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There’s no single solution that will turnaround Michigan

Monday, Nov 21, 2011
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When you’re down, you often look for role models to inspire your growth or a simple way to fix whatever is holding you back.  In Michigan’s case, this has meant searching for the “ideal state” we can emulate or a “silver bullet” policy prescription we can adopt in an attempt to improve our economy. 

When searching for role model states, some point to Indiana because it’s a bordering state that has grown at a better rate than we have for years.  Others point to North Carolina or Texas as states that have diversified their economies and have been consistently ranked as some of the best states for business. Some even say we should aspire to be like California because they have Silicon Valley! 

The latest role model being suggested is Minnesota.  Why?  Because Minnesota has a higher per capita income than Michigan and it’s a “mid-west” state.  But comparing Michigan to Minnesota demonstrates the difficulty of comparing us to any other state.  Minnesota’s population is half our size and about one-third less diverse.  In Minnesota, one city drives over half its economy, versus Michigan’s more diverse economic geography.  But what’s more significant is that since 2002, Minnesota’s per capita income and employment rates have been falling.  In fact employment growth has ranked 39th worst since 2002 according to non-partisan think-tank Minnesota 2020. 

Similarly, Michigan has often searched for the “silver bullet” that would grow jobs.  For years we tried a number of different tactics to spur growth such as targeting certain industries or diversifying away from manufacturing.  We tried building big projects with the thinking that more development will naturally follow the anchor investment.  We’ve even tried eliminating taxes entirely in places to jump start growth.   Recent theories suggest the best way to grow Michigan’s economy would either be to just increase the number of college graduates or invest more money in community amenities, like parks, transit, cultural centers, etc. to make them more attractive places to live and work. 

All of these ideas can be part of a well-rounded economic growth strategy.  But Michigan runs the risk of delaying real economic progress if we look at them as stand-alone solutions.

The truth is there is no one state we can emulate or one solution we can adopt that is going to lead to sustainable growth.  In practice, the places that offer the best value for the money are the ones that grow the most.  Like a customer shopping for a product, businesses both large and small generally select locations that offer a wealth of amenities for a reasonable cost.  It’s the reason why Ford sells more cars than Porsche.  It’s a better value proposition. 

That means Michigan has to have competitive costs, reasonable regulations, functional government, excellent service, a strong infrastructure, nice communities and lots of amenities – not one more than the other.  Business Leaders for Michigan developed the Michigan Turnaround Plan because Michigan needs a holistic strategy to get back to being a Top Ten state again for job, economic and personal income growth. 

So rather than look to one state for the answers let’s focus on getting as competitive as we can in today’s global economy.  Rather than focusing on one dimensional policy solutions, let’s recognize we need to work on multiple fronts concurrently to grow our economy.   But perhaps most importantly, let’s focus on growing a new Michigan that builds on our competitive assets and unique strengths and doesn’t try to copy some other place. 

Michigan’s economy began turning around this year because we have begun to follow a uniquely Michigan path to economic success.  Unlike other states, we are improving the business climate without pitting one group against the other.  We are recognizing that our automotive and manufacturing sectors not only distinguish us, but are keys to our long-term success.  And we’re taking pride in what defines us – a state, like the commercial says, “that has been to hell and back” but embodies grit, determination and stamina. 

Michigan doesn’t need to be like some other state or search for the next silver bullet to grow again.  We need to be who we are – a state that works hard doing some things extraordinarily well and offers good value for the money.

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