I just read this on the Detroit Free Press after seeing it on Drudge.

Ok. I have friends and acquaintances who work there. Just like my friends at Ford. Of whom, many will likely be on the receiving end of a job-ax.

So what is state to do?

A number of things.

First: There is a whole heck-of-a-lot-a talent in Michigan. Huge amounts. Maybe, somehow, someway, if we could, I dunno, stop subsidizing failing industries and focus on, I don’t know, microcapitalizing small startup ideas here … Sort of like a MLSC but done right. None of this 6 months of waiting for reviews and reviewers whom are not focused upon the mission. If implemented correctly (and this is hard to do), you would be helping to launch lots of little businesses which become the employers of today and tomorrow. Yes, some will fail. Yes, some will try to abuse this system.

The idea is that this is the price of doing it right, is that there will be people pushing the limits. Are we to reject a good idea due to potential bad apples?

Second: Fix the business laws/taxes. Make this state *friendly* to small business. Make it easy to create a business, easy to run it, and easy to expand and hire workers here. Resist the temptation to tax the poor little guys to death. Its much easier to tax profitable companies than companies that don’t exist. It would be better for states revenue base if the small companies existed in the first place, as they could attract revenue into the state. And hire and grow in the state.

Yes, some of them will fail. And take money down the tubes. This happens. It takes lots of broken eggs to make good omelette’s. Learn to cut the losing bits early.

Third: Stop giving away tax breaks to large companies who do not commit to growing and remaining growing in the state for a long period of time. No more breaks. The ROI on this is negative. Stop it. It ain’t worth it. If company X says they will pull out their workers and move somewhere-else unless you give them 10M$ tax credit, tell them not to leave the lights on when they go. Such companies are bad neighbors and we all wind up footing their tax bill for them. That isn’t very fair now, is it. Its also not right.

Fourth: Get creative. Imagine you have 10 little businesses start up in a town. What do all of them need, and can we creatively use land/resources/… to help lower costs for these business? Think about it. Promote economic activity by growing not incubation centers, but business centers, where small companies can come and rent specific types of space at reasonable rates (remember, small companies are usually badly undercapitalized, so cost effective space is critical) for times usually much less than a typical lease. For example, suppose we get a large order that strains our capabilities as we don’t have space/power to build it. This is a very real concern for us by the way. If we can grab a small portion of a building with a loading dock, and enough power to do our builds and then vacate, say within about a week or so, this could be incredibly beneficial to a small entity like us. Or other small entities that bust their backsides like we do.

The point is, get creative. Think outside of the box. Way outside.

Fifth: Diversify the economy. I am thinking that now that the lynch pin of life science industry has left the building, the LSC idea may be formally put to rest in terms of its implementation. The idea is good. The implementation was/is terrible. No more trying to be a micro-NSF or micro-NIH. Time to focus our efforts on a diverse economic base. This means micro-capitalization, seeding if you will, small companies with enough to get going, get their ideas together, and see what they can do. The areas I would suggest avoiding are manufacturing and automotive. We have an oversupply of this talent, and thanks to layoffs, we now need to figure out how to use it elsewhere, or lose this talent.

The state needs things which will pay off quickly. This suggests technology and software. A number of other things as well. High performance computing. If it ever gets serious about this, it wasn’t in the last N iterations of the 21st Century Fund and preceding incarnations, they should give me a call (I am not holding my breath that they will). Focus upon growing industries where the state could have a fighting chance at doing good things. Not industries with 10-15 year product cycles and huge risk profiles. Limited goals and objectives.

Maybe someday the state will do something like this. Then again, maybe someday the horse will learn to sing.

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