Michigan Economic Outlook Reveals Accomplishments, Challenges

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ANN ARBOR — Michigan has plenty of room for new economic initiatives and leadership, according the results of the recently completed first annual Michigan Economic Outlook 2012 whose results were unveiled at the Economic Club of Detroit.

Conducted Nov. 12 to Dec. 7 by Baker Strategy Group and CFI Group of Ann Arbor, the survey had nearly 3,000 responses from 70 business, government and nonprofit organizations. Of the respondents, 87 percent or 2,611 are employed either full time or part-time and can be grouped in three sectors: business 60 percent, nonprofits 15 percent, and public 25 percent.

A principal finding of the survey, according the David Baker, managing partner of the firm, is that “changing Michigan will require a change in our culture. A new Michigan requires new organization DNA; organizations that involve employees, promote a clear vision and adapt well to change.”

He also noted that while improving, “Michigan is not yet a great place to grow and business and the near-term economic outlook is not as bright we would hope.”

Baker reviewed the findings to kick off panel discussion of leading state economic leaders Michael Finney, president and CEO of the Michigan Economic Development Corp., and Charles Ballard, professor of economics at Michigan State University. Tom Walsh, business columnist of the Detroit Free Press, moderated the group.

The business, nonprofits and public segments agreed to the following:
* Michigan is not yet a great place to grow a business
* The vast majority of businesses and nonprofits plan to remain in Michigan
* Businesses can do a better job in providing training and education for a skilled workforce
* Health care costs and employee benefits costs are the top two challenges that businesses face
* Lack of available skilled labor is not the primary challenge that the business sector faces in Michigan as a whole. Health care costs and other taxes and costs are greater challenges to businesses in Michigan.
* Michigan overall is not yet a great place to start a business, is not business friendly, and does not have a strong, vibrant economy
* Michigan must attract and retain top talent to the state
* Michigan must ensure water is clean and the Great Lakes protected
* Michigan regions do not have efficient, seamless mass transportation systems
* Michigan regions do not have unquestionable identity as a vibrant technology hub
* Michigan has great places of worship

The three segments disagreed on these areas:
* The nonprofit sector is more likely to recommend Michigan, their region, and their community as a great place for business
* The nonprofit sector has the strongest outlook for the next three years, while the public sector has the weakest outlook over that same period
* The nonprofit and public sectors do not fully appreciate the tax challenges imposed on Michigan businesses
* The business sector says businesses support the local community, but the nonprofit and public sectors do not necessarily agree
* The business and nonprofit sectors are more enthusiastic about Michigan as a great place for raising a family
* The business sector does not agree with the nonprofit and public sectors that Michigan must better fund vital services (public safety, fire, transportation)

Potential opportunities were identified by sector as follows:
* Public Sector: Recent tax changes, such as the elimination of the MBT and personal property taxes, are critical for Michigan business. While all sectors agree that Michigan must attract quality talent, the bigger challenges that businesses face are healthcare costs. The public sector should focus efforts on working with the private sector to find ways to alleviate this pain for Michigan businesses and nonprofits.
* Business Sector: If we are to see a new Michigan, businesses need to take a leadership role by strengthening training and education in the workplace, designing jobs that attract skilled labor, and contributing and supporting efforts to build up the local community.
* Nonprofit Sector: Nonprofits are critical for making Michigan a great place to grow a business. Churches, charitable organizations, and human services organizations help heal our communities. There is a great need in Michigan. And as more contribution and support is expected from businesses, nonprofits must all the more demonstrate effective and well-run organizations that fulfilling their mission to the community.

Baker and his firm have conducted surveys of Michigan manufacturers for the past four years. Those have shown increasingly positive sentiment about the state’s business climate and the future of manufacturing in the state.

CFI Group is a global leader in providing customer feedback insights through analytics. CFI Group provides a technology platform that leverages the science of the American Customer Satisfaction Index. This platform continuously measures the customer experience across multiple channels, benchmarks performance, and prioritizes improvements for maximum impact.

Partners in the program include Eiler Communications, Apogee Insights Group, Move Communications and Denison Consulting.

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