Since 1984, Michigan has committed significant resources to grow the state’s innovative economy through the programs, activities, and investments of the Michigan Strategic Fund. Over the past 10 years the state’s return on that investment has been strong, however the state’s economy is now “at a crossroads,” from which it “must not turn back.” That’s the assessment of a comprehensive new report based on a study commissioned by the Michigan Economic Development Corporation.
Michigan’s “ability to reshape itself through innovation and entrepreneurship is predicated on its ability to stay the course and continue to make significant investments to improve the entrepreneurial climate of the state,” according to the report prepared by TEConomy Partners, a consulting firm based in Columbus, Ohio that focuses on analysis and strategies for innovation-based economic development.
The 74-page report tells the MEDC, “The time is now to seize this economic development opportunity.”
Citing $261.6-million in investments in innovation and entrepreneurship in Michigan since the 21st Century Jobs Trust Fund Initiative was created in 2005, the state has assisted nearly 1,400 companies and new entrepreneurial start-ups either directly or through service intermediaries. Those companies directly employed more than 11,000 workers in 2014, with estimated wages & benefits of nearly $879.5-million. The direct effect of those workers is estimated to generate $3.2-billion in output, and, in turn, support nearly $48.4-million in state and local tax revenue.
Armed with 11 strategic recommendations, TEConomy Partners builds a case for encouraging the state “to nurture and support aspiring entrepreneurs and, in some cases, attract them to locate in Michigan.”
Those recommendations focus on:
Providing requisite talent that covers the continuum of needs from early-stage start-ups to scalable enterprises. Specifically the 21st Century Jobs Trust Fund should:
- (1) Develop an Executive Connect Program…
- (2) Develop Cluster-Specific Entrepreneur-in-Residence Programs…
- (3) Provide Additional Funding for the Executive Attraction Program…
- (4) Streamline Entrepreneurial Service Providers to Ensure Consistent Value-Added Assistance Statewide…
Facilitating access to risk capital at all stages of development. Specifically the 21st Century Jobs Trust Fund should:
- (5) Create the Third Fund of Funds with Restructured Terms and Strong ties to the Michigan Pension Fund and Other Institutional Investors…
- (6) Provide Funding for Additional Rounds of Pre-Seed/Seed Funds…
- (7) Foster Angel Networks and Investments…
Fostering the commercialization and deployment of new products. Specifically, the 21st Century Jobs Trust Fund should:
- (8) Create Proof-of-Concept Funds…
- (9) Create a Sector-Specific Matching Grant Program…
Providing improved programmatic oversight and operational management. Specifically, the 21st Century Jobs Trust Fund should:
- (10) Develop a Revised Reporting System Built Around a Customer-Relationship Management Tool That Reduces Redundancy and Effort; Supports Service Provision, Efficiency, and Programmatic Connectivity; and Increases Data Accuracy…
- (11) Undertake Analysis of Innovation Industry Clusters to Determine How Best to Support Their Unique Sector Needs, Thereby Helping to Create “stickiness” by Tying Entrepreneurial Efforts to the Larger Economy…
Benchmarking data in various charts and graphs assembled in the report tabbed a dozen other states for comparison purposes to Michigan including some states similar in size, some regional competitors to Michigan, and some that have made long-term investments in entrepreneurship. Those states include:
- Arizona
- Connecticut
- Georgia
- Illinois
- Indiana
- Maryland
- Minnesota
- Ohio
- Pennsylvania
- Tennessee
- Texas
- Washington
Michigan fared well in some benchmark comparisons like industrial research and development spending and university research and development spending…while lagging in some arenas including venture capital investments.
Steve Arwood is CEO of the MEDC. In receiving the report he says, “Michigan’s economy has made impressive gains as companies grow, creating more and better jobs.” He adds, “It’s important for us to have outside groups study what we’ve done to create an environment for economic success and measure the effectiveness of programs so we know how we can continue.” He concludes, “We want our state to be thriving not just in the short term, but for decades to come.”
You can read the full report right now by clicking the link below:
