Most of us working stiffs didn’t have time to head to downtown Motown for this months National Summit on the economy. But there’s still time for us to catch up on the big-picture thinking. Go to PBS to watch quick prescriptions for economic growth from a couple dozen leading corporate execs.
Speaking of big-picture thinking, Chris Rizik, one of Michigan’s most experienced venture capitalists, is guest blogger on Metromode this week. Among his conclusions…
Over 10% of the jobs and 18% of the GDP in the United States today are in companies with venture capital origins, and an entire generation of technology companies, from Intel to Google, are trophies of the venture capital community. At a time when states are throwing literally hundreds of thousands of dollars in incentives for each job created in manufacturing, statistics show that significantly smaller investments in venture capital yield more and higher paying jobs and companies that pay more taxes to states than their “old economy” counterparts, all while delivering returns to venture capital investors that materially outperform the stock market… In the venture capital business it means creating a generation of trained entrepreneurial managers (CEOs, CFOs, marketing people, etc.), professional service providers (i.e., lawyers, HR professionals and accountants), university technology transfer specialists and investment and banking professionals, all of whom have the relevant experience in creating and quickly growing technology-based companies in a changing world. But most of all, it means transforming a low-risk culture – a culture that has resulted from two generations of insulation by the unparalleled success of our large, institutional businesses, where innovation and daring decisions are often suppressed or bogged down by bureaucracy. This is all a major challenge that will test our region’s real desire for and commitment to change.”
Finally, how ’bout a big cheer for the next step toward a major, jobs-and-wealth-producing Aerotropolis for Metro Detroit. Nine governments finally and formally signed on this month….
“The next step in the process is help pass legislation setting up incentives to bring businesses to the area, most notably setting up Renaissance Zones eliminating most state and local business taxes,” the Detroit News reported. “Ficano said the state still stands to gain from income taxes, estimated to be about $67 million a year for over 64,000 jobs. The nine local governments involved are Romulus, Taylor, Belleville, Van Buren Township, Huron Township, Ypsilanti, Ypsilanti Township, Wayne County and Washtenaw County.”
3 Comments
I inititated a successful multi-million dollar investment in medical device inhjection molding in Michigan 1n 1998. My group was in Kansas and Massachusetts, and I sold Central Michigan to them (I was not a resident at the time). Your VC comments are very true. But Michigan was a tough sell to my VC’s. None of my investor’s fears were realized. Unions never successfully intruded, quality was superb, people were great, costs were fine, and injection molding technologies were state-of the art. I wish I could help you. Michigan’s manufacturing and tech potential is huge, it is in a “sweet spot” for growth, and the investor story can be told.
“You cannot love jobs and hate jobs creators,” Jack Kemp used to say.
While I applaud the progress made toward the Aerotropolis, I am mortified by the “jobs first-profits-second” rhetoric surrounding it. I am sympatheric to the hunger of our elected officials so show progress in helping truly needy Michigan citizens. But JOBS-JOBS-JOBS headlines represent a kind of cart-before-the-horse mentality that reveals that Michigan still has not shaken the entitlement mentality that has so damaged our reputation in the world.
May I pause a moment to tell you how bad it is? This from “THE ECONOMIST”…It was written by John Kao, a business consultant who published a book entitled, “INNOVATION NATION”, which was reviewed in the Book Review section of THE ECONOMIST.
RE: The US becoming the fat, complacent “Detroit of Nations”
“I see a crisis brewing, and it makes me angry. We should be doing better than we are. We have the talent, money, track record and infrastructure necessary for continued success. But we are rapidly becoming the fat, complacent Detroit of nations. We are losing a collective sense of purpose along with our fire, ambition, and determination to achieve.”
The fact that this pull quote resonated with the world is disturbing. We must acknowledge at least an iota of truth it the author’s metaphor as we press forward on this Aerotropolis.
To conclude with helpful suggestions:
1. Call it Great Lakes International Aerotropolis, or something like this. We may only have a short window of time to make this Aerotropolis thing work. In my opinion, as someone who grew up in Detroit and who travels internationally, we must break free from anything that sounds “Detroit-Like”
2. Get someone from Canada on that Board. I found nothing on the Aerotropolis web site that even aknowledges the proximity of Canada. How well do you think that goes over with the internationalists at the universities along I-94?
3. Focus on safety and logistics rather than the health care industry (health care is going to be nationalized anyway and, in the long run, the profit motive will be removed). The Netherlands, a small country with a 700-year old middle class, is an example of how to prosper with trade as its main source of income. We can be that way, too. But we’re going to have to sharpen our pencils logistics-wise. Someone ought to be studying the success of hubs like Memphis to see how our Aerotropolis could improve upon them.
4. Develop the real estate along I-94 between Ann Arbor and DTE/GLI. Mimic the dramatic, deep thinking 50 years ago that resulted in the City of Troy today.
Hope this helps.
Why not set the goal? End the Michigan recession now.
How? Make all of Michigan an Aerotropolis zone. Stop picking winners and losers. Make everyone a winner. Make every business a winner. Let the remaining state tax revenues grow to balance the budget.