Michigan s Economic Future and MEDC Initiatives Doug Smith, Senior Vice President, Governmental Affairs & Strategic Partnerships Michigan Economic Development Corporation Apartment Association of Michigan November 21, 2014
Pace of Change In 1920 S&P 500 Companies - 67 years In 2015 S&P 500 Companies - 15 years In 10 years 40% of Fortune 500 will not exist Company Changes (Kodak) 1996 2012 $28 billion (market cap) bankrupt 140,000 employees 17,000 XIAOMI (Shau Me) 1.5 years $12 billion (market cap)
Pace of Change Global Population 7 billion Internet connections 2015-23% 2020-66% (40% of 7 billion connected in 5 years)
5,500,000 Employment Levels in Michigan 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008 Jan 2010 Jan 2012 Jan 2014 Source: Michigan Bureau of Labor Market Information & Strategic Initiatives, LAUS - seasonally adjusted Shaded areas denote NBER (Nat'l Bureau of Economic Research) defined national recessions
Real GDP by state (millions of chained 2009 dollars) Levels Bureau of Economic Analysis All industry total Fips Area 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 26000 Michigan 423,952 411,560 422,765 430,816 428,476 433,324 426,355 420,156 399,656 366,302 385,779 394,201 400,232 408,218 Legend / Footnotes: Note-- NAICS Industry detail is based on the 2007 North American Industry Classification System (NAICS). Last updated: June 11, 2014 - advance statisticss for 2013 and revised statistics for 1997-2012. 440,000 Inflation-adjusted Gross State Product 420,000 Millions of U.S. Dollars 400,000 380,000 360,000 340,000 320,000 2000 2002 2004 2006 2008 2010 2012 Source: U.S. Bureau of Economic Analysis. Inflation-adjusted, chained 2009 dollars. Shaded areas denote NBER (Nat'l Bureau of Economic Research) defined national recessions
Business Climate and Development Talent Enhancement Community Development Image Enhancement!
Leveraging Change in Michigan Business Tax Reform Eliminated MBT, new 6% CIT Personal property tax phase out Corporate tax rank #7 from #49-3rd among the nation s 12 largest states Reinvented Government Eliminated a $1.5 billion state budget deficit Repaid $3.2 billion Unemployment Trust Fund balance Eliminated 1300+ state rules and regulations Michigan became the 25th Right to Work state
1521 Regulations and Rules have been eliminated! Insurance & Finance Working to eliminate unnecessary operating requirements Environmental 11% of DEQ Rules have been recommended for elimination Workplace Safety 624 recommended changes to 334 separate MIOSHA rules and the work continues Liquor Control Encouraging growth of Michigan s craft brewing and wine industries Occupational Licensing Reducing barriers to entry for 18 professions Inspections & Permitting Creating a streamlined and predictable inspections and permitting process for construction projects www.michigan.gov/orr
Prosperity Regions 1. State aligned resources team work 2. Regional inventory of economic development assets regional economic growth vision 3. Encourage and support collaboration Outcome: state no longer seeks one issue one answer
Reinvention Eligibility Economic Development Asset Based Economic Development
New Practice of Business Development 1. New Customers (PMBC, Export, PTAC-Defense) 2. Talent 3. Access to Capital
PureMichiganB2B.com A public-private initiative developed to uncover and develop new business opportunities and support services for Michigan companies.
Why? New Michigan Business 2012-2016 = $8 Billion $197,000 Increase in New Business = 1 New Job $8 Billion = 40,000 Jobs $1.8 Billion new contracts generated for Michigan businesses!
FY 2012: 132 Companies Entered 62 New Markets Finland, 1 Kosovo, 1 Netherlands, 2 Canada, 31 Romania, 1 Poland, 3 Mexico, 8 Bahrain, Egypt, 1 1 Israel, 1 Jordan, 2 Kuwait, 2 Oman, 2 Qatar, 4 Saudi Arabia, 6 Sweden, 1 Ukraine, 1 South Africa, 4 Turkey, 2 UK, 5 Switzerland, 4 Spain, 2 Slovenia, 1 Russia, 2 Norway, 1 Netherlands, 2 UAE, 7 Argentina, 3 Aruba, 1 Brazil, 19 Italy, 7 Belgium, 1 Hungary, 1 Chile, 2 Germany, 16 Colombia, 2 Costa Rica, 4 Dominican Republic, 1 Panama, 2 Peru, 1 Suriname, 1 Uruguay, 1 Nicaragua, 1 El Salvador, 1 Honduras, 1 Guatemala, 1 Belize, 1 Australia, 3 France, 14 Denmark, 1 Austria, 2 Brunei, 1 Vietnam, 4 Thailand, 4 Singapore, 6 India, 12 New Zealand, 1 Malaysia, 2 Japan, 5 Korea, 2 Indonesia, 1 China, 40
Top 10 Countries for Michigan Exports (Values in USD, Source: http://tse.export.gov) Top 5 Food and Agriculture Markets in 2010 in Descending Order: Canada, Mexico, Japan, South Korea and China (Source: U.S. Department of Agriculture)
Access to Capital Grants Business Development & Community Revitalization Programs, $120 million Michigan Film Incentive Program, $50 million Loans Collateral Support and Loan Participation Programs, $100 million Grow Michigan, $50 million Equity State investments of over $675 million in venture capital and private equity firms who are required to invest in Michigan companies
Talent Enhancement Programs Addressing the skills gap Skilled Trades Training Fund Michigan Advanced Technician Training (MAT 2 ) Connecting employers to workers Michigan Works! Agencies Virtual and physical job fairs Helping seasoned professionals re-skill Shifting Gears Connecting workers to permanent employment Community Ventures
How are we doing? Michigan is America s comeback state #1 on the list of states that recovered most from the Great Recession In 2011, the Michigan economy grew 2.3%, the 6th best growth rate in the U.S. Corporate tax rank #7 from #49-3rd among the 12 largest states Today, we have 177,000 new payroll jobs Unemployment is 8.8% down from 14.2% in 2009 Michigan home sales were up 10% in 2012 Michigan ranks #3 for high-tech job growth Michigan employers are saving $1 Billion in unemployment costs Moody s and Standard & Poor s revised Michigan s outlook to positive Fitch Ratings improved Michigan s general obligation bonds from AA- to AA
Jobs Auto supports 513,300 jobs in Michigan 14.6% of Michigan s workforce is employed in automotive 3 22.1% of all direct auto jobs in the United States are in Michigan 3 Industry Presence Michigan is home to 61 of the top 100 North American automotive suppliers 4 Michigan produces 23% of the vehicles in the nation, more than any other state Michigan leads U.S powertrain production with 31% of engine and 26% of transmission output Michigan is Automotive! State Revenue The auto industry generates $2.8 Billion in direct taxes and fees to Michigan s Treasury in 2010 Direct automotive jobs generate $14.5 Billion in personal income in Michigan Technology & Talent Michigan is the automotive R&D hub with 370 R&D centers and more than 70% of all U.S. automotive R&D spending Michigan ranks #1 nationally in concentration of engineers, with 65,000 industrial, mechanical, and electrical engineers Michigan has 650 automotive education programs offered at 91 institutions
www.puremichiganb2b.com www.michiganbusiness.org www.michiganbusiness.org/ marketing-toolkit www.mitalent.org