It’s relatively easy to point to the challenges of growing a business in Michigan. I will touch on some areas of concern that we have, but I will focus on what we as business leaders can do to create the environment that we need to succeed. 

At SRT Solutions, our single biggest challenge is adding young talent to our growing company. The challenges of finding the right talent, attracting it, and then keeping are significant. There are fewer graduates coming out of our universities with relevant degrees for a software business. Those graduates are being actively recruited by larger firms outside of the state. 

In addition to selling our own company, we have to convince potential employees that a future in Michigan will turn out better than advertised. It’s difficult to overcome the national perception of Michigan’s economic woes.

Our other major challenge is working with public policy. Software is not one of the targeted growth sectors for the state of Michigan - the growth sectors are ,advanced manufacturing, alternative energy, homeland security, and life sciences. While software contributes significantly to each of these industries, software businesses don’t have a seat at the table when it comes to public policy.  Some of this is historical. Our state leaders don’t seem to understand a business whose assets are not physical assets, but rather purely intellectual assets.

The final challenge is understanding the markets we serve. We don’t write software for software developers; we write software for businesses in other sectors. We’re not domain experts in these other areas; we need to communicate with leaders in these fields to understand their challenges.

So, let’s move beyond the challenges and get to what we can do about it.

First of all, Michigan needs to move beyond simply looking for huge successes to replace the lost jobs.  We need to promote the large number of smaller successes. There are several small to medium size software firms that are growing in and around the Ann Arbor region. Publicizing these successful companies will do much to improve the image of the region. 

As a job seeker, most professionals will look at the health of the overall job market in a region rather than just a single company. Knowing that there are several growing software companies makes it easier to attract young talent to the area. Silicon Valley startups are not considered risky for employees because if your first startup fails, there are hundreds of others you could join. We need to publicize the number of opportunities in our region more effectively than we have been. It will paint a more accurate picture of the number of opportunities available to job applicants in our area.

Second, we need to provide better access to growth programs in all sectors of the 21^st century economy. It’s a failure of public policy to exclude software companies from programs like the 21^st century jobs fund. 

Unfortunately, this policy has created a ripple effect: other programs are following the lead of this program and also excluding software companies not targeting the four sectors chosen by the state.  This exclusion affects our economy well outside of software: business leaders in all excluded sectors are affected. That minimizes the real diversification of our economy. With so few target sectors, it’s more of a shift than a true diversification.

Third, we need to make education a priority. At a minimum, a bachelor’s degree will be required for any job in a software company. Not all positions will require computer science degrees, so we need to ensure that education funding creates a rich talent pool with business skills, artistic design skills, music skills, and more. The rich user experience expected for newer software requires a talent pool with great breadth as well as depth. Again, this priority will help all sectors: people with knowledge outside of their own sector will be better equipped for broader leadership roles in any company, not just software companies.

Finally, we need our business leaders to work better cross - sector. We’ve learned quite a bit about running a business by talking to lawyers, bankers, management professionals, accountants, and others. IT leaders can help de-mystify our sector for business leaders who need software. That’s going to take more cross-sector events that help leaders in different sectors work together.

Clearly taking this on requires action on our part. Traditional business development organizations in our state have been firmly rooted in the 20^th century economy.  

If the traditional business organizations, such as the Chamber of Commerce, MEDC, and other public policy organizations don’t share the goals of future-oriented startups, we have a few choices.  We can either work to change those organizations, or agree that they have a place in the economy but that we need our own organizations that are more closely aligned with our goals.  

Newer business organizations in our area dedicated to forward-looking businesses include Ann Arbor Young Professionals, a2geeks, and countless technology user groups. We need to leverage the numbers in these organizations to engage with our elected officials, as well as to promote our region with 21^st century objectives in mind. 

When we have shown enough business leaders share an alternative vision of policy, we can better influence our state leaders. In the meantime, we need to engage with our elected officials as business leaders, and continue to have our voice heard on public policy issues.

Bill Wagner is co-founder of SRT Solutions in Ann Arbor and a software blogger. He shares this regular column with co-founder Diane Marsh.