This report provides a fact-based assessment of Michigan’s economic competitiveness relative to other states and nations. Michigan’s performance is compared with that of other
states on key output (e.g., employment, GDP) and input (e.g., labor cost) metrics. A set of “traditional,” “new economy,” “global,” and “Top Ten” benchmark states were used to
provide multiple reference points to evaluate Michigan’s performance.
While the intent of this report is not to make recommendations, general conclusions are
outlined. These conclusions are used by Business Leaders for Michigan to help develop strategies for making Michigan a “Top Ten” state for job, economic, and personal income growth, such as those contained in the Michigan Turnaround Plan.
4. This report provides a fact-based assessment of Michigan’s economic competitiveness
relative to other states and nations. Michigan’s performance is compared with that of other
states on key output (e.g., employment, GDP) and input (e.g., labor cost) metrics. A set of
“traditional,” “new economy,” “global,” and “Top Ten” benchmark states were used to
provide multiple reference points to evaluate Michigan’s performance. "
"
While the intent of this report is not to make recommendations, general conclusions are
outlined. These conclusions are used by Business Leaders for Michigan to help develop
strategies for making Michigan a “Top Ten” state for job, economic, and personal income
growth, such as those contained in the Michigan Turnaround Plan.
"
Research for the 2013 Economic Competitiveness Benchmarking Report was conducted
by Anderson Economic Group, a research and consulting firm with expertise in economics,
public policy, finance, and industry analysis."
2013 Economic Competitiveness Benchmarking Report!
Introduction
4
5. ▪ Michigan continues to recover faster than most states, but has more ground to make up.!
– Growth in employment, per capita GDP, and per capita personal income has exceeded most peers since 2009, but
per capita GDP and per capita income levels remain below pre-recessionary levels.!
!
▪ Michigan’s corporate tax climate has risen from the 2nd worst to the 7th best nationally.!
– The overall tax climate has improved to 12th best nationally. !
– The state ranks in the bottom 10 nationally for the total cost of doing business.!
– Business incentives are less competitive than other states.!
!
▪ Michigan’s talent production is good, but college attainment is low.!
– Michigan’s colleges confer a large number of degrees and award more “critical skills” degrees than most peer
states.!
– The percentage of the population with an associate’s degree or above is lower than “Top Ten” states.!
– Michigan’s talent deficit can be attributed, in part, to low numbers of degreed individuals migrating to the state.!
▪ Michigan is a “Top Ten” state for R&D and patent activity and growing in venture capital
availability.!
– University R&D is among the “Top Ten” in the nation and Michigan ranks 13th in patents awarded.!
– Michigan increased venture capital investment by more than 60%, improving its ranking from 33rd to 19th. !
▪ National business leader perceptions do not reflect Michigan‘s improved business climate!
– Michigan has passed significant reforms that improved the business climate for most businesses, but national
business climate rankings do not reflect these improvements.!
!
2013 Economic Competitiveness Benchmarking Report!
Key Findings
5
6. Key Findings: Michigan’s Performance – 2009-2012
2013 Economic Competitiveness Benchmarking Report!
* 2012 data not available - 2011 and 2010-2011 growth are used.
** 2012 indicators reflect Michigan's performance on the Tax Foundation 2013 State Business Tax Climate Index.
6
0
3.75
7.5
11.25
15
7 2 12
14 3 4
Unemployment Rate
Real Per Capita GDP
Per Capita Personal Income
Population
Cost of Doing Business*
Corporate Tax Climate
Overall Business Tax Climate
Unit Cost of Labor*
Electricity Costs*
Business Climate Rankings
Talent
8th Grade Math Proficiency*
4th Grade Reading Proficiency*
College & Career Ready Students
Total Degrees Conferred
Educational Attainment*
Infrastructure
% of Urban Roads in Poor Condition
Innovation
All Exports
University R&D Expenditures*
U.S. Patents per 100,000 Residents
Venture Capital Investment
Entrepreneurial Activity
In 2009, Michigan was below Top Ten states on
most metrics and heading in the wrong direction.
While not yet at Top Ten levels, Michigan has
reversed course and is improving in most areas.
2009
Trend Top 10
2012 2009 2012
q
q
q
q
q
tu
q
p
q
q
p
q
p
p
tu
q
q
p
p
q
p
p
p
p
p
p
p
p
tu
q
tu
p
p
p
p
p
q
p
q
tu
p
q
Improving
Holding
Declining
OUTPUTINPUT-CostINPUT-Value
7. 1 Population metric added to the 2013 Benchmarking Report as an indicator of a state’s economic health.
2 “Top Ten“ is comprised of states with highest average rankings across Per Capita GDP Level and Growth, Per Capita Personal Income Level and Growth, Employment
Level and Growth, and Population Level and Growth (See slide 8). 2012 “Top Ten” states Maryland and Virginia replaced in the 2013 “Top Ten” by Iowa and
Massachusetts.
2013 Economic Competitiveness Benchmarking Report!
Peer States were selected based on traditional peers
and new economy peers.!
California
Texas
Georgia
North Carolina
Massachusetts Virginia
Traditional Benchmarks!
Alabama
Ohio
Indiana
Illinois
Key Indicators!
“Top Ten” states were selected based on average
ranking on key job, economic, personal income, and
population indicators (2002- 2012).!
!New Economy Benchmarks!
Tennessee
Colorado
Nebraska
Massachusetts
Alaska
New York
North Dakota
Iowa
Texas
South Dakota
Washington
Wyoming
“Top Ten” 2!
Michigan’s performance on economic output and input metrics compared!
to selected traditional and new economy peers and the “Top Ten” states
Per Capita
GDP Level and
Growth!
Per Capita
Income Level
and Growth !
Employment Level
and Growth!
Population
Level and
Growth1!
7
8. Michigan’s performance on input output metrics is tracked over time and
against the average level of performance of “Top Ten” states.!
2013 Economic Competitiveness Benchmarking Report!
Improving!
Holding!
Declining!
At or better than!
“Top Ten” Average!
Worse than !
“Top Ten” Average!
Performance Against “Top Ten”!
Trend Against Prior Year Performance!
TRENDING SYMBOLS: !
Track Michigan’s performance over time and against the “Top
Ten” states.
Output!
Changes in input
and output metrics
compared across states
Input!
BENCHMARK METRICS:!
Divided into input and output metrics.
Cost Inputs!
• Labor Cost!
GDP!
• Incentives!
• Energy!
• Talent (4th Grade Reading 8th
Grade Math Scores, Career and
College Readiness, Degrees
Conferred, Education
Attainment)!
!
• Infrastructure (Percent of
Urban Roads in Poor Condition)!
• Taxes!
• Innovation (Exports, RD
Expenditures, Patents, Venture
Capital, Entrepreneurial Activity) !
Employment!
Income!
• Cost of Doing Business!
Value Inputs!
• Government!
• Business Climate Rankings!
Population!
8
9. Over the last ten years, these states averaged the highest ranking across four basic indicators
of jobs, income, GDP, and population. We look at a weighted average rank for both level and ten-
year growth for these four categories.!
“Top Ten” States for Job and Economic Growth (2002-2012)!
! !Source: Bureau of Economic Analysis; U.S. Census Bureau; Bureau of Labor Statistics; team analysis!
2013 Economic Competitiveness Benchmarking Report!
Overall
Rank! State!
Employment
Growth1!
Employment
Level1!
Per Capita
Income
Growth!
Per Capita
Income
Level!
Population
Growth!
Population
Level!
Per
Capita
GDP
Growth!
Per
Capita
GDP
Level!
1! North Dakota! 1! 1! 1! 6! 21! 48! 1! 3!
2! Wyoming! 6! 16! 4! 7! 8! 50! 27! 5!
3! South Dakota! 4! 8! 2! 18! 23! 46! 14! 20!
4! New York! 2! 20! 6! 4! 46! 3! 5! 7!
5! Massachusetts! 10! 2! 24! 2! 41! 14! 13! 6!
6! Nebraska! 12! 4! 14! 20! 28! 37! 4! 18!
7! Iowa! 9! 6! 7! 22! 35! 30! 3! 23!
8! Alaska! 3! 34! 16! 10! 14! 47! 32! 2!
9! Texas! 16! 30! 11! 25! 4! 2! 15! 14!
10! Washington! 17! 32! 25! 12! 13! 13! 12! 10!
1 Employment is measured per capita to control for state size.
9
10. Output metrics focus on areas indicative of strong economic performance!
Output Metrics!
2013 Economic Competitiveness Benchmarking Report!
Growth!
Per Capita
GDP!
Per Capita
Income!
Population!
Employment!
10
12. !
Employment: 2009-2012
2013 Economic Competitiveness Benchmarking Report!
Source: Bureau of Economic Analysis; team analysis
Michigan’s annual unemployment rate is falling 4 times faster than the U.S.
average but is still 1% point higher.
13.4%!
12.7%!
10.3%!
9.1%!9.3%!
9.6%!
8.9%!
8.1%!
7.0%!
8.0%!
9.0%!
10.0%!
11.0%!
12.0%!
13.0%!
14.0%!
2009! 2010! 2011! 2012!
Annual Unemployment Rate!
Michigan! United States!
2009-2012 Growth: -4.3% pts.!
2009-2012 Growth: -1.2% pts.!
12
13. 0.8%
2.3%!
0.7%!
1.1%!
-1.2%!
1.6%!
1.3%!
2.5%!
0.3%!
1.5%!
0.4%!
-1.0%!
2.1%!
-0.3%!
$50,099
$35,298 !
$53,221 !
$46,498 !
$47,127 !
$46,151 !
$46,029 !
$39,065 !
$32,615 !
$37,254 !
$40,289 !
$46,242 !
$37,690 !
$37,702 !
Michigan Turnaround Plan: “Top Ten” State for Economic Growth!
MI!
!
State!
2002-12 !
CAGR!
2011-12
Growth!
2012 !
Level!
!Source: Bureau of Economic Analysis; U.S. Census Bureau; team analysis
2013 Economic Competitiveness Benchmarking Report!
P !
!
E !
!
E !
!
R!
!
S!
4!
20
16
45
10
14
3
30
11
28
43
7
38
2011-12 !
Rank!
While Michigan’s
per capita GDP has
declined since
2002, growth in the
past year has been
better than most of
its peers.
Michigan’s per
capita GDP is
below all peers
except Alabama. !
!
Michigan’s per capita GDP growth was 4th highest between 2011 and 2012 – 1.5
percentage points higher than the “Top Ten” average. However, recent GDP growth is off
of a low base and absolute GDP remains lower than the “Top Ten”.!
Per Capita GDP
1.4%
-0.5%!
1.0%!
1.0%!
0.8%!
0.7%!
0.7%!
0.7%!
0.6%!
0.5%!
0.3%!
0.2%!
0.0%!
-0.4%!
Top Ten !
MA!
TX!
VA!
IL!
CA!
IN!
AL!
TN!
NC!
CO!
OH!
GA!
13
14. !
Per Capita GDP: 2009-2012
2013 Economic Competitiveness Benchmarking Report!
Source: Bureau of Economic Analysis; US Census; team analysis
$31,521 !
$33,169 !
$34,521 !
$35,298 !
$42,691 !
$43,729 ! $44,276 !
$45,110 !
$25,000 !
$30,000 !
$35,000 !
$40,000 !
$45,000 !
$50,000 !
2009! 2010! 2011! 2012!
Real Per Capita GDP!
Michigan! United States!
2009-2012 Growth: 12.0%!
2009-2012 Growth: 5.7%!
Michigan per capita GDP is recovering at twice the rate of the U.S. average,
but is still $10,000 lower.
14
15. $46,994
$37,497 !
$41,471 !
$47,082 !
$35,625 !
$54,687 !
$37,678 !
$44,815 !
$44,980 !
$39,289 !
$37,049 !
$36,902 !
$45,135 !
$36,869 !
$44,661
$39,375 !
$41,915 !
$40,344 !
$45,059 !
$35,757 !
$41,591 !
$38,458 !
$46,507 !
$39,331 !
$45,125 !
$44,495 !
$38,311 !
$48,913 !
0.7%
1.3%!
1.2%!
0.0%!
0.1%!
0.2%!
0.9%!
0.4%!
1.0%!
1.7%!
0.7%!
1.3%!
0.4%!
0.4%!
1.5%
-0.3%!
1.2%!
0.9%!
0.8%!
0.8%!
0.5%!
0.4%!
0.3%!
0.3%!
0.2%!
0.2%!
0.1%!
-0.2%!
Top Ten !
TX!
VA!
AL!
MA!
TN!
IL!
CA!
OH!
NC!
IN!
CO!
GA!
Michigan’s per capita personal income growth was almost twice as high as the “Top Ten” state
average between 2011 and 2012, but per capita income level in Michigan is almost $10,000 less
than “Top Ten” states – $5,000 less when adjusting for cost of living.!
!
Michigan Turnaround Plan: “Top Ten” State for Personal Income Growth!
2013 Economic Competitiveness Benchmarking Report!
MI!
!
State!
2002-12!
CAGR!
2011-2012!
2012 !
Level!
P !
!
E !
!
E !
!
R!
!
S!
8!
12
42
41
39
19
31
18
2
22
9
33
32
Source: Bureau of Economic Analysis; U.S. Census Bureau; C2ER; team analysis
Real per capita
personal income
growth was 1.3%
between 2011 and
2012, equal to or
higher than all
peers except for
Ohio. Michigan’s per
capita income level
is below most of its
peers.!
2011-12 !
Rank!
Per Capita Personal Income
2012 !
Level Adjusted for
Cost of Living!
15
16. !
Per Capita Personal Income: 2009-2012
2013 Economic Competitiveness Benchmarking Report!
Source: Bureau of Economic Analysis; US Census; team analysis
Michigan per capita income is recovering faster than the U.S. average, but is
still $6,000 lower.
$35,552 !
$36,142 !
$37,014 !
$37,497 !
$42,149 ! $42,327 !
$43,211 !
$43,791 !
$30,000 !
$32,000 !
$34,000 !
$36,000 !
$38,000 !
$40,000 !
$42,000 !
$44,000 !
$46,000 !
2009! 2010! 2011! 2012!
Real Per Capita Personal Income!
Michigan! United States!
2009-2012 Growth: 5.5%!
2009-2012 Growth: 3.9%!
16
17. 6,694
9,883 !
26,059 !
9,752 !
9,920 !
5,188 !
8,186 !
6,456 !
38,041 !
4,822 !
6,537 !
6,646 !
12,875 !
11,544 !
1.1%
0.1%!
1.5%!
1.0%!
1.1%!
1.4%!
1.1%!
0.8%!
0.9%!
0.4%!
0.3%!
0.9%!
0.0%!
0.0%!
Michigan’s population increased slightly between 2011 and 2012, and the state has a population
of 3 million more than the “Top Ten” average.!
!
Michigan Turnaround Plan: “Top Ten” State for Job Growth !
State!
2002-2012 !
CAGR !
2011-12 !
Rank!
2011-2012 !
Growth!
! Source: U.S. Census Bureau; team analysis
2013 Economic Competitiveness Benchmarking Report!
P !
!
E !
!
E !
!
R!
!
S!
45!
2
15
14
4
11
21
19
32
35
20
46
48
Michigan’s population
has been declining
over the past decade
while Michigan’s
peers have been
growing, particularly
those in the South
and West. !
!
MI!
2012 Population !
(thousands)!
Population
1.0%
-0.2%!
1.8%!
1.6%!
1.5%!
1.4%!
1.2%!
1.1%!
0.9%!
0.8%!
0.6%!
0.3%!
0.2%!
0.1%!
Top Ten!
TX!
NC!
GA!
CO!
VA!
TN!
CA!
AL!
IN!
MA!
IL!
OH!
17
18. - !
1 !
2 !
3 !
4 !
5 !
6 !
$2 !
$20,002 !
$40,002 !
$60,002 !
$80,002 !
$100,002 !
Michigan’s
future
growth
rates
will
have
significant
economic
implica7ons
for
its
ci7zens.
Michigan
has
been
growing
at
a
compe77ve
rate
since
2009
but
from
a
low
base.
Conclusions!
Note: The above graphs show Michigan’s projected per capita GDP, private sector employment , and per capita personal income over the
next ten years if MI grows at the 10-yr average rate of the best state, the 10-yr average rate of the worst state , or at the rate of MI over the
past three years. Michigan has had considerable growth in the past three years as the economy has recovered. The state’s three-year
average growth rate was used to show Michigan’s future economic situation if growth continues on its current trajectory after the recession.
2012 Per Capita
GDP $35,298
Michigan
GDP
per
capita,
Dollars
(2005
chained),
2002-‐2022
Employment,
Millions,
2002-‐2022
$17,903
more
GDP
per
person
than
in
2012
$37,494
more
personal
income
per
person
than
in
2012
2013 Economic Competitiveness Benchmarking Report!
2012 Private
Employment
3.37 Million
Michigan
personal
income
per
capita,
Dollars
(nominal
dollars),
2002-‐2022
Actual
Michigan
performance
Future
ProjecAons
Actual
Michigan
performance
Future
ProjecAons
839,000
more
Michigan
people
working
than
in
2012
2012 Per Capita
Personal Income
$37,497
Future
ProjecAons
Actual
Michigan
performance
Source: Bureau of Labor
Statistics; Bureau of Economic
Analysis; team analysis
If
Michigan
con,nues
on
its
current
growth
trajectory
to
2023
there
will
be…
$30,000 !
$35,000 !
$40,000 !
$45,000 !
$50,000 !
$55,000 !10 year Best
State!
MI 3-year trend!
10 year Worst
State!
18
19. Input metrics focus on defining the costs to do business relative to the value received
from locating in a given state.!
Input Metrics!
2013 Economic Competitiveness Benchmarking Report!
COST!
• Total Costs!
• Taxes!
• Labor!
• Incentives!
• Energy!
• Government!
• Business Climate!
VALUE!
• Talent (4th Grade Reading
8th Grade Math Scores, Career
and College Readiness,
Degrees Conferred, Education
Attainment)!
• Innovation (Exports, RD
Expenditures, Patents, Venture
Capital, Entrepreneurial Activity) !
• Infrastructure (Percent of
Urban Roads in Poor Condition)!
19
21. 5.83
5.85!
5.90!
5.81!
5.50!
5.25!
5.33!
4.99!
4.96!
4.02!
4.78!
4.61!
5.20!
4.37!
Michigan now ranks among the best corporate tax climates and exceeds the “Top Ten” average.!
!
State!
!
2006-13 Avg. !
!
2013!
!
2012!
!
With the tax changes that
went into effect on January 1,
2012, Michigan’s corporate
tax environment is now
ranked among the best. Only
Virginia among the peer states
has a better corporate tax
climate than Michigan.!
Scale of 0-10, 10 = best!
1 Measures impact of principal tax on business. Unemployment and property taxes are measured separately
(see Slide 22).
Index, US average = 5!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
7!
6
9
14
20
17
28
29
47
33
38
22
45
!
2013
Rank!
Michigan Turnaround Plan: Create a Competitive Business Climate
Source: Tax Foundation 2013
State Business Tax Climate Index
Cost: Corporate Tax Climate 1
5.78
3.94!
6.16!
5.91!
5.68!
5.54!
5.22!
5.17!
5.02!
4.73!
4.37!
4.68!
4.77!
4.41!
Top Ten!
VA!
GA!
TN!
CO!
AL!
IN!
NC!
IL!
MA!
TX!
OH!
CA!
5.86
3.35!
5.96!
5.88!
5.56!
5.31!
5.39!
5.33!
5.02!
4.07!
4.78!
4.67!
5.26!
4.42!
21
22. State!
Corporate
Tax!
Unemployment
Insurance Tax!
Property
Tax1!
Sales !
Tax!
Personal
Income
Tax!
Overall
Rank!
Top Ten
Average
26 28 29 26 17 20
MI! 7! 44! 31! 7! 11! 12!
AL! 17! 13! 8! 37! 18! 21!
CA! 45! 16! 17! 40! 49! 48!
CO! 20! 39! 9! 44! 16! 18!
GA! 9! 25! 30! 13! 40! 34!
IL! 47! 43! 44! 34! 13! 29!
IN! 28! 11! 11! 11! 10! 11!
MA! 33! 49! 47! 17! 15! 22!
NC! 29! 5! 36! 47! 43! 44!
OH! 22! 12! 34! 29! 42! 39!
TN! 14! 26! 41! 43! 8! 15!
TX! 38! 14! 32! 36! 7! 9!
VA! 6! 38! 27! 6! 38! 27!
Recent changes have
made Michigan more
competitive than
peers in terms of
overall business !
tax climate.
Unemployment and
property tax climates
remain uncompetitive. !
1 !Includes both real and personal property tax in Michigan. !
Peer States’ Tax Environment Rankings 2013!
2013 Economic Competitiveness Benchmarking Report!
Business Taxes! Individual Taxes!
Michigan’s overall business tax climate improved to 12th best nationally while the “Top Ten”!
state average rank is 23.!
Source: Tax Foundation 2013 State Business Tax Climate Index
Michigan Turnaround Plan: Create a Competitive Business Climate
Business tax climate!
2013 state rankings !
1 = best, 50 = worst!
Cost: All Taxes
P !
!
E !
!
E !
!
R!
!
S!
22
23. $0.52
$0.59 !
$0.51 !
$0.53 !
$0.55 !
$0.56 !
$0.57 !
$0.55 !
$0.51 !
$0.61 !
$0.55 !
$0.59 !
$0.59 !
$0.56 !
$0.51
$0.59 !
$0.50 !
$0.53 !
$0.56 !
$0.56 !
$0.56 !
$0.55 !
$0.52 !
$0.62 !
$0.55 !
$0.58 !
$0.59 !
$0.56 !
-0.8%
-0.4%!
-1.0%!
-1.0%!
-0.6%!
-0.6%!
-0.6%!
-0.5%!
-0.5%!
-0.4%!
-0.4%!
-0.3%!
-0.2%!
-0.2%!
Top Ten!
TX!
IN!
CO!
IL!
AL!
CA!
NC!
MA!
TN!
OH!
VA!
GA!
2001-2011
CAGR!
Michigan Turnaround Plan: Create a Competitive Business Climate
Michigan’s unit labor cost remained constant from 2010 to 2011 but is 15% higher than
the “Top Ten” average.!
!
State! 2011!
2011
Rank!2010!
1 Labor cost is calculated as labor compensation per dollar of GDP.
Unit Cost of Labor = Total Compensation of Employees/Total Output!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
47!
8
14
28
31
34
24
11
50
18
43
48
35
Like most peers, the
cost of labor in
Michigan has fallen
over the decade,
but Michigan’s unit
labor cost is
slightly higher
than most of its
peers.!
Source: Bureau of Economic Analysis; team analysis
Cost: Labor 1
23
24. 1.3%
0.5%!
1.5%!
1.4%!
1.4%!
1.4%!
1.3%!
1.2%!
1.2%!
1.1%!
1.0%!
1.0%!
0.8%!
0.6%!
Top Ten!
AL!
CA!
VA!
NC!
TN!
IN!
TX!
MA!
IL!
CO!
GA!
OH!
$101,259
$83,454 !
$82,257 !
$118,599 !
$102,386 !
$97,161 !
$85,443 !
$85,122 !
$105,557 !
$105,367 !
$100,626 !
$102,281 !
$91,955 !
$81,268 !
$101,317
$84,768 !
$82,525 !
$117,525 !
$102,335 !
$95,902 !
$85,773 !
$85,161 !
$106,286 !
$105,624 !
$101,478 !
$101,724 !
$92,666 !
$82,350 !
Michigan’s worker productivity growth was lower than the “Top Ten” average over the past
decade and has a current level of GDP per worker that is lower than the average for the “Top
Ten” states.!
!
!
State!
2002-2012 !
CAGR!
2012
Rank!2011!
Michigan’s worker
productivity is growing
but is still below most of
its peers. !
Value Added per Worker = Real GDP per Worker!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
34!
37
4
13
19
31
33
10
11
16
14
21
38
2012!
Source: Bureau of Economic Analysis; US Census; team analysis
Michigan Turnaround Plan: Invest for Future Growth
Value Added per Worker
24
25. 14%
18%!
4%!
5%!
6%!
6%!
6%!
9%!
11%!
12%!
15%!
15%!
17%!
18%!
12%
17%!
3%!
4%!
4%!
5%!
6%!
8%!
9%!
9%!
13%!
14%!
15%!
17%!
*!
Y!
Y!
Y!
Y!
Y!
Y!
N!
Y!
Y!
N!
N!
N!
N!
13%
17%!
4%!
5%!
6%!
6%!
7%!
9%!
11%!
10%!
14%!
16%!
16%!
18%!
Michigan’s share of workers that are represented by a union has declined slightly from 18% to
17%, ranking Michigan 44th nationally. Michigan’s unionization rate is 5 percentage points higher
than the “Top Ten” average.!
State!
2012!
Representation!
2012!
Membership!
Michigan’s union
membership and
representation rate is
higher than all of its
peers except for
California. !
! Source: Bureau of Labor Statistics; team analysis
US average = 12.2%!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
44!
2
4
5
8
12
20
24
22
33
39
38
45
2012
Rank!
Michigan Turnaround Plan: Create a Competitive Business Climate
Rankings !
1= lowest union
representation!
50 = highest!
Cost: Union Representation
RTW
State!
2011!
Representation!
2011!
Membership!
12%
18%!
3%!
4%!
5%!
5%!
5%!
8%!
10%!
11%!
13%!
15%!
16%!
17%!
Top Ten!
NC!
GA!
VA!
TN!
TX!
CO!
AL!
IN!
OH!
MA!
IL!
CA!
* Of the “Top Ten” states, 6 out of 10 are Right-to-Work states.
25
26. Source: 2013 Tax Foundation State Business Tax Climate Index
Michigan is one of !
only four states without
any Job, Investment, or
Research and
Development tax
incentives. The other
three states without any
such incentives also
have no corporate
income tax.!
2013 Economic Competitiveness Benchmarking Report!
Incentives are an important consideration for businesses in site location decisions, !
particularly when other factors are equal.!
Michigan Turnaround Plan: Create a Competitive Business Climate
Cost: Incentives
26
27. 0.6¢
1.0¢!
(1.8¢)!
(0.5¢)!
(0.1¢)!
(0.1¢)!
0.3¢!
0.3¢!
1.0¢!
1.3¢!
1.6¢!
1.8¢!
1.9¢!
2.4¢!
Top Ten!
CA!
TX!
IL!
MA!
NC!
OH!
VA!
IN!
GA!
CO!
AL!
TN!
9.4¢
9.3¢!
12.6¢!
8.0¢!
7.9¢!
14.4¢!
7.6¢!
8.0¢!
7.8¢!
7.3¢!
8.9¢!
8.7¢!
8.2¢!
9.1¢!
Michigan’s electricity costs for business are lower than the “Top Ten” average but have been
rising. Energy costs have been rising steadily in the past decade for most states. !
27!
Michigan’s
electricity costs for
business are
significantly
lower than those
in peer states
California and
Massachusetts. !
!Source: Energy Information Administration; team analysis
2013 Economic Competitiveness Benchmarking Report!
MI!
2011 !
Electricity !
Cost per kWh!
P !
!
E !
!
E !
!
R!
!
S!
36!
42
24
22
46
17
25
21
13
31
30
28
33
State!
Change in
Electricity !
Cost per kWh!
2001-2011!
2011 Elec.
Price Rank!
Michigan Turnaround Plan: Create a Competitive Business Climate
Cost: Energy Costs for Businesses, Electricity
9.6¢
9.2¢!
13.0¢!
8.5¢!
8.5¢!
15.1¢!
8.0¢!
8.5¢!
7.9¢!
7.2¢!
8.5¢!
8.7¢!
8.3¢!
8.7¢!
2010!
Electricity !
Cost per kWh!
28. Michigan Turnaround Plan: Create a Competitive Business Climate
Source: CEO Magazine “Best and Worst States for Business”;
CNBC “Top States for Business”; Forbes “Best States for Business
Michigan’s average ranking across three major business climate indices has not moved over the
past year and is below the “Top Ten” average.!
2013 Economic Competitiveness Benchmarking Report!
Top Business Climate Rankings
Average Rank Across Three Indices1!
2011! 2012! Trend!
Top Ten! 19! 19! ↔
MI! 42! 42! ↔
P
E
E
R
S!
AL! 35! 33! ↑ 2!
CA! 40! 44! ↓ 4!
CO! 7! 8! ↓ 1!
GA! 7! 8! ↓ 1!
IL! 37! 37! ↔
IN! 18! 12! ↑ 6!
MA! 23! 31! ↓ 8!
NC! 3! 4! ↓ 1!
OH! 34! 31! ↑ 3!
TN! 14! 15! ↓ 1!
TX! 3! 3! ↔
VA! 3! 4! ↓ 1!
Michigan’s 2012
average ranking
across the major
business climate
indices is lower than
all peers except for
California. !
1 BLM calculation from source data. !!
28
30. -12.7%
19.7%!
-1.4%!
-0.9%!
1.3%!
1.7%!
4.7%!
6.6%!
9.4%!
9.7%!
14.3%!
16.5%!
17.8%!
39.1%!
Top Ten!
TN!
OH!
NC!
MA!
TX!
GA!
IN!
AL!
IL!
CA!
CO!
VA!
$2,098
$1,536 !
$559 !
$5,043 !
$246 !
$2,967 !
$1,005 !
$1,057 !
$1,897 !
$2,299 !
$4,799 !
$2,522 !
$3,365 !
$1,754 !
$2,521
$4,071 !
$277 !
$2,592 !
$3,496 !
$2,254 !
$2,153 !
$1,981 !
$82 !
$3,010 !
$3,401 !
$1,874 !
$354 !
$547 !
$2,286
$2,205 !
$555 !
$5,016 !
$334 !
$2,832 !
$1,105 !
$1,256 !
$2,106 !
$2,695 !
$5,950 !
$3,049 !
$4,012 !
$2,656 !
$1,748
$4,509 !
$270 !
$2,546 !
$3,458 !
$2,480 !
$2,203 !
$1,983 !
$59 !
$3,130 !
$3,422 !
$2,075 !
$370 !
$547 !
Michigan’s unfunded liabilities per capita increased 19.7% between 2009 and 2010 while the
“Top Ten” state average dropped 12.7%. Michigan’s state-level unfunded retiree health care
liabilities per capita are 3 times the “Top Ten” average.!
!
Michigan’s
unfunded health
care liabilities
greatly exceed its
peers. Actions
taken by the
Governor and
Legislature will
help reduce
Michigan’s total
unfunded liability,
which is one of the
highest in the
nation.!
1 Unfunded liabilities include public sector workers pensions and retiree health care. !!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
!
State!
Michigan Turnaround Plan: Responsibly Manage Finances
Source: Pew Center for the States,
“The Widening Gap Update,” 2012
Cost: Government Expenditures; Unfunded Liabilities1
41!
3
45
24
35
21
20
12
38
46
31
29
19
2010 Total
Unfunded
Liabilities Rank!
2009-2010 Change
in Unfunded
Liabilities
per capita!
Pensions
per capita!
Retiree Health
Benefits!
per capita!
2009 Unfunded Liabilities! 2010 Unfunded Liabilities!
Pensions
per capita!
Retiree Health
Benefits!
per capita!
30
31. 44.5%
43.6%!
43.3%!
43.6%!
42.0%!
43.8%!
46.7%!
43.8%!
44.9%!
45.3%!
43.3%!
45.1%!
43.9%!
44.5%!
44.4%
43.8%!
44.1%!
44.2%!
42.3%!
43.9%!
47.4%!
43.7%!
44.8%!
45.3%!
42.9%!
44.7%!
44.3%!
44.1%!
Michigan’s 4th graders are performing below the “Top Ten” average, but are less than one !
percentage point behind.!
A score of 47.6% is
considered proficient,
Michigan’s 4th grade
average score is
43.8%. Michigan 4th
grade reading scores
increased slightly over
the past decade, but
are still in the bottom
half of the nation. !
!
!
!
1 Defined as the average reading test score of 4th graders.
!
State!
2002-11 !
CAGR ! 2009!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
35!
32
26
46
34
1
36
15
8
41
17
23
27
Rank !
2011!
!Source: National Center for Education Statistics;
U.S. Department of Education
Michigan Turnaround Plan: Provide Efficient and Effective Public Services
Value: Talent, 4th grade reading proficiency1
2011!
-0.01%
0.01%!
0.70%!
0.31%!
0.29%!
0.16%!
0.14%!
0.07%!
0.07%!
0.07%!
0.05%!
-0.01%!
-0.01%!
-0.06%!
Top Ten!
AL!
GA!
CA!
IL!
MA!
TX!
OH!
VA!
TN!
CO!
NC!
IN!
31
32. 57.6%
56.0%!
59.7%!
58.1%!
57.9%!
54.6%!
55.7%!
54.8%!
57.3%!
56.6%!
58.3%!
57.7%!
53.8%!
57.0%!
Michigan 8th grade math scores have been slowly rising since 2000 but rank in the bottom half of !
the country. !
A score of 59.8% is
considered proficient,
Michigan’s 8th grade
average score is 56%. !
Michigan’s 8th graders
are being
outperformed by
those in all peer states
except California,
Georgia, Tennessee,
and Alabama. !
1. Defined as the average 8th grade math score on national tests.
!
State!
2000-2011
CAGR! 2009!
2011
Rank!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
36!
1
10
12
48
40
45
21
27
8
15
50
23
Source: National Center for Education
Statistics; U.S. Department of Education
Michigan Turnaround Plan: Provide Efficient and Effective Public Services
Value: Talent, 8th Grade Math Average Proficiency 1
2011!
0.29%
0.09%!
0.62%!
0.55%!
0.47%!
0.44%!
0.44%!
0.42%!
0.32%!
0.28%!
0.26%!
0.26%!
0.19%!
0.12%!
Top Ten!
MA!
TX!
VA!
CA!
GA!
TN!
NC!
IL!
CO!
OH!
AL!
IN!
57.6%
55.7%!
59.8%!
57.3%!
57.2%!
54.1%!
55.5%!
55.0%!
56.9%!
56.5%!
57.5%!
57.1%!
53.7%!
57.4%!
32
33. 31%
21%!
33%!
44%!
30%!
32%!
25%!
22%!
31%!
24%!
25%!
28%!
18%!
16%!
The percentage of “Career- and College-ready” high school graduates in Michigan increased
slightly between 2011 and 2012 but is 10 percentage points lower than the “Top Ten” average. !
!
State!
2005-2012
Change!
2012
Rank!2011!
Michigan’s share of
“career- and college-
ready” high school
graduates declined 4
percent since 2005.
Among peers, only
Alabama’s and
Tennessee’s high
school graduates
are less prepared
for careers and
college than
Michigan’s.!
1 ACT's College Readiness Benchmarks are the minimum scores needed on the ACT subject area
tests to indicate a 50% chance of obtaining a B or higher or about a 75% chance of obtaining a C or
higher in corresponding first-year credit-bearing college courses.
2012!
High School Grads with “College and Career Ready” ACT Composite Score1!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
37!
13
1
18
15
30
36
16
33
30
25
44
49
Source: ACT.org; team analysis
Michigan Turnaround Plan: Invest for Future Growth
Value: Talent, Career- and College-Ready High School Graduates!
5%
-4%!
14%!
14%!
13%!
7%!
7%!
7%!
7%!
7%!
5%!
4%!
3%!
0%!
Top Ten!
VA!
MA!
NC!
IN!
CO!
GA!
CA!
TX!
IL!
OH!
AL!
TN!
29%
20%!
32%!
43%!
30%!
31%!
23%!
21%!
30%!
24%!
23%!
28%!
18%!
15%!
33
34. 128
116!
164!
149!
128!
123!
123!
122!
110!
97!
98!
90!
85!
86!
The number of degrees conferred by Michigan higher education institutions2 per 10,000
Michigan residents has been increasing, but remains below the “Top Ten” average.!
!
State! 2004-11 Avg.!
2011
Rank!2010!
Michigan is in the
middle of its peers for
number of degrees
per 10,000 of
population.!
Source: IPEDS; U.S. Census Bureau;
team analysis
2011!
Per 10,000 of Population!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
23!
5
9
15
18
19
20
25
37
36
40
46
43
Michigan Turnaround Plan: Invest for Future Growth!
Value: Talent, Associates, Bachelor’s, Master’s Doctoral Degrees1
1 Includes Associate, Bachelor, Master, and Doctoral Degrees. Last year’s report did not include Associate Degrees.
2 Includes degrees awarded at all higher education institutions in Michigan, including universities and community
colleges, both public and private.
114
107!
150!
129!
117!
112!
109!
102!
98!
90!
88!
81!
78!
73!
Top Ten!
MA!
AL!
IL!
CO!
IN!
VA!
OH!
CA!
NC!
TN!
TX!
GA!
119
113!
157!
141!
123!
117!
115!
117!
103!
93!
94!
85!
83!
78!
34
35. 91
78 !
84 !
93 !
63 !
93 !
77 !
66 !
68 !
116 !
66 !
72 !
85 !
80 !
90
73 !
78 !
93 !
63 !
98 !
80 !
71 !
67 !
116 !
66 !
74 !
82 !
82 !
Michigan has increased the number of individuals with technical degrees and certificates at
5.5% per year since 2003, a higher rate than the “Top Ten” average. However, the number of
degrees awarded is still lower than the “Top Ten” average.!
!
State!
2003-11 Annual Growth in
Technical Education!
2011
Rank!
2010 Tech Degrees
and Certificates !
Michigan increased the
number of critical skills
degrees and certificates
awarded by 6.8%
between 2010 and
2011and falls in the
middle of its peers for
total certificates and
degrees conferred. !
1 Critical Skills areas, as defined in the Fiscal Year 2013 Budget, include: Agriculture, Natural Resources, Architecture, Communications Technology,
Computer Science, Engineering, Biological Sciences, Mathematics and Statistics, Military Technologies, Physical Sciences, Science Technology,
Construction Trades, Mechanic Technology, Precision Production, Transportation and Materials Moving, and Health Professions. We include all degree
levels and certificates for all public and private community colleges and universities in Michigan.
Critical Skills1 certificates and degrees (per 10,000 working age population)!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
25!
21
12
43
13
26
37
33
6
35
29
19
24
2011 Tech Degrees
and Certificates !
Source: IPEDS; US
Census; team analysis
Michigan Turnaround Plan: Invest for Future Growth
Value: Talent, Technical Education
5.1%
5.5%!
7.8%!
7.3%!
6.9%!
6.8%!
6.5%!
6.4%!
6.0%!
5.9%!
5.8%!
5.2%!
4.7%!
4.6%!
Top Ten!
OH!
GA!
TN!
CO!
VA!
TX!
IN!
AL!
CA!
NC!
IL!
MA!
35
37. $9,393
$13,244 !
$11,375 !
$9,673 !
$8,329 !
$11,357 !
$10,016 !
$18,975 !
$9,471 !
$6,192 !
$8,336 !
$4,171 !
$7,141 !
$2,770 !
$9,474
$14,230 !
$11,240 !
$9,799 !
$8,319 !
$11,530 !
$10,663 !
$18,943 !
$9,550 !
$6,323 !
$8,080 !
$4,100 !
$6,343 !
$2,980 !
3.1%
3.7%!
6.7%!
6.3%!
6.1%!
4.9%!
4.6%!
4.5%!
3.0%!
2.5%!
1.5%!
1.1%!
0.7%!
-0.3%!
Top Ten!
TN!
IL!
GA!
IN!
AL!
TX!
OH!
NC!
CA!
VA!
MA!
CO!
4.2%
4.0%!
6.4%!
6.6%!
6.1%!
4.9%!
4.9%!
4.5%!
3.2%!
2.6%!
2.0%!
1.0%!
0.9%!
0.1%!
Michigan’s export value per $100k of GDP has grown at a “Top Ten” pace over the decade, and its
2012 export value is 50% larger than the “Top Ten” State average.!
37!
!
State!
2002-12 CAGR
Manufacturing
Exports!
2012
Rank!
!
In the past year,
Michigan has grown its
export value while the
value for many peer
states has gone down. !
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
8!
12
15
24
11
13
3
17
37
25
42
36
49
2011 !
All Exports!
Source: U.S. Department of Commerce;
U.S. Census; team analysis
Michigan Turnaround Plan: Invest for Future Growth
Value: Innovation, Exports
2002-12 CAGR
All Exports!
2012 !
All Exports!
Export value per $100,000 GDP!
38. $5,149
$6,557 !
$5,414 !
$4,522 !
$5,691 !
$5,322 !
$6,947 !
$6,002 !
$3,487 !
$4,179 !
$8,828 !
$5,035 !
$4,176 !
$4,854 !
Michigan universities’ Research and Development expenditures were in the top ten in 2011
and higher than the “Top Ten” average.!
Michigan universities’
Research and
Development
expenditures are
greater than all of its
peers except
Massachusetts and
North Carolina.!
!Source: National Science Foundation; Bureau of Economic Analysis; team analysis
per $1,000,000 GDP !
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
8!
19
31
18
22
4
14
42
35
3
25
36
27
!
State!
2001-11 !
CAGR!
2011
Rank!2010! 2011!
Michigan Turnaround Plan: Growing the New Michigan!
Value: Innovation, University RD Expenditures
2.5%
5.0%!
5.7%!
5.0%!
4.3%!
4.2%!
4.1%!
3.2%!
3.1%!
3.0%!
2.8%!
2.5%!
2.3%!
2.2%!
Top Ten!
OH!
TN!
CO!
IN!
NC!
AL!
VA!
IL!
MA!
CA!
TX!
GA!
$5,102
$6,580 !
$5,295 !
$4,408 !
$5,455 !
$5,239 !
$6,920 !
$5,903 !
$3,395 !
$4,214 !
$8,636 !
$5,002 !
$4,228 !
$4,843 !
38
39. 23.3
30.2 !
54.3 !
55.6 !
20.6 !
14.3 !
13.1 !
33.0 !
22.8 !
22.5 !
16.7 !
6.3 !
20.3 !
10.0 !
In 2011, Michigan ranked 13th nationally, producing 30 patents per 100,000 residents – better
than the “Top Ten” average and every “Top Ten” state except for Massachusetts and
Washington.!
Michigan produces
more patents per
capita than all peer
states except
California,
Massachusetts, and
Colorado.!
Source: U.S. Patent Office; Bureau of Economic Analysis; team analysis
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
13!
5
4
24
29
30
11
18
19
26
43
25
38
!
State!
2002-2012 !
CAGR!
2012 Rank!
Patents!
Per capita!2011! 2012!
Michigan Turnaround Plan: Growing the New Michigan
Value: Innovation, U.S. Patents per 100,000 Residents!
-0.6%
-1.9%!
1.2%!
0.2%!
-0.1%!
-0.7%!
-0.9%!
-2.0%!
-2.0%!
-2.7%!
-3.3%!
-3.6%!
-3.7%!
-3.8%!
Top Ten!
CA!
MA!
NC!
GA!
VA!
CO!
TX!
IL!
IN!
AL!
OH!
TN!
20.8
30.3 !
51.5 !
53.7 !
19.3 !
13.9 !
12.9 !
32.2 !
22.7 !
21.4 !
15.2 !
5.8 !
19.3 !
9.2 !
39
40. $144
$68 !
$33 !
$92 !
$816 !
$67 !
$870 !
$237 !
$99 !
$39 !
$77 !
$72 !
$15 !
$44 !
Venture capital investment in Michigan in 2012 more than doubled from its 2011 level.
Michigan VC investment, while lower than the “Top Ten” average is growing faster than
the “Top Ten”.!
!
State!
The availability of
venture capital in
Michigan has grown
more than in peer
states in the past year
and is about in the
middle of peers in
terms of overall level.!
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report;
Bureau of Economic Analysis; Bureau of Economic Analysis; team analysis
per $100,000 of GDP!
2002-12 CAGR! 2012! 2012 Rank!2011!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
19!
27
13
2
20
1
6
11
26
17
18
37
23
Michigan Turnaround Plan: Growing the New Michigan
Value: Entrepreneurism, Venture Capital Investment!
-11.5%
6.2%!
3.9%!
3.3%!
0.4%!
-1.2%!
-1.9%!
-4.0%!
-5.4%!
-5.5%!
-6.9%!
-10.5%!
-11.3%!
-14.6%!
Top Ten!
IN!
IL!
CA!
OH!
MA!
CO!
VA!
TN!
TX!
GA!
AL!
NC!
$155
$26 !
$75 !
$137 !
$901 !
$105 !
$938 !
$271 !
$168 !
$48 !
$142 !
$108 !
$2 !
$82 !
40
41. 0.31%
0.22%!
0.44%!
0.42%!
0.35%!
0.44%!
0.29%!
0.28%!
0.26%!
0.20%!
0.20%!
0.20%!
0.27%!
0.26%!
0.30%
0.18%!
0.41%!
0.37%!
0.27%!
0.36%!
0.24%!
0.26%!
0.27%!
0.26%!
0.20%!
0.22%!
0.19%!
0.23%!
The amount of entrepreneurial activity in Michigan declined from 2011 to 2012
and remains below the “Top Ten” average.!
!
State!
Entrepreneurial
activity is lower in
Michigan than in all
peer states.!
1 Percent of individuals (ages 20-64) who do not own a business in the first survey month that start a business
in the following month with 15 or more hours worked.
Index, Percent!
2002-12 Avg.! 2012! 2012 Rank!2011!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
48!
7
12
30
15
34
31
29
32
44
39
46
36
Michigan Turnaround Plan: Growing the New Michigan!
Source: Kauffman Index of Entrepreneurial
Activity, the Ewing Marion Kauffman Foundation
Value: Entrepreneurism, Entrepreneurial Activity1
0.31%
0.24%!
0.40%!
0.39%!
0.39%!
0.38%!
0.31%!
0.27%!
0.26%!
0.24%!
0.24%!
0.24%!
0.23%!
0.21%!
Top Ten!
CA!
CO!
GA!
TX!
TN!
NC!
MA!
IN!
VA!
IL!
OH!
AL!
41
42. The percentage of urban roads in poor condition in Michigan is 17%, the 45th worst in the
nation. While conditions have improved since 2001, they have worsened again since 2009.!
!
State!
2001-11
% Change ! 2011!
2011
Rank!20092!
!
Among peers, !
only California and
Massachusetts have
a greater percentage
of urban roads rated
in poor condition.!
!
! ! !Source: Federal Highway Administration; team analysis
Urban Roads in Poor Condition1 (Percent)!
2013 Economic Competitiveness Benchmarking Report!
MI!
P !
!
E !
!
E !
!
R!
!
S!
45!
12
15
33
1
48
6
18
27
32
37
36
46
Michigan Turnaround Plan: Invest for Future Growth
Value: Infrastructure
1 Includes interstate highways, freeways, expressways, and major arterial roads in urban areas.
2 Data for the State of Indiana was not available for the year 2009.
1%
-6%!
-3%!
-1%!
0%!
0%!
2%!
2%!
3%!
4%!
4%!
6%!
6%!
7%!
Top Ten!
NC!
VA!
TX!
GA!
CA!
AL!
TN!
IL!
OH!
IN!
CO!
MA!
11%
14%!
4%!
5%!
2%!
0%!
17%!
3%!
4%!
10%!
6%!
9%!
11%!
11%!
17%!
4%!
4%!
9%!
0%!
19%!
3%!
5%!
8%!
9%!
11%!
11%!
18%!
42
43. Michigan today! Summary!
Labor costs!
US avg. = $0.55
per $1 of GDP!
(2009)!
!
“Top Ten”!
Conclusions: COST
Cost of Doing
Business Index
US avg. = 100
(2012)!
2013 Economic Competitiveness Benchmarking Report!
!
▪ Michigan’s Cost of Doing
Business is higher than
both the U.S. average and
the “Top Ten” state average.!
!
!
▪ Michigan’s labor costs are
15% higher per unit of GDP
than the “Top Ten” state
average.!
Source: Anderson Economic Group Business Tax
Burden Ranking;, Bureau of Economic Analysis; US
Census; team analysis
103!
94!
$0.59 !
$0.51 !
43
44. 37%!
41%!
▪ Michigan venture capital
investment has made large
gains but is still less than half
that of the “Top Ten” states.!
Source: American Community Survey, U.S. Census Bureau; PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report;
U.S. Department of Commerce; team analysis
▪ Michigan produces a level
of talent comparable to
“Top Ten” states but has
less talent available.!
Michigan today!
Summary!
“Top Ten”!
2013 Economic Competitiveness Benchmarking Report!
Population
with
Associate’s or
above (2011)!
Venture
capital
spending per
$1,000,000
GDP (2012)!
Urban Roads
in Poor
Condition!
(2011)!
Conclusions: VALUE
$68 !
$144 !
▪ Michigan road conditions
have worsened, and the share
of urban roads in poor
condition is 50% higher than
that of the “Top Ten” states.!
17%!
11%!
44
45. Comparing Michigan’s two largest metropolitan areas
with their aspirational and traditional peers !
2013 Economic Competitiveness Benchmarking Report!
The colored symbols below compare
Michigan’s metro performance on
important business location factors to
their aspirational peers.
§ Taxation!
§ Talent!
§ Infrastructure!
§ Public Safety!
§ Population!
Benchmarking Michigan to
traditional aspirational
peers on factors important to
businesses that local
governments can influence.
Local Indicators !
Important to Business!
Metropolitan peers were chosen
based on aspirational peers and
more traditional peers.!
Detroit Peers !
§ Knoxville!
§ Madison!
§ Syracuse!
§ Tulsa!
Peer metros selected based on
traditional peers and metros with
aspirational economies.1!
1 Peer metros were selected based on an analysis of industrial clusters, population, resident demographics, unemployment rate, educational attainment rate,
personal income growth, and GDP growth over the past ten years in all U.S. metro areas (MSAs). The pool of possible peers was narrowed first by demographics and
economic make-up. Then, aspirational peers were selected based on personal income growth, GDP growth, and unemployment rates that performed better than
Michigan’s metros. We discussed the traditional and aspirational peers with economic developers in both Grand Rapids and Detroit before making the final selection.
Grand Rapids Peers !
Performance Legend!
At or better than
Aspirational Average!
Worse than !
Aspirational Average!
Aspirational!
§ Des Moines!
§ Louisville!
§ Omaha!
Traditional!
§ Kansas City!
§ Minneapolis!
§ Nashville!
§ Pittsburgh!
§ Cleveland!
§ Dallas!
§ Indianapolis!
Aspirational! Traditional!
45
46. Corporate Tax Rate
(highest bracket)!
Personal Income Tax
(highest bracket)!
Sales Tax Rate!
State ! Local! Total!
Gross Receipts !
Tax! State! Local! Total! State! Local! Total!
Detroit! 6%! 2%! 8%! NA! 4.25%!
Residents: 2.4%
Non-Residents:
1.2%!
Residents: 6.65%
Non-Residents:
5.45%!
6%! 0%! 6%!
Aspirational Peers
Kansas City! 6%! 1%! 7%! NA! 6%! 1%! 7%! 4.225%! 4.125%! 8.35%!
Minneapolis! 9.8%! 0%! 9.8%! NA! 7.85%! 0%! 7.85%! 6.875%! 0.9%! 7.775%!
Nashville! 6.5%! 0%! 6.5%! ≤ 0.3%! 6%! 0%! 6%! 6.875%! 2.25%! 9.13%!
Pittsburgh! 9.99%! 1%! 10.99%! NA! 3.07%! 1%! 4.07%! 6%! 1%! 7%!
Traditional Peers ! ! ! ! ! ! ! ! ! !
Cleveland! 0.0%! 2%! 2.0%! 0.26%! 5.925%! 2%! 7.93%! 5.5%! 2.25%! 7.75%!
Dallas! 0.0%! 0%! 0.0%! 0.581%-1.997%! 0%! 0%! 0%! 6.25%! 1%! 7.25%!
Indianapolis! 8.5%! 0%! 8.5%! NA! 3.4%!
Residents: 1.62%
Non-Residents:
0.405%!
Residents: 5.02%
Non-Residents:
3.805%!
7%! 0%! 7%!
Detroit residents and businesses face lower tax rates than peers.!
!Source: Local government websites; Tax Foundation 2013 Report!
State and Local Tax Rates!
2013 Economic Competitiveness Benchmarking Report!
Michigan Turnaround Plan: Accelerate the Growth of Cities and Metros
Metro Areas: Detroit Taxation
46
47. $22.91 !
$21.97 !
$24.19 !
$20.10 !
$21.28 !
$21.79 !
$22.18 !
$21.33 !
Kansas City!
Minneapolis!
Nashville!
Pittsburgh!
Cleveland!
Dallas!
Indianapolis!
! !!
Average Hourly Wage!
2013 Economic Competitiveness Benchmarking Report!
Share of Employment in
High-Tech Industries!
Educational Attainment
BA or Higher!
Detroit!
Source: American Community Survey; Bureau of Economic Analysis; County Business Patterns
Population CAGR
2001-2011!
Michigan Turnaround Plan: Accelerate the Growth of Cities and Metros
Detroit’s educational attainment is below almost all peers both aspirational traditional. It also
has lost population where most of its peers have grown. However, it’s share of employment in
high-tech industries is higher than all peers.!
Metro Areas: Detroit Talent
Aspirational Peers!
Traditional Peers!
13.4%!
10.9%!
9.8%!
6.6%!
10.5%!
0.8%!
10.3%!
9.2%!
13.0%!
32.2%!
46.5%!
30.7%!
33.0%!
27.7%!
31.1%!
30.7%!
-2.7%!
0.4%!
0.1%!
0.7%!
-0.8%!
-1.8%!
0.3%!
0.5%!
47
48. ! !!
2013 Economic Competitiveness Benchmarking Report!
Annual Hours of
Congestion Delay per
Auto Commuter!
Value of Commodities by
Truck through Metros!
(millions)!
Total Annual Hours of
Truck Congestion Delay
(millions)!
Source: Federal Highway Administration 2009; 2012 Urban Mobility Report
Michigan Turnaround Plan: Accelerate the Growth of Cities and Metros
Detroit has the highest level of truck congestion next to Dallas. It also has the second most highly valued
amount of commodities traveling by truck. !
Metro Areas: Detroit Infrastructure
Detroit!
Aspirational Peers!
Traditional Peers!
6.3!
2.0!
3.1!
2.6!
2.8!
1.7!
9.8!
3.2!
$161,391 !
$72,882 !
$97,828 !
$66,124 !
$70,352 !
$68,720 !
$230,466 !
$85,407 !
40!
27!
34!
47!
39!
31!
45!
41!
Kansas City!
Minneapolis!
Nashville!
Pittsburgh!
Cleveland!
Dallas!
Indianapolis!
48
49. 2,137!
1,200!
965!
1,181!
802!
1,363!
681!
NA!
Kansas City!
Minneapolis !
Nashville!
Pittsburgh!
Cleveland!
Dallas!
Indianapolis!
Though improving, the violent crime rate for Michigan’s largest metropolitan area
remains high.!
Detroit’s violent crime
rate has decreased in
the past 6 years but not
by as much as its
aspirational peers.!
Source: Crime in the United States 2006, 2011, and 2012 FBI Uniform Crime Report.
Indianapolis not available for 2011, 2006-2012 growth shown.
Incidence of Violent Crime (per 100,000 of Population)!
2011! 2012! % Change 2006-2012!
2013 Economic Competitiveness Benchmarking Report!
City!
Aspirational Peers!
Traditional Peers!
Michigan Turnaround Plan: Accelerate the Growth of Cities and Metros
Metro Areas: Detroit Safety
Detroit! 2,123!
1,263!
992!
1,216!
752!
1,384!
675!
1,186!
-12.2%!
-12.5%!
-37.1%!
-20.4%!
-29.7%!
-10.5%!
-44.0%!
23.5%!
49
50. Grand Rapids’ business taxes are lower than most of its aspirational peers.!
State and Local Tax Rates!
2013 Economic Competitiveness Benchmarking Report!
Source: Local government websites; Tax Foundation 2013 Report
Michigan Turnaround Plan: Accelerate the Growth of Cities and Metros
Metro Areas: Grand Rapids Taxation
Corporate Tax Rate
(highest bracket)!
Personal Income Tax
(highest bracket)!
Sales Tax Rate!
State ! Local! Total!
Gross Receipts
Tax! State! Local! Total! State! Local! Total!
Grand Rapids! 6%! 1.5%! 7.5%! NA! 4.25%!
Residents: 1.5%
Non-Residents:
0.75%!
Residents: 5.75%
Non-Residents:
5.0%!
6%! 0%! 6%!
Aspirational Peers
Knoxville! 6.5%! 0%! 6.5%! ≤ 0.3%! 6%! 0%! 6%! 7%! 2.25%! 9.25%!
Madison! 7.9%! 0%! 7.9%! NA! 7.75%! 0%! 7.75%! 5%! 0.5%! 5.50%!
Syracuse! 7.1%! 0%! 7.1%! NA! 8.82%! 0%! 9%! 4%! 4%! 8%!
Tulsa! 6%! 0%! 6%! NA! 5.25%! 0%! 5.3%! 4.5%! 3.167%! 7.667%!
Traditional Peers ! ! ! ! ! ! ! ! ! !
Des Moines! 12%! 0%! 12%! NA! 8.98%! 0%! 8.98%! 6%! 0.0%! 6.00%!
Louisville! 6%! 0%! 6%! NA! 6%!
Residents: 2.2%
Non-Residents: 1.45%!
Residents: 8.2%
Non-Residents: 7.45%!
6%! 0%! 6%!
Omaha! 7.81%! 0%! 7.81%! NA! 6.84%! 0%! 6.84%! 5.5%! 1.5%! 7%!
50
51. $20.09 !
$19.41 !
$22.16 !
$21.42 !
$19.73 !
$21.59 !
$19.97 !
$20.30 !
Knoxville!
Madison!
Syracuse!
Tulsa!
Des Moines!
Louisville!
Omaha!
Grand Rapids has a competitive average hourly wage compared to its aspirational and traditional !
peers. !
! !!
Average Hourly Wage!
2013 Economic Competitiveness Benchmarking Report!
Share of Employment in
High-Tech Industries!
Educational Attainment
BA or Higher!
Source: American Community Survey; Bureau of Economic Analysis; County Business Patterns
Population CAGR
2001-2011!
Michigan Turnaround Plan: Accelerate the Growth of Cities and Metros
Metro Areas: Grand Rapids Talent
Grand Rapids!
Aspirational Peers!
Traditional Peers!
5.7%!
10.5%!
13.8%!
5.9%!
4.0%!
7.2%!
5.5%!
5.2%!
28.0%!
30.9%!
54.0%!
24.8%!
29.8%!
26.3%!
26.2%!
32.0%!
-0.4%!
0.4%!
1.2%!
-0.1%!
0.1%!
0.4%!
1.8%!
0.6%!
51
52. Grand Rapids has fewer hours of truck congestion and the second highest commodity value!
for goods traveling by truck next to Louisville.!
! !!
2013 Economic Competitiveness Benchmarking Report!
Annual Hours of
Congestion Delay per
Auto Commuter!
Total Annual Hours of
Truck Congestion Delay
(millions)!
Source: Federal Highway Administration 2009; 2012 Urban Mobility Report
Value of Commodities by
Truck through Metros!
(millions)!
Michigan Turnaround Plan: Accelerate the Growth of Cities and Metros
Metro Areas: Grand Rapids Infrastructure
Grand Rapids!
Aspirational Peers!
Traditional Peers!
0.6!
0.8!
0.4!
NA!
0.9!
NA!
1.9!
0.4!
$38,029 !
$12,104 !
$17,534 !
NA !
$29,127 !
NA!
$55,941 !
$8,764 !
24!
37!
20!
NA!
32!
NA!
35!
24!
Knoxville!
Madison!
Syracuse!
Tulsa!
Des Moines!
Louisville!
Omaha!
52
53. -22.2%!
-6.1%!
-9.6%!
-11.8%!
-20.7%!
-21.2%!
-2.9%!
-1.1%!
The violent crime rate for Grand Rapids has been improving since 2006, however it increased
slightly between 2011 and 2012.!
Violent crime in Grand
Rapids is dropping at a
faster rate than its
aspirational peers.!
Incidence of Violent Crime (per 100,000 of Population)!
2011! 2012!
% Change!
2006-2012!
2013 Economic Competitiveness Benchmarking Report!
City!
!Source: Crime in the United States 2006, 2011, and 2012,
FBI Uniform Crime Report
Grand Rapids!
Aspirational Peers!
Traditional Peers!
Michigan Turnaround Plan: Accelerate the Growth of Cities and Metros
Metro Areas: Grand Rapids Safety
742!
936!
348!
893!
1,000!
523!
614!
560!
Knoxville!
Madison!
Syracuse!
Tulsa!
Des Moines!
Louisville!
Omaha!
774!
975!
395!
940!
990!
527!
595!
595!
53
54. $35,298 !
$35,992 !
$8,251 !
$36,938 !
$37,479 !
$37,850 !
$40,788 !
$34,240 !
$21,562 !
$5,721 !
$6,834 !
$1,107 !
$3,348 !
Canada!
Mexico!
Japan!
Germany!
United Kingdom!
Netherlands!
France!
Republic of Korea!
Brazil!
Russian Federation!
India!
China!
Michigan GDP and average wages are similar to those of its global peers. !
Michigan has comparable per capita GDP, wages, and educational attainment to almost all of its peers.!
Note: Data for global competitors represents the most recent data available and is more complete for some countries than others. We
will continue to pursue and refine global comparisons in future reports based on availability of international data.
2012 Per Capita GDP !
2005 Chained U.S. $!
Average
Annual Wage
2011 U.S. $!
2013 Economic Competitiveness Benchmarking Report!
Michigan!
Global Competitors!
Source: World Bank; Organization for
Economic Cooperation and Development
Educational Attainment
2009!
Population with an Associate
Degree or higher!
$46,727 !
$55,376 !
na!
$51,613 !
$46,984 !
$50,366 !
$57,001 !
$47,704 !
$29,053 !
na!
na!
na!
na!
32.8%!
69.0%!
32.0%!
52.0%!
33.0%!
37.0%!
30.0%!
30.0%!
39.0%!
27.0%!
58.0%!
na!
na!
54