Just a few miles from downtown Ann Arbor, American bison roam near the M-14 entrance ramp, peacefully grazing in front of a sprawling office park.

These bison aren’t exactly wild. They live at the Domino’s Farms Petting Zoo. But the visual does encourage a certain notion of an urban city surrounded by frontier.

In many ways, Ann Arbor seems to be isolated. Sitting a comfortable 35-odd miles from Detroit, the city also enjoys some economic and geographic distance from the Motor City’s current woes.

At just below seven percent, Ann Arbor boasts one of the lowest unemployment rates in the state. In December 2008, the most recent regional statistics available from the Michigan Department of Energy, Labor and Economic Growth, the unemployment rate in Wayne County — where Detroit is located — was 11.7 percent. The unemployment rate in Oakland County, where much of metro Detroit’s upper crust reside, was 8.6 percent.

Washtenaw County’s rate was 6.9 percent, nearly four percentage points lower than the state average of 10.6 percent for the same month.

Last week, the DELEG announced that January’s statewide unemployment rate was 11.6 percent, the highest mark in 25 years.

While much of the Southeast Michigan region is married to the auto industry, the Ann Arbor economy is founded in generally dependable industries.

Seven of the city’s ten largest employers are in either the education or health care sector, according to statistics kept by to Ann Arbor SPARK, an organization that promotes economic development in the city. The city’s two top employers are far and away the University and the University Medical School, which employ approximately 16,000 and 12,000 people respectively, according to SPARK’s December data.

But as the country and the state sink deeper into recession, the notion of the “Ann Arbor bubble” has been put to the test. While the University and Health Care System may provide the city some stability, there is no escaping that Ann Arbor’s economy is both directly and indirectly linked to the economic health of the rest of the state.

AN IVORY TOWER'S PROTECTION

The University’s central role in the city’s prosperity is undeniable.

“I don’t think the University would be what it is without Ann Arbor, and I don’t think Ann Arbor would be the same without the University,” said Jesse Bernstein, president and CEO of the Ann Arbor Chamber of Commerce.

But when asked if the city was too dependent on the University, Bernstein answered with a confident “no.”

“There’s an automatic flow of commerce that’s been symbiotic and self-perpetuating,” he said.

The University functions in two key ways in the region’s economy. First, the University directly employs thousands and brings in a student population of more than 41,000 to the city.

The University provides a stable job base for the region, said Lou Glazer, president of Michigan Future, an Ann Arbor-based think tank that conducts research on Michigan’s transition to a knowledge-based economy. A knowledge-based economy is one that is centered on high-skill jobs like those in the technology sector rather than manufacturing.

“For Washtenaw County, it’s a huge employment safety net,” Glazer said.

But secondly — and perhaps more importantly, according to Glazer — universities generate spin-off industries, businesses and investments.

With this in mind, the University has recently formed new centers and partnerships with the city that are focused on encouraging offshoot start-ups, particularly in science and technology.

These organizations include MPowered Entrepreneurship, a joint venture between the Ross School of Business, the College of Engineering, which supports student entrepreneurs, and the University’s Office of Technology Transfer, which helps University faculty and students market their science and technology-related product ideas

According to a new national report released March 3 by the Land Policy Institute at Michigan State University, every new patent in a metro county leads on average to the creation of nearly 500 new jobs. In addition, it raises the county’s average income by approximately $3, said Yohannes Hailu, an associate director for land policy at the institute and co-author of the study.

If this statistic holds true for Ann Arbor, then University programs like the Tech Transfer Office could have a sizable impact in bolstering the city’s economy. In the 2008 fiscal year, the office had a hand in 13 new start-ups and 75 new patents, according to its annual report.

The key to Ann Arbor’s success isn’t solely the presence of a college because this reasoning fails to explain why Ann Arbor is seemingly more prosperous than its Michigan counterparts.