Research Out of Ann Arbor’s U-M Contributed Nearly $5B to National Economy from 2002-2017

According to a new report, the University of Michigan in Ann Arbor contributed $4.8 billion to the national economy through vendor contracts and subcontracts between 2002 and 2017.
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University of Michigan campus
Research out of U-M has contributed $4.8 billion to the national economy from 2002-2017. // Stock photo

According to a new report, the University of Michigan in Ann Arbor contributed $4.8 billion to the national economy through vendor contracts and subcontracts between 2002 and 2017.

More than 4,000 minority-owned, woman-owned, and small businesses supplied goods and services to support the U-M research enterprise during that period.

“Research at the University of Michigan addresses important challenges and opportunities that impact our daily lives, and as a result of our ongoing investment in research, there is a positive ripple effect on the economy that helps drive global competitiveness and spur new jobs,” says Rebecca Cunningham, interim vice president for research at U-M.

The findings are part of a report produced by the Institute for Research on Innovation and Science at the U-M Institute for Social Research, which also details the impact of U-M research spending in specific industries. Manufacturing companies received more than $127 million during the time period, and those companies paid their employees annual earnings that were more than 58 percent higher than the national average for the sector. The report cannot show that U-M contracts drove wage increases.

Companies based in Oakland, Washtenaw, Wayne, and Ingham counties received the most research support from U-M, with businesses in Oakland County generating $14 million in 2017 for their help in advancing U-M research.

Michigan-based companies received $43 million in research contracts from U-M in 2017, and the university has developed partnerships with companies in California, Texas, and Illinois.

The institute created the report by linking U-M administrative data with industry data provided by the U.S. Census Bureau, as well as workforce data from Bureau van Dijk’s Orbis dataset, which contains information on characteristics of businesses such as whether they are owned by minorities or women. Once the data is matched with the U.S. Census Bureau or Bureau van Dijk’s datasets, the resulting reports mask the identities of individual organizations in the data.

The institute is a national consortium of more than 30 research universities organized around an Institutional Review Board-approved data repository, housed at U-M’s Institute for Social Research.

“Linking data from multiple sources this way reveals important insights into the results of university research spending, not only for the national and regional economies, but for specific industries as well,” says Jason Owen-Smith, executive director of the institute and a U-M professor of sociology. “Other IRIS reports contain similar information on the career paths, earnings, and outcomes for university employees and students. Through these data-driven reports, our goal is to better understand and explain, and ultimately improve the public value of higher education and research.”

The reports are available to institution members. The members submit their administrative data on research spending to the institution, which then links them to other datasets to produce the reports.

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