News Story

Michigan Government Program Gives $30 Million To Seven Universities, Creates Less Than Half of Projected Jobs

A state program that awarded nearly $30 million to Michigan universities for job creation in Competitive Edge Technology sectors has created 153 jobs, a little more than a third of what was projected.

The Competitive Edge Technology Grants and Loans program awarded over $100 million to various universities, companies and research firms "to encourage the development of competitive edge technologies to create jobs in the state."

Twenty-nine grants totaling over $29 million went to seven Michigan universities in 2006 and were projected to create 411 jobs. 

A 2011 progress report states that 209 jobs have been created, but 56 jobs have been lost as a result of these grants.

The sectors of competitive edge technology are classified as life sciences technology, advanced automotive, manufacturing and materials technology, homeland security and defense technology; or alternative energy technology.

Funds for the Competitive Edge Technology program come from the 21st Century Jobs Fund and the program is administered by the Strategic Economic Investment and Commercialization Board.

In a 2008 press release, then-Gov. Jennifer Granholm stated that, "The 21st Century Jobs Fund is the cornerstone of the most comprehensive and aggressive strategy in the nation to transform our economy, grow new high-tech companies and create good-paying jobs for our citizens.

"...Just as we are working to create jobs today, this is an important part our plan [sic] to create jobs tomorrow."

Competitive Edge Technology was one of various 21st Century Jobs Fund programs identified by the Auditor General for lack of effective oversight. In a random sample of awards examined by the Auditor General, six Competitive Edge Technology program payments totaling $428,722 were made before receiving the related progress reports.

Additionally, the Auditor General found that the Michigan Strategic Fund did not validate expenses in progress reports submitted by recipients of 21st Century Jobs Fund awards.

When asked if progress has been made in improving oversight of 21st Century Jobs Fund programs, Martin Dober, who oversees the 21st Century Jobs Fund for the MEDC, declined to comment.

The universities receiving funds were Lake Superior State University, Lawrence Technological University, Michigan State University, Michigan Technological University, University of Michigan, Wayne State University and Western Michigan University.

The Competitive Edge Technology program also created a $7.7 million loan fund that has created only 20 percent of promised jobs.

Further state investment in competitive edge technology programs will continue now that Gov. Rick Snyder signed into law House Bill 5477, which repackages the failed Granholm-era “Centers of Energy Excellence” program under the new title of “Centers of Innovation.” House Bill 5477 states that Centers of Innovation program exists “to promote the development, acceleration, and sustainability of competitive edge technology sectors.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.