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Posted on Wed, May 12, 2010 : 6 a.m.

State business leaders discuss role of state government in economic development

By Dave Gershman

Doug Rothwell delivered a sobering description of Michigan’s business climate to a crowd of financiers and deal-makers Tuesday evening.

The state is not just competitive by any measure. Period, he said.

“Our educational system, our tax system, our infrastructure and frankly, the attitude of the state - not state government - but the state as a whole is not competitive relative to the places we are competing against for jobs and investment,” said Rothwell, president and CEO of Business Leaders for Michigan.

Rothwell was a member of a panel that addressed the annual meeting of the Michigan Growth Capital Symposium on the role of state government in encouraging economic development. The meeting was held at the Ann Arbor Marriott Ypsilanti hotel.

He defended the work of the Michigan Economic Development Corporation, which came under fire after a $9.1 million business tax credit was announced for a company owned by a convicted embezzler. No money was handed out. Rothwell said the MEDC needs to be strong for Michigan to compete, but it can’t do the job alone.

Greg Main, CEO of the MEDC, said the state is trying to encourage the diversification of the economy. He said it has invested $500 million to support venture capital and early stage funding for companies. He defended the state's MEGA tax credits, saying the state doesn't pick winners and losers, but makes them available for a wide range of companies looking to grow in Michigan.

Rothwell’s group, which includes the CEOs of the state’s largest companies and universities, is running advertisements promoting its Michigan Turnaround Plan, which was released in January. It calls for tightening state spending; reducing state employee pay and work force levels; changing the tax structure; consolidating school districts and retaining tough graduation standards; and encouraging entrepreneurship, among other items.

He said the state’s fractured environment - including political, racial and labor divisions - ended up discouraging Volkswagen from opening a new manufacturing facility here in 2007, despite generous state incentives. He challenged audience members to change that culture.

Another panelist, Jeff Mason, director of the University Research Corridor, a collaboration of Michigan State University, the University of Michigan, and Wayne State University to get academia to boost the state's economy, provided another example of the region's difficulties. He said the city of Denver invested in and built mass transit while southeastern Michigan is still talking about it.

Phil Power, founder and president of The Center for Michigan, which he called a “think and do tank,” said the center just released a report based on community conversations with 10,000 citizens. Its top points include streamlining regulations, promoting alternative energy and green economy jobs, investing in mass transit, and focusing on small business.

“Our focus is to catalyze the policy environment in Michigan,” said Power.

Power did provide a piece of encouragement. Places rife with economic dislocation, as Power put it, offer good opportunities to make money. Michigan is such a place.



Wed, May 12, 2010 : 11:34 a.m.

During the depression of 79-81, we heard about all this talk about diversification. 30 years later we are talking the same thing. This time, however, our industrial infrastructure is in China, our politicians are even more worthless, and we have fallen from 15th in wages to 40th. We as a state are now competing with Alabama, Arkansas, Mississipi instead of California, New York and Texas. Hence the resources we had to move up have also been eroded.

Jeff Westbrooks

Wed, May 12, 2010 : 11:03 a.m.

If you want them hiring in Michigan again you have to look to the future not blast the past. Make Michigan Carbon Free by 2023!


Wed, May 12, 2010 : 10:30 a.m.

If Michigan were a one party state with no unions or human rights where welders in Ford factories get 88 cents an hour, anotherwords, more like CHINA then maybe businesses would invest in Michigan again.

Me Next

Wed, May 12, 2010 : 9:01 a.m.

The reason Volkswagen's name is still around is because they build a good product that is affordable, durable, & sells. Business does not care about politics, racial, nor labor divisions. They care that there are trainable potential employees close enough that will leave their individual lifestyles at the gate & do the job they are paid for - safely & efficiently. "...change that culture" not only is social engineering attempt but an attempted intrusion of GOD given Rights of Life, Liberty, & the pursuit of happiness. If Volkswagen has gotten into social engineering business, it's days are numbered. I don't believe the insinuation. We have to face the fact that " economy jobs" come after Scientific Research of the pros & cons. Right now, I have not found cost-benefit evidence of a market for products or services that are cost efficient or relatively "safer".