Economist Manufacturing life sciences link unique

May 24, 2010
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Anderson Economic Group consultant Caroline Sallee, manager of the firm’s Chicago office and next week’s guest speaker for the Medical Mile Resource Group, is upbeat about the unique life sciences/advanced manufacturing combination Michigan offers.

Sallee’s topic is “Making a Living in the Life Sciences” for the 8 a.m. June 1 talk  at the Loosemore Auditorium on Grand Valley State University’s Pew Campus in downtown Grand Rapids.

“Nationwide, advanced manufacturing makes up about 8 percent of employment, and in Michigan, it’s 11 percent. So we do have this concentration, and that’s unique,” Salliee said.

“One of the things that we’ve seen is that Michigan has this higher share of advanced manufacturing compared to its neighbors. Coupled with three big universities and tons of private sector work in the life sciences…the combination of the two I do think is unique.”

In a 2009 study commissioned by the University Research Corridor, a consortium of those three universities, Sallee and two of her colleagues at the Lansing-based Anderson Economic Group pointed out that life sciences employment expanded by 10.7 percent from 1999 to 2006 to 79,062 jobs. The impact of the recession is not reflected in that data, Sallee noted.

The average annual wage for a job in the sector increased by 29.1 percent from 1999 to 2006, from $64,604 to $83,494, according to the study.

“Wages in the life sciences are really, really high in Michigan. They are almost double the average wage in other industries,” Sallee said. “I don’t think you’re going to be able to sustain this really great wage growth. I think that’s going to slow down a little bit, but I do think there are going to be some opportunities going forward still.”

She said the study did not compare life sciences wages in Michigan to other states.

Seventy-five percent of life sciences jobs are concentrated in the biological research. The rest are in medical research and development and agriculture-related industries, such as biofuels.

“In those areas, we saw growth in Michigan and I think that there are some opportunities…particularly around the R&D component. That’s where we’re really seeing people coming to the state,” Sallee said. “There is the infrastructure, the higher-skilled people and in addition you can actually manufacture what you have once your research is commercialized. So we’re seeing that kind of link.”

Sallee said she expects that university research will continue to spawn small start-ups, which now number about 20 per year.

“Some have pretty big potential and are getting going and employing people,” she said. “I think that will continue. In our analysis, between 1999 and 2006 we saw employment in this industry going up 10 percent, whereas manufacturing has fallen 30 percent, so we do see this as a growth area.”

In 2008, 60 percent of University Research Corridor research funding, or $529.5 million, came from the federal government, the study indicated, with the remainder from the state, university fund-raising and private donations. That money paid for researchers’ salaries and supplies and equipment purchased from Michigan companies, according to the study.

Those three universities — the University of Michigan, Michigan State University and Wayne State University — account for 94 percent of university research spending in the state, which has 15 public higher education institutions.

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