LANSING — While strides have been made in recent months to right Michigan’s economic ship and state business leaders are seeing a glimmer of hope for a stronger economy, Michigan’s competitiveness position vis-à-vis other states will continue to require work. That’s the message of the 2011 Economic Competitiveness Benchmarking Report conducted by Business Leaders for Michigan (BLM).
Findings of the study were unveiled today before a gathering of more than 300 Michigan business, civic and community leaders convened in Lansing for a half-day session specifically focused on Michigan’s position relative to key economic benchmarks. Nationally recognized experts and local business executives provided context on the measurements and insight on the steps Michigan needs to take to propel its economy forward.
The annual report offers a robust assessment of Michigan’s economic position relative to other states and nations, and is used by BLM to prepare and update its Michigan Turnaround Plan. The Michigan Turnaround Plan contains strategies aimed at making Michigan a top ten state for economic growth and job creation.
“Our benchmarking data shows that Michigan is starting to recover from our decade-long and deep recession, but we have a long way to go to reach our goal of being a Top Ten state for job and economic growth,” said Doug Rothwell, president & CEO of l, president & CEO of Business Lrts and local business executivesphy. I should handle the lead-in as to why these are on the agBLM. “Benchmarking shows how we compare to our peers based on actions taken in the past. This year’s report doesn’t reflect recently enacted state tax and regulatory reforms or changes being made to grow entrepreneurism and improve Michigan’s position in the future. The report is evidence that Michigan’s turnaround will take years of hard work and we need to build on recent state progress.”
The 2011 Benchmarking Report shows:
- Michigan’s economic performance has started to show modest improvement in GDP and per capita income growth, but the long-term trend of growing less than the national average continues.
- The cost of doing business in Michigan continues to remain higher than the national average, driven by corporate taxes and labor costs. These costs exacerbate Michigan’s relatively weak rankings on economic development efforts, regulatory environment and infrastructure. (Note: The benchmarking data does not reflect recently enacted state tax reforms which are expected to significantly improve Michigan’s rankings in the future.)
- Michigan’s innovation and entrepreneurial environment has strong assets that continue to be underleveraged compared to new economy peers, but the number of high growth companies and overall level of venture capital is relatively low.
- Michigan has strong quality of life assets, yet negative attributes— below average K-12 student test scores, a relatively high crime rate in some major Michigan cities and negative image — detract.
“Michigan has tremendous potential. Site Selection Magazine consistently ranks Michigan as a top ten state for corporate plant investments. Michigan’s university system ranks second in the country in total federal R&D expenditures. And in 2010, Wayne County EDGE in Wayne County ranked as a top ten performing economic development organization, based on jobs and capital investment created in its service area,” said Ron Starner, General Manager of Site Selection Magazine and Conway Data, Inc. “Couple these types of accomplishments with additional reforms, effective marketing strategies and a collaborative regional approach to economic development, and you have a compelling case for locating businesses in Michigan.”
The benchmarking report reaffirmed the core elements included in the Michigan Turnaround Plan, BLM’s definitive approach to improving the state’s economic climate and attracting new business growth.
“The Governor and Legislature have already acted to address many key elements of the Michigan Turnaround Plan, including fiscal, tax and budget reforms,” said BLM board chair David Joos. “But a turnaround doesn’t happen overnight, so we need to remain vigilant and build on this recent success by continuing these reforms. Concurrently, we need to move forward on other aspects of the Plan that would prioritize investments in higher education and infrastructure and begin building the foundation of the New Michigan.”
The 2011 Benchmarking Report was prepared by BLM with assistance from McKinsey & Company, a global management consulting firm that is an advisor to the world’s leading corporations, governments and institutions; and the Anderson Economic Group, a research and consulting firm with expertise in economics, public policy, finance and industry analysis. The report was prepared using the latest information available for each metric. The full report is available at http://www.businessleadersformichigan.com/research-and-reports.