Michigan's grades on a benchmarking study of economic competitiveness show strong need for back-to-basics tutoring. However, report analysts suggest that leaves plenty of room for improvement with a return to good work habits.
The study, released by Business Leaders for Michigan (http://www.businessleadersformichigan.com/), assessed more than 100 factors important to job creation. It was conducted by the Detroit office of McKinsey & Company, a global management consulting firm. Among the findings:
• Michigan’s economic performance has eroded significantly, with both GDP growth over the past 18 months and unemployment last among the 50 states.
• The state’s business costs are uncompetitive, with the cost of doing business 4% above the
national average - driven by high corporate taxes and total labor costs.
national average - driven by high corporate taxes and total labor costs.
• Michigan is delivering average to above average results from innovation and
entrepreneurism, but additional work is needed to become a leading state.
entrepreneurism, but additional work is needed to become a leading state.
• The state’s quality of life has strong fundamentals, but has a very poor perception.
Hans-Werner Kaas, a managing partner at McKinsey & Company, said Michigan has been an growth underachiever in 90% of economic sectors since 1990. Still, he observes, "there are genuine strengths that Michigan could better leverage to turn this situation around, like our engineering talent base, universities, manufacturing skills, and quality of life. We need to find ways to build on these advantages, and we need a well-diversified strategy for scaling economic development into adjacent industries with attractive growth potential”
Hans-Werner Kaas, a managing partner at McKinsey & Company, said Michigan has been an growth underachiever in 90% of economic sectors since 1990. Still, he observes, "there are genuine strengths that Michigan could better leverage to turn this situation around, like our engineering talent base, universities, manufacturing skills, and quality of life. We need to find ways to build on these advantages, and we need a well-diversified strategy for scaling economic development into adjacent industries with attractive growth potential”
Adds Mark Murray, president of Meijer Inc. and Co-Chair of the Business LeadersBenchmarking Committee: “The 4 percentage point penalty businesses pay in Michigan can be the entire profit margin for many companies – whether they stay in business or not. We have to do a better job getting competitive on costs to leverage our strengths in a more powerful way.”
The benchmarking data informed many of the recommendations in the Business Leaders Turnaround Plan, which can also be viewed at http://www.michiganturnaroundplan.com/.
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