| A recent report from the University of Michigan's School of Public Policy points out encouraging signs of growth -- and opportunity -- in the Michigan economy as the state works through a wrenching, historical change in its manufacturing base. |
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| But Thomas Ivacko's "Michigan's Economic Transition" also puts some difficult questions before us: Does Michigan have the capacity to reinvent itself for success in a knowledge economy? Or will we all be mesmerized by what the report calls "a slow-motion economic train wreck unfolding before the citizens' eyes"? |
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| The answers to these questions are by no means certain, but I answer with a hopeful "yes" to our future in the knowledge economy and "no" to the train wreck. |
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| Netlink Inc. is making a huge bet that Michigan will compete and succeed in a global knowledge economy. It is adding about 470 jobs in Michigan and opening a new headquarters building in Madison Heights, which will collaborate with our development center in Bhopal, India. We have doubled in size in each of the last five years. |
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| Netlink has prospered by helping companies outsource or contract out back-office business operations and computer services. Isn't there something counterintuitive about an outsourcing company with major operations in India creating jobs in Michigan? We don't think so. Understanding why helps point us all in the right direction when discussing the state's future. |
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| Michigan can compete |
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Contrary to what many may believe, the U.S. economy is not about to be crated up and shipped off to India. In the industry where Netlink competes, we are seeing more and more competition from firms in China, Eastern Europe and, increasingly, Mexico.
In the global knowledge economy, there are no sheltered harbors where companies operate free of competitive pressure. There is no place to hide. Like everyone else, we compete on the basis of technical expertise, service and returning clear savings to our customers. |
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| Here's where the U-M report offers, perhaps, the most encouraging signs. In "human capital," our state has huge assets and advantages. Michigan, the report notes, ranks second in the nation in the percentage of the labor force employed in high-tech jobs and 10th in the nation in the percentage of engineers in the work force. What's more, the report notes, the state ranks near the top in research and development spending from both private and university sources. |
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| To translate this human capital into new products and new industries will take an entrepreneurial spark, a willingness of talented people to undertake risky, innovative ventures. In this area, Michigan led the nation in new business start-ups in 2002-03 -- precisely during the deep restructuring of state industries such as auto and office furniture. This, the U-M report concluded, is "clearly evidence of improving entrepreneurial activity, refuting the accepted view of Michigan as a lethargic and hulking economic has-been." |
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| In important sectors such as health care, financial services, law and accounting, some of Michigan's best businesses are already competing and winning in the global knowledge economy. However, two areas need immediate attention if we are to escape the train wreck that so many fear. |
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| First, Michigan's political leadership needs to resolve the state budget crisis without hobbling business people and entrepreneurs -- those who create new jobs -- with excessive tax burdens. Our political leadership needs to address this problem with the same sense of urgency, and willingness to make the tough calls, that we see in the executive suites of our major auto companies today. |
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| Second, we need to come to grips with the rapidly escalating cost of higher education at state universities. We are approaching a real a crisis of affordability. We worry now about our best and brightest young people hitching up the U-Haul and leaving Michigan for good as soon as they graduate from college. If we're not careful, they increasingly will be leaving a lot sooner and taking their talents -- their human capital -- with them. |
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| So it's up to us to choose the path -- economic has-been or knowledge economy powerhouse. |
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| Dilip Dubey is chief executive officer of Netlink Inc. in Madison Heights. E-mail comments to . |
