New Study Traces University Impact on State Economy

Aerial view of Michigan Technological University Campus with trees and brick skyscrapers in the background and a dock with boats
Aerial view of Michigan Technological University Campus with trees and brick skyscrapers in the background and a dock with boats
University operations, alumni earnings and student spending inject hundreds of millions of dollars into the state economy.

Michigan Technological University created about 4,200 jobs and generated $448 million in spending in the State of Michigan in 2016, delivering a nearly 10:1 rate of return on every dollar the state invests in it, according to an economic impact study released today.

The study by Anderson Economic Group (AEG) also finds that each of Michigan’s 83 counties benefits financially from the University, with Houghton County, where the institution is located, accounting for almost 30 percent of the overall effect.  

Commissioned by Michigan Tech, the report uses data primarily drawn from the 2016 fiscal year to show how University operations, alumni earnings and student spending inject hundreds of millions into Michigan’s economy. The report also highlights research and development activities at Michigan Tech that contribute to the state’s fiscal health. In 2016 the University spent $72.5 million on endeavors to bring new businesses and products to market 

The Scenario: What if Michigan Tech Didn’t Exist?

AEG used conservative methodology solely based on activity initiated by Michigan Tech; it excluded economic impacts that would happen in the region regardless of the University’s presence. “We refer to the economic activity that would not have otherwise taken place in Michigan as ‘Net New’ to the state,” the report says. 

The report evaluates three major sources of economic activity: University operations and construction spending, student spending and incremental earnings by Michigan Tech graduates.

University Spending

The University spent nearly $235 million on construction and operations in 2016. The report estimates that about $189 million went to businesses and households in Michigan. Payroll is the largest sector of the category, with $162 million going to nearly 470 faculty and more than 1,100 staff. 

Student Spending  

Pegged at more than $70 million for the 2015-16 academic year, it’s estimated that $66 million in student spending by Michigan Tech’s 7,238 enrolled students stayed in the state. Notable spending categories: groceries and off-campus housing dominate the pie chart, followed by books and supplies. Other categories include transportation, apparel and other basic needs, and off-campus meals and entertainment. 

Billion-Dollar Alumni 

The study finds Michigan Tech alumni aren’t just an asset to their University—they inject millions into the state economy. Nearly 26,000 strong (there’s a Husky in every county in the state), alumni in Michigan earned approximately $1.4 billion in fiscal year 2016.

"While much of these earnings cannot claim to be caused by Michigan Tech, this figure shows the scale of the role MTU plays in preparing and educating Michigan’s workforce."Anderson Economic Group, "The Economic Impact of Michigan Technological University"

In the if-Tech-didn’t-exist framework of the report, the methodology attributes a $340-million infusion of those salaries and wages into the state economy. Terming it a “conservative estimate,” the report notes that average wages for degrees in computer science, math and engineering fields tend to be higher than the average state wage across all occupations that was used for the study. 

Business and Product Development 

From 2007 through 2016, more than 400 inventions, 51 patents and 113 licensing and option agreements were issued, and the University received more than $3 million in licensing revenues. 

"In addition to increasing spending in Michigan, MTU also increases earnings for workers because it increases the demand for products from Michigan."Anderson Economic Group, “The Economic Impact of Michigan Technological University” 

Breakthroughs in acoustics, discoveries in aerospace technology and health sciences developments continue to attract inventors, innovators and entrepreneurs to what’s come to be known as Innovation Shore—an environment that fires creativity, productivity and next-generation technology with global impact. 

The study found that the bulk of Michigan Tech’s 2016 research focused on applied work conducted to meet specific and practical goals. 

In the commercialization category, electronic instrument manufacturing is the top industry category among the 12 startup companies that rely on Michigan Tech-licensed technology. Just under half of the startups are less than five years old. The longest-running startup, IR Telemetrics, has been going strong for two decades. 

"For 133 years, Michigan Tech has provided for the evolving workforce needs for the great state of Michigan. This latest economic impact study proves that for every dollar invested from the state, Michigan Tech's students, faculty, staff and alumni pay it back tenfold."Michigan Tech President Richard Koubek

For more information about the report, contact John Lehman, vice president for University Relations and Enrollment.

Michigan Technological University is a public research university founded in 1885 in Houghton, Michigan, and is home to more than 7,000 students from 55 countries around the world. Consistently ranked among the best universities in the country for return on investment, Michigan’s flagship technological university offers more than 120 undergraduate and graduate degree programs in science and technology, engineering, computing, forestry, business and economics, health professions, humanities, mathematics, social sciences, and the arts. The rural campus is situated just miles from Lake Superior in Michigan's Upper Peninsula, offering year-round opportunities for outdoor adventure.