Michigan’s economic future tied to investing in special assets

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State of Michigan Board of Education President John Austin

Michigan is emerging from a painful period, defined by restructuring and job losses in the auto and factory based economy, and the beginnings of a renaissance to a more diverse, better educated, cleaner-greener, high-tech economic future.


What matters most to accelerate this economic transformation? Evidence is overwhelming that the richest states, with growing per capita income, are the ones that are the best educated. Eight of the 10 highest per capita income states have the highest education attainment rates.Michigan is not one of these states, ranking 37th   in per capita income and 34th in education attainment.


The “winning states” also, on balance, strategically invest more in education, infrastructure, research and development, cities, and their natural assets.


Colorado is one of the richer states today.  Why? Forty years of in-migration of highly educated people attracted to the great outdoors and Rocky Mountains. They alsobuilt a world class airport, and a thriving downtown Denver. Heck, they even voted to tax themselves to pay for a regional rail transit system.


Look too at North Carolina and its Research Triangle.  Public-private partnerships and shared investment in education and higher education—under both Democrat and Republican Governors – brought North Carolina out of the“raccoon club” and into the front ranks of new economy states.


Ditto Pittsburgh, where, like Detroit, a dominant industry, steel, was a middle class job generator. It tanked in the‘70s and ‘80s. Incomes in Pittsburgh plummeted. Thousands, young and old, fled the region. (Sound familiar?) Today Pittsburgh’s incomes are soaring, and young people are returning. Why? They built-outCarnegie-Mellon and University of Pittsburgh, with new medical, life sciences, clean energy and IT firms,  and spruced up their special “river city” location as an attractive urban destination.


Guess what. We have similar assets. World-leadinguniversities. Historic cities and towns.  A beautifuloutdoors, water, and the Great Lakes. And great hard-working people.


These assets ultimately matter more to job creation than business climate.  Just ask Bill Gates, who told state legislators: “Take the two big leading industries, biology and medicine and computer technology. (These industries) are more sensitive to the quality of talent in a location than they are to tax policies….Job creation and the success for those industries have been overwhelmingly in the locations where there is a great university. There is almost a perfect correlation between the number of jobs in a region and the strength of the universities.”


What have we been doing to these assets in Michigan?Over recent years Michigan is last of all states in our support for higher education, pricing these great schools out of reach of working class Michiganders. We’ve cut support for roads, bridges and infrastructure.  Revenue sharing to cities and towns has been slashed. Capital expenditure on Michigan parks has plummeted.


We cannot grow new jobs by decimating the foundationsof economic growth, the things the private sector does not do on its own. The market does not create schools and educate people.  The private sector did not create the University of Michigan-Dearborn, nor Grand Valley University, nor Michigan’s Community Colleges. Nor does the market magically build the highways, airports,cyber-infrastructure, our state forest and parks system, norclean and maintain the Great Lakes for enjoyment.


To grow faster, we must invest in the things that make us strong.  Chief among those is people, helping young and old get a great education, keeping our young talent here, and  welcoming new immigrants to come to Michigan –who start new businesses, reinvigorate our communities with their energy, diversity and sheer numbers.  That is the path to new prosperity.

About John Austin

John Austin is the elected President of the Michigan State Board of Education, Non-resident Senior Fellow with the Brookings Institute, and Visiting Faculty at University of Michigan.