Focus, Economic Development, and Sustainability

Water, water everywhere

Report calls for Michigan to become a global freshwater innovation center.

April 17, 2015
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More than one in five jobs in Michigan already are linked to water. Researchers say Lake Michigan, shown here at the Frankfort breakwater lighthouse, offers many more economic development opportunities in nontraditional ways. ©Thinkstock.com

A new report released earlier this month, Michigan’s Blue Economy, highlights several ways the state is already a leader in the area of water-related businesses, university research and placemaking, while also laying out a path to turn Michigan into a freshwater innovation center on a national and global level.

The report is the result of more than a year’s worth of inventorying the state’s current “blue economy” by the Michigan Economic Center at Prima Civitas — a nonprofit economic and community development organization that works to improve Michigan by connecting, convening, collaborating and adding expert capacity to projects that support Michigan's economic growth — and Grand Valley State University’s Annis Water Resources Institute.

“More than one in five Michigan jobs are already linked to water, and given Michigan's unique natural water and water innovation assets, we can be the world's center of water work and seize more than our share of growing global water solutions business and related jobs,” said John Austin, lead author of the report.

The report highlights traditional water uses in the state and emerging value opportunities the state has begun to take advantage of. Traditional ways the Great Lakes have mattered to Michigan’s economy have revolved around industries’ use of the water to operate — for example, using water for transportation of goods and in the daily operations of two of the state’s most important industry sectors: agriculture and manufacturing.

Today, Michigan’s water transportation industry contributes more than 65,000 jobs and $3 billion annually to the economy. In 2010, it was estimated that 660,000 jobs and $49 billion in annual wages in Michigan were linked to large-scale, water-dependent farming, manufacturing, mining and energy production sectors.

A more recent report by Anderson Economic Group found the size of Michigan’s water-enabled sector, including big water users in agriculture, manufacturing and mining, at 581,000 employees, putting Michigan eighthin the nation in its share of water-enabled employment.

While water remains valuable in those traditional ways, the state is starting to see a broader value for Michigan’s water resources in the form of placemaking, water research and emerging water technology — with which, Austin said, state and local governments, philanthropic organizations and businesses should be aligning their resources.

According to the report, emerging water growth sectors, which include water technology product and service firms, already account for 138,000 jobs in the state. Michigan has seen more than 175,000 jobs and $12.5 billion annually, thanks to water placemaking efforts that include water cleanup and waterfront development. In addition, research universities have conducted $300 million worth of water research over recent years, and water conservation organizations have employed 2,700 people and contributed $80 million to incomes.

The report highlights many of the efforts already underway in these emerging areas, including many in West Michigan.

For example, Muskegonhas entered into a public-private planning process to expand its deep-water port facility — the only deep-water port on Lake Michigan — for commercial use and to redevelop significant parcels surrounding the port.

West Michigan companies such as Whirlpool, Steelcase and Moore and Bruggink are all contributing to Michigan’s blue economy in unique ways focused on technologies that help reduce water usage and increase efficiency.

Whirlpool continues to develop hyper-water-efficient appliances. Steelcase is reducing its water use globally in its own operations and among its customers and suppliers. Moore and Bruggink is a construction and engineering firm specializing in water and water treatment. It re-engineered a wastewater treatment facility in Greenville to incorporate anaerobic digesters, making power and heat for buildings and reducing costs and energy consumption by 34 percent.

The city of Grand Rapids began its efforts to reconnect its residents with the Grand River through increased public access more than 20 years ago through its Voices and Visions plan and is now embarking on a plan to restore the river’s rapids and turn the Grand River into the city’s star asset.

“Grand Rapids Whitewater, a nonprofit, commissioned a report estimating an expanded recreational use of the river and riverfront will stimulate net new economic impact of $15.9 million to $19.1 million per year. Tourism generated from kayaking, fishing, rafting and other forms of water and riverfront recreation would comprise new visitor spending and new earnings for the city,” the Blue Economy report said.

These stories and many others have helped Michigan realize that water can be an even bigger economic driver than it already is.

By taking inventory of all of the ways Michigan is already taking advantage of its greatest natural resource, Austin and his colleagues put together a list of action items, which could be implemented to further maximize water’s value in Michigan.

The nine recommendations are:

1. Create a business-led “Blue Economy Council” to forge public-private partnerships bringing companies and researchers together to solve thorny water treatment and new technology development issues, and spur new business lines and companies.

2. Create a new state Office of Water Innovation to re-fashion water use, regulatory standards and financing tools to encourage new sustainable water technology deployment and business growth.

3. Organize a Pure Michigan Water Technology Innovation fund: a catalyst organization to commercialize new water product and services, and develop new firms.

4. Market Michigan as the Center of Water Education and Research Center of Excellence, and expand its footprint.

5. Develop World's Freshwater Innovation Center in Detroit, where Michigan’s leading research universities, corporations and philanthropies would focus on water research, innovation and commercialization of new ideas and technologies.

6. Create blue economy compacts challenging communities and regions to organize around their Blue Economy as a priority economic development opportunity.

7. Put blue economy building at the core of Michigan's state, regional and community placemaking and economic development strategy.

8. Create a blue economy "prize" for innovative community water and blue economy development strategies.

9. Extend and make more flexible the Natural Resources Trust Fund to support blue economy building.

The next step in the blue economy project is to begin implementing the recommendations.

Austin said he and his colleagues have already begun conversations with stakeholders from all sectors, government, private business owners and entrepreneurs, philanthropic groups and educational institutions on doing just that.

“If you look at the next steps, we are already engaged in pretty active dialogue with all of the stakeholders,” he said. “That’s what we are going to be focusing on.”

He noted consultations with the business community specifically helped in the development of several of the recommendations.

“When you look at the recommendations around public-private partnerships to focus on developing new technologies, that is one the business community, including leading actors like Dow, Whirlpool and Fred Keller at Cascade Engineering, are very keen on,” Austin explained.

He said the business community was very interested in the idea of creating an accelerator or catalyst organization that would help finance startups coming out of the research institutions.

“Some of our greatest assets are our research universities, including Grand Valley State University and University of Michigan,” Austin explained. “If you look in the higher education section, you see all these interesting technologies that are being developed in universities as well as new business opportunities.”

He said businesses would like to see stronger paths to commercialization for these innovations.

With implementation of all nine of its recommendations, Austin said Michigan could be the “center of freshwater innovation” globally.

“Already there is tremendous economic development, value and new business opportunities in these emerging products and services that are linked with taking better care of the water, water efficiency and cleaning,” Austin said. “There is a huge growth worldwide for these emerging water technologies, products and services of all sorts, and this is a huge sweet spot for Michigan already.”

To read the full report, visit michiganblueeconomy.org.

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