Ask any person on the street, and they’ll probably tell you that the U.S. has the largest economy of any nation in the world. But there is much more uncertainty about how the country actually got there. Some students probably had grandparents who told them that Americans just work harder than people in other countries. The preachers on the Diag might be more inclined to tell you that God did it. But I’m partial toward the explanation offered by President Franklin Roosevelt, who credited America’s success to “that spark of creativity and ingenuity — which has always been at the heart of who we are and how we succeed.” And universities like this one are now at the center of the ingenuity my favorite president was talking about.

One of the most remarkable features of the U.S. is, to me, the country’s preeminence in innovation. If innovation were a pie, Americans would be eating much more than their fair shares. Of the roughly 800 Nobel Prizes awarded since 1901, more than 300 were awarded to Americans in areas including physics, chemistry and medicine. (The United Kingdom was the runner-up, with 114 at last count.) Although other nations have been gaining ground, the U.S. still holds a hefty lead in the number of patents it produces.

That the U.S., which comprises less than five percent of the world’s population, has produced over 35 percent of the world’s Nobel Prize Laureates is quite an achievement, to say the least. This imbalance in innovation can be partly explained by U.S. leads in another area: graduate schools and research universities. According to the Academic Ranking of World Universities, more than 30 of the top 40 universities in the world are in the U.S. With their prestige, research, facilities and highly esteemed programs, American research universities are very successful in attracting brainpower from within and outside of the U.S.

The role of this knowledge is more important now than ever. The modern world of invention looks a lot different from the world of Edison or Ford. In growing areas of the U.S. economy like medicine, energy and IT, it’s increasingly difficult for a single person to create breakthrough technologies in his or her backyard. Research universities, corporations and startups that employ university graduates fill a void by pouring billions into laboratories, computers and research projects. This results in new technologies, new products, new jobs and new value for beneficiaries. Among other things, this research contributes to genetic engineering of food to the drugs you take when you’re sick.

Although it’s not always entirely obvious, innovation is taking place behind the scenes at universities across the country, including here. And these innovations have real economic effects. A 2009 study of Michigan’s top three research universities found that the institutions generated a $16 economic benefit for every dollar invested by the state and produced an economic impact of $14.5 billion — large enough to support more than 48,000 full time employees. On top of that, they produced more than 480 inventions, 120 patents and 130 licenses during the past five years.

From the looks of it, at least some of these inventions are going to result in startup companies right in our own backyard. Just recently, the University announced the launch of the Michigan Venture Center, an organization that will pair faculty and researchers with entrepreneurs and investors to launch startups based around University research and inventions. In the past, the University has been involved in launching about nine startups per year, but the number is anticipated to increase to 12 with this new public-private partnership.

Research universities make good use of the limited money available for their research. But as a nation, the U.S. is tanking. The U.S. is now behind Europe and Asia in the number of degrees it awards in science and engineering, in both undergraduate and graduate programs. Although the U.S. continues to spend more on research and development than the Eurpean Union and other nations, the percent of GDP the government spends on R&D is much lower. Politicians don’t typically gain popularity by investing tax dollars in research, development and universities. But they ought to. Innovation matters, and it springs from research universities — not from thin air.

Brian Flaherty is an associate editorial page editor. He can be reached at blfa@umich.edu.

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