Beyond the Buzzwords

We hear a lot of talk about a knowledge based economy that creates thousands of 21st century jobs. Buzzwords like "green jobs","economic gardening" and "innovation clusters" blanket the campaign literature of candidates across the state, including mine. In these tough economic times, it's certainly reassuring to think about a light at the end of the tunnel.

But, beyond vague concepts like "creating a better business climate" or "investing in our future" most candidates don't attempt to answer the most important question: What specifically can we do to build a new economy for Michigan?

There are a number of concrete steps we can take that will create jobs today while diversifying and growing our economy over the long term. Look at our primary economic strength - we know how to make things!  Unfortunately, the things we've been making (cars, boats, furniture) have been declining markets over the past decade. The good news is that our ability to bend metal, lay fiberglass, and extrude plastic opens up a world of possibility in other areas - wind turbines, advanced batteries, solar panels, medical devices, homeland security. Many of our more entrepreneurial manufacturers have long recognized the need for diversification and have started to make the transition.

So what’s the problem? Because of declining collateral values and cash flows, most of these companies have found it nearly impossible to finance new lines of business. We’ve all heard the refrain: “Banks aren’t lending. They’ve redlined Michigan.” While this is a bit of hyperbole - go talk to your local community banker - it’s true that increased pressure from regulators and weakened balance sheets have made it much harder to qualify for a loan. 

That’s where the Michigan Supplier Diversification Fund (MSDF) comes in. My team and I at the MEDC designed this program in conjunction with small businesses and community bankers to help traditional manufacturers diversify their customer base and transition their skills into new industries. Unlike a typical government loan guarantee program, the MSDF presents a real solution - making borrowers healthier.

To date, $14 million from the program has facilitated more than $60 million in private sector loans helping to create or retain more than 4,500 jobs.  There’s more good news. Last fall, I testified in front of Congress on the importance of this new type of program, and I’m proud to say that there is now legislation moving with the support of the Obama administration to create a $2 billion national program based on the MSDF.

This is great news for Michigan. It will mean tens of thousands of jobs in the short run, and most importantly, it’s a huge part of building a new Michigan economy!