State needs makeover, not 'Buy Michigan' policies

Dan Redford

I lived in China for several months before recently returning. But before I left home for China, I looked for a gift that is unique to my hometown to give to my host, as is customary in Chinese culture. After searching for a gift in my price range, however, I was amazed that everything I considered purchasing had "Made in China" branded on it. I thought to myself, "Man, not much is made in America anymore."

This reality is hitting Michigan hard today. Our jobs are being taken. Our state's economy is being left behind.

Michigan needs a makeover. My observations here in China have convinced me that if we don't change soon, we'll never be able to catch up later.

Everybody else is moving too fast. China is only getting bigger and stronger. Its middle class is growing. Its professional management is improving, and its manufacturing and production sector is pumping out everything from toy cars to real ones at a staggering pace.

So why not move with the global tide? It is time to see the writing on the wall: Adapt or die. Manufacturing and production jobs are leaving the state whether we like it or not. If we don't invest our time and money into areas where we still have a competitive advantage, such as innovative ventures and 21st-century education, we will start to lose ground to countries like China in these areas as well, maybe even sooner than we think.

And here's the best part: This change doesn't have to be a bad thing. Think about it. If countries like China, Laos and Vietnam get our "old jobs," that saves Michigan-based businesses time and money to pursue other endeavors that could create dynamic growth (that is, research and development). While a car is being made in Tsingtao, CEOs, managers and business developers in Detroit could be working on creating the "what's next"-- innovation that will produce more value and opportunities here in our state.

Manufacturing-heavy companies could concentrate on creating more quality supply centers and retraining current employees for new jobs that align with new business strategies. This could help middle-class workers that depend on these industries find a new niche in this changing economy.

Not only will this prepare us to be competitive now, but it will also help us create better partnerships with players in the world economy, particularly with China, a country that has already become the world's largest car consumer. The Big Three automakers are already learning this lesson. Although sales went down in China after the financial crisis, they are still making a large profit over here as their outlays fail at home. With a population of more than 1.3 billion people, it is critical that Michigan businesses reach this large consumer base.

For this makeover to work, actors in business, education and government need to start thinking differently. Gov. Jennifer Granholm and others in Lansing have recently started pushing for more tax incentives and for state contracting preferences for companies that exclusively hire Michiganians, as well as the adoption of more "Buy Michigan First" policies. Our state must fight the urge to enact short-term policies like these that only "minimize the damage" and "protect" our state, because in the long run, they make us less competitive.

The state should instead increase tax incentives for businesses that produce value for this state, whether or not they are saving jobs in the short term. Creating an atmosphere suitable for long-term strategies focused on producing dynamic growth will not merely save jobs, but create them. Companies need to be encouraged to move branches of their business to other places if it is more efficient, and not negatively be labeled as "outsourcers."

Our business community needs to be thinking and acting globally, preparing to compete with India as much as with Indiana. While the "Buy American" philosophy seems to be regaining strength around Michigan, we cannot keep talking, much less thinking, like this. CEO's and business leaders must be willing to adapt their business strategies to the new global marketplace so Michigan businesses can compete with the world.

Just take a look at GM's new CEO Fritz Henderson, who is revamping the company by cutting out some slow moving parts and building a more agile and globally competitive firm.

This makeover will take time and, in the short term, it may result in some lost jobs. But the way things are going now, our current way of doing things is not working.

Long-term strategies that embrace instead of fight global economic trends will create better jobs for Michigan citizens that pay more and create more value. The sooner Michigan starts getting to work on this makeover, the sooner our state will be able to look in the mirror and see a new, fresh and growing 21st-century economy.

Dan Redford is a Michigan State University student and co-founder of the student group called Spotlight Michigan, which promotes awareness about entrepreneurship and innovation in Michigan. E-mail comments to letters@detnews.com