In Focus: Michigan Rises to the Competitive Challenge
As the competition heats up, the state is taking concrete steps to ensure Michigan maintains its advantage in attracting and retaining advanced technology companies.
Competition Heats Up
Take the global auto industry, with its birthplace in Michigan. It is undergoing the greatest transformation in its history across these global company footprints as the industry embraces new propulsion systems at a rapid rate. Because of this seismic shift in engine development and the resulting investment demands on the auto industry, states are aggressively vying to attract an unprecedented number of billion-dollar investments by global automakers and joint-venture partners from other advanced technology industries, such as Ultium — the joint venture between GM and LG Energy Solutions.
In Michigan, the auto industry directly and indirectly supports nearly 684,000 jobs and contributes $230 billion to our state’s gross economic output. However, even with our proud history and traditional advantages in the automotive manufacturing industry, we know Michigan’s homecourt advantage is not guaranteed in the industry’s increasingly electrified future. Michigan will need to earn it amid a strong and crowded playing field.
States are aggressively vying to attract an unprecedented number of billion-dollar investments by global automakers and joint-venture partners from other advanced technology industries. Michigan is not alone. The industrial Midwest — specifically our fellow Big-10 states of Illinois, Indiana, Ohio, and Wisconsin — has been not only the American manufacturing base but also its design and research and development center for mobility for generations. As we have recently seen, history alone will not site future projects in our region or dictate investment decisions. Our competitors are not waiting (witness the emergence of the Southern Automotive Alliance), and the stakes are higher than ever, as more than 300,000 Michigan jobs are at risk between now and 2031 if we aren’t ready to successfully compete for, and win, these kinds of transformational investments. While we may compete fiercely with our Midwest colleagues, we all benefit from ensuring manufacturing — and the supply chain and talent implications that come with it — remains a strong and growing presence in the region.
The Ripple Effect
As companies make transformational decisions that will determine the economic prosperity for states for a generation, Michigan ended 2021 by making strategic investments in tools that will help us compete for not only major electrification projects but also transformative projects in other technologically intensive and supply-chain rich industries such as semiconductor fabrication, vertical farming, and life sciences. These projects will have a ripple effect on communities throughout the state, as these “anchor" companies bring more suppliers to co-locate, resulting in families moving to neighborhoods throughout Michigan, buying local, attending our schools, and visiting communities along our 500-mile coastline, thereby increasing overall economic activity and adding to Michigan’s population.
Michigan ended 2021 by making strategic investments in tools that will help us compete for not only major electrification projects but also transformative projects in other technologically intensive and supply-chain rich industries. Led by a coalition of bipartisan elected officials, business leaders, economic developers, and labor and educational leaders, we are ensuring that Michigan has a market-responsive and aggressive economic development toolkit to build on our inherent competitive strengths: our people and our heritage in manufacturing and innovation. The package of flexible, competitive programs and $1 billion in initial funding signed into law by Gov. Gretchen Whitmer in late 2021 allow Michigan to further de-risk project investment economics for much larger-scale projects and better partner with local communities on site-readiness efforts.
In late January, the first transformational projects utilizing the new programs were approved as General Motors announced a $7 billion investment in Michigan — the largest in their history. The importance of securing investments like this — for the direct local and overall state economies — can’t be overstated, especially as the shift to electrification continues to revolutionize the auto and mobility industries.
While we understand the importance of winning a significant share of these new attraction projects, Team Michigan remains laser-focused on ensuring our existing Michigan-based companies, regardless of industry, need not look anywhere else in North America for a compelling investment thesis. Michigan is committed to earning these capital deployment decisions as thriving Michigan businesses look to grow and expand. The enacted new programs and funding framework are important elements in creating a new homecourt advantage for Michigan in the years ahead as technological change accelerates and creates entirely new industries and demands on our existing physical infrastructure. Taken together, these efforts are vital to secure transformational projects, retain some of the world’s most innovative companies, and accelerate long-term economic prosperity across the entirety of Michigan.
Economic development only matters if it is giving more people the chance to realize their hopes and dreams. Michigan is, and always has been, a state of innovators from Henry Ford to Barry Gordy and Sherman Poppen, who invented snowboarding. Michigan in 2022 is no different. The state continues to burnish its reputation for designing and making things that change the world.
At the end of the day, beyond the announcements and groundbreakings, what elected leaders of both major political parties, business leaders, economic developers, and organized labor accomplished the last year is rooted in what makes Michigan emblematic of America – a focus on the kitchen table. By working together, we have made a significant down payment on securing the future of our state and demonstrating that economic development only matters if it is giving more people the chance to realize their hopes and dreams.
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