Corridor Funding Being Spread Thin
Granholm’s predecessor launched the Life Sciences Corridor four years ago as a 20-year initiative designed to grow life sciences research, commercialization and jobs in Michigan — an initiative supported by $1 billion set aside from the state’s tobacco settlement money.
The Technology Tri-Corridor will include an automotive technology corridor and a homeland security technology corridor in addition to the original life sciences program, so the focus will expand to new technology business recruitment and development in all three of those sectors.
The move also means that diminishing amounts of corridor funding will have to be spread across three sectors rather than just one.
That’s a bitter pill for some in the life sciences, given the fact that the Life Sciences Corridor Fund has already been slashed from its intended $50 million-a-year appropriation to $32.5 million, as one of the governor’s budget balancing measures.
The Michigan Legislature has appropriated $15 million in 2004 corridor funding to the life sciences, said Raili Kerppola, managing director of the Michigan Life Sciences Corridor.
In addition, $10 million in Michigan Economic Development Corp. (MEDC) corporate funding is earmarked for the automotive and homeland security technology corridors, for a total of $25 million in funding for the Technology Tri-Corridor.
Michigan’s life sciences sector has had a healthy track record of growth. According to an MEDC study released in August, Michigan was No. 1 nationwide in creation of new life sciences companies between 1999 and 2002.
The study further revealed that the state’s life sciences industry presently employs 31,777 people and includes 542 companies. The industry generated $4.8 billion in sales in 2002.
The study also indicated that from 1999 to 2000, the number of people employed in the state’s life sciences industry increased 27 percent, the number of life sciences companies increased 32 percent, and annual sales generated by the industry increased 165 percent.
Granholm is expected to appoint 19 business and academic leaders to the Tri-Corridor steering committee shortly.
The current Life Sciences Steering Committee has 14 members, some of whom the governor may decide to reappoint to the new committee. Western Michigan University will have a seat on the committee for the first time, Kerppola said.
Representatives of the University of Michigan, Michigan State University, Wayne State University, MEDC and the Van Andel Institute will each retain a seat, as well.
Previously, the Life Sciences Corridor Steering Committee has awarded corridor funding for projects based on recommendations from the American Association for the Advancement of Science (AAAS), the world’s largest general scientific society and the publisher of Science magazine.
AAAS scientists and engineers peer reviewed, scored and rated pre-proposals and recommended to the steering committee those they deemed had the most scientific merit. Then the steering committee invited selected applicants to submit a full proposal for further review.
The AAAS review and recommendation process will continue under the new Tri-Corridor Steering Committee, Kerppola said.
According to the MEDC, the peer review process was put in place to guard against “unscientific preferences and influences,” so no one region of the state would have an unfair advantage over others.
The MEDC will continue to administer the program, but the program will see changes for multiple reasons — the biggest one being that the focus is going to be on a technology tri-corridor rather than just a life sciences corridor, she said.
Until the new committee is appointed, the schedule for proposal submission, review and the award of funds is on hold. Kerppola said at this time last year, proposals were already being reviewed.
She noted that a number of unknowns have been introduced due to the change in direction from the Life Sciences Corridor program to the Technology Tri-Corridor program.
“Given that we have less time this year to go through the competition round and that we have less funding, there will be some changes that have to be introduced in order to get done what needs to get done,” she explained.
“We may be in a situation where we have to forgo the pre-proposal round and go straight to full proposal round.
“Every month that goes by reduces the flexibility of the kind of program that we can run and the length of time applicants have to put together proposals, which is regrettable.”
Competition for the 2004 round of funding can’t get underway until the Technology Tri-Corridor Steering Committee is assembled and issues a request for proposals.
The original Life Sciences Corridor has gone through three rounds of funding since late 2000. The initial round was for $100 million, the second for $45 million and the third for $32.5 million, Kerppola noted.
For the last two rounds, MEDC records show that a total of 494 pre-proposals were submitted for 2002 and 2003 funding, of which only 14 were from researchers and businesses in Kent, Ottawa, Muskegon and Allegan counties.
Though the number of pre-proposal applications from West Michigan might seem low for the region, Kerppola doesn’t think it stems from lack of awareness that funding opportunities exist.
“A lot of companies in the West Michigan area I would characterize as already being in a phase where they are out there selling products or services to customers rather than developing new technologies.
“A lot of the funding out of this program is towards development, so that, I think, is a factor.
“My thinking is that despite the fact that many West Michigan companies are very successful in the marketplace, most of them are not really very R&D technology development focused.”
In the West Michigan area, the only institution that has been consistently applying for, as well as receiving, corridor funding is the Van Andel Institute.
“The Van Andel Institute has, over the course of the program, received well north of $10 million. Probably even more by now,” Kerppola observed.
“Their ratio of awards to applications is probably one of the best of all institutions that have been applying.
“The VAI has been a recipient of awards each year that the program has run. Each year we have received a handful of pre-proposal applications from them.”
Kerppola said the MEDC does not review the proposals or make recommendations. It only provides assistance in explaining how the corridor applications program works and what is required of applicants.
But if a company seeks a collaborator for a proposed corridor project, she said, the organization would be willing to use its database and contacts to help them locate one.