Office of the Vice President for Global Communications

Wednesday, July 21, 2010

URC study: Manufacturing 'alive and well in Michigan'

More than 381,000 people at 11,000 Michigan firms are working in high-tech, highly productive advanced manufacturing jobs — nearly two-thirds of the state's manufacturing base, according to a new University Research Corridor study.

URC institutions U-M, Michigan State University and Wayne State University support advanced manufacturing at every step of the product development lifecycle from the idea stage to design and testing to commercialization to business operations, the study shows.

David Canter, executive director of the North Campus Research Center, leads a tour of the complex. (Photo by Joe Serwach, News Service)

"When we think of manufacturing, we might imagine the manufacture of automobiles,” U-M President Mary Sue Coleman said. "But today's advanced manufacturing, though it certainly includes the important auto sector, also means pharmaceuticals and chemicals, sensors, circuits and robotics.”

In FY 2009, the URC invested more than $101.9 million in advanced manufacturing R&D and had active research awards of more than $425 million. The study was released today (July 21) as part of a three-campus URC bus tour showcasing the proximity between the three partners and research strength of Michigan's world-class research-intensive universities.

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"Manufacturing continues to play a very important role in the state's economy, but it will require a more skilled and educated work force than was the case for our parents' generation,” MSU President Lou Anna Simon said. “Universities are helping to shape the high-tech, high-wage future of manufacturing in Michigan — through our research, our education, our commitment to tech transfer and our industry partnerships.”

Wayne State President Jay Noren said: "This report does an excellent job of describing in detail the URC's role in the advanced manufacturing process, from research and development through the education of tomorrow's leaders and innovators in present and emerging high-tech fields — a comprehensive network of support that will pay off for all sectors of Michigan's economy."

The tour included visits to Wayne State's Smart Sensors and Integrated Microsystems Lab, MSU's National Superconducting Cyclotron Laboratory and U-M's new North Campus Research Complex, home to an advanced manufacturing complex and 2 million square feet of research space.

"The future of manufacturing can be found all around the URC, from the lab space where science turns into discovery to commercial technologies creating new companies and job growth,” said URC Executive Director Jeff Mason. "We wanted to quantify, catalogue and show rather than tell how our research universities can help Michigan speed up the transformation from an old manufacturing economy to a knowledge-based economy with hundreds of thousands of high-wage, high-skilled advanced manufacturing jobs.”

The report, prepared by East Lansing-based–Anderson Economic Group (AEG), shows Michigan's particular strengths in research-related advanced manufacturing: a third of the research and testing jobs in the Midwest are in Michigan and more than half of the state's advanced manufacturers are seeing productivity gains exceeding the U.S. average while employing 10 percent of the state's workforce.

"This report provides, in great detail, hard evidence that manufacturing is alive and well in Michigan today, and that much of the manufacturing now done in Michigan is high-tech, high productivity advanced manufacturing,'' AEG founder Patrick Anderson said. As jobs have been cut or moved to lower-wage markets, the state has been unfairly "saddled with a reputation for being very good at something that is no longer relevant, modern or particularly useful in the 21st century,” Anderson said.

The report acknowledges that 27 percent of the U.S. private sector jobs lost nationwide over the past decade were in Michigan and that the state's overall manufacturing employment has dropped by more than a third since 2001. Still, advanced manufacturing fared much better than manufacturing as a whole, seeing fewer losses and greater wage gains.

"While manufacturing's share of total employment has declined steadily since the mid-1950s, the number of manufacturing jobs has remained steady at around 20 million nationwide," the report states.

AEG divided advanced manufacturers into three categories all with URC relationships: advanced products and processes (about half the jobs), emerging manufacturers and "research relevant” companies that have the closest ties to URC institutions.

The "research relevant" cluster employed 124,610 Michigan workers in 2007, generating average salaries of $81,175 per year, beating the Midwest and national averages.

While the auto industry has gone through a massive transformation that cut jobs, highly productive Michigan industries seeing good productivity gains include businesses such as office furniture manufacturing, medical equipment and supplies, transportation equipment manufacturers and chemical manufacturers.

The report catalogs numerous companies that have partnered with or grown out of URC research as well as 33 centers or laboratories working directly with advanced manufacturing firms.

The URC was launched by the state's three research university presidents in late 2006 to align their resources to transform, strengthen and diversify Michigan's economy. Previous reports have looked at other emerging sectors of promise with potential for great job growth including life sciences and new energy technologies.