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Straight Talk

By James Hettinger
Senior Advisor, Battle Creek Unlimited
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Governor Rick Snyder and his team would be well advised to take note of a white paper recently published by the Michigan Economic Developers Association (MEDA), a professional association of approximately 380 professional practitioners, on how to re-make Michigan.

I should disclose that I consulted on the project with MEDA to produce the white paper. The paper, nonetheless, is significant because it is the first time Michigan economic development practitioners have banded together to make a comprehensive statement about the economic development strategy and approach of the state of Michigan.

It has been a continuing bewilderment that when policy makers want to formulate economic development strategies, they ask interest groups, lobbyists, universities and think tanks, thereby giving the impression that if they wanted to know anything about brain surgery, they would ask diesel mechanics rather than brain surgeons.

There are lessons in the MEDA white paper that ought to be heeded by Lansing and Washington, D.C. People will not invest in such an extreme climate of cost uncertainty. And if investment capital stays on the sidelines, you can expect any new job or wealth creation processes to remain stymied as well.

Both levels of government must now fashion new taxation and regulatory policies that are stable, predictable and contain some reasonable prospect of a return on the investment. As long as employers are facing significant cost uncertainties in healthcare, environmental, workforce and financial matters they will refuse to invest new dollars.

At the state level, MEDA practitioners strongly believe that the Michigan Business Tax (MBT) needs to be replaced by something stable, predictable and easy to explain. Practitioners throughout the state have had the doubtful pleasure of trying to explain to prospects just how the MBT works, not to mention those of us who have tried to explain it to foreign-owned enterprises.

Tactically, we need, with similar urgency, to redesign our regulatory and permitting processes to foster clarity and predictability. In terms of regulatory permitting, our competitors get approvals done in weeks. Michigan can take months, even years to approve regulatory permits, in circumstances where time really is money and “first-to-market” in a hypercompetitive world really is a huge advantage. We might put a lot of stock and faith in entrepreneurs as a way out of our economic misery, but if we think we can support and nurture job creation entrepreneurial pursuits, we are going to have to do it with “can-do” customer service attitudes rather than the grumpy bureaucrat who goes on a two-week vacation halfway through the permitting process.

Michigan businesses and employers will respond positively to environments which are helpful and friendly to investment.

Finally, Michigan economic development practitioners believe that job and wealth creation is such a priority of state government that it should be cabinet level. Governor Snyder needs to make economic development the true priority of his administration and he then has to make international trade and investment a priority of state economic development. The new governor needs to recognize the distinctions in Michigan’s regions and that one size will not fit all. What works and is appreciated in Seney, Michigan, may not be appropriate for Saginaw.

Very few people bring the business acumen to state government as will our new governor. As a company-builder and investor, he, of all people, will be the first to recognize the wise advice meted out by Michigan’s economic development practitioner community. The white paper is available at: www.medaweb.org.

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