Remarks to the Detroit Economic Club
(Introduced by President Irvin Reid, Wayne State University)
January 21, 2003
Thank you, Irv, for that wonderful introduction. While we both are here, I should mention that the University of Michigan invited a distinguished alumnus of Wayne State University to be the speaker for our Winter Commencement ceremony last month: Phillip Levine, the Pulitzer Prize-winning poet. It was delightful to listen to an artist of such insight, and to meet such a notable graduate of the Detroit schools and one of our states universities.
I would like to recognize the distinguished guests sitting at the dais with me, and thank each of you for joining us for todays event.
Also, I would like to introduce some members of the audience who perform significant roles at the University of Michigan.
I am very pleased that several members of the Board of Regents could attend this event. One of these Regents was a member of the Board which brought me to the university: Regent S. Martin Tayler of Grosse Pointe Farms. And the most recently elected member of our Board also is here today: Regent Andrew Richner of Grosse Pointe Park.
A strong, thoughtful, and supportive Board of Regents is one of the most important components of a successful university, and the strength of this Board was one of the features that attracted me to the University of Michigan.
Chancellor Dan Little, who oversees our Dearborn campus, joins us this afternoon. He is providing great leadership and vision for the University of Michigan at Dearborn, and he is an enthusiastic member of this community.
Several of the executive officers of the university are also here: our Vice-President for Communications, Lisa Rudgers; my Chief of Staff, Chacona Johnson; Vice President and General Counsel, Marvin Krislov; Vice President and Secretary of the University, Lisa Tedesco; and Vice President for Government Relations, Cynthia Wilbanks; Hank Baier, Associate Vice President for Facilities and Operations.
I thank the leadership of the Detroit Economic Club for including me on its roster of speakers so soon after my arrival in Michigan. Your organization is known throughout the nation as one of the most illustrious public platforms available to national leaders, and I am honored to be speaking to you today.
It is especially fitting to be addressing you in the city of Dearborn, where one of our campuses is located. It has been fascinating to see how well our Dearborn campus and this city complement each other, and to learn of the unique programs that the University of Michigan offers here, including automotive engineering.
The intertwined history of our Dearborn campus and the Ford Motor Company is a model for the successful partnership of industry and education. The donation of the land for the campus by Ford, and the co-location of the Henry Ford Estate and our Dearborn campus is a wonderful evolution in the history of the university.
I am approaching the six-month anniversary of my move to Michigan. What have I observed in this first half-year?
More than anything, I see resilience. I witness the strength of the people who manage and fuel the industry of Michigan, I value the depth of the work ethic of this state, and I marvel at the never-ending quest for innovation. A strong people, a strong industry, and a strong imagination are a powerful combination of forces.
Like all of you, I learned early in life about the immense significance of Michigan in our countrys history. The path-breaking methods of the assembly line and the astonishing growth of the automotive industry is perhaps the worlds best model of innovation and progress.
So, I arrived in Michigan thinking that perhaps I had a good grasp of its enormous contributions to the national economy, but it has been transforming for me actually to live in this great state and to study it at close range.
Trips on the road have taken on a whole new significance for me. Since moving to Michigan, I see much more than the models of Chrysler, Ford, and General Motors. Automobiles now represent the faces of Dearborn and Detroit and Flintand all of you who work so hard in every business sector to keep the economy of this state and nation strong.
Some of my colleagues suggested that I sprinkle my remarks with phrases from the language of the states leading industry, with ideas such as:
the information superhighway, or
steering ourselves in new directions, or
downshifting our budgetary expectations, or
my favorite: the "transmission" of knowledge.
But I decided that the economic challenges we face today are so serious that I want you to leave this room clearly aware of how very concerned I am for all of us who must find our way out of the thick fog of economic gloom.
The Regents asked me to come to this state to lead one of the top research universities in the country. And the dazzling excellence of the University of Michigan invigorates me every day.
Whether you have joined us for a football game, a Shakespearean play, a public lecture, or for treatment at one of our hospitals, I hope your encounters with our university have enriched your life.
Let me highlight just one of our recent honors that affects so many Michigan families: our C. S. Mott Childrens Hospital has just been named one of the top five childrens hospitals in the country.
Every year, over 10,000 Michigan children are treated at that hospital, for problems ranging from injuries of the simple accidents of childhood to the terrible diseases that no person of any age should have to face.
I am struck by the manner in which our childrens hospital not only provides the best care available in the country, but also offers a compassionate package of care to entire families in crisis because of a childs affliction.
An extraordinary story of one childs survival was told in a series of articles in the Detroit Free Press over the past six months. A two-year old child from the Upper Peninsula, Kaden Cook, waited for a heart transplant, which he finally received in September. It was wrenching to read about his wait for a new heart, and deeply moving to see the impact of the transplant on Kaden and his family. We were thrilled to read the follow-up article in late December about his remarkable recovery.
Sometimes, the deep impact of the hospital is best expressed by the children themselves.
Here is one tribute written in blue crayon in the block letters of a nine-year-old patient:
O is for the operation which I had yesterday. I am lucky to be near a good hospital,
The C.S. Mott Childrens Hospital is just one snapshot of the intersection of intellect, skill, and humanity that exemplifies the University of Michigan. There are many others of which I will speak in a moment.
But first, let us note that this is a difficult time to try to lead any organization, whether it is an industry, a state, or a university. Those of you in business know how challenging the last two or three years have been. My colleague Irv Reid knows the challenges we face in higher education.
And I do not envy our new Governor the difficult decisions she will have to make regarding the state budget deficit.
Two months ago, the National Governors Association released a comprehensive report on the deficits facing the entire nation. The governors concluded that today, states face the most dire fiscal situation since World War II.
I know that all of us in this room are dealing with the issue of constrained resources in different ways, and are trying to find intelligent ways of remaining productive and solvent at the same time.
Universities face a particularly vexing problem during a downturn in the economy: just when jobs become more scarce, people look to universities to make a career shift, or to obtain advanced degrees. So at the very moment when we must accommodate increased demand, we often are looking at a flatline or reduction of state funding.
When any of us thinks of a university, we tend to think of the education of undergraduate and professional students, and the excitement of learning in classrooms and laboratories. Indeed, teaching will always be a primary mission of any university.
But the oversight of a modern research university is similar to the management of a highly diversified corporation, with highly differentiated autonomous units.
As the president of a major research university, I oversee not only the highly visible instructional component of the university, but also the hospitals, the federal research enterprise, and a major sports program. I mention these three areas specifically because the university administers these programs while conforming to stringent federal or national regulatory criteria in each one.
A healthy research university must have a broad range of educational and research activity, in order to generate new knowledge while conveying our discoveries to each new generation of students. The variety of activity in a research university is both breath-taking and massive.
Just last week we announced a 10 percent increase in research funding for the past yearour research and teaching productivity has never been higher!
Given my own research background in biological chemistry, it is especially meaningful to me to be leading the University of Michigan at a moment of such growth in the Life Sciences.
The states significant investment in the Life Sciences Corridor has complemented the development of major initiatives in the life sciences at the University of Michigan as well as our ability to collaborate with our sister universities.
The discoveries and the innovations that will result from this enormous venture can scarcely be comprehended right now, but we know they will change our lives and those of our children.
Several years ago, the university saw the direction of future opportunity in the life sciences, and decided to adapt itself to the anticipated future wave of bioscience.
Like our university, the State of Michigan has always displayed agility in dealing with new conditions, and that versatility has allowed this state to become a leader of the nations economy.
The current celebration of the centennial of the Ford Motor Company has caused us all to focus on the automotive industry that emerged 100 years ago.
At that point, Michigan was adapting from being a state that relied on the timber and agricultural industry to one that would depend on the industrial revolution.
It is amazing to look back to 1903 and to see all that has emerged from the creation of the automotive industry. So much had to change in order for cars to become broadly viable: we needed new types of roads, we needed fuel, we needed fueling stations, and we needed parts for the new cars.
Reading about the difficulty in designing tires for the new cars of 1903 is an education in engineering: Were they to be air-filled? Should they be tubeless? What material would be used to construct those tires?
Michigan was engaged in re-inventing the wheel, but for a new purpose!
Ultimately, Michigan re-invented the world.
Today, we stand at another crossroads in the history of Michigan.
The traditional strengths of the automotive industry have become energized by the technological innovations of the past 40 years. As previewed by the International Auto Show these past few weeks, we can look forward to exciting innovations.
A study released in November, commissioned by the Michigan Economic Development Corporation, shows that Michigan is ranked fourth in the nation for total employment in high-tech industries. Once again, this state is leading the future of industrial innovation.
Just as Michigan adapted from being an agricultural, logging state to an industrial state 100 years ago, it now has the opportunity to evolve as a leader in the newer technological fields as well as industry. It must seize that opportunity or risk falling behind.
Our Life Sciences Initiatives at the University of Michigan will play a considerable role in transforming the future of health care, and also will provide a stimulus to the economy.
In the past 20 years, medical research has made huge advances in preventive care, early diagnosis, and treatment of diseases.
When I began my research into the connections of DNA and childhood leukemia in the 1970s, it was almost inconceivable that children would one day be cured of that terrible disease. In 1970, a diagnosis of leukemia meant almost certain death for a child. But in the past ten years, many children with leukemia have indeed been cured because of the enormous advances in research and treatment.
And this is just one diseasethe projects that will be undertaken at the Life Sciences Institute will cover a vast array of medical issues.
Sometimes, the scientific discoveries that emerge from the University of Michigan are convenient as well as life-saving.
I wonder how many of you had a flu shot this year? Even those of us in the medical sciences are not fond of being poked with needles, and a new product developed at the university may help us all face one less needle.
This new product is called FluMist, a vaccine that is administered as a nasal mist instead of an injection. It has just passed a major hurdle at the Food and Drug Administration, and is now awaiting approval of a license for production from the FDA.
FluMist is the lifetime work of Professor John Maassab, a faculty member in our School of Public Healthhe began to work on the idea of a nasal vaccine in the 1950s as a graduate student. This is a stellar example of the dedication that results in discovery.
But FluMist is not simply a convenienceit will help save lives. Just two weeks ago, the Center for Disease Control released new statistics regarding the number of deaths that result from the flu each year: 36,000 lives are lost from respiratory distress or subsequent heart failure attributed to the flu infection.
Remember that Professor Maassabs work had to be supported with public funds over five decades before it paid off. But our society will be the huge beneficiary for that continuing investment.
If FluMist encourages more of us to get vaccinated each year, we will be able to limit the spread of flu to vulnerable populations, saving some of those lives as well.
While one major benefit of the Life Sciences Institute and our associated initiatives will be improved health care, another benefit is economic in nature.
A direct financial benefit flows to the state from university research. In 1980, Congress passed legislation that was intended to foster a closer collaboration with universities and industry.
This legislation, known as the Bayh-Dole Act, has created many opportunities for technology transfer, which takes university research and converts that research into commercial business ventures.
In some states, technology transfer has generated significant economic benefits. When university research moves into the marketplace, it generates new products, new companies, new revenues, even new industries. And it gives established industries and companies new ways to do their work, and brings new work for them to do.
In the past three years, 25 new start-up companies have been generated by the University of Michigan. These companies operate independently, just as the federal legislation had envisioned.
We have applied for 254 patents in the past three years, and have had 222 licenses issued for our discoveries. To appreciate these numbers fully, you need to know that they represent significant increases over the preceding three-year period.
Just as the automotive industry spawned a host of related jobs in the oil industry, manufacturing, and road construction one hundred years ago, biotechnology can add strong new components to the economy of Michigan.
However, like those of you in the business sector, we at the University of Michigan face stiff competition. Our competitors are the states that intend to become the leaders in biotechnology.
Other states are coping with even bigger deficits than Michigan. However, they realize that they need to invest even more in higher education to speed their recovery from the economic downturn.
In the past two weeks, Democratic and Republican governors around the country have delivered their state of the state addresses. In those speeches, they have asserted that they will invest in higher education as the road toward a healthy economy.
Listen to the ways other states are positioning themselves as they write their budgetsand remember that these are the competitors for our faculty and our research dollars:
Two weeks ago, Californias Governor Gray Davis delivered his second inaugural address, and he vowed:
"[W]e will make California the worlds nucleus for life science innovation. This sector of the economy, perhaps more than any other, has high-growth potential, high wages for its workers, and a higher purposeusing cell technology to build healthier, happier lives. Well put California at the center of this remarkable industry,"
Two days later, Governor George Pataki of New York promised:
"We will combine the power of our high-tech industry with the strengths of our top-flight academic institutions and we can create a new economy and a new prosperity for New York,"
I could go on with examples from other states. What we must remember in Michigan is that we have many competitors for our resources. On the football field, we can see the team of the other university. In the laboratory, it is possible to lose the game without ever being aware that the game was being played. We must be watchful of these eager economic competitors from other states.
Let me tell you a vivid economic story of one governor, his states unprecedented deficit, and the resulting budget.
One of our chief competitors in the academic world is the University of California system, which has hired away some of our faculty and which competes with us vigorously for federal research dollars.
I just quoted Governor Davis and his commitment to make California the center of biotechnology. In October, he demonstrated the strength of his conviction to protect the research universities.
The state of California just faced a much bigger deficit than Michigan for Fiscal Year 2003. Three months ago, Governor Davis signed a budget that had to balance a deficit of $24 billion dollars.
Yetdespite that huge deficitCalifornia lawmakers ultimately decided not to make major cuts in the core instructional needs of higher education. Even more telling, California maintained its considerable commitment to research funding, which is even larger than Michigans planned investment in the same time period.
Now California is facing a new deficit of $34 billion dollars for Fiscal Year 2004. But when he announced his proposed cuts last week, the governor did not suggest reducing the $400 million dollars that California is investing in its universities for "Institutes of Science and Innovation" over the next two years.
Let us consider Michigan again.
The question is not whether we will deal with hard times.
The question is not even how we will deal with hard times.
Here is the big question I want to pose:
How well positioned will we be when the current economic situation turns around?
We must assure the next generation the same outstanding quality of education and research that exists for the current generation.
We must provide our children with access to higher education, but merely having seats in the classroom is not enough.
We must ask ourselves, and we must ask our state: access to what? If we are admitting students to universities of declining quality, it will diminish the future of our children, and will deplete the future of our state.
Former Governor Engler and our legislators protected higher education last year, realizing how important a strong system of higher education is to the future of the state. But subsequently, we have experienced a mid-year cut, and we face the prospect of additional cuts as our new Governor and Legislature struggle to make decisions regarding the mounting deficit.
Governor Granholm delivered a stirring inaugural address about the multitude of doors that can open opportunity. We have many sets of doors at the University of Michigan, but none are more important than these two:
The doors through which students enter the university;
And the doors from which they exit at graduation.
The outstanding education students receive at the University of Michigan can open doors to employment and to opportunity in Michigan and around the world. We must not allow any reduction of funding to reduce access to those doors or to lower the high quality that students find behind those doors. It will weaken the future of Michigan if that occurs.
Also, our doors must remain wide open to the broad array of races, nationalities, and ethnicities that make up these United States. As I am sure you know, our cases before the U.S. Supreme Court on affirmative action admissions will affect public and private universities across the nation.
We agree with the position of President Bush last week when he stated that he, strongly supports diversity of all kinds, including racial diversity in higher education,
Where we disagree is how best to achieve that diversity.
In our admissions policies, we consider the whole student. Our admissions policies at the University of Michigan look at a broad range of factors and a students entire background.
And lets set the record straight: We do not have nor have we ever had quotas or numerical targets in either the undergraduate or the law school admissions system. By far the overwhelming consideration is academic qualification.
The development of a diverse, highly qualified, student community is essential to a comprehensive, top-tier educationjust the sort of education our economy requires to drive the industrial and technological revolutions of the future.
This debate will be important and robust, and in the end, we believe the Supreme Court will find our admissions policies to be fair and legal under the Constitution of the United States of America.
I would like to close with a few thoughts about the ability of the university to remain strong even in challenging times. The remarkable quality of our faculty, staff, and students provides us with the strength to create an economic engine based upon innovative research that has an impact on lives, health, and policies throughout the world.
Strong research universities will nourish and sustain a strong Michigan economy. We need Wayne State, Michigan State, and the University of Michigan to partner with state government, the private sector, and other cultural and educational institutions to create a Michigan that leads, not follows.
And a strong Michigan economy is necessary to maintain strong universities.
None of us will thrive separately without the other.
At the university, we will do our share to create efficiency and to operate under constrained circumstances, but we must make sure that we do not undercut the future of the state as we make tough choices in our budgeting process.
We can notwe must notallow short-term problems to become long-term impediments.
I will do everything possible to protect the University of Michigan from deep cuts to our academic quality, and I ask your help to make the case to public officials for all of the states outstanding institutions of higher education.
We must keep our attention focused on two aspects of the current economic problem: how will we get through the current downturn, and where do we want to be positioned when this downturn is finished?
I am quite struck by the great similarities between the Michigan of 1903 and the Michigan of 2003. Separated by a century, these two Michigans had the potential to change the world. You succeeded doing so, brilliantly, 100 years ago.
With the partnership of education and industry, we are about to change the world again.
Thank you very much for allowing me to speak with you today.