A southeast opinion of the West Michigan study

September 13, 2010
| By Pete Daly |
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Birgit Klohs of The Right Place Inc. says the new study on ways to improve Michigan’s statewide economic development organization isn’t “east versus west” — but “east” has its own opinions, some of which are in sync with “west” and some not.

“East” might be represented in this case by Doug Rothwell, president and CEO of Business Leaders for Michigan. Known as Detroit Renaissance until about a year ago, BLM is now an expanded organization with a broader focus that includes West Michigan CEOs, and it is working on a plan for returning Michigan to a competitive state that attracts investments and jobs.

Rothwell said he very much agrees with the study’s leading recommendation that a statewide organization is needed for effective economic development.

“We tried back in the early ’90s eliminating that function (at the state level) and it didn’t work out very well,” said Rothwell.

“What I would disagree with is the next recommendation — that there has to be a kind of massive reorganization of the MEDC,” he added.

The study states that the MEDC should be replaced with “a more focused business development organization” because “too many functions and programs diminish its ability to stay focused on the core mission.” Incentive evaluations, community development and Community Development Block Grant administration should be transferred to another agency, he said, “such as Florida did when it created the Governor’s Office of Tourism, Trade and Economic Development. This results in a logical split between product development and business development.”

Rothwell said he believes the MEDC needs those programs to help businesses, so that it can “deploy those resources in the ways that it sees fit. If you give those to another state agency, it becomes very difficult to access those resources when you need them.”

He also disagrees “a little bit” with the fourth recommendation, which calls for “a governance structure that permits the new EDO to maintain continuity in its strategic direction,” noting that “big boards are a hindrance.”

A smaller board than what MEDC has, with staggered teams of office, will ensure more continuity in strategy, according to the study. Rothwell said the board of the MEDC is “really not a policy-making board. It’s just a board of partners that formed the organization. There is an executive committee that has all the power, and the executive committee is only about 20 people.”

Rothwell said the problem, as noted in the study’s third recommendation, is that the MEDC executive committee has not been sufficiently insulated “from political influence in terms of the appointments, and in terms of the staffing of the organization.”

At times, he said, “outside interests have kind of influenced what direction the organization is supposed to go in.”

Rothwell agrees with the study in that the state’s incentives to spur economic development are “too complex and complicated. It does need to be streamlined.”

He also “definitely” is in agreement with the recommendation that the issues of existing business expansion and recruitment of new businesses into the state “need to be treated equally.”

“No doubt about it; I think there’s been too much focus on attraction over retention and expansion, recently,” he added.

“Overall, I think it’s a good report. I think there’s a lot in this to like,” said Rothwell.

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