2010-02-21 / Marketplace

Michigan has got to get smarter, says economist

BY PHIL FOLEY STAFF WRITER

Lou Glazer, president and co-founder of Michigan Future Inc., chats with Patricia Lucas, executive director of the Lapeer Development Corp., prior to the Economic Club of Lapeer County’s luncheon at the Lapeer Country Club Thursday. Photo by PHIL FOLEY Lou Glazer, president and co-founder of Michigan Future Inc., chats with Patricia Lucas, executive director of the Lapeer Development Corp., prior to the Economic Club of Lapeer County’s luncheon at the Lapeer Country Club Thursday. Photo by PHIL FOLEY ELBA TWP. — If Michigan doesn’t get a whole lot smarter, it’s going to get a whole lot poorer. That’s the simple message Lou Glazer, president and co-founder of Michigan Future Inc., brought to the Economic Club of Lapeer County Thursday.

Glazer told club members the state’s income ranking slipped from 16th to 33rd between 2007 and 2009, and while his organization is days away from releasing its third annual state progress report, he doesn’t expect the picture to get any prettier. In just one year, Michigan dropped from 33th to 37th place.

The one thing that hasn’t changed, he said, is Michigan’s college attainment ranking — 34th.

He pointed out that Alabama had a lower percentage of college graduates (21.39%) in 2007 than Michigan and a higher poverty rate (16.6%) and a lower per-capita income ($32,401). At the same time, Minnesota had a high percentage of college graduates (30.95%), a lower poverty rate (9.5%) and a higher per-capita income ($40,969) than the Great Lakes State.

The question, he said, is which direction does the state want to go.

Glazer said Michigan, which ended the 20th century in the top 20 states for income, could well end the first decade of the 21st century in the bottom 10, alongside places like Mississippi and West Virginia.

“Michigan was one of the most prosperous places on the planet for much of the last century,” said Glazer, noting that that prosperity was based on the auto industry, which has fundamentally changed.

He said that while Michigan “basically invented the 20th century middle class,” the question now is “How do you get back there?”

The answer, he said, is a knowledge-based economy. Surprisingly, he said, that doesn’t mean computer software. In fact, information services accounts for only 5 percent of what Glazer refers to as the knowledge economy. He said professional and business services, health services and education account for 67 percent of the knowledge economy.

While some have pointed to Michigan’s gray skies as a factor in the state’s failure to retain it’s best and brightest, Glazer noted that seven of the nation’s most prosperous metropolitan areas are in cold-weather regions.

Pointing to successful communities of similar size, Glazer said, “Lansing’s fundamental problem is that nobody who goes to Michigan State stays.”

“You cannot participate in the knowledge economy without human capital,” he said, and increasingly the state’s best and brightest are voting with their feet. He said fully one-third of recent college graduates who left Michigan had a Michigan job offer.

Glazer and his organization have five recommendations for turning the state around:

•Align Michigan culture with the new flat-world realities

•Create places were talent wants to live

•Ensure success of vibrant higher education system

•Reinvent K-12 education to align with new realties

•Develop new public and — more importantly — private sector leaders.

Glazer said that while there is “reason for hope” in the state, “there is no quick fix.” He said that while the Pittsburgh metropolitan area shed its image of being in the Rust Belt after the collapse of big steel and in 2008 posted one of the highest per-capita incomes in the nation, it took 30 years to do it and along the way the region lost 20 percent of its population.

He noted that Massachusetts survived the loss of the textile industry that once dominated the region.

“There is a way out. The decline doesn’t have to be permanent,” he said. The key, however, is education and the state’s cultural attitude toward education.

He said recent studies have shown only one-third of the state’s population believes education beyond high school is essential to success, and only half thinks it’s important.

At the end of the day, he said, “We must get younger and better educated or we will get poorer.”

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