Temporary Small Business Administration loans provide boost to Index, which measures economic innovation activity in Michigan
May 23, 2011
DEARBORN / May 23, 2011---The University of Michigan-Dearborn’s Center for Innovation Research – iLabs – today released its Innovation Index for the forth quarter of 2010. The Index, which quarterly measures economic innovation activity in the state of Michigan, soared from 85.3 to 94.4.
“The new level is the highest level of the Index since 2008 and is considerably above a year-earlier level of 83.3. While the magnitude of the Index movement was largely due to the Small Business Administration loan program, there were gains in several categories,” according to Lee Redding, associate professor of business economics and director of the Innovation Index at the College of Business.
The Innovation Index tracks economic innovation in Michigan based on calculations of employment of “innovation workers,” trends in venture capital, trademark applications, incorporation activity, small business loans and gross job creation. In the most recent quarter, three indicators rose while three declined.
Positive indicators in the forth quarter 2010 Innovation Index were Small Business Administration loans, which soared in the fourth quarter due largely to a temporary provision passed by Congress that encourages SBA loans. Trademark Applications coming from the State of Michigan increased in the fourth quarter, as did employment of innovation workers, which showed an increase in the percentage of workers employed in science and engineering up to its highest level since 2007.
Negative indicators included incorporations and LLC filings, which continued a drop from earlier quarters; venture capital funding in Michigan, which continued its fall from a very high number reported for the second quarter and gross job creation, which fell slightly, despite the drop, job creation continued to outpace job losses.
The next University of Michigan-Dearborn Innovation Index report, due out in late August, will contain a detailed report of first quarter activity with a preliminary indication for the second quarter.
“Going forward, it is likely that the Small Business Administration loans will return to a lower level in the next report, likely leading to an overall drop in the Index,” said Redding.
Founded in 1959 with a gift of just over 200 acres of land and $6.5 million from the Ford Motor Company, University of Michigan-Dearborn is a metropolitan university serving southeastern Michigan, committed to excellence rooted in strong academics, innovative research and programming and civic engagement. The University has nearly 8,900 students pursuing more than 90 bachelor's, master’s, doctoral and professional degrees in liberal arts and sciences, engineering, business and education. A top-ranked university with a faculty devoted to teaching, and students committed to achievement, UM-Dearborn has been shaped by its history of partnering with local leaders and communities, and is committed to finding solutions for the challenges that face the region.