. As Susan Demas wrote in a terrific MLive column: “Consider the fact that right now, legislative-passed fiscal 2013 budgets unquestionably go after our two biggest and most prestigious universities, Michigan State University and the University of Michigan. Our universities could lose state funding if they give benefits to gay couples, require students to have health insurance, have students who dare protest conditions at a local restaurant (!) or do life-saving embryonic stem cell research …”. Add in the move towards price controls (tuition caps) and increasing state interference in what degrees to offer and you have a toxic brew that threaten the quality and agility of our now terrific major research universities. Not smart!

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