E.L. firm looks to prove a stable state economy depends on universities

The building blocks of Michigan

As the state budget continues to shrink and higher education funding declines by millions, the work of a local consulting group rarely has been more crucial to Michigan universities building their case for more support.

East Lansing-based consulting firm Anderson Economic Group’s economic impact studies involving the state’s three largest universities — MSU, the University of Michigan and Wayne State University, collectively known as the University Research Corridor — have shown the impact of higher education on the state.

The schools combine for about $13 billion in net economic impact, a 3.5 percent growth in economic impact from 2007-08 and more than $25 billion in wages and salaries for alumni living in Michigan.

“It’s a phenomenon that has really grown over the last eight to 10 years, and makes a lot of sense given the importance of allocating scarce dollars,” said Steve Webster, MSU’s vice president of government affairs and the firm’s main contact for its studies.

“More and more, stakeholders, such as the Michigan Legislature, want to know what is the economic benefit to the state and the region by investing in Michigan State University.”

Since 2007, the University Research Corridor has used Anderson Economic Group for studies that typically take about six months to complete.

“We really think we have been able to assist MSU in showing the value and showing the economic impact on the state, what programs are really benefiting the state,” said Caroline Sallee, an Anderson Economic Group consultant who has worked with MSU and the URC on several projects.

“If you can show all that, the Legislature is less likely to slash your budget.”

State Rep. Vincent Gregory, D-Southfield, said the House Appropriations Subcommittee on Higher Education, of which he is a member, takes a long look at economic impact studies when making budget recommendations to the rest of the House.

“I think that has become much more needed during these times because there is a struggle over dollars,” Gregory said.

“It is very important to make your case and show hard data as to what you’re able to do and how you affect the state and the economy. I think it would be difficult to make claims of your value when you don’t have numbers to back it up.”

Although the demand for market analysis has dropped steeply for Anderson Economic Group, more universities are seeking consultation to prove economic impact, Sallee said.

Anderson Economic Group has been working with several colleges in addition to the URC, she said, but the firm cannot name those colleges because their reports have not yet been released.

In addition to providing an outlook on the URC’s economic impact, the report stacks MSU, U-M and Wayne State up against a similar cluster of schools from across the country every year. The results compare university funding, research levels and growth, and show Michigan tends to run in the middle or ahead of other competing university clusters.

“The first report showed we’re pretty strong,” said Joseph Serwach, the URC’s primary spokesman and a U-M spokesman. “You always hear about some doom and gloom in Michigan, but you see yourself match up against your peers well.”

Serwach is a member of the State News Alumni Association.

Webster said the comparative and economic impact results hold more water than anecdotal data given to prospective funding sources.

“The studies really confirm what we suspected but had not yet quantified,” he said. “That being the three research universities … not only are very large components of Michigan’s economy, but they influence in a positive way all of the growth industries that we currently enjoy in Michigan.”