For my Wayne State speech I used three quotes to introduce our framework for what state and local policy makers and economic development leaders should focus on if they want to recreate a high prosperity Michigan – a place with a broad middle class. What are the levers that can best position Michigan and its citizens to do well economically in a flattening world, driven by globalization and technology?
Here is the framework I presented:
“The purpose of the exercise: It is not simply to reduce the deficit, but to ensure prosperity. Solvency is vital, but it is not enough.” Thomas Friedman and Michael Mandelbaum, That Used To Be Us
Friedman and Mandelbaum set out the purpose of policy: to ensure prosperity. That is the goal. Economic development should be about a rising standard of living for Michiganders. Everything else are options for how to achieve prosperity.
“In the 20th century, the most valuable assets to job creators were financial and material capital. In a changing global economy, that is no longer the case. Today, talent has surpassed other resources as the driver of economic growth.” Governor Rick Snyder, Special Message on Talent
Governor Snyder describes what matters most to obtaining prosperity: talent. Do everything else we think of as economic development and don’t increase the concentration of talent in Michigan we, almost certainly, will remain a low prosperity state.
Harvard economist Glaeser describes the levers available to state and local policy makers and economic developers that matter most in developing the talent concentrations needed to achieve prosperity. Schools to better prepare talent and cities because that is where talent is increasingly concentrated and where it is most productive. So economic development priority #1 for Michigan must be to prepare, retain and attract talent.
When we apply this framework – the purpose of policy is prosperity, talent is the driver of prosperity and schools and cities matter most to concentrating talent – we developed a five part agenda:
- Building a culture aligned with (rather than resisting) the realities of a flattening world. We need to place a far higher value on learning, an entrepreneurial spirit, and being welcoming to all.
- Ensuring the long-term success of a vibrant and agile higher education system. This means increasing public investments in higher education. Our higher education institutions—particularly the major research institutions—are the most important assets we have to develop the concentration of talent needed in a knowledge-based economy.
- Creating places where talent—particularly mobile young talent—wants to live. This means expanded public investments in quality of place, with an emphasis on vibrant central-city neighborhoods particularly in the city of Detroit
- Transforming teaching and learning so that it is aligned with the realities of a flattening world. All of education needs reinvention. Most important is to substantially increase the proportion of students who leave high school ready for higher education.
- Developing new public and, most important, private sector leadership that has moved beyond a desire to recreate the old economy as well as the old fights. Michigan needs a leadership that is clearly focused, at both the state and regional level, on preparing, retaining, and attracting talent so that we can prosper in the global economy.
The details of our agenda are laid out in our 2006 A New Agenda for a New Michigan. Clearly we have ended up with an agenda that is much different than the one being pursued in Lansing now and for at least the last decade. Policy makers of both parties have been focused on the financial and material capital that Governor Snyder wrote are no longer the chief assets for job creators. Primarily through tax cuts. But in a world where “talent has surpassed other resources as the driver of economic growth” making smart public investments in education and quality of place are much more likely to lead to prosperity.