Sunday, June 10, 2007

Michigan's Economy: Time for Two Steps Forward

Earlier this week, Reuters reported that Michigan was the only state with a declining real GDP (gross domestic product) last year. A sadly unique position, but that isn't the whole story. The Free Press followed up with a more comprehensive assessment of our condition. And this is what we need, realism and hope together.

We took one step back; we are poised to take two steps forward.

From the Free Press article:

"Michigan ranked sixth among the 50 states in attracting highly educated workers." While we are seeing a reduction in manufacturing jobs, positions requiring higher education are increasing. Engineers are coming to Michigan. Let's not cut higher education funding, please.

"Michigan ranked 19th overall in the 2007 State New Economy Index, up from 34th in the 1999 version of the report and up from 22nd place in the 2002 index."
We are shifting to high-tech and knowledge-based enterprises.

Michigan "boasts a $376-billion-a-year economy, roughly the size of Sweden's, and remains a top 10 state in total output, exports and manufacturing, despite the elimination of one in four factory jobs since 1999."
In spite of shrinking manufacturing, we still have high output compared to other states.

"U-M alone has been spinning off an average of eight to 10 high-tech firms each year for the past five years, said Ken Nisbet, executive director of U-M's Tech Transfer office." Universities are doing their part to generate enterprises for the New Economy. As I said, cutting higher education funding--not a good choice right now.

Our unemployment rate is high. Our work force is shrinking. The number of businesses employing one to four people is growing and there is growth in high-tech. What does this all mean for our future? I'm not sure and neither are the professionals. As with any statistics, you'll find naysayers and optimists citing the same figures to make their cases.

Here's something true: time is not on our side. Our economy and morale cannot tolerate anymore state level budget crises. Our legislators must set aside partisanship, ideology, and electoral desires to work together on behalf of the entire state. They need to muster the same creativity and pragmatism of downsized workers starting small businesses in many of their districts. They need to think outside the hundred-year-old box of a manufacturing-based economy, and fast.