Like constructing a house to withstand the many tests of harsh weather conditions and time, a prosperous economy must have a strong, unyielding foundation. Since 2010, the primary focus has been putting Michigan’s 21st-century economic foundation in place.
Today, amid an intensifying public debate about the state’s economic policy direction, let’s consider the building blocks for a prosperous Michigan economy.
In the last four years, the goal at the Michigan Economic Development Corporation has been clear: create a business-friendly climate with low corporate taxes; attract private investment that yields jobs; strengthen communities; enhance the positive perception of Michigan; and, elevate the state as a dynamic environment for employers and jobseekers.
From Marquette to Grand Rapids to Kalamazoo to Detroit, there has been significant private investment from Michigan-based and foreign companies. Throughout the state, communities are economically stronger and more vibrant because of business development and community assistance grants.
In addition, the difficult, but necessary steps to install an emergency manager in the city of Detroit has transformed the finances and hopes of Detroiters, while the influx of capital, a new transit system and MEDC’s aggressive small-business initiatives have helped to transform the state’s most populated city into an entrepreneurial haven.
Meanwhile, the glowing perception of “Pure Michigan” as a place to live and play, is demonstrated in record-breaking number of tourists visiting the state, which translated into $18.7 billion in travel spending last year. In 2013, the highly successful Pure Michigan national campaign returned $4.50 to the state for every dollar spent.
While improving the image and perception of Michigan as exciting place to live and work, there has been an intense focus on creating greater possibilities for talented workers. In a short time, Michigan has become a magnet for high-skilled, high-tech employees in a region that boasts the most automotive research-and-development activity in the nation.
There’s plenty of other good news.
Nearly 300,000 jobs have been added since December 2010, including 120,000 new manufacturing jobs since 2009. Michigan’s GDP growth outpaced the national average last year. And, while unemployment is higher than anyone would like, the current rate of 7.3 percent is about half of the rate shortly after the end of the Great Recession.
Building Michigan’s 21st-century economic foundation is more than a shift of priorities; it’s a philosophy based on accountability and measurable impact.
Four years ago, Michigan implemented a historic shift in its economic development strategy by eliminating tax credits and expanding value-added services for businesses. In this past fiscal year, 33 percent of jobs created were facilitated through services provided by the MEDC. The result is the “cost per job” for economic development has decreased dramatically.
In addition, common sense reforms have led to replacement of the convoluted Michigan Business Tax, elimination of personal property tax, lower unemployment insurance and workers compensation costs, and cutting more than 1,500 business-related regulations. Among the encouraging signs is the state’s steady rise in best business climate rankings for U.S. states.
There are more encouraging signs ahead.
In the next month, a $50 million investment will be made available for community colleges to purchase equipment to train students for in-demand jobs. And, in the near future, significant progress will be made a passenger rail service proposal to expedite travel from Detroit to Chicago, the building of a new International Trade Crossing from Detroit to Windsor and hopefully a bi-partisan road financing plan.
A century ago, Michigan also faced a great economic challenge: How to build a 20th-century economy on back of the fledgling automotive industry. The infusion of capital, labor and a supportive state government transformed Michigan into a global manufacturing leader.
Today’s economic challenges require the same type of long-term vision and private-public collaboration.
Prosperity doesn’t happen by chance.