Office of the Vice President for Global Communications

Thursday, June 2, 2011

URC report: Information technology sector shows potential for Michigan

The University Research Corridor released a new report today that shows how the information and communication technology industry (ICT) is a worthy educational investment, offers higher-paying jobs and has potential for more business growth in Michigan.

The independent analysis, conducted by Anderson Economic Group, is the URC's fourth annual report that quantifies and assesses industry sectors where the universities' research and development play a major role.

 
 

President Mary Sue Coleman (left) and Michigan State President Lou Anna Simon chat with WJR-AM's Paul W. Smith at the Mackinac Policy Conference. They, along with Wayne State President Allan Gilmour, were interviewed by various media about the URC's report on the state's information technology industry. (Photo by Laura Lessnau, News Service)

The report was released during the Mackinac Policy Conference, which runs June 1-3 on Mackinac Island.

"All of Michigan's key industries rely heavily on information and communication technologies," said Patrick Anderson, CEO of AEG. "Firms that create new ICT technologies, which are the lifeblood of the new economy, require trained employees, many of which rely upon an education from a URC university. Additionally, the URC universities are developing new technologies that are making all industries more productive and efficient, and are allowing entrepreneurs to start new businesses."

Some highlights from the report:

• The URC universities (Michigan State University, U-M and Wayne State University) spent nearly $74 million on research projects with a strong information technology focus in fiscal year 2010.

• Of the nearly 150 start-ups the URC has assisted in creating since 2001, approximately 40 percent have had a distinct ICT component.

• Information technology employs about 3.5 percent of the state's work force, or about 135,000 workers, and is significant not only as its own sector but as the underpinning for much of the major industry activity and growth represented in previous sector reports.

• Employees in the IT industry earn about $20,000 a year more than other workers in the private sector.

Many URC-related startups have a strong ICT component. They include: AquaBioChip (MSU), which has developed technology to test for the presence of germs in air, food and water; SenSound (WSU), which offers diagnostic software that creates three-dimensional digital images of sound as it travels through space and time, allowing users to identify the source of noise or vibration; and Arbor Networks (U-M), a provider of network security and monitoring solutions for global networks, whose customers include more than 70 percent of the world's Internet service providers.

The report shows that no sector is immune from the effects of Michigan's recession. Employment in the ICT sector declined 4 percent from 2000-09, while overall employment declined 15 percent during that time period. Michigan's share of ICT employment (3.5 percent) is slightly less than that of the Midwest (3.7 percent) and United States (4.2 percent).

"From mobile applications to smart phones and medical imaging devices, this sector represents a key part of doing business in Michigan," said Jeff Mason, URC executive director. "Along with our previous reports that focused on alternative energies, life sciences, and advanced manufacturing, we are gaining insight to pathways that are key to the recovery of Michigan's economy."

Summaries of those reports:

Advanced Manufacturing (2010)

• Michigan's advanced manufacturing industry employs 381,351 workers, accounting for 10.3 percent of all employment (2007 data). Fully one-third of advanced manufacturing jobs in the Midwest are in Michigan.

• The average annual pay in the advanced manufacturing industry was $64,122.

• URC universities spent $101 million on advanced manufacturing R&D in 2009.

• URC universities are educating more than 14,000 students in engineering.

Life Sciences (2009)

• Michigan's life sciences industry employed more than 79,000 workers, accounting for 2.1 percent of all employment (2006 data).

• Between 1999 and 2006, life sciences industry employment grew by 10.7 percent while during that same time period manufacturing employment dropped by 24 percent.

• Life sciences annual pay averaged $83,494 in 2006.

• In 2008, URC universities spent $887 million on life sciences research and development.

• R&D expenditures grew 69 percent since the founding of the Life Sciences Corridor in 1999.

Alternative Energy Research and Development (2008)

• Michigan has a comparative advantage in biomass and wind compared to the energy potential in the other 49 states.

• URC universities spent more than $79.5 million on R&D related to alternative energy in 2007.

• Federal funding provided 71 percent ($56.8 million) of total R&D funding in alternative energy.

• More than 50 percent of all alternative energy R&D supported the auto industry.

For more information about the URC, go to urcmich.org.