Opinion and Guest Column

A four-pronged approach to economic well-being in Michigan

June 16, 2017
| By Lou Glazer |
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It was an honor to serve as a member of Gov. Rick Snyder’s Building the 21st Century Economy Commission. Its report is really worth reading. Thanks in large part to the leadership of Detroit Regional Chamber CEO Sandy Baruah, the commission chair, and terrific staffing by PwC, the report provides a visionary roadmap of what Michigan needs most to do to be economically successful 20 years from now and beyond.

Start with its goal of prosperity for all. Don’t assume that some combination of a low unemployment rate, a growing gross state product and being business friendly will lead to economic well-being of all Michigan households.

To achieve that goal, the report identifies four state policy levers that matter most:

Talent: The state with the best talent wins the 21st century

Educational attainment is the greatest predictor of state and individual economic growth. Michigan currently ranks 34th in per-capita bachelor’s degrees, and our attainment in primary and secondary school is similarly concerning. Michigan’s decline in educational attainment has been matched by its decline in per-capita income.

In a future typified by economic uncertainty, having a large pool of skilled, educated, creative and connected individuals is the best recipe for success — a recipe Michigan must pursue to attract and grow businesses.

Infrastructure: Serious investment in our public goods is overdue

Economies require strong infrastructure, and the condition of Michigan’s physical and digital infrastructure is not world class. In a global economy, we need to connect Michigan’s businesses, individuals and institutions to key markets, including urban mega-cities, developing world markets and the rest of the state. If not, physical industries like agriculture and manufacturing, as well as digital-based ones cannot grow. They, and all other industries, will require rail, air, water, road and digital connectivity capacity and quality.

Investment from the 1920s to 1960 served the state well through the 20th century, paying a dividend to the economy later. But neglect since then has taken its toll, and our economy today is paying the price for that deficit — creating a $4-billion annual gap that we must close.

Business climate: Consistent, efficient and customer centric

Business climate rarely is the sole deciding factor in the health of a regional economy, but it is important to both existing and new businesses because it functions as an important signal of the region’s goals and intentions. Creating a user-friendly, supportive, consistent business climate that aligns with our values helps to reinforce the value of doing business in our state and to deliver additional growth.

Quality of life: A necessity, not a luxury, in the 21st century

Demographic projections for Michigan show continued out-migration of residents and increasing importance of international migration. Michigan’s population is lagging behind the national trends in the United States — a damaging direction for an economy. Improving quality of life is one of only a few available levers to reverse this trend.

Michigan has some direct quality of life challenges — both perceived and real — to overcome. Many outside the state perceive its drinking water as unsafe, its major urban centers as dangerous or derelict, and have little sense of the rest of the state at all. Our major urban center, while rebounding, is not one of the largest in the United States or globally, and risks being left behind if growth continues to cluster into the largest mega-cities. If we do not reverse these perceptions and issues, we cannot build the population and business base needed for future success.

Equally important is what the report does not recommend. No path to returning to the high-wage, low-education-attainment economy that made Michigan one of the most prosperous places on the planet for most of the 20th century. No picking industries of the future that someone believes are the key to future economic success. No call for tax cuts or reduced government spending.

All of the above have way too often been the strategies proposed here and around the country. They haven’t moved Michigan toward prosperity for all in the past and, almost certainly, won’t in the future.

In his transmission letter, Baruah sums up the commission’s bottom line: “To accomplish this, Michigan will need to take a different approach to investment in public goods — ‘the commons’ — than we have for the last generation.”

Exactly! Hopefully, this report will change the nature of the debate in Lansing. Both parties offer competing ideas on “a different approach to investment in public goods than we have for the last generation.” Maybe then we can get on a path to returning Michigan to prosperity for all.

Lou Glazer is president of Michigan Future Inc. 

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