Huge Jump for Michigan in Business Competitiveness


Just a few years ago, Michigan’s economic condition was the butt of every joke on TV.  However, just a couple years ago, the GOP took over the Governor seat and both Houses of the Legislature.  Today, Michigan’s overall economic competitiveness is now improving, according to the results of a second annual public policy study conducted by Northwood University on behalf of the Michigan Chamber Foundation.

“Michigan is on an aggressive comeback path,” said Dr. Timothy G. Nash, of Northwood University, who led the study. “Clearly, when you look at Michigan’s competitive position compared to other states, there is still room for improvement, but this is great news for Michigan.”

The 2013 Michigan Economic Competitiveness Study, conducted by economists from Northwood University, Rutgers University and Central Michigan University for the Michigan Chamber Foundation, analyzed over 200 variables to create the Northwood University Competitiveness Index. The variables were factored into five categories that measure economic performance. Those categories, and Michigan’s corresponding ranking, are as follows:

2013 2012
Northwood University Competitiveness Index 39th 47th
General Macroeconomic Environment 31st 48th
State Debt and Taxation 14th 10th
Workforce Composition and Cost 43rd 45th
Labor and Capital Formation 44th 45th
Regulatory Environment 26th 24th

“Michigan’s relatively strong performance in terms of debt and taxation, plus our regulatory environment, are two positive findings of this study,” said Bob Thomas, Executive Director of the Michigan Chamber Foundation. “Going forward, Michigan’s policymakers should consider building on these strengths.”

“The results are promising, but there is still work to do to improve state and local economic competitiveness,” noted Rich Studley, President & CEO of the Michigan Chamber of Commerce. “Michigan and our cities are in a fierce competitive battle with other states and foreign countries for jobs and workforce development and our labor markets still need to catch up.”

The study noted challenges with Michigan’s energy costs, auto insurance rates, population migration and entrepreneurial activity.

The Michigan Chamber Foundation’s 2013 Michigan Economic Competitiveness Study also contains two new features looking at the competitiveness of the Great Lakes Region; and a snapshot of key Great Lakes Region Cities. The Great Lakes Region, including Wisconsin, Illinois, Indiana, Ohio and Michigan, outpaced national gross state product growth rates over the last two years, with Michigan leading the region. Out of seven of the largest regional cities, both Detroit and Grand Rapids saw the highest GDP growth rates over the same period.

The study considered Michigan a non-right-to-work state for the period measured, 2000-2012, and again notes that more study is needed to quantify the relationship between right-to-work legislation and economic competitiveness.

“Still new to Michigan, the right-to-work law only took effect in March and is still subject to pending legal challenges,” noted Studley.

“Can Michigan return to the position of greatness it once occupied in the U.S. business structure?” asked Nash. “The answer is unequivocally yes, but only if we continue to confront the economic reality facing this great state.

“Michigan must set its sights high and benchmark to the best economic and political practices of this country’s top performing states,” added Nash.

“We are optimistic that Michigan will continue its path to become the comeback story of the decade as it relates to economic competitiveness,” Thomas concluded.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.

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