The University Record, July 22, 2002

Public universities added $39B to state

By Jennifer Kopp
MEDC Communications

Michigan’s 15 public universities have a significant economic impact on the state’s economy, according to a study commissioned by the Michigan Economic Development Corporation (MEDC) and the Presidents Council, State Universities of Michigan. The study, conducted by SRI International, measured how the combination of public and private investment in four-year universities contributes to the state’s economy.

State public universities annually contribute an estimated $39 billion to Michigan’s economy. The analysis showed a return of between $5.50 and $6.50 for each dollar that it cost to operate the universities. For each dollar of the state government’s share of the universities’ operating cost, the state’s economy receive a return of $26 collectively. Included in this rate of return were expenditures by the university faculty, students and visitors; business spin-offs; and other technology transfer activity.

The model used for this study calculated the direct and indirect economic impact of Michigan’s public universities in 1999, the latest year for which the necessary data were available.

“This is a significant rate of return for a public investment,” said Doug Rothwell, president of MEDC. “It demonstrates the unique and powerful role universities play in enhancing the state’s economic vitality.”

The significant rate of return was primarily a result of higher earnings among college graduates versus non-college graduates. According to the study, this rate will continue to grow as earnings of university graduates continue to increase at a faster rate than the earnings of those without a university degree.

Recent data show Michigan retains an impressive 79 percent of its public university graduates.

“The results of the first statewide university economic impact study reinforces the value of education to the state and its citizens,” said Glenn Stevens, executive director of the President’s Council.

The Presidents Council and MEDC created the Partnership for Economic Progress to strengthen Michigan’s economy in an increasingly competitive workplace.

MEDC, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life. For more information on the MEDC initiatives and programs, visit the Web at