Michigan makes progress but needs to accelerate the pace to keep up with competitors, according to new Business Leaders for Michigan Top 10 Benchmarking

December 12, 2022
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DETROIT— Business Leaders for Michigan today released its updated benchmarking report comparing Michigan’s performance against the Top 10 states. In a landscape where many states showed considerable growth in the last few years, Michigan grew more slowly, and it was not enough to maintain its position or move up in the ranks.

Business Leaders’ benchmark metrics are designed to provide a holistic view of how well all Michiganders are succeeding by measuring GDP per capita, median household income, business climate perception, education, labor force participation, net migration, poverty and business creation.

Based on these indicators, Michigan showed improvement in per capita GDP (up 1 rank), median household income (up 1 rank), poverty (up 1), and labor force participation (up 2 ranks). However, other states grew faster, causing the state to slip from 29 to 31 nationally. This still is a significant improvement from the state’s position in 2009, when it was ranked 49. Many states experienced substantial shifts in rankings this past year, with Idaho, Tennessee and New Hampshire ascending into the Top 10 and Ohio jumping 10 spots to 23rd nationally, leapfrogging Michigan.

“We’ve seen significant progress in Michigan’s rankings over the last decade, but as these numbers show, our competitors aren’t waiting for Michigan to catch up,” said Jeff Donofrio, Business Leaders for Michigan president and CEO. “While Michigan improved in most individual metrics year over year, other states are growing faster and if we don’t act now, they will leave us in the dust. Michigan’s recent catalytic investments in economic development, talent and education haven’t been in place long enough for us to feel their full impact. We need to keep our foot on the pedal and continue our work to help Michiganders compete and win.”

The benchmarking allows the public and leaders to see how Michigan stacks up to other states and how to make Michigan’s people, businesses and communities more competitive and successful.

Where Michigan stands

Top 10 states

1 Most-recent education data is from 2019
2 Top 10 is calculated using a composite of absolute ranking and growth rank

Tennessee, which was ranked 34th just six years ago, reached the Top 10 for the first time in large part due to its decades-long investment in economic development and focus on overhauling its kindergarten through career education system.  In addition, Tennessee and Idaho both attracted a large number of tech workers to their states who could work remotely. Ohio, which was ranked 33rd just a year ago, makes it easy for companies to do business in the state. It experienced major growth in business creation and labor force participation and consistently has ranked in the Top 10 for business climate.

“Michigan has made historic investments in the past year to make our state more competitive, and we must continue to stay focused on what it will take to become a Top 10 state,” said Howard Ungerleider, Dow President and CFO and chairman of Business Leaders for Michigan. “It is critical that we continue to have a consistent and long-term strategy – with bipartisan support from our policymakers – that improves economic development, K-12 education, post-secondary education and training, and the overall business climate.”

Business Leaders for Michigan released its “Compete to Win: Michigan’s Path to Top 10,” plan in May that outlined a strategy for Michigan to join the Top 10. The research and data-driven recommendations in “Compete to Win” focus on four priority areas: doing better by our kids, investing in people, accelerating our economy and getting the fundamentals right.

In the last year, Gov. Gretchen Whitmer and the legislature moved many of the bipartisan Compete to Win recommendations forward, including:

  • Accelerating job creation: by establishing and funding the Strategic Outreach and Attraction Reserve (SOAR), investing in economic and site development, and business retention and attraction in Michigan.
  • Strengthening the fundamentals: by improving Michigan’s infrastructure, with investments in roads, bridges, rail, water and broadband.
  • Investing in our kids: by providing equitable funding for K-12 and financial aid and helping bring more teachers and funding into the classroom.
  • Creating a more agile and skilled workforce: by helping more Michiganders obtain a post-secondary credential and working to make college more affordable.

“While global disruptions and economic uncertainty continue to create obstacles, they are also creating pathways to new and greater opportunity,” Donofrio said. “With strong leadership, clear goals and strategic investments, Michigan can be poised to outpace its competitors and provide widely shared prosperity for decades to come.”

About Business Leaders for Michigan:

Business Leaders for Michigan, the state’s business roundtable, is dedicated to making Michigan a Top 10 state for jobs, education, widely shared prosperity and a healthy economy. The organization is composed exclusively of the executive leaders of Michigan’s largest companies and universities. Our members drive 40% of the state’s economy, employ more than 540,000 people in Michigan, generate over $1 trillion in annual revenue and serve more than half of all Michigan public university students.  Find out more at www.businessleadersformichigan.com.

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