28 Jan Tech Council report says academic R&D spending linked to 38,000 jobs in Wisconsin
Madison, Wis. – It could be an uphill climb to lobby for more higher education funding in the current economic climate, but a new report from the Wisconsin Technology Council argues that the state would reap economic benefits by reversing the downward trend in support of its university system.
Citing the link between academic research and job creation, the report concludes that unless the state begins to reverse the slide in higher education funding, it could become an “also-ran” in the knowledge economy.
The report, titled “The Economic Value of Academic Research and Development in Wisconsin,” touts university research throughout the University of Wisconsin System, not just UW-Madison, its flagship campus that receives the bulk of federal funding for academic R&D – $840.7 million in Fiscal Year 2007. The report was prepared to give Wisconsin lawmakers something to think about as they craft the 2009-11 budget, where a projected $5.4 billion deficit in the second year of the biennium will make it difficult to increase UW support.
“The deficit didn’t come into being because of spending alone,” said Tom Still, president of the Tech Council. “It’s also a reflection of an economy that needs to accelerate its transition to knowledge-based economic growth. While you need to cut spending, you also need to think about ways to boost the economy.”
Job-creating research
According to the report, private and public academic research institutions in Wisconsin spent about $1.067 billion on direct research activities in the latest fiscal year for which complete records are available. That spending translated to 38,376 jobs, using generally accepted multiplier estimates of the U.S. Department of Commerce, Bureau of Economic Analysis (36 direct and indirect jobs for every $1 million in R&D spending).
By comparison, the paper manufacturing employs 33,830 people in Wisconsin, printing employs 39,920, and plastics and rubber products employ 32,380, according to labor market statistics of the state Department of Workforce Development.
The report characterized a 25-year decline in state support for higher education as a “corrosive force” that threatens the university’s standing. In the past decade alone, state appropriations as a percentage of the total UW System annual budget have declined from 33.75 percent in 1997-98, when an $880 million state appropriation was applied to $2.6 billion UW System budget, to 24.21 percent in 2006-07, when a $1.04 billion state allocation covered less than one-fourth of the $4.3 billion UW System budget.
The report, the Tech Council’s second look at the economic value of academic R&D, also cites the economic relationships between academic institutions and key technology sectors, including:
- The North Carolina Research Triangle and Duke University, the University of North Carolina, and North Carolina State University.
- Silicon Valley and Stanford University and the University of California-Berkeley.
- Boston’s high-tech industry and Harvard University, the Massachusetts Institute of Technology, and Boston College.
The same is true of Madison and UW-Madison, the report notes, but it says the state’s other UW campuses tend to be underutilized assets from the standpoint of research and development and technology transfer. Examples of academic R&D with commercial potential are given for each four-year campus, and include research into biotechnology, medical devices, nanotechnology, and biofuels.
Of the $1.06 billion in R&D spending by all UW System campuses in the 2007 fiscal year, most ($840.7 million) took place on the UW-Madison campus. Figures reported by the National Science Foundation also include $54 million in R&D spending combined by other UW System campuses, including (rounded figures): UW-Milwaukee, $40 million; UW-La Crosse, $3.4 million; UW-Stevens Point, $3.1 million; UW-Superior, $2.5 million; UW-Eau Claire, $1.3 million; UW-Oshkosh, $1.1 million; UW-Green Bay, $1 million; UW-Platteville, $540,000; UW-Stout, $360,000; UW-River Falls, $287,000; UW-Whitewater, $223,000; UW-Parkside, $218,000.
The report says that Wisconsin’s annual academic R&D figures also includes $172 million in research spending by private institutions such as the Medical College of Wisconsin ($158.2 million), Marquette University ($9.74 million), the Milwaukee School of Engineering ($3.74 million), and Lawrence University ($301,000).
However, the NSF figures do not include research spending by the private Marshfield Clinic Research Foundation (roughly $25 million annually) or the Blood Center of Wisconsin ($17 million). In the view of the Tech Council, these should be included in the state total because such research is conducted in close association with other institutions and/or private industry.
In addition to economic strength, the report asserts that continued funding decreases could weaken the state’s ability to compete for merit-based federal research grants. The grants typically go to states with modern laboratories, well-compensated researchers, a healthy environment for scientific research, and a willingness to collaborate to leverage its intellectual and physical resources, the report said.
Gov. Jim Doyle, who reportedly will focus on the economy during tonight’s State of the State address, has said that university building projects is one potential use of federal stimulus money, but it’s unclear how much of that is linked to academic R&D. The address can be seen live on the Governor’s website tonight at 7 p.m.
Recommended reading
In addition to reversing the funding decline, the Tech Council offers a series of recommendations to build on existing research. To drive more research on UW System campuses outside of Madison, the study urges that the University of Wisconsin System, with the support of the Legislature, do more to free the time of hundreds of non-Madison campus professors who have the credentials and willingness to conduct high-level R&D. The report said more time should be freed for activities like grant writing and research, managing a lab, and keeping up with discoveries reported in scientific journals.
The Tech Council also calls on state and university policy makers to boost technology transfer by removing any impediments that prevent UW System professors from commercializing their discoveries. For example, it encourages the UW Board of Regents to review conflict-of-interest rules that may slow or prevent the transfer of technology. In addition, faculty should be encouraged to pursue entrepreneurial ventures without penalty and collaborate with one another and with industry. The Tech Council noted that so-called “safe harbor” agreements at other universities may serve as a model for technology transfer reform.
Kevin P. Reilly, president of the UW System, praised the Tech Council’s report, and noted that academic research and development is one of Wisconsin’s largest industries in its own right.
“Most of that R&D takes place at the University of Wisconsin, and we are taking steps to accelerate the pace of our R&D in line with several of the Council’s recommendations,” Reilly said in a statement released by the UW System. “The WTC’s warning, however, that unless the state stops the slide in higher education funding, it could become an also-ran in the knowledge economy, should be taken seriously.
“We need to invest in the engines of our future. At a time when knowledge and innovation are the basis of economic strength, reinvestment in the UW is a prudent way to fuel a resurgent Wisconsin.”
Mark Bugher, director of Madison’s University Research Park, predicted the Legislature would give the recommendations fair consideration. “The Legislature operates based on delivery, and I think that when they see the university delivering meaningful results as a result of the public investment in the university and the research activities on campus, they will be much more willing to reciprocate with some of these public policy issues, which I think are important to continue the entrepreneurial climate that we have,” he said.