4 Blogs You Should Read

One can’t emphasize enough, in a knowledge economy, the strategic importance of our major research universities. Communities across the globe, recognizing the importance of research universities, are trying to replicate what we already have here.

One can make a strong case that the most productive state and local economic growth policies over the past several decades have been public investments in research universities in Austin, San Diego and North Carolina's Research Triangle. The payoff in each case has been huge.

Bill Gates in a 2005 presentation to the National Conference of State Legislatures said it best:

... take the two big leading industries, industries around biology and medicine, that's one, and industries around computer technology, that's two. The job creation and the success for those industries have been overwhelmingly in the locations where there is a great university. There's an almost perfect correlation between the number of jobs in a region and the strength of the universities. And, that will continue, whether it's new fields like nanotechnology, or those two fields I mentioned, on the ongoing strength that they'll have. And so for this country, we have to have the best universities.

Conventional wisdom has it that the most important contribution that research universities make to the economy is by spinning off for commercialization new knowledge. No question places where new knowledge is being created have a big edge in being the places where new technologies are commercialized. But there are no guarantees. It's hard to turn an idea into a commercial success. And when you do, often there aren’t many jobs or they go elsewhere.

There are other more predictable ways research universities boost our economy:

• Forget spin-offs, research universities themselves are major job creators. Higher education is one of the fastest growing areas of long-term, good-paying employment growth. And within higher education, research universities are the most important because they are export-based enterprises. Rather than just selling goods and services to each other, research universities are growing the wealth of the state/region by bringing $ from across the country. In total Michigan universities--mainly the three research universities--bring in more that $1 billion annually of federal funds and employ thousands of knowledge workers.

• Higher education’s importance in preparing talent for a knowledge economy is clear. But it also is one of--if not the--most important assets in retaining and attracting talent.

Our universities--particularly the research universities--are among the few enterprises in the state that attract talent from around the world: students, faculty and researchers. And they are anchors of the kind of neighborhoods that young talent wants to live in: mixed use, high density, walkable, culture and entertainment rich. Those kind of neighborhoods are essential to keeping recent college grads here rather than Chicago, Seattle, etc. It's no accident that such neighborhoods are growing around the University of Michigan and Wayne State.

• Knowledge-based employers are increasingly locating where they find knowledge workers. And that means around research universities. If you want to attract world-class enterprises like Toyota, Google and Pfizer, as Ann Arbor has, it helps a lot to be the home of a world-class research university.

And yet, for some reason, even though in the University of Michigan we have one of the great research universities in the world and in Michigan State and Wayne State two others that rank in the top 100 nationally, Michigan policy makers have never viewed major research universities as a key economic resource. This needs to change!

Politics aside, Governor Granholm is right; our cities must be the bedrock of our state’s rebirth. We will not revive our state’s economy with a silver bullet approach, luring jobs away from places like Ohio or Indiana. It must be because we have the best cities and as you would expect, a better quality of life. 

As I look out over the way our state economy has bottomed out in the latter part of the 20th century and today, I see a place that has disinvested in its core communities by systematically allowing sprawl.  More importantly than our reliance on the auto industry, our cities have been assigned such a negative stigma over the last fifty years that, as they have suffered, so has the whole of our state. 

Without strong quality of life policies, we have not become the magnet for investment or population growth that others have. Years of shortsighted leadership have led us down the wrong path and into the mess we are in today. 

Luckily, just as there are problems, there are solutions. 

In particular, there are two major areas we should be focusing on today: (1) better land development policies and (2) a greater focus on quality of life indicators in cities across the state.

For those who define things in terms of the market, it is pretty simple; think of our cities as though we were running in direct competition with cities around the world.  The region’s businesses are already competing in the global marketplace, but our cities, measured by quality of life, are not.  Our cities should behave more like a business would and benchmark themselves against competing urban centers.

For example, if Chicago ranks higher on the quality of life index than Detroit, then Detroit should identify what they are doing right and duplicate it.  Mass transit is an obvious difference, but what about land use?  It just so happens that Chicago actively promotes building density while Detroit as a whole, does not.  We live in one of the most sprawling cities in the nation.  Maybe that is why you still hear people in the suburbs disavow any association with the city... as if it were a badge of honor. 

Take it from me, it is not productive to bash Detroit or brag to visitors that the most famous city in Michigan is an insignificant place.  It is certainly not in the best interest of the businesses we have competing for clients, talent and investment. 

Creative, entrepreneurial-minded people are the best asset any state has, but getting more of them to come to our state will not happen unless we create the kind of environment they want to live in. 

The framework for our state’s success has been laid out for us in places like Chicago.  We must now capitalize on the assets we already have and begin to invest in long-term strategies that change our land use methodologies and drastically improve the quality of life standards that everything is now measured by.  That should be a goal everyone strives for, regardless of where they live in our state.

What We Can Learn from Hamtramck

Some parts of Michigan are growing in population, but very few. Some of the places that are may surprise you. 

Southwest Detroit, Dearborn and most importantly Hamtramck, are three of the places in our great state that are growing. As a matter of fact, Hamtramck has grown almost 7,000 people since the 1990 census. That is an increase of nearly twenty eight percent.  Hamtramck’s growth, like its urban counterparts in southwest Detroit and Dearborn, has come mostly as a result of immigration.

There is a difference between population growth in Macomb and population growth in Hamtramck. Macomb population growth represents those people moving farther and farther from the core of the region.

They are not attracting new residents to southeast Michigan and they are a product of sprawl.

In contrast, Hamtramck population growth is almost exclusively because of new residents moving to the state from other countries or regions; twenty six to be exact. There are twenty six distinct nationalities--now nearly 25,000 people-- in Hamtramck. All residing inside 2.2 square miles.

Hamtramck is an immigration hotbed and should serve as a model for how diverse groups of people can live together in a structurally dense, urban area.

Betting on the Tracks

I have two small pieces of paper from my early childhood, given to me by my grandfather when he was mayor of Ann Arbor. One is a note card commemorating my first train ride, complete with a drawing of engine and caboose. The other is my first driver’s license, authorizing my use of tricycles, bicycles and all other vehicles within the city limits.

When I was a kid, we were just as likely to take the train as drive to anywhere distant. My grandfather had prepared me for either alternative, but as time moved on, it became evident that the tattered driver’s license would be the more useful piece of memorabilia.

I’m not going to bore you with statistics this time. There’s nothing numbers can tell you about our transportation system that a 45-minute rush hour commute won’t illuminate with more impact. Rather, I want to share with you what I think we’re missing and what the first steps to reclaim it are.

One hundred and seventy years ago, Michigan's first train took to the rails. Even by frontier standards if must have been an unusual trip. The rails were cut from oak trees. The car was pulled by a team of horses. The route between what is now Toledo and the boom-town of Adrian passed over (and often due to the weather, through) the thick swamp that covered most of southeast Michigan. The forty mile trek could take as long as two full days. Despite the hardship of the trip, it was cause for great celebration. The coming of the rail meant essential things for a community: new residents would move there, new businesses would crop up, the town would be connected in an important and constant way.

More than a century and half later, these things are still true.

Most people who live here, however, are rightfully skeptical that that transit could ever be successful. In large part, we don’t know where we’d get on and if it would take us where we need to go. In truth, most jobs in the region are scattered an unreasonable walking distance from any transit stop, existing or proposed.

For 50 years, as the individual freedom offered by the automobile increasingly captured the American imagination (not to mention huge quantities of the federal budget), we have ignored the sinister consequences of a new kind of development: exploitative, segregationist, and unsustainable. Harsh words. Understand, it’s not the fault of the car. That’s a marvelous machine.

The machine at work here is political, a careless interaction of short-sighted public policy and selfish social mores. It has torn apart our region with grueling efficiency.

Restoring vibrancy to SE Michigan requires some keen attention to what John Elkington called the “triple bottom line,” a commitment to economic prosperity, environmental sustainability and social equity. For too many years we have allowed our culture to fall out of balance, relying on the strength of our auto industry economy to overshadow increasing social inequities and declining environmental quality. Now that our economic prospects aren’t so strong, these companion weaknesses are being thrown into glaring light. Our regional renaissance must recognize the unavoidable interplay between these three essential elements.

Not coincidentally, there’s a regular drumbeat call for transit in southeast Michigan. We are, after all, the only major metropolitan area in the country without a comprehensive mass transit system. And transit is a powerful development tool that serves the triple bottom line.

The economic benefits of transit are well-documented. Not only does it elevate personal economy by reducing individual transportation costs, but businesses located along transit lines appear to thrive whether they are large or small.

According to the U.S. EPA, most air pollution in our region comes from automobiles. While technology is slow to advance, transit provides an effective foil against toxic emissions.

Heaster Wheeler, Executive Director of the Detroit NAACP, has noted that transit is an essential equity-builder in our region. And he notes the need for white leadership on the issue. He and I agree that skeptics should not be empowered to declare transit a problem of “urban” (read black) or poor communities. But if transit is to work for everyone, people must have places to come from and places to go.

One way to begin is by rethinking the shape of our neighborhoods. We need to design places to live that are intentionally communal – that foster interaction and interdependence. These places respect our natural resources by using land efficiently and ensuring that water pollution is effectively mitigated. They concentrate our economic power into self-supporting cycles allowing more dollars to stay in our region. And they help us defy the desire to separate, segregate, and leave others to their own devices.

Enter “transit-oriented development.” This neighborhood design model integrates mixed-use development and pedestrian-scale designs to support transit and advance economic development.

There is no doubt that we need transit. We need transit-oriented development even more. It is a strong and underutilized building block for community revitalization and redevelopment. If our region is to survive, to compete globally and nationally in the next 20 years, we must draw residents and businesses back into the fabric of community. To do that, we need neighborhoods that will support their values and meet their goals. Transit-oriented development gives us options that our region simply does not have right now.

It’s far past time that we should be prioritizing transit and transit-oriented development. By giving these investments the time and attention they deserve in our stumbling economy, one day our own grandchildren will have the opportunity to trade their tattered drivers’ licenses for that note about the train.

Welcome to Michigan, now start a company…

I recently read a bumper sticker which commanded, "Welcome to America….now speak English." Whoever came up with idea was probably tired of bad accents. I am glad the Immigration and Naturalization Service does not have such signs at the entry points of the country. But if we extend the idea to attracting entrepreneurs to Michigan, what would the tag line be?

I have noticed a very interesting trend where entrepreneurs who have built successful companies on the coasts are returning back to Michigan to repeat the economic successes.

Take for example, Doug Neal who spent several years on the West coast, built a successful venture backed company, survived various ups and downs and eventually had a nice exit. Now, Doug has moved to Brighton and is using his expertise to help build start-ups in Michigan. His family ties brought him back to Michigan. 

Bob Poloskey and Tom Bollum built a successful company in California which raised over $30mm of venture capital. The company was sold within four years and Bob and Tom brought back their expertise (and wealth, thank you very much) to Michigan, where they became a part of Osiris Innovations. Osiris is based in Auburn Hills & is focused on sales of cutting edge supplier management software. With marquee customers like Office Depot, TRW and Detroit Medical Centers, Bob & Tom are well on their way to replicate the success, this time in Michigan.

Sreeram Veeragandham was the founding member of Juniper Networks, now a public company with $10 billion market capitalization. Sreeram was a part of the team that helped develop and re-tool the initial product line that led Juniper to eventually grow and compete with the likes of CISCO. Sreeram came to Michigan to get his MBA at the University of Michigan and decided to stay. He worked tirelessly to build Accuri Cytometers, an Ann Arbor based University of Michigan spin-off that is selling research instruments. Sreeram also invested capital and helped raise initial rounds of funding for Accuri. Sreeram now spends time with Plymouth Ventures to help build Michigan companies.

So how can the State of Michigan attract more of the ilk… entrepreneurs are unique beasts who are highly independent. Charlie Rothstein, founder of Beringea, one of the successful venture funds in Michigan shared a brilliant idea: "Destination Michigan" where any entrepreneur in any part of the country who can raise the first million of venture capital would get a matching investment from state programs. A simple elegant idea which can attract entrepreneurs, start-ups and investments to Michigan – all without any tax incentives. You can spot a good idea whose time has not yet come… hopefully we will see this get launched sometime soon. Till then, some bumper stickers maybe?

Mahendra Ramsinghani is with Plymouth Venture Partners, an "all immigrant" venture firm with an Australian (Ian Bund) and two Indians (Mahendra & Sreeram) working hard to build Michigan’s economy. Thank God, at least two of the three speak English well.