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University In Detroit’s Shadows Joins Knowledge Economy Battle

June 25, 1989

ANN ARBOR, Mich. (AP) _ When prosperity depends on ideas, higher-learning institutions such as the University of Michigan become as important as gritty factory towns were during the Industrial Revolution.

Corporate research facilities crowding northeast Ann Arbor are proof that knowledge today equals power and profits, and college towns aren’t placid bystanders in the brains-over-brawn brawl.

In recessionary chills of years past, manufacturing-heavy Michigan caught economic pneumonia. When people delayed big purchases like cars, Michigan shut down. It happened in the last downturn, pushing the state’s jobless rate as high as 17.3 percent in December 1982.

Michigan is hoping to use high technology to diversify the economy and avoid that jobless jolt the next time a recession comes. At the same time, there’s a statewide effort to make Michigan’s big factories more competitive.

Success will mean other regions look to Michigan for lessons, state Commerce Director Doug Ross said.

With the University of Michigan in the lead, Ann Arbor is a major source of the technology to restore Michigan’s manufacturing might.

Research facilities now dot the university area and form a 40-mile automation alley along Interstate 94 from Ann Arbor to Detroit. Their success is reflected in state job figures.

Employment that hovered around 3.5 million jobs in 1982 topped 4 million in 1986 and has ranged around 4.3 million in 1989, the highest ever recorded in Michigan.

The number of jobless, which reached 749,000 in December 1982, has dipped below 300,000 in two months this year, for the first time since 1978. Seasonally adjusted employment rates from the U.S. Bureau of Labor Statistics have dropped as low as 6.1 percent.

The much-maligned rust belt starts with innate advantages, built up over time and sometimes not appreciated until a company moves, said J. Downs Herold, who manages the university’s industrial development research program.

″What you have here are a lot of little tool and die shops, and model makers,″ Herold said. ″The amount of expertise that exists among these places - in heat-treating, sandblasting, the ability to bend and mold metals of all types - that’s an infrastructure you don’t just start out and build.″

It may seem worthwhile at first to move elsewhere - for lower labor costs, for example, Herold said. ″But when you need something special you don’t just run down the street and say, ‘I wonder if Charlie can do that.’ It’s probably the same thing if you’re out in California and want to develop a new electronic chip.″

To add the advanced technology edge, the university’s college of engineering emphasizes research contracts with auto, chemical, electronics, computer and aerospace companies including General Motors Corp., Ford Motor Co., Chrysler Corp. and Dow Chemical Co., said Robert W. Schneider, director of corporate relations at the college.

Students pursue real-world investigations in their area of interest, and the research provides material for Ph.D. theses. Sometimes research leads to post-graduate employment.

One GM project with the college led to a computer software system that reschedules plant operations in case of an equipment breakdown to keep turning out the most-needed products.

GM has similar programs with other schools such as Rensselaer Polytechnic Institute in Troy, N.Y., Massachusetts Institute of Technology in Cambridge, Mass., and Stanford University in Palo Alto, Calif.

GM assigns experienced engineers, usually with advanced degrees, to work with the students, said Jim Caie, director of advanced manufacturing engineering at GM.

″We certainly aren’t dummies. We are really in most cases on the cutting edge of technology,″ he said. ″We need to leverage ourselves as much as possible - get good people from the universities helping us. We can’t do it all ourselves.″

The University of Michigan’s intellectual properties office has expanded from one part-time staffer 10 years ago to 10 people today. Its royalty income from faculty inventions rose 66 percent in 1987 and another 10 percent last year, to $850,000.

″What you’re finding is that intellectual property issues are becoming increasingly important in American business,″ said Bob Gavin, director of the office. ″That is a function of the United States recognizing that it has to protect its knowledge because that is the basis of its future economy.″

Patented items include a fluid that gets thicker or thinner depending on an electrical charge applied to it.

Auto companies are vitally interested in how it could be used in hydraulics, said Frederick H. Reinhart Jr., marketing director of the intellectual properties office.

Besides ideas, ″Ann Arbor has also become the home of an awful lot of new industries where people get an idea and spin something off,″ said Herold, the university industrial development official.

In a coup with a ripple effect, the university also helped lure the U.S. Environmental Protection Agency’s auto emissions laboratory.

That led to establishment of a string of laboratories by auto companies, especially importers, that wanted to tinker with cars failing to meet U.S. emissions requirements without taking them home.

End adv for Sunday June 25

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