Michigan national leader in life sciences despite recession
May 28, 2009
MACKINAC ISLAND, Mich. --- As Michigan lost a quarter of its manufacturing jobs, Michigan's University Research Corridor partners helped the state become a national life sciences leader, boosting the number of jobs 10.7 percent as average wages jumped 29 percent, according to a new analysis released Thursday.
More than 79,062 Michigan residents now work in the state's life sciences industry, the report found, with the average worker's salary climbing from $64,602 in 1999 to $83,494 in 2006. The sector grew even faster than the services sector, including education, healthcare, accommodation and food services, which grew 9.5 percent during the same seven-year period.
"The tremendous growth of life sciences employment and the fact that the average wage exceeds $80,000 shows that Michigan is a powerhouse life sciences state," said Patrick L. Anderson, CEO of Anderson Economic Group LLC (AEG) and a co-author of the report. "The growing wages in the life sciences industry prove that Michigan can leverage its research and knowledge into high-skill jobs of the future."
This summer will mark 10 years since the state approved legislation establishing the Michigan Life Sciences Corridor with URC partners Michigan State University, the University of Michigan and Wayne State University. The URC was established in late 2006 to take that collaborative approach to a higher level, crossing boundaries and disciplines to transform, strengthen and diversify the state's economy.
Since 2007, the state lost 2,100 jobs when Pfizer Inc. cut its operations worldwide. From January 2006 through March 2009, state labor officials estimate the overall Michigan manufacturing employment fell by another 26 percent.
"Despite these losses, however, Michigan's life sciences industry has shown signs of substantial growth and promise for continued expansion in the future,'' the report said. "The URC universities have stepped in to transform abandoned space into productive R&D and commercialization centers.''
AEG said the URC invested more than $887 million in life sciences research in 2008, a 69 percent increase since the Life Sciences Corridor was launched in 1999. Sixty percent of life sciences research dollars came into Michigan through federal grants, up from 54 percent a decade ago. The report released at the Detroit Regional Chamber's Mackinac Policy Conference, also found:
-- Salary growth. Between 1999 and 2006, the average life sciences salary grew 29 percent (nearly triple the state average rate of growth for all industries) to $83,494, boosting total payrolls by 43 percent to $6.6 billion. In biological life sciences jobs, making up 75 percent of the total, the average wage was $95,018 per year, while physical, engineering and biological jobs paid an average of $115,960 per year.
-- Elite innovation cluster. Among seven leading innovation clusters nationwide, the URC was topped by just two clusters (North Carolina's Research Triangle and three Silicon Valley research universities) for the percentage of research spending devoted to life sciences. The URC devoted 64 percent of its research spending to life sciences while other leading clusters trailed.
-- National leader in jobs and payrolls. The life sciences industry now accounts for 2.1 percent of the jobs in Michigan and 4.4 percent of total Michigan payrolls, both a greater percentage in Michigan than the United States as a whole with rapid growth since 1999. Since 1999, life sciences payrolls have been relatively flat nationally, growing slightly from 2.6 percent to 2.8 percent while Michigan's life sciences salaries grew from 3.3 percent of total payrolls to 4.4 percent.
-- Biological leader. About 75 percent of life sciences jobs are in biological fields including medical product manufacturing, chemical preparation or research and development, another 18 percent are medical and 7 percent are in an agricultural-related field.
"Throughout Michigan, the URC is advancing the life sciences with major investments in people, innovations and facilities," said U-M President Mary Sue Coleman. "At U-M, we are weeks away from taking ownership of the former Pfizer R&D property. MSU is reviving former Pfizer laboratory in Holland, and Wayne State is investing in the state's first stem cell commercialization lab. It is an exciting, and critical, time for establishing a leadership role in what is a potentially limitless sector of our economy."
MSU President Lou Anna Simon noted MSU chemists John and Karen Frost raised $21 million in the first quarter for their new company, Draths Corp., which has hired former Pfizer scientists who wanted to stay in the state after Pfizer closed several state operations.
Wayne State President Jay Noren said life sciences offers a host of potential growth opportunities, including the recent development of a new U-M-led consortium that would include the URC partners and potentially researchers from Oakland University, UM -Dearborn and Case Western Reserve University in Ohio .
"Momentum in the life sciences is accelerating at a rapid pace," Noren said. "Last week, the New Economy Initiative for Southeast Michigan partnered with the Ewing Marion Kauffman Foundation to launch a $9.25 million entrepreneurship initiative at Wayne State's TechTown business incubator, with a goal of creating more than 400 start-up companies over the next three years. Many of these companies will be in the life sciences sector."
In a separate life sciences report, recently completed by Business Development Advisors for the Detroit Regional Chamber and Detroit Renaissance, life sciences business development was called the growth factor with the most broad-based support across the region.
One of the BDA's primary findings: "Enhancing university-business partnerships and inter-university collaboration is a priority. Collaboration across disciplines and among different types of organizations throughout the region is seen as potentially transformational for business development opportunities.''
The URC, an alliance of MSU, U-M and WSU, was organized by the URC presidents to bring the universities together to leverage their collective assets and encourage collaboration with business, government and communities to help accelerate innovation and economic growth. Together, they conduct more than $1.3 billion worth of research per year, 94 percent of the academic R&D conducted in Michigan.
"The half-billion dollars in federal funding the URC universities bring to Michigan alone demonstrates the financial benefits of maintaining the world-class reputation of Michigan's research universities,'' Anderson said.
For a copy of the report, visit: http://www.urcmich.org/
"URC: Life Sciences,'' a short video featuring the URC presidents: http://www.urcmich.org/multimedia/urc_video_3.html
For more on the Anderson Economic Group, visit: http://www.andersoneconomicgroup.com/.
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