Doug Rothwell: Michigan economy is no longer the last but must improve


Where is Michigan today as you move from business leaders to Michigan?

Better. We’ve come so far from where we were a decade ago, while we were practically the last at every bar. But if you look at where we are today, despite COVID, most of the data points to us being above average performing, which is a tremendous comeback.

But our goal is to be in the top 10 states, so we can’t be happy with where we are at. And there is still a lot of work to be done to get to the top of the pack.

When you consider the magnitude of the changes you have influenced, what is at the top of this list?

What I’m most proud of are the two organizations I helped create, the Michigan Economic Development Corporation and Business Leaders for Michigan. I say this because these organizations have stood the test of time. MEDC is entering its third decade and BLM has been in existence for over a decade. They provide a platform for people to do a good job and grow the economy of the state. The fact that they have lasted as long as they have across different administrations, different business leaders, different political environments makes me feel pretty good that these are sustainable organizations… that will stand in the future.

What resonates with each of them that makes you say this?

The commitment to do better. When I first arrived in Michigan one of the things I didn’t think we did very well was measure how we were doing. We typically measure our progress by how Michigan has performed over the past year or the past 10 years relative to our performance against those we compete with. It’s a different bar.

What Concerns You About Michigan After COVID is Over?

We change our minds too much about the political goals we are trying to achieve. You can identify virtually any area and you will find it in Michigan.

Our education policy goals change every two years, our economic development policy goals change, what we think is good in terms of infrastructure investment changes. This is a real problem. We compete with the best in the world. These places usually have very cohesive efforts going on that they pursue for the long haul. For example, Massachusetts has had an educational reform program for about 20 years. The most aggressive developing states are those in the south that have been investing in economic growth for decades. Every time we decide to zigzag in a different direction, we just hurt ourselves.

When COVID exited, the most fundamental issues we have in Michigan haven’t changed: education, infrastructure, and economic diversification. But we haven’t always pursued these three goals consistently enough to see the kind of outcome we need to see.

Is this an argument against term limits for the Michigan legislature?

This is part of it. Part of it is also that we didn’t have to think long term like other places did. Until the last two decades, Michigan was one of the most powerful states in the country. We invented the middle class, we invented the mass assembly of vehicles and products, and all of these Fortune 100 companies were headquartered here. Michigan was a prosperous and prosperous state.

We are a different state today. We have to choose our priorities a little more selectively and we have to stick to them.

Are there enough influential voices in agreement to be able to make these decisions?

It’s probably more difficult now than it has been just because of the political environment. It was one of the most divisive moments I have seen. The 60s and 70s were also difficult times. It was easier for us in Michigan to be on the same page when we were 50 out of 50. When you’re desperate people know you have to work together.

Aside from COVID, the state of Michigan is not in crisis. We are so much better than we were. This doesn’t mean that if you don’t set your priorities, you will achieve your goals.

Michigan has spent years as a divided state, east against west. How do you describe the geographic tension at the moment?

It’s much better than before. The east-west tension 10 years ago was much worse. The Detroit bankruptcy was a good test. There was strong support on the West Side to take the necessary steps to put Detroit back into good financial health. I would like to think that [BLM] was one of them. The same is true on the east side, where people have been exposed to the Grand Rapids rebound and West Michigan success.

There will always be regional divisions because there are different needs across the state. I don’t think it divides as much as it was 10 years ago.

When you consider how the business community finances the Republican legislative agenda, are the deputies satisfied with what is happening? And what does this tell us about how business leaders invest in our state?

Businesses as a whole are not as politically involved as you describe. … There are a lot of business leaders who certainly follow politics and the like, but that doesn’t mean they’re financially invested. I think it’s a smaller group than businesses in general.

Businesses want certainty. … [Owners] care about consistency, certainty and policies because they make financial decisions that have consequences for years to come. There were a lot of things that happened under the Republican administrations that they loved. For example, putting the federal corporate tax structure in a more competitive place was a good thing. Same thing in Michigan: the elimination of the Michigan Business Tax and the introduction of the corporate income tax have been a big problem for the competitiveness of the state. Sensitivity to regulations that are not overbearing and that are appropriate are things the business world will always care about.

At the same time, the things that will be essential for Michigan to move forward are coming from business. A better education system. An affordable higher education system. We need workforce development and training for our employees. These are things you hear a bit more from the Democratic side (but the companies are backing them).

My feeling is that it’s a bit of a stretch to say that business is on par with Republicans on everything.

How did Michigan manage to diversify its auto economy?

I think we’ve done well, in part because the auto industry has changed so much… It brings technology and other investments. … There has also been a growth in entrepreneurship over the last ten or twenty years, which has also helped to diversify the economy. Technology has allowed businesses to be in different places than in the past. Michigan is now on the radar screen of many companies (due to our strong engineering talent) that are not in the “automotive” space.

At the same time, I would say this is an area where Michigan’s inconsistent consistency comes into play. Twenty years ago we tried to establish a corridor for the life sciences and we stayed there for a few years. , then we tried a technology tri-corridor, with the money split between life sciences, computing, and advanced manufacturing. until the critical mass is not sufficient for any area.

Now, for example, we are trying to advance the mobility sector, but it will take an effort of 10 or 20 years. Michigan did not do that. We did not stick to things to see the fruits of our labor.

Is mobility a guardian?

Not only should we stick to mobility, but we also need to look at a few other areas that could benefit from a more forward-looking policy. We are a peninsula state. Logistics for us will be more important than in average condition. The investments that we could make in certain infrastructures would allow us to play a more important role in the logistics space. Yet we have not been able to end Detroit Freight Terminal, or invest in port facilities as we should and Aerotropolis (near Detroit Metro Airport) was stop and go.

The whole world seems to be chasing mobility. What is our distinctive piece for this?

We are the only place that brings together R&D, technology talent base and manufacturing base in one place. California still can’t say that, Texas can’t say that, South Carolina can’t say that.

But it does mean we need to double down on some areas. Let’s talk about the talent base. Do we really have the curricula in our colleges and community colleges to the extent that we should meet the needs of this mobility sector now and in the future? My guess is probably not. Do we have the infrastructure in place to be able to support the launch of these new products on the road? Probably not.

There are things we can do. This does not guarantee success. But we can lay the groundwork to ensure support. It will not be enough for us to have individual businesses to do this. It also has to be the state.

What are you most worried about right now?

Stay hungry. The thing I watch the most about Michigan is population growth and personal income growth. Both are lagging behind. The places in America where incomes increase most generally are those where the population is also increasing.

We can’t change Michigan’s climate…. But what we can change is do a better job of leveraging the strengths we have to be a place people want to come. Every child in America, if understood correctly, should want to work in the mobility industry.

What is undone for you when you leave this job?

Something I’m not happy about is… I see today a lack of appreciation for what our higher education institutions have meant for America and certainly for Michigan. If you ask me about Michigan’s greatest assets, I would say our higher education system. We have some of the best in the world. The fact that we don’t accept this and don’t do everything we can to take advantage of it is a disappointment to me.

The next frontier is K-12 education reform. … We need to change the way we finance education. Children are being left behind, and with COVID it’s just getting worse and worse.