Saturday, October 9, 2010

The Next Economy: Economic Recovery and Transformation in the Great Lakes Region

Jennifer S. Vey, Fellow, Metropolitan Policy Program
John C. Austin, Nonresident Senior Fellow, Metropolitan Policy Program
Jennifer Bradley, Fellow, Metropolitan Policy Program

Brookings Institution
September 27, 2010 —

As the American economy works its way slowly out of the Great Recession, a consensus is developing among public and private-sector stakeholders that simply re-constructing our old economy, one based on highly-leveraged domestic consumption, would be a serious mistake. The nation must instead focus on building the next economy, one that is oriented towards greater exporting, powered by a low-carbon energy strategy, driven by innovation, and that creates opportunities for all.

The Great Lakes region, too long tagged with the misleading nickname, The Rust Belt, could show the rest of the country the way forward to the next economy. Although battered by decades of declining economic health, and particularly by the recession, the nation’s heartland still has many of the fundamental resources—top-ranked universities, companies with deep experience in global trade, and emerging centers of clean energy research to name just a few—necessary to create a better, more sustainable, economic model.

This is not to disregard the region’s challenges. Its major metros have neither the economic development strategies nor the transportation infrastructure in place to fully take advantage of their export generating capacity. Many have inefficient physical development patterns, hollowed out urban neighborhoods, and concentrations of energy-intensive industries, and thus remain the epicenters of the nation’s fossil fuel-reliant economy. They lack the early-stage capital and other supports needed to strengthen existing firms and encourage start-up enterprises. And many suffer from deep, entrenched poverty, and have low educational attainment levels compared with their peers nationwide.

With both the strengths and challenges clearly in mind, this report provides a roadmap to economic recovery and transformation in the Great Lakes region, powered by its metropolitan areas. It describes how federal, state, and local stakeholders can leverage the region’s substantial assets to create a more productive, sustainable, and inclusive economic future.

The report finds:

First—The Great Lakes region, particularly its metropolitan areas, has significant resources essential to creating the next economy:

Global Trade Networks —These networks, developed in large part by the auto industry, are critical to an export economy. Seven Great Lakes metros—Dayton, Detroit, Grand Rapids, Indianapolis, Milwaukee, Toledo, and Youngstown—are already among the country’s top 20 metro areas in terms of the share of their metro output that is exported. In particular, Great Lakes metros can capitalize on the growth potential of knowledge exports, as they have a concentration of top universities and associated medical complexes.

Clean Energy/Low Carbon Capacity — Industries and universities in Great Lakes metros have created the research capacity and manufacturing prowess needed to build a clean energy, low-carbon economy. They have an outsized ability to lead on wind and solar renewable component manufacturing, and to capitalize on the “green-blue” potential of the Great Lakes and their waterways. The region’s research and innovation infrastructure is already spurring the development of new products and processes: Michigan, Ohio, and Illinois are among the top states in terms of green tech patenting, focused on new technologies in battery power, hybrid systems, and fuel cells.

Innovation Infrastructure — Great Lakes metros have the industrial and institutional infrastructure necessary to power an innovation economy. The 21 largest Great Lakes metros alone are home to 32 major public and private research universities, which attract substantial federal research investment. The region produces approximately 36 percent of America’s science and engineering degrees each year. Between 2001 and 2007, an average of nearly one-third of the country’s patents each year were awarded to the Great Lakes states.

Opportunities — Like innovation, opportunities grow in the presence of a robust educational network, such as the one that exists in the Great Lakes region. In addition to its public and land grant universities—the latter created in the 19th century to promote agriculture, science, and engineering—the region is also dotted with community colleges, which help the region’s workers develop skills and credentials necessary to secure jobs in the region’s industries, and in so doing maintain a pool of skilled employees to attract and support them.

Second — To realize the promise of the next economy, federal, state, and metropolitan leaders should join with the private and philanthropic sector to:

Invest in the assets that matter: innovation, infrastructure, and human capital

Devise new public-private institutions that are market-oriented and performance-driven.

Reimagine metros’ form and governance structures to set the right conditions for economic growth.

Tuesday, September 21, 2010

Michigan needs tax incentives to compete for jobs

Chris Knape | The Grand Rapids Press

GRAND RAPIDS -- Despite political rhetoric, Michigan needs tax incentives, lower taxes and fairer trade policies to remain globally competitive.

That was the collective conclusion of a panel of a top site-selection consultant and two economic development experts speaking Friday at the West Michigan Policy Forum.

Ron Pollina, a site selection consultant, said the country stands to lose many of the new "green energy" jobs it has created in wind, battery and other industries once subsidies run out if Congress doesn't create trade policies with the nation's interest in mind rather than special interests. Michigan also needs to create a more competitive environment.

"You have to change the business climate in this state or, long term, those companies won't be here," he said.

"The basic problem is in Washington, D.C.," said Pollina, author of the book "Selling Out a Superpower." "We have horrendous trade policies established by special interests."

For Michigan to quickly become more competitive, the state would do well to adopt a Right-to-Work policy, said Pollina. Doing so would take off the table some outsiders' concerns about problems with unions.

He also said Michigan has become less competitive because it has let some programs such as tax-free Renaissance Zones sunset while others have lost pace against more aggressive competing states.

"Your competition is not the surrounding states around Michigan, your real competition is global competition: Mexico, India, Brazil and China," said Pollina, whose company is based in Park Ridge, Ill.

Michigan has dropped in virtually every competitiveness metric measured by Pollina's firm. It was ranked No. 1 in 2004 for its incentives and economic development agency. Today it ranks 11th.

Overall it ranked 7th in 2004 and, today, ranks 31st in terms of total performance.

He blamed the sunset of tax-free Renaissance Zones and less competitive tax credits from the Michigan Economic Growth Authority for part of the drop.

Birgit Klohs, CEO of The Right Place Inc. in Grand Rapids, derided calls for the elimination of tax incentives. Doing so would immediately take Michigan out of consideration by many expanding companies, she said.

"I will be glad to lay down my weapons if 49 other states agree to do the same," she said. "We need a better tax climate, but if you unilaterally disarm me and my colleagues by cutting out incentives, then I'm out of this game."

Doug Rothwell, CEO of Business Leaders for Michigan, said Michigan needs to take a holistic look at reforming its tax system and simplifying tax incentives in order to remain competitive.

"The Michigan Business Tax equates to the highest corporate income tax in the country," he said. "We don't have enough assets to offset, compensate for the cost problem."
That being said, Rothwell said there are no quick fixes.

"There is no silver bullet for this stuff," he said. "I think that's something in Michigan that we fall in to. I am so sick of the economic development fad of the month."

E-mail Chris Knape: and follow him on Twitter at

Sunday, September 19, 2010

Michigan's economic recovery hinges on turnaround strategies debated by Rick Snyder, Virg Bernero

By: Nathan Bomey Staff

As Michigan’s gubernatorial candidates vie for the chance to lead the state’s economic revitalization efforts, regional economic developers are hoping to influence the state’s strategy after the Nov. 2 election.

Michigan’s economic development strategy is becoming a central issue in the race between Ann Arbor venture capitalist and Republican candidate Rick Snyder and Lansing Mayor and Democratic candidate Virg Bernero.

The new governor will shape the future of Michigan’s economic development strategy, which will decide the pace and complexion of the state’s resurgence.

At stake: the future of the Michigan Economic Development Corp.’s tax incentives and the state’s role in distributing small amounts of capital to private companies.

“There’s a fair amount of uncertainty at the MEDC with the change in administration,” said David Parsigian, managing partner of the Ann Arbor office of law firm Honigman Miller Schwartz and Cohn. “A lot of people have left, and it’s kind of hard to see what’s going to happen in terms of who staffs that thing, how it’s built and what it’s going to focus on.”

Since Gov. Jennifer Granholm took office in 2003, MEDC’s Michigan Economic Growth Authority Board has distributed $3.56 billion in tax incentives to 508 companies, according to a list of tax credits MEDC provided to Studies by the Anderson Economic Group and the Mackinac Center for Public Policy say the MEGA program has been a waste of government resources, while a competing study by the Upjohn Institute says the tax incentives are worthwhile.

Regardless, Michigan’s economy, pummeled by the automotive crisis and global economic trends, has lost 592,900 jobs since 2003, according to the Michigan Department of Energy, Labor and Economic Growth. Some 13.4 percent of Michigan’s jobs have been eliminated over the last seven years.

Snyder and Bernero told they would both take a harder look at the effectiveness of the state’s tax incentives and give more economic firepower to Michigan’s regional economic development groups.

But they differ on the tax incentives MEDC should be allowed to distribute - incentives local economic developers promote heavily in discussions with businesses that are considering their future in Michigan.

Snyder and Bernero both claim to be the most effective “job creator” in the race. But their policy proposals, placed in the context of Michigan’s evolving economic development picture, illustrate the increasing influence of groups like Ann Arbor SPARK, Grand Rapids-based The Right Place, Detroit-based TechTown and the University Research Corridor, a coalition among the University of Michigan, Michigan State University and Wayne State University.

Those organizations are convinced incentives need to stay in some form. But their main focus is on the pursuit of collaborative opportunities with other economic development groups, major corporations, startup companies, universities and state government.

“It is all about collaboration if you’re going to make this work,” said Stephen Forrest, chairman of Ann Arbor SPARK and U-M's vice president of research. “People who want to come to this region are not interested in our differences. They’re interested in how we work together, how SPARK and any other economic developers can connect them to the state and how the state can connect them to the national.”

SPARK, for one, is emphasizing the importance of “open source economic development,” the idea that successful economic development practices should be shared with other communities because the various regions throughout the state rise and fall together.

“To have this what I would call boundary-less development strategy is extremely important and it has borne many fruits for the Washtenaw County area as well as for southeast Michigan in general,” Forrest said. “And I believe that philosophy has extended appeal to other economic developers around the state and outside the state.”

SPARK’s collaborative moves offer pathway

Increased collaboration in Michigan’s economic development process is already unfolding as the gubernatorial transition draws near.

SPARK announced in August that it would lead a $1 million business plan competition in cooperation with Oakland County-based Automation Alley, Detroit-based TechTown and the new Macomb-Oakland University Incubator. The New Economy Initiative for Southeast Michigan is funding the project through the new Business Accelerator Network for Southeast Michigan.

The statewide business plan competition - which aims to encourage entrepreneurialism in Michigan - is the latest in a series of collaborative economic development projects SPARK has agreed to lead.

The group already manages the Michigan Pre-Seed Capital Fund, which invests in startup technology companies on behalf of the MEDC and the state’s 15 SmartZones, as well as the Michigan Microloan Fund, which provides small amounts of financing to companies that can’t get traditional bank financing. Collectively, SPARK has distributed $11.2 million to 84 companies through those programs.

The group has also coordinated with local communities, universities and the state to launch several business incubators. The biggest, a 57,000-square-foot life sciences facility in Plymouth Township, was the result of cooperation among SPARK, MEDC, Wayne County and private companies.

Collaborative economic development efforts like those, which have been praised by local businesses, should serve as an example for Michigan’s future economic development strategy, SPARK CEO Michael Finney said.

“I think it’s part of the solution,” said Finney, whose ties to Snyder could make him a candidate to become the next CEO of the MEDC. “We think we’ve created a model that has huge upside potential, and the upside potential is definitely beyond the Ann Arbor region.”

The evolution of SPARK provides a framework for understanding the economic development mindset of Snyder, who co-founded SPARK in 2005.

Snyder said MEDC should encourage economic development organizations throughout the state to replicate successful business services offered by groups like SPARK. One program he likes is a service in which SPARK collects job openings at local companies and connects talented local jobseekers to those businesses. SPARK posted 2,781 job openings for 1,001 companies from 2006 to 2009.

“I’m still amazed that more organizations aren’t doing that,” Snyder said. “That’s something that we should be doing statewide.”

Jeff Mason, executive director of the URC and a former vice president at MEDC, said collaborative efforts among the state’s top economic development groups are vital.

“It just becomes stronger when everyone is rolling in the same direction,” he said. “We see the opportunity to work with the MEDC and with a new administration and the existing administration to effectively harness the assets and the resources we have to benefit the future of the state’s economy in anyway that we can be of assistance.”

Bernero’s economic development approach can be viewed through the lens of his strategy in Lansing.

Over the last five years, the Lansing Economic Development Corp. gave out $177.6 million in tax incentives in 121 installments - including 37 brownfield redevelopment credits, 24 obsolete property rehabilitation tax certificates and 18 tax abatements. LEDC claims those efforts created more than 5,100 jobs in the city of Lansing.

“Much of my strategy is what I’ve done in Lansing,” Bernero said. “It’s not based on hypotheticals. It’s based on actual things we’ve implemented in the city. We’ve leveraged every asset we have locally.”

Bernero said that without incentives, the state would be missing a vital element in its economic development tool kit.

“I believe in a global economy we’re competing not just in a local basis, but state and global basis. It would be disarmament, waving the white flat, to scale back the use of economic incentives,” Bernero said.

That aggressive use of incentives reflects a philosophical divide between Snyder and Bernero.

Snyder believes MEDC’s incentives are indirectly making it more expensive for Michigan’s existing companies to do business. He wants to significantly slash the number of incentives MEDC distributes through programs like the Michigan Economic Growth Authority (MEGA) Board’s tax credits.

Snyder wants to eliminate the state’s controversial Michigan Business Tax in favor of a 6 percent corporate income tax.

“A natural consequence of that is you should be able to reduce the amount of incentives that are required,” he said. “Why do you need incentives at that level? It’s because we’ve got a broken tax system. In some ways those are Band Aids. You’ve almost got to buy someone to come into our state because of our broken tax structure.”

Opinions about Michigan’s tax incentives strategy vary among the state’s economic development leaders, past and present. Several economic development leaders said in interviews that they believe the incentives need to stay, although they also said they’d like to see the Michigan Business Tax reworked.

“I believe we need to make Michigan a much more business friendly state,” said James Epolito, who served as CEO of the MEDC under Granholm before resigning in spring 2009. “But at the same time you can’t just throw away your tax incentives and expect people to come to Michigan. You’re not only competing against other states in the Midwest but all over the county and all over the world.”

Doug Rothwell, CEO of Business Leaders for Michigan, which has endorsed Snyder, said the MEGA tax credits have been misguided. He said the state shouldn’t be focusing on specific sectors of the economy MEDC has historically favored, such as life sciences, alternative energy and advanced manufacturing.

“I think the issue here is not too much that they have too many incentives, it’s the way it’s being used,” said Rothwell, who served as CEO of MEDC when Snyder was chairman of the agency under Gov. John Engler.

“We get enamored with the economic development fad of the month. There is no one answer to this. The answer is the basic blocking and tackling, which is get yourself a competitive business climate, make sure you’re having an aggressive economic development strategy and incentive program.”

Bob Trezise, CEO of Bernero’s Lansing Economic Development Corp. rejected the suggestion that incentives are part of the problem. He hopes “those core community tools,” like brownfield redevelopment credits, aren’t eliminated under the next governor’s administration.

“Those tools have been magic bullets for cities,” he said. “Without those tools, we would have really been dead in the water. I do not think this is the time to be cutting incentives. That is absolute insanity.”

Finney said some level of tax incentives is necessary though not always decisive for companies considering where to expand.

“Being on the ground and talking to companies on a daily basis, incentives is not one of the topics that come up very early in the conversation,” Finney said. “In fact, it tends to come up when companies are very close to their final decision making. You’ve got to package and sell all the other things. You’ve got to lead with the talent we have here, the infrastructure we have, the quality of education we have. When you lead with all those things, this state fares very well when compared to other states throughout the country.”

One of the main problems for small companies is lack of access to capital, which typically helps them expand, introduce new products and hire more workers.

Bernero wants to form a state-owned-and-operated bank to offer loans directly to Michigan companies that can’t get access to credit from big banks that “have basically stymied our recovery.”

“Our small businesses are being punished for the abuse of Wall Street,” Bernero said. “They’re the most creative, dynamic businesses. They’re the ones that create the jobs and they’re being stifled from the growth.”

Chuck Hadden, CEO of the Michigan Manufacturers Association, said he would be willing to consider a state-owned bank like that in North Dakota. But he’s not sold on it.

“It’s definitely worth exploring, if for no other reason than it puts some heat on other banks out there to make something happen,” Hadden said. “We’re not really comparable to North Dakota though.”

Access to capital is a key aspect of the success of Michigan’s research universities in their efforts to launch startup companies and boost the economy in their respective communities.

Forrest, Snyder’s successor as chairman of SPARK, said the state’s 15 public universities form a major asset that needs to be leveraged more effectively. He said the URC was “the single greatest resource we have to build on.”

But those university spinoff companies generally can’t get off the ground without access to loans or venture capital, financing that helps them get their products ready for the market.

Rothwell said a state-owned bank is not an effective way to get capital to startup companies. He said he is comfortable with programs that place state money in the hands of professional investors to back promising Michigan companies. But he said he was uncomfortable with Michigan offering loans directly to companies.

“At some point you have to let the market determine what is worth investing in and what’s not,” Rothwell said.

Forrest, for one, wants to see visionary leadership from the next governor.

“I’m most interested to see how the old equation is going to change. What are the ideas behind moving us from an entrenched, heavy manufacturing economy, which we all know has drained away? How do we make this transformation? What is the long-term vision?” Forrest said.

He added: “The state of Michigan used to be at the very heart of the American economy. It was the driver. So what do we do to make that happen again? It may be too big of an ask to hope that at some point that we can overtake the state of California or Texas, but we can certainly be a player in their league, and I want to know what’s the strategy to go there?”

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.

Tuesday, August 24, 2010

Great Lakes Water Should be Valued, Not Discounted

A central premise of the new Great Lakes Compact is that Great Lakes waters are worth protecting and that a premium be placed on water conservation and efficiency. In short, we need to put our own house in order.

That point is being missed by Milwaukee, however, as that city looks to offer Great Lakes water at a discount to lure high-volume business and industry water users to relocate and expand there.

It’s not that we shouldn’t lure sustainable businesses to invigorate the Great Lakes economy. In fact, quite the opposite.

But it’s time community leaders in Milwaukee and other Great Lakes communities put their money behind the words of the compact -– that the lakes are an asset to be touted and protected, not discounted and squandered. Put another way, if Great Lakes cities don’t recognize the intrinsic value of being situated near the world’s largest concentration of freshwater lakes, how can they convince others of their value?

In comments presented to Wisconsin’s Public Service Commission (PSC) in Milwaukee Wednesday, Alliance Water Conservation Director Ed Glatfelter urged the commission to reject Milwaukee’s bid for a discounted “economic development” water rate, terming it a “a false bargain with cheap water.”

“Great Lakes municipalities with a ready supply of water who want to promote economic development need to promote the reliability and long-term sustainability of their water resource -- genuine qualities that contrast with artificially low prices,” he said.

Indeed, Glatfelter –- with more than 26 years of water supply management experience under his belt -- notes that smart marketing could even help communities pay for water infrastructure if they use full-cost and conservation pricing for water.

There are other reasons to deny Milwaukee’s request. Among them: the city’s water rates are already low. A draft PSC survey of large cities in Wisconsin and throughout the United States determined Milwaukee’s water rates would be the fifth lowest of the 28 cities surveyed even after proposed rate increases on the city’s existing water users are enacted.

Another reason: Fully 68 percent of respondents to a recent survey of corporations considering relocation or expansion say sustainable development is more important now than ever.

Noting growing concerns about the availability of long-term water supplies beyond the Great Lakes Basin, Glatfelter said, “The reliability, long-term sustainability and quality of the Great Lakes Basin’s water resource should be attractive enough -- even at fully valued prices -- to be an effective economic development tool.”

Attractive enough, to be sure, but still taken for granted by many in the region. It was this same complacency that drove adoption of the Great Lakes Compact back in 2008, a policy that largely bans water diversions from the Great Lakes at the same time that it calls for ratcheting up conservation and water efficiency in the region.

The simple thinking was this: the region must demonstrate that it values and protects the waters of the Great Lakes before it can tell others who come calling for water to do the same.

Ultimately, the battle for maintaining the Great Lakes over time won’t be won with a single sweeping piece of legislation, but with many smaller acts that underscore our reverence and commitment to these waters.

The Wisconsin PSC has an opportunity now to send a clear message that Great Lakes water doesn’t belong on the closeout rack.

Alliance For The Great Lakes

Monday, August 9, 2010

Exports in the Great Lakes:

How Great Lakes Metros Can Build on Exports and Boost Competitiveness



Using newly developed information from the Brookings report “Export Nation,” this analysis of export activity in the 21 largest metros of the Great Lakes region for the years 2003 to 2008 reveals that:

■ Exports support 1.95 million jobs in the largest metropolitan areas in the Great Lakes. Even after decades of decline in manufacturing employment, export industries (primarily manufacturing) still employ millions of people in the region, ranging from 398,000 in Chicago, to 240,000 in Detroit, to 20,000 in Des Moines, as of 2008.

■ Great Lakes metros have some of the highest dollar volumes of exports and
the greatest reliance on exports of any of the large metropolitan areas in the nation. Chicago and Detroit rank third and ninth, respectively, in total dollar export volume among top 100 metropolitan areas, and Minneapolis, St. Louis, and Indianapolis all rank in the top 20. Great Lakes metros also tend to export a greater proportion of their economic output than most large metropolitan areas.

■ In general, Great Lakes metros with the highest levels of manufacturing employment are less innovative than their manufacturing oriented or export intensive peers. Nationally, metros that are manufacturing oriented or export intensive (or both) tend to create patents at much higher rates than other metros. But most Great Lakes metros underperform on innovation compared to their national peers, despite high levels of manufacturing employment and generally high export intensity. Only three of the 15 most manufacturing-intensive metros in the region, Detroit, Minneapolis, and Rochester, post above average patenting rates.

■ The region’s metros lag the nation’s other large metros in terms of service exports and service export growth. Only Chicago and Minneapolis export more services as a share of total output than do the nation’s top 100 metros as a whole, and only four Great Lakes metros (Syracuse, Buffalo, Des Moines, and Columbus) outpaced other large metros in the growth of their service exports. Despite this lackluster growth performance relative to other metros, infl ation-adjusted service exports grew faster than output in 20 of the 21 Great Lakes metros from 2003 to 2008 (Pittsburgh was the only exception).

■ Considerable growth in global customers for products and services produced in the Great Lakes metros will come from the large emerging markets of Brazil, India, and China. Most Great Lakes metropolitan areas (12 out of 21) send 8.6 percent or more of their export value to Brazil, India, and China (the BIC countries), meaning that they meet or exceed the average large metro export share going to the BIC nations. Some Great Lakes metros, such as Youngstown, Des Moines, and Columbus, have seen huge jumps in the value of their exports to BIC countries over the last five years.

A legacy of success in exports does not guarantee future dominance, a lesson that Great Lakes metros should have learned through rough experience. But raising exports holds out the promise of creating thousands of new jobs in Great Lakes metros that desperately need them. For that reason, metropolitan leaders and their federal, state, and private sector partners must be aggressive and creative in determining what new or re-imagined goods and services the world demands from them, and equally dedicated to expanding their global reach.

Monday, June 21, 2010

Think tank lists Des Moines, Iowa, as No. 2 city for performance during downturn

By John Schmid of the Journal Sentinel

As the nation's industrial heartland rises from recession, its cities might look to an unlikely metro region to emulate: Des Moines, Iowa.

According to The Brookings Institution, a Washington, D.C., think tank, Des Moines nearly tops a ranking of "overall performance during the recession" of the 21 biggest cities of the Great Lakes region, which stretches from Minneapolis and St. Louis, Mo., to Pittsburgh and Rochester, N.Y.

Iowa's capital edged past Madison, which has a larger population, while Des Moines also came out well ahead of both Chicago and Milwaukee under the index. Brookings used a composite measure of employment, unemployment, economic output and housing prices. It tracked each from the start of the recession through the first quarter of 2010.

Only one city fared better than Des Moines: Buffalo, N.Y. But even before the Brookings study, Iowa had caught the attention of Wisconsin's economic planners. Many ask why Iowa - seen by some as a sleepy agricultural state without major cities or professional football or baseball - outpaces the Midwest.

"Anybody that's been watching economic data sees that Iowa definitely outperforms other states in the region," said Todd Berry, president of the Wisconsin Taxpayers Alliance in Madison. "It's a fairly recent phenomenon."

Many took notice in 2008 when IBM Corp. announced plans to create 1,300 technology jobs in Dubuque, Iowa. At the time, a media commentator in the Research Park Triangle, a university and technology mecca in North Carolina, expressed astonishment that IBM chose "the land of farms, cattle and the Iowa caucuses."

"Iowa has won good marks for its economic strategy," said Tim Sheehy, a top official in the Milwaukee 7 economic development consortium and president of the Metropolitan Milwaukee Association of Commerce. "Some of the work that we did early on looked at Des Moines."

"We've been watching Iowa for the last three or four years," said Berry, who tracks competitive benchmarks for Wisconsin. In the 10 years from 1998 to 2008, Iowa's per-capita economic output outpaced the national average while Wisconsin lagged behind the national average, Berry said.

Among the reasons for Iowa's relative success: The state has two notable research universities - Iowa State University in Ames and the University of Iowa in Iowa City. Iowa invests disproportionately in its universities, and it relies less on heavy manufacturing than many neighbors, he said.

The 21 largest cities of the Great Lakes region - which have roots in the 19th century farm, factory and foundry economy - offer one of the most relevant comparisons for Wisconsin's urban centers.

Milwaukee, Minneapolis, Louisville, Ky., and Cincinnati cluster in the middle of the pack, Brookings found. "The extent of job losses during the Great Recession has been highly varied across the Great Lakes region," it said. And compared with the rest of the nation's metro centers, "the Great Recession has been more severe and its recovery weaker in the Great Lakes region than any of the previous three recessions and subsequent recoveries."

Faring worst on the list was Youngstown, Ohio, a former steelmaking town of about 500,000 people.

The ranking makes clear that cities with a concentration of automakers or auto-parts supplies "are among those with the largest employment declines in the nation." Detroit has suffered employment declines greater than 10% since its pre-recession employment peak, as have Dayton, Youngstown and Toledo in Ohio, it said.

One bright spot: The region as a whole avoided the worst of the housing-price inflation that led to the mortgage meltdown. Housing prices fell in the past three years in the Great Lakes region, Brookings said, "but by significantly less than in the 100 largest metropolitan areas."

Great Lakes rankings
The Brookings Institution measured employment, unemployment, economic output and housing prices in the 21 biggest cities in a region that includes Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, Kentucky, Missouri, Wisconsin and the western parts of New York and Pennsylvania. Ranked from the top:

Buffalo, N.Y.

Des Moines, Iowa


Rochester, N.Y.

Columbus, Ohio



St. Louis, Mo.

Syracuse, N.Y.


Louisville, Ky.



Akron, Ohio



Dayton, Ohio

Grand Rapids, Mich.


Toledo, Ohio

Youngstown, Ohio

Source: Brookings Institution

How one Michigan city tries to lure Millennials and retain talent

T. J. Hamilton | The Grand Rapids Press

GRAND RAPIDS -- Bridget Clark Whitney and Leslie Perales represent the yin and yang of Michigan as a destination for talented, college-educated Millennials.

Whitney oozes Grand Rapids' youthful energy from every pore.

The 30-year-old is executive director of Kids' Food Basket, a fast-growing nonprofit agency that serves after-school meals to children in low-income families. She could be a poster child -- or maybe more accurately, a poster Millennial -- for the crusade to attract young professionals to West Michigan and stem the state's so-called "brain drain."

A dynamo on the job and off, the Pittsburgh native and 2003 Aquinas College graduate bubbles over when describing the qualities that should make Grand Rapids a hotbed for 21- to 35-year-olds.

"Everything you want, you've got here, short of IKEA or Whole Foods. The culture, the excitement, the nightlife, the sociability and the people all together create an incredible place to live," she raves. "There's an incredible generosity that exists. It's part of the culture. ... There's nowhere else in the world I'd rather be."

The Pennsylvania transplant even blogged online, "I'll say it: Grand Rapids. Best. City. Ever."

Perales, 24, is impressed by Grand Rapids' progress, but it doesn't guarantee a job and it's unlikely to bring her back here anytime soon.

Perales, a Zeeland High School graduate who earned a print journalism degree from Grand Valley State University in 2007, adores her new home in Reston, Va., just outside Washington D.C.

After her boyfriend, GVSU grad Steve Loges, couldn't find work in Michigan three years ago, he accepted a position with his brother's Internet marketing firm outside Washington. Perales joined him four months later. In just three weeks, she found work as a general assignment newspaper reporter and has since taken a better-paying job as content editor for Knowlera Media, which specializes in how-to videos.

Perales loves the culturally diverse Washington area and wonders if the Grand Rapids area can match that city's vibe and robust economy.

"At this point, I'm not sure if I want to come back at all," she concedes. "I love it here. It seems like a lot of young people in the area really enjoy living here. The opportunities that you find here, you just don't feel like you have to go searching for those more diverse opportunities. They're just everywhere here."

Economic hurdles

Stopping the brain drain of Millennials drawn to vibrant urban centers and making Michigan a magnet for creative minds is a hot topic, online and on the street. Groups such as the Great Lakes Urban Exchange (GLUE), seek to revitalize industrial cities in the region, in part, by targeting these young, "post-boomer urbanists" who experts consider linchpins in spurring growth, innovation and economic recovery. More here.

Monday, June 7, 2010

Economic development group's performance and budgeting being questioned

Melissa Domsic

LANSING -- Three years after its founding, the Lansing Economic Area Partnership Inc. regional economic development group seems to be at a crossroads.

LEAP has been involved in several efforts to boost business and the economy in general since its formation, from helping draw IBM to Michigan State University to compiling the Greater Lansing Next: A Plan for Regional Prosperity that outlines ways for the area to grow.

But some local officials are raising questions about the organization's overall performance and budgeting, including transparency. And some LEAP board members are taking another look at their financial commitments.

"Some of us believe the initial three-year (financial) commitment was to help the organization get off the ground," said Ted Staton, East Lansing city manager. "Now that it has a plan and is working on that plan, they need to move to the next phase of the organization's existence."

Nonprofit group LEAP was formed in 2007 to unite public and private organizations to boost the region's economic development.

Of the 36 organizations listed as board members, 15 said they intend to continue financially supporting LEAP. Eight said they were unsure of their plans for next year, including three companies that recently had management changes. Six municipalities will consider lowering their contributions. Four board members did not respond to requests for information.

Three board members exchange services instead of paying a fee, including the Lansing State Journal.

While the organization has support from many business and community leaders, it also has been catching flak for what some local officials describe as a lack of transparency and measurable results.

Delhi Township Trustee Derek Bajema recently questioned whether the township's $35,000 annual investment in LEAP was paying off.

"I understand that the economy has been down, it's tough to attract business in this kind of environment," he said. "At the very least, I think just more transparency needs to be there."

Bajema requested a copy of LEAP's budget and received a seven-line budget that didn't break down components, such as the $750,843 in personnel costs.

"At the heart of it all really is: These are taxpayer dollars, and if nothing else, let's see how you're spending taxpayer dollars," Bajema said.

LEAP is funded by contributions from more than 60 businesses, local governments and other community organizations. About half of the members serve on the board of directors.

The organization provides the same seven-line budget to its board members.

Board member and Delta Township Supervisor Ken Fletcher said he thinks LEAP needs to better account for the money it spends.

"I think LEAP does do great work in the community and they should be willing to go out there and show the funders exactly how they're using that money and how they're accomplishing their goals," he said.

This year's $1.2 million budget provided to the Lansing State Journal by LEAP included a $750,843 personnel budget for eight employees.

President and CEO Denyse Ferguson would not disclose details beyond the seven-line budget.

However, LEAP files financial reports with the Internal Revenue Service. A report filed in September 2009 shows former President and CEO Matthew Dugener was paid a $144,845 salary plus benefits in 2008. Ferguson made $120,791 plus benefits. She served as executive vice president until October 2008, when Dugener resigned and Ferguson took over as interim president and CEO. Justin Himebaugh, former chief operating and financial officer, made $104,710 plus benefits.

Ferguson has noticed people have focused on the amount spent on wages and benefits and are asking why the business development budget isn't larger. But, she said, service organizations such as LEAP hire professionals to carry out business development activities and pay them accordingly.

The business development budget accounts for incidental costs that arise as the employees carry out their jobs, Ferguson said.

For more on this story, read Friday's Lansing State Journal.

New York considers five Great Lake offshore wind proposals

The state of New York has begun a multi-phase review process for five proposals seeking to build offshore wind turbines in the Great Lakes.

The New York Power Authority is expecting to spend six to seven months looking into the projects proposed for state waters of Lake Erie and Lake Ontario before picking a preferred developer or developers.

The proposals came forward under the Authority’s Great Lakes Offshore Wind (GLOW) initiative, launched last December.

The exact size and location for the wind project has not been decided, but the Authority’s original request for proposals sought projects of between 120 megawatts and 500MW in capacity.

Under the current timeline, a preferred developer or developers will be selected in late 2010 or early 2011, before a two-year permitting process is carried out.

Construction for the successful wind projects is slated for a 2013 start, with hopes that offshore wind farms could be commercially operational by 2015 or 2016.

Richard M. Kessel, president and chief executive officer, NYPA, said on Friday: “There is much work to be done before any project can be built and once NYPA’s initial review phase is complete, there will be significant opportunities for community participation in the next phases of the evaluation process.”

The Authority said the five proposals now being reviewed represented a “strong showing”, comparing it to the three projects that came forward for Delaware’s offshore wind attempt and five for New Jersey.

The successful project or projects will enter into a power purchase agreement to sell generated power to the NYPA.

Meanwhile the Authority has been encouraging businesses in the state to come forward if they might be in position to provide goods or services to a developing offshore wind industry in New York.

Companies can register on the GLOW initiative website, where 220 businesses have already listed their availability.

A number of “Get Listed!” events are being organized to help businesses find out more, with one scheduled for June 24 at Syracuse University, and another for July 27 in Dunkirk.

Bill Daily, administrative director and chief executive officer at the Chautauqua County Industrial Development Agency, said: “Harnessing this resource to generate electricity will lead to economic development by the creation of jobs. Many jobs during construction phases, but more importantly high-paying permanent jobs located in our communities along Lake Erie.”

While local politicians and citizens groups are supporting the development of offshore wind in New York State waters, opposition to the installation of wind turbines is also materializing.

Legislatures in Owego, Jefferson, and Wayne Counties have all passed resolutions opposing “the New York Power Authority’s proposals to provide incentives for the siting of wind towers (Great Lakes Offshore Wind project) in Lake Ontario’s eastern basin”.

Thursday, June 3, 2010

Great Lakes are Dead, Long Live the Great Lakes

John C. Austin, Nonresident Senior Fellow, Metropolitan Policy Program
June 01, 2010

The portion of the blogosphere inclined to noodle over Brookings State of Metro America report, included some who now ask, “whither the Rust Belt?” and “whither the Brookings Great Lakes Economic Initiative?”.

I’m pleased to say all are alive and in forward-looking form. The Great Lakes Economic Initiative developed several years ago, not out of a DC-based “mega-region” overlay, but as I traded notes from my years as an elected official and public policy-shaper in Michigan and teamed up with similarly situated political, business and civic leaders from Cleveland, Pittsburgh, Milwaukee, and elsewhere around the region. We basically said, “Don’t we have a similar economic and cultural story? Aren’t we trying to treat the same problems; and leverage the same assets? Isn’t there more we can do working together to accelerate our economic transition?”

At the same time Dick Longworth, a Pulitzer prize-winning former journalist, documented the shared Midwestern and cultural reality in his book Caught in the Middle: America's Heartland in the Age of Globalism.

The basic story line of the Great Lakes states was of a region uniquely rich in raw materials and fertile land that became the breadbasket of the growing country, then the world’s manufacturing innovation and creation center.

As the grains of the plains came to Minneapolis-St. Paul, it became the flour-milling and export capital of the world, home to Pillsbury and General Mills. As pigs were slaughtered in Cincinnati, making soap as a byproduct, the consumer products giant Proctor and Gamble grew. As buggy makers in Flint and Detroit were converted by Henry Ford and Billy Durant into Ford and GM, so too metal-benders for farm equipment in Grand Rapids starting making chairs for Steelcase and Herman Miller, electronics innovators in Dayton led to EDS and AC-Delco, iron ore from Duluth-fed US Steel in Gary, Cleveland and Buffalo. More here.

Great Lakes Share of Selected National Totals

A Blueprint for ‘Regional Transformation’

A proposal for a region-wide venture capital fund may be the key to future prosperity for the Great Lakes states, but how badly do they want it?


Frank Samuel, Jr., author of “Turning Up the Heat: How Venture Capital Can Fuel Regional Transformation,” a Brookings Institution report If one could simply light a spark under the economic potential resident in the Great Lakes region, and transform those states into red-hot centers of enterprise, then why hasn’t it happened yet? Two reasons: Every spark needs an energy source, and the region has to want the spark in the first place.

Long-term economic prosperity will elude regions and nations if businesses cannot grow and flourish and create jobs – if entrepreneurship is not rewarded and encouraged to take root and bear fruit. In the Great Lakes, this means keeping area companies with promising ideas and technologies from growing their businesses somewhere else.

A paper released in late January by The Brookings Institution explains how to do just that. “Turning Up the Heat: How Venture Capital Can Fuel Regional Transformation” was authored by Frank Samuel, Jr., a consultant and former science advisor to Ohio Gov. Bob Taft and architect of some of that state’s most successful venture capital initiatives, including the Third Frontier program. The paper was also the topic of a March 2010 Global Midwest Policy Brief, “A Venture Capital Strategy for the Great Lakes,” from the Chicago Council on Global Affairs.

Samuel advocates the formation of a Great Lakes 21st Century Fund, a fund of funds managed by the private sector – that’s a key point – and capitalized with US$1 billion to $2 billion targeting early-stage ventures with the goal of keeping them from moving and expanding elsewhere. His premise is threefold:

The Great Lakes region has the ingredients in place for economic growth, including major research assets, a rich supply of human capital and a mature industrial base.

Venture capital investing in the region is hindered by too few “investable” deals emerging from area research institutions, the high cost of early-stage investing due to geographic and other reasons and a lack in capacity to fund initiatives further into their life cycle, prompting them to seek locations outside the region that can provide post-early-stage financing.

A coordinated effort in the part of multiple stakeholders is needed “to create and sustain a virtuous cycle of venture investment, entrepreneurship and firm growth in the region.”

In early April, Site Selection Editor in Chief Mark Arend spoke with Frank Samuel about his case for a Great Lakes regional venture capital fund, which was first recommended in a 2006 Brookings Institution report called “The Vital Center.” More here.

Saturday, May 29, 2010

Building a better brand


By HANK DANISZEWSKI, The London Free Press

In a world where companies and even countries live by their branding, Southwestern Ontario — a huge farming and manufacturing region, with 20% of Ontario’s population — often defies recognition beyond its borders. A regional economic conference in London next week will tackle that issue. Hank Daniszewski reports.

* * *

Southwestern Ontario is more than a place. It could be a brand. One that could be sold to the world.

That's one of the goals of the South-West Economic Alliance (SWEA) assembly to be held at the London Convention Centre June 3 to 4.

It's been more than four years since area municipalities met in Stratford to forge the alliance, an economic front for the region, and SWEA chairperson Dan Mathieson said this will be a watershed meeting for the 250 delegates.

"The biggest weakness we have is that people in governments and businesses outside the region can't identify what the Southwest does. It's time to build a brand around our economy," said Mathieson, who is mayor of Stratford.

Mathieson said SWEA must counteract the perception Southwestern Ontario is no more than an extension of the American rust belt, with a sagging manufacturing sector done in by the collapse in the auto industry.

He said the region represented by SWEA has a diverse economy with a strong and evolving agricultural base and a manufacturing sector that is fighting back with new productivity and green technologies "We have some of the most fertile agricultural land in the country. We need to talk about tourism and bioscience and other things we do well," he said.

Mathieson said his own city is a classic example of image not fitting the reality. While Stratford is known internationally for its Shakespearean festival, Mathieson said the theatres have been icing on the cake for a city that has always relied on manufacturing and agriculture.

That's why the Ontario Pork Congress held in Stratford every year gets equal billing to the Stratford Festival on the city's welcome signs.

A study done for SWEA by the Richard Ivey School of Business at the University of Western Ontario analysed the economic development plans of 19 Southwestern municipalities. It showed agriculture was the top shared economic priority, followed by tourism and culture, green technology, advanced manufacturing and transportation and logistics.

Serge Lavoie was hired last August to serve as SWEA's full-time president and administrator.

Lavoie admits manufacturing and agriculture have been written off as "dead ends" by some policy markets battered by the economic downturn, the rising value of the Canadian dollar and trade policies.

But he said SWEA recognizes these sectors are still the key to the region's economic future."

"It's what we have been in the past. It's what we are still good at it and it's not going away. It's simply changed and we have to nurture those changes," he said.

Lavoie said agriculture has become a "different beast" branching out to green energy production and bioplastics. He said manufacturing is also evolving into more efficient and "green" technologies.

He said SWEA has been able to broaden its original municipal base by entering into formal partnerships with the universities including Western, Guelph, Windsor and Waterloo and Fanshawe College.

He said post-secondary institutions can provide expertise and research in business, rural economic development and engineering.

SWEA has also created a 45-member advisory council that includes representatives from businesses such as Libro Financial, Ernst & Young and SmartCentres.

Mathieson said it has taken years of meetings and debate to pull SWEA together. There was initial skepticism from municipalities such as Woodstock. And Elgin County and St. Thomas are still not members.

Mathieson said there were fears municipalities would have to surrender their economic development office to a bureaucratic regional super agency.

"We are not top-down, trying to control where development takes place. We are trying to bring the area together in a cohesive fashion to tell our story," Mathieson said.

Lavoie said SWEA has become more of a "think tank" and forum for the region's municipalities to work on common strategies.

"We have created a big tent where everyone can work together. That's very different from a super economic development agency," he said.

E-mail, or follow Hankatlfpress on Twitter.

Indiana to partner with Chinese on economic development

Business First of Louisville

Indiana Secretary of Commerce Mitch Roob Friday joined Zhang Yingxin, deputy director general of the China Investment Promotion Agency of the Ministry of Commerce, to sign a memorandum of understanding that outlines an economic development partnership between Indiana and the Chinese government.

The agreement outlines ways Indiana and China can strengthen trade and economic development opportunities, according to a news release from the Indiana Economic Development Corp.

According to information provided by the Indiana Economic Development Corp. for 2008, the most recent data available, Indiana exported $930 million worth of goods to China, making it the state’s sixth-largest export destination. Indiana exported $759 million worth of goods to China in 2007 and $559 million in 2006.

“As Chinese companies look to expand into the U.S., Indiana has the manufacturing and life science capabilities to attract a significant portion of this new investment,” Yingxin said in a release.

The agreement was signed at the U.S.-China Advanced Technology Vehicle Summit, which is being held this week in Indianapolis. The event brought a delegation of more than 70 Chinese automakers to Indiana to meet with Indiana companies that make components for hybrid and plug-in electric vehicles.

The event is being presented by the Energy Systems Network, a nonprofit organization that is focused on the growth and commercialization of Indiana’s clean-technology and energy sectors.

Tuesday, May 25, 2010

CanAm Wind Energy sets itself to be an industry force

By Matt Glynn
The Buffalo News

Call it tilting at the wind power industry.

Buffalo Niagara Enterprise is teaming up with Greater Rochester Enterprise and the Niagara Economic Development Corp. in Southern Ontario to try to attract investments in that segment of renewable energy.

The initiative, called CanAm Wind Energy, will debut at the 2010 Wind Power Conference and Exhibition, scheduled this week in Dallas.

The three groups are pitching their collective territory as suitable to support the manufacturing, assembly and distribution of wind energy-related components.

The collaboration is designed to better position the three areas to compete as one against big regions in the West and Midwest angling for the same type of investments, said Paul Pfeiffer, a BNE spokesman.

The three groups want to use a unified approach working with government leaders, businesses, universities and other nonprofit economic development groups.

"Each community stands to benefit from the joint effort," Pfeiffer said.

For instance, promoting a bigger roster of suppliers in the CanAm Wind Energy territory increases the area's overall appeal to potential investors, Pfeiffer said. And an investment by a company could generate more business for suppliers from across the territory.

Tom Kucharski, BNE's president, said that development of the wind energy sector suffered during the economic downturn but that interest seems to be picking up again.

"We're betting it will be part of an industry solution going forward," he said. "And what we have here matches up really well with what it looks like the industry will be needing."

Through CanAm Wind Energy, the three groups play up their binational location, proximity to major markets, existing base of suppliers and transportation infrastructure, as well as the strong wind patterns in the Great Lakes area.

Renewable energy is one of the industry clusters the BNE targets for jobs and investment. Kucharski said the region is home to many suppliers that serve other industries, such as the auto industry, that could diversify their businesses by making parts for wind turbines.

The effort will include promoting the region, connecting businesses with resources available in the region and finding ways to increase resources for new and existing companies.

The binational initiative was formalized through a memorandum of understanding among the three organizations. About $10,000 will be spent on the CanAm Wind Energy effort in Dallas, with a grant from National Grid covering about half of those expenses, Pfeiffer said.

Monday, May 24, 2010

Michigan's Lieutenant Governor urges port communities to work together

By Dave Alexander | Muskegon Chronicle

MUSKEGON -- Michigan's port communities should take lessons from the state's development of an emerging advanced battery manufacturing sector, Lt. Gov. John Cherry said Thursday in Muskegon.

Speaking to the Michigan Port Collaborative at the Holiday Inn Muskegon Harbor, Cherry said the port communities have the built-in advantage of promoting the state's No. 1 resource -- the Great Lakes.

At a time of "resource scarcity," the 100 port communities across the state must work together on a common strategy to improve the state's harbors, what Cherry calls Michigan's "front doors."

Advanced battery plants now being developed from Midland to Holland -- including the fortu PowerCell plant in Muskegon Township -- are the result of a strategic plan to make Michigan the leader in powering future electric vehicles, Cherry said.

Similar efforts to bolster activities such as commercial shipping and recreational boating can produce similar economic development gains, he said.

"The more attractive our port cities, the more attractive the state of Michigan is for those seeking a home or a business in our state," Cherry told the 110 port officials from Detroit to Marquette gathered here. "With batteries, we took action quickly and worked together to achieve our goals. The ports must do the same." More here.

Gov. Doyle: Announces $1.6 million for Wisconsin’s coastal communities

Contacts: Laura Smith, Office of the Governor, 608-261-2162
Carla Vigue, Department of Administration, 608-266-7362

MADISON – Governor Jim Doyle announced today $1.6 million in grants to protect and enhance Wisconsin’s coastal communities and natural resources. The Governor awarded 39 grants that will be used by nonprofit organizations, as well as local, state, and tribal governments to assist with projects totaling nearly $5.4 million.

“Our wise stewardship of Lake Michigan and Lake Superior is critical to the long term environmental and economic health of Wisconsin,” Governor Doyle said. “The Great Lakes provide us with drinking water, commerce and recreation. They are critical habitat to countless species of plants and animals. I am pleased to announce these investments to support efforts to protect our coastal resources, ensuring that the integrity of our lakes will be maintained for future generations.”

The grants will support projects that will protect and sustain resources in coastal communities. Funds will be used for enhancing public recreational access to the lakes, wetland preservation, storm water management, education, habitat protection, and the protection of critical land.

As Chair of the Council of Great Lakes Governors since 2004, Governor Doyle has led major efforts to protect, preserve and improve the Great Lakes for future generations. His work to identify key priorities to protect the Great Lakes became the foundation for the work of the Great Lakes Action Plan. Governor Doyle also helped make history with the passage of the Great Lakes Compact, ensuring the protection of the world's largest fresh water basin for generations to come, and has taken aggressive steps to stop the spread of Asian carp and other invasive species into the Great Lakes.

Recipients for this year’s grants were recommended by the Wisconsin Coastal Management Council, a Governor-appointed citizen and governmental advisory group. The Wisconsin Coastal Management Program, which administers the grant program, balances natural resource protection and sustainable economic development along Wisconsin's Great Lakes coasts. Additional information about the Coastal Management program can be found at

A complete list of grants can be found at:

Analysis: Great Lakes Wind Development Too Risky

By Russ Harding
Mackinac Center for Public Policy

More than any other state, Michiganders identify with the Great Lakes. They are essential to the state's tourism industry and provide extensive recreational opportunities to boaters, fisherman, and those who stroll the many miles of pristine beaches. It seems hard to believe that anyone would want to put the Great Lakes at risk for the unproven development of off-shore wind energy.

On-shore wind energy is expensive and off-shore wind energy even more so. A study done for the Heritage Center for Data Analysis titled "A Renewable Electricity Standard: What It Will Really Cost Americans," quantifies the economic cost of wind energy. The study predicts that using on-shore wind to provide electricity for a family of four as opposed to coal would increase monthly bills from $188.66 to $339.58. For off-shore wind that climbs to $403.65.

The impact from development of wind farms in the Great Lakes is arguably a much greater concern than high energy costs, especially for communities along the Great Lakes that depend on tourism for their economic livelihood. Constructing hundreds of wind turbines in the water, each approaching 400 feet in height with blades as long as 70 feet, would transform the scenic vistas of the Great Lakes into one of an industrial complex. Hardly "pure Michigan."

It seems ironic that state officials who were more than enthusiastic about banning directional drilling for oil and natural gas under the Great Lakes (even though the nearest structure would be at least a quarter of a mile inland from the lakeshore) seem to be content with locating wind farms in the waters of the Great Lakes.

The Great Lakes are Michigan's irreplaceable treasure. Any claimed benefit from developing wind farms in the Great Lakes is not worth the risk.

Progress and Pride: Solar seems like Great Lakes Bay Region's salvation

By Kathryn Lynch-Morin | The Saginaw News

SAGINAW — Over the past six months, the San Jose, Calif.-based solar technology company known as GlobalWatt has been quietly settling into its new digs on Saginaw’s northeast side.

The same 74,000-square-foot facility that once housed Enterprise Automotive Systems — where workers performed processing operations on aluminum engine blocks for Saginaw Metal Casting Operations — soon will be the production home of advanced solar modules and power systems for use by the military, in the aftermath of emergency situations such as earthquakes and hurricanes, rural farming, and other specialty applications.

Since December, when the company announced it would locate in Saginaw, GlobalWatt’s Chief Executive Officer Sanjeev Chitre has been reiterating the importance of the Great Lakes Bay Region’s automotive past and how it will play a role in GlobalWatt’s — and the region’s — future success.

“Without the existing expertise and infrastructure of the automotive industry, we wouldn’t have been able to do this in such a short amount of time,” Chitre said.

While Chitre says GlobalWatt didn’t go out looking for an empty auto plant, he admits the coincidence is undeniable.

“It’s the way the universe worked out,” Chitre said. “It was just a fate.”

GlobalWatt is not alone in its solar or alternative energy efforts, as Dow Chemical Co., Dow Corning Corp., Hemlock Semiconductor Corp., Suniva, Evergreen Solar, Dow Kokam, Merrill Technologies and others are part of an emerging alternative energy manufacturing chain that experts say will forever change the region’s employment and economic landscape.

Saginaw Future Inc. President JoAnn T. Crary said those employers see a benefit in the workforce of the Great Lakes Bay Region. More here.

GE and Lake Erie Energy Development Corporation Announce Great Lakes Offshore Wind Partnership

GE and Lake Erie Energy Development Corporation (LEEDCo) of Northern Ohio announced today a long-term partnership beginning with the development of the first fresh water offshore wind farm in the US and involving a broad range of other initiatives.

Under the new partnership GE will provide direct-drive wind turbines to LEEDCo's 20 megawatt offshore wind project in the Ohio waters of Lake Erie. The partnership and project is a significant step towards accelerating the deployment of offshore wind in the Great Lakes. The announcement was made at the American Wind Energy Association's annual WINDPOWER Conference in Dallas.

"Ohio's greatest potential for creating wind energy is offshore in Lake Erie, and this partnership marks a significant step forward," said Ohio Governor Ted Strickland. "In Ohio, we have all the right assets to make offshore wind energy successful, including an innovative workforce and the manufacturing strengths that would allow us to build all the component parts for wind turbines. This partnership will not only advance offshore wind technologies, it will also advance Ohio's economy. We are eager to continue the state's strong collaboration with GE and LEEDCo as we pursue this exciting, first-of-its-kind initiative for Lake Erie."

The LEEDCo-GE partnership builds on the momentum of a four-year effort by The Great Lakes Energy Development Task Force and other partners in Ohio to establish an offshore wind industry on Lake Erie, leveraging the region's strong manufacturing base. More here.

Sunday, May 23, 2010

Bold experiment produces few jobs

Billion-dollar fund developed to diversify, save state's economy


Four years after Michigan launched the 21st Century Jobs Fund to diversify its economy and create jobs, the first two major initiatives under the 10-year, billion-dollar program have generated mixed results so far.

A handful of small companies that received loans look promising, a handful have failed and only a small number of direct jobs have been created. Venture capital firms outside the state that were awarded millions have been slow to invest in Michigan businesses. And the majority of the grants, loans and investment dollars went to recipients in one city: Ann Arbor.

On the positive side, many of the small companies that received loans say the money has proved critical to their survival. "It's really helped enable a lot of growth in our company," said Michelle Crumm, co-founder and chief business officer of Adaptive Materials. The Ann Arbor maker of portable fuel cell power systems for the military used the $6.3-million loan it received to buy new manufacturing equipment and to develop its products.

The jobs fund has been the centerpiece of Gov. Jennifer Granholm's economic development strategy. But critics say the money could have been better spent. Others accuse the state of trying to pick winners by funneling millions to only four industries: advanced manufacturing, alternative energy, life sciences and homeland security and defense.

"It's very difficult to pick the right technologies and industries," said Lou Glazer, president of Michigan Future, an Ann Arbor think tank, and a former deputy director of the Michigan Department of Commerce. "Government doesn't know how to do that very well." More here.

Saturday, May 22, 2010

Ohio's economic development plan is a model for Wisconsin

Sparked by the success of a referendum in Ohio earlier this month to enlarge bonding for economic development by $700 million, there is a growing interest in a similar initiative in Wisconsin.

By a solid margin of 62%-38%, voters in Ohio authorized the four-year expansion. The plan builds on the creation in 2002 of a $1.4 billion bonding program to promote innovation and long-term growth.

Ohio's economy, which has lost 635,000 jobs since 2000, is just as challenged as Wisconsin's, and voters there bit the bullet and supported a large-scale initiative called the Ohio Third Frontier. The commitment of more than $2 billion for economic development in that state dwarfs all job-creation initiatives in Wisconsin.

The Third Frontier leaders rolled out some impressive statistics to make the case for the additional $700 million of investments in promising industries, technologies and entrepreneurs. They did not use the normal metrics for investing, like return on equity. Instead, they looked at creation of companies and jobs and the amount of tax revenue flowing from the new economic activity. More here.

Friday, May 21, 2010

Minnesota starts to shake off unemployment blues

Employers add 10,200 workers in April; jobless rate at 7.2%

By Julie Forster

Kristin Johnson was laid off in October from a marketing job at Target Corp. after six years with the retailer. When she started her job search, the market was grim. But in recent months, Johnson noticed a marked change in promising job postings. Last week, she clinched a new job at better pay and with similar benefits.

"I couldn't be happier," said Johnson, 30, who on Monday starts her job as a consumer marketing manager for a custom jewelry company in the Minneapolis warehouse district.

Johnson's story replayed thousands of times illustrates a labor market in recovery as employers start to hire again. Minnesota went into the recession ahead of the U.S., starting with an earlier downturn in the housing market. Now, it is coming out ahead of the nation.

Minnesota employers added 10,200 jobs in April, the state reported Thursday, helping to push the unemployment rate down slightly to 7.2 percent, versus 9.9 percent for the nation. That is the largest gap between the two on record.

The trend represents a return to normal. At the end of 2006, Minnesota had lost the historic advantage of having an unemployment rate better than the U.S. rate. Traditionally, Minnesota's rate had been 1.5 to 2.5 percentage points lower. For some of 2007, its jobless rate actually jumped above the national rate. In May 2009, the state had a full percentage point advantage, and the spread has been widening since.

In Minnesota, more people are finding work across a broad base of industries. Consumers are starting to spend again, and retail employers are hiring. The retail and wholesale trade sector showed strong signs of job growth. Manufacturers added jobs for the fourth month in a row, as factories ramped up to meet an increase in orders. Those sectors were particularly weak during the recession and are typically the first to lead a recovery.

Minnesota's economy wasn't as damaged as the economies of states such as California and Florida, which had more severe downturns in the housing and construction markets, said Scott Anderson, senior economist with Wells Fargo. More here.

Wednesday, May 19, 2010

GLIDE receives $75K to help budding companies

State Rep. Matt Lundy (D-Elyria) and State Sen. Sue Morano (D-Lorain) announced May 10 that the state will spend $75,000 to help a local program that encourages new high-tech companies to create jobs. The Great Lakes Innovation and Development Enterprise (GLIDE) will use the state funds to expand their services to more budding companies.

“To compete for high-tech jobs for Ohio the state must continue to invest in GLIDE. By helping the companies grow, we are able to grow new jobs for Ohio,” Lundy said.

GLIDE was founded in 2001 as a partnership between Lorain County Commissioners, Lorain County Community College and the Ohio Department of Development. Their mission is to promote job creation and economic growth in Lorain County and northern Ohio. GLIDE serves as a business incubator to support all facets of the start-up, development and growth of technology based companies. More here.

Chrysler to rehire 379 in Kokomo

Chrysler says it will rehire 379 laid-off workers and hire 20 new supervisors to build transmissions at its operations in Kokomo, Ind.

The company said Tuesday that it will invest $43 million in equipment to expand the Kokomo operations, which include casting and transmission plants.

Some of the workers have already been brought back, said Chrysler spokeswoman Jodi Tinson.

The factories will build components and transmissions that accompany four-cylinder engines in Chrysler, Dodge and Jeep small and midsize vehicles.

Chrysler says the investment was made possible because of a tax abatement granted by the City of Kokomo.

Business-friendly bills signed into law in Green Bay


In an area continuing to weather the lingering effects of one of the worst economic downturns since the Great Depression, Gov. Jim Doyle on Monday signed several pieces of legislation aimed at creating and retaining jobs and industry in the state. More here.

Friday, May 14, 2010

Mich. economic agency defends itself after audit



The head of Michigan's economic development agency said it will defend itself Wednesday from lawmaker criticism after an audit said some companies that received tax incentives didn't live up to agreements on how much they would pay workers.

Michigan Economic Development Corp. CEO Greg Main said agency officials will detail their review and audit practices for the tax credits at a House Tax Policy Committee hearing.

The MEDC has been under fire since the auditor general report on Michigan Economic Growth Authority tax incentives was released last month. State Sen. Nancy Cassis, R-Novi, wants the auditor general to do a more thorough review of tax credits for the 2008 and 2009 tax years because much of the audit focused on earlier years.

Cassis called the report "troubling" and said further investigation is needed.

"To put Michigan back on the right track, we must regain confidence in state programs, like MEGA," Cassis said in a statement. "This is done by being watchful and accountable with taxpayer dollars."

But Main said the follow-up report Cassis ordered will just duplicate a similar review already has started within the MEDC.

MEDC officials are upset they didn't get a chance to testify at last week's hearing of the Senate Finance Committee, which Cassis chairs.

Main said the agency agreed with much of the audit, but he has issues with how it and the MEDC have been portrayed by some lawmakers.

"I think there was an attempt to impugn the integrity of this organization and the companies who have used this program," he said.

MEDC started audits of every tax credit awarded since 2006 before the auditor general report was released last month. Those audits, done with the help of an outside firm, are to verify job creation numbers reported by companies. The audits should be finished this year.

MEDC also began conducting pre-audits before issuing tax credit certificates to companies this year and doing criminal background checks on many types of tax credit applicants. Pre-audits include on-site visits and reviews of documentation needed for verifying the number of employees hired and wages paid by companies receiving tax credits.

Gov. Jennifer Granholm ordered the background checks after a convicted embezzler out on parole was awarded a $9 million tax incentive in March. The credit was rescinded before RASCO CEO Richard Short got any money, and he would up in jail.