New economy businesses give Michigan benefit of doubt
Feb. 23, 2005
KALAMAZOO--Those who run Michigan's cutting-edge businesses call access to venture capital their single most pressing need, but despite the difficulty in obtaining such funds, they're optimistic about their companies' futures and keeping an open mind about the state's ability to become a powerhouse in such new economy sectors as the life sciences.
Those are just some of the conclusions found in a Survey of New Economy Businesses in Michigan unveiled by Western Michigan University President Judith I. Bailey during a Feb. 22 address to the Detroit Women's Economic Club. The survey, completed early this year, was a joint effort of the WMU Research Foundation and EPIC-MRA, a Lansing-based, public-opinion, marketing and research firm.
"New economy businesses now play a significant role in shaping Michigan's business climate and they intend to play an even greater role in the future," says Bailey. "Their need for capital to continue growth came through loud and clear in this survey, and the views they expressed illustrate the merit of recent state government proposals to increase the availability of such funds."
More than 1,100 company representatives took part in the survey, which was designed to gauge the companies' resources and growth plans, define the challenges they face, analyze their confidence in Michigan's ability to build a life sciences base, and examine how such companies view and use the state's universities as a resource.
The companies taking part in the survey included those whose primary business is in engineering, information technology, consulting in a variety of areas, life sciences, telecommunications, health care, scientific services or manufacturing. The companies are small, with an average employee base of 58 and average annual gross sales in 2004 of $6.7 million.
Key findings include the following:
Most--two out of three--new economy businesses expect to make capital investments in the next five years, but four out of five businesses that are looking for money today find investment capital hard to find.
About 40 percent of new economy businesses are engaged in research and development activities, with 90 percent of that work taking place in Michigan. Those figures are even higher for life sciences companies.
Michigan's universities are key resources for new economy businesses, and more than half of such firms have turned to universities for help with a variety of needs. The most successful business/higher education collaborations have occurred in the life sciences and health care.
Most new economy business leaders remain unconvinced that Michigan will become competitive in the life sciences, but they point to startup funds for life sciences entrepreneurs as the most effective strategy for making Michigan a major player in that sector. They believe the second most effective strategy is to speed the commercialization of discoveries made at the state's universities.
The companies surveyed expect to provide healthy employment opportunities for skilled workers this year, and an overwhelming majority of those surveyed delivered a ringing endorsement for the caliber of the work force being trained by Michigan's public universities.
Bailey says one of the most significant findings was that survey respondents place great confidence in the state's public universities and believe those institutions can provide the expertise and graduates necessary to reshape the state's economy.
"Those surveyed told us the state's greatest strength is its educational system," Bailey says. "That's a message we were hoping to hear. One of the reasons the WMU Research Foundation undertook this survey is to make sure our efforts are on track, both in preparing new members of the work force and providing the research and commercialization resources new companies need."
The WMU Research Foundation supports University research efforts and facilitates the commercialization of patents and other technologies developed at the University. Among the major WMU initiatives under the auspices of the research foundation is a Biosciences Research and Commercialization Center, which focuses on rapidly moving life sciences discoveries from the laboratory to the marketplace.
Complete survey findings are available on the Web at www.wmich.edu/neweconomy.
Media contact: Matt Kurz, 269 387-8400, firstname.lastname@example.org