Growing Detroit’s Startup Ecosystem

Crain’s Content Studio

Support to local, small, and midsize businesses will help grow Southeast Michigan. That’s according to Dynamics of Detroit’s Startup Community, a session hosted by the William Davidson Foundation on Thursday, May 30 at the 2019 Mackinac Policy Conference.

Panelists, including New Economy Initiative’s Pamela Lewis, Endeavor Detroit’s Antonio Lück, and Vectorform’s Jason Vazzano, offered their insights in a conversation moderated by William Davidson Foundation’s Darin McKeever.

Lück cited the findings from “Southeast Michigan’s Competitive Advantages in Entrepreneurship,” a report the William Davidson Foundation commissioned Endeavor to conduct on how entrepreneurs can grow their companies and others can help.

“The community has capacity for much more improvement,” he said.

Lewis said one barrier to growth is that too often people think only about tech companies or small neighborhood businesses when they think of entrepreneurship.

“Sometimes the high-scale group gets lost in the shuffle. It’s important to know they are adding to the economy in a significant way,” she said, naming Art Van Furniture, Amway, and Bartech Staffing as examples. “They all started small. We need to make the link toward the value of supporting small neighborhood businesses so they can be on that pathway to becoming large growth businesses. Entrepreneurs come in all shapes and sizes.”

Key Takeaways:

  • Forty-six percent of employees work in sectors expected to decline or grow slower than the labor force.
  • Businesses created by local entrepreneurs reinvest a greater share of their sales within their communities.
  • Southeast Michigan has about 20% more high-value entrepreneurial companies than the rest of the country, Lück said.
  • The region would increase local GDP by more than $5 billion annually if it created 60 new larger, high-value, entrepreneurial companies.
  • There should be more economic development strategies that support existing high-value entrepreneurial companies and increase their numbers.
  • Entrepreneurs should focus on creating quality over simply doing more.
  • Startup leaders should build networks with founders of larger, higher-growth startups.

This article was written by Crain’s Content Studio for the 2019 Mackinac Policy Conference.

Michigan’s Quad Leaders: ‘We’re Going to Work Together’

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Against the backdrop of Thursday morning’s signing of landmark auto insurance reform on the Grand Hotel’s front porch, Michigan’s legislative leaders gathered that evening to talk shop about the pressing issues still lingering as they move toward budget negotiations and reaching a deal on increased funding for the state’s declining roads.

On May 31 at the 2019 Mackinac Policy Conference, the legislative quadrant of Senate Majority Leader Mike Shirkey (R-16), Senate Minority Leader Jim Ananich (D-27), House Speaker Lee Chatfield (R-107), and House Minority Leader Christine Greig (D-37) convened in a session moderated by Detroit Public Television’s Stephen Henderson and The Detroit News’ Nolan Finley.

The group initially reveled in their recent success with the new reform package’s passage.

“When you tackled something that’s eluded the state for 30 years, victory has a thousand fathers,” said Chatfield.

And with the passage of the budget and road funding the next looming objective, Chatfield saw this progress as a positive precedent.

“I’m optimistic,” Chatfield said. “I am sitting here with what we just accomplished saying we’re going to get this done. We’re going to work together; we have an open mind on it.”

Despite the differences that exist between the parties, which were evident in the discussion, there were several overtures that underscored the mutual hope for compromise over the rest of the legislative session.

“Gov. Whitmer is my governor and she’s going to be my governor until she’s not elected, and I’m committed to supporting her in every way I can, given the differences that we have,” Shirkey said.

Greig pointed to exploring larger possibilities, such as municipal revenue sharing and education funding, as the budgetary process continues.

“There’s nothing that says this has to be a linear approach,” Greig said. “We have immense talents in these two chambers on both sides of the aisle and we can start looking at those issues at the same time we’re doing the other big things.”

Key Takeaways:

  • Shirkey revealed that in “three years,” which he later corrected to “2021,” he intends to create a ballot proposal reforming the state’s legislative term limits, which are currently the strictest in the nation.
  • The leaders made it clear they still had considerable space to bridge before reaching an agreement about how to fund Michigan’s roads. Democratic leaders were behind Gov. Whitmer’s proposed 45-cent gas tax increase. Shirkey replied to an inquiry about support from his caucus with a simple “nope.” A counterproposal of sorts from Republican legislators is not yet ready, Shirkey said.
  • All agreed that they would like to see a new budget passed in a timely manner, but leaders did not offer any promises. Chatfield said they would work “as long as it takes to have a good budget.” They didn’t predict a budget passage would come down to the line, however.
  • Shirkey also said he intended to assess the “original intent,” of Proposal A, a measure which is responsible in part for declining municipal revenues, to see if the policy has had “unintended consequences.” There wasn’t a hint about any of the reforms long-sought from municipal groups.

This session was sponsored by Consumers Energy.

This article was written by Crain’s Content Studio for the 2019 Mackinac Policy Conference.

Breaking Down The Digital Divide for Michigan’s Students

More than 360,000 homes in Michigan and 27% of K-12 students lack access to broadband internet in their homes. This digital inclusion discrepancy is posing a serious risk for Michigan students as the state ventures into the information economy.

On Thursday, May 30 at the 2019 Mackinac Policy Conference, panelist explored this issue and the action that needs to be taken to eliminate the infrastructure, affordability, and literacy barriers responsible for this gap. Michigan State University’s Johannes M. Bauer, Lt. Governor Gilchrist, and Rocket Fiber’s Marc Hudson, moderated by Merit Network’s Joe Sawasky, engaged in an impactful conversation on the digital divide plaguing Michigan students during the Digital Inclusion: #FixTheDamnInternet for Michigan Students session hosted by Merit Network.

The speakers reinforced the gravity of this issue and the risk it poses for a large—and important—population of Michiganders—children. Sawasky cited the digital inclusion issue, also known as the “homework gap,” as a crisis for the state.

In rural areas of Michigan, climate and distance remain primary barriers to internet access due to the difficulty and cost of installing the infrastructure residents need. Students are well aware of this issue and the negative effects it has on their ability to perform academically.

“We need to create the conditions for success no matter where you live in the state of Michigan,” Gilchrist said. “If Michigan’s children are better connected, our state will be better for it.”

Significant deficits in internet access are just as pervasive in urban areas as in rural communities. In urban areas however, the barriers are less related to access and more rooted in affordability and digital literacy. Based on a Rocket Fiber study, Hudson acknowledged the misconception that the digital inclusivity issues are purely access-based, as findings indicated that 40% of Detroit households don’t have a fixed broadband connection.

The necessity to close the prominent gap in internet connectivity has implications beyond underserved students’ immediate academic performance and into their career paths. Bauer describes the internet as a “general purpose technology,” access to which is necessary to support workforces in the information economy.

“For a long time it’s been underestimated how important the internet is to economic development,” Hudson said.

The speakers agreed that the path forward requires collaboration across internet providers, government leaders, and community groups to generate solutions for infrastructure, affordability, and literacy issues. Progress is being made in the research space, and Bauer mentioned a project underway to assess the impact of the homework gap in Michigan, with results to be released this summer.

“We need to think about community action to deal with community challenges,” Gilchrist said.

Gov. Gretchen Whitmer Talks Compromise and Michigan’s Fundamental Issues

Shortly after signing a historic auto insurance reform bill on the Grand Hotel porch, Gov. Gretchen Whitmer took to Michigan’s Center Stage on Thursday, May 30 to deliver her first keynote as governor at the 2019 Mackinac Policy Conference.

“We need to go back to seeing the humanity in one another,” she said. The reform of the state’s no-fault auto insurance demonstrated notable bipartisanship and compromise. Although it was a difficult process, the agreement showcased a conviction to focus on finding common ground to solve critical issues, she said.

From criminal justice reform to auto reform, Whitmer cited examples of bipartisan dialogue and cooperation. However, in order to move the state forward, there must be improvements to the fundamentals, said Whitmer— infrastructure, skills gap, and public education.

“When we focus on the fundamentals, we can find common ground.”

Key Takeaways: 

  • Ninety percent of the states’ roads should be in good or fair condition. Currently, in Michigan, 78% of roads are in good or fair condition. “In order to take us to 90%, which will take 10 years, we have to spend $2.5 billion in infrastructure. If we wait, it will be $3.5 billion or higher,” Whitmer said.
  • Whitmer discussed her proposed 45 cent gas tax as the solution, as opposed to corporate income, individual income, or sales taxes.
  • Several of Michigan’s 11,000 bridges face structural challenges and require attention. One thousand bridges have weight restrictions, 800 are in poor condition, more than 400 are serious condition, and 49 are closed, said Whitmer.
  • Michigan’s children are falling behind in 4th grade reading proficiency compared to the rest of the nation. Forty-five percent of adults have some form of postsecondary education. Whitmer noted that her budget will assist local schools and ensure that adults have pathways to postsecondary degrees or certificates.

This session was sponsored by Blue Cross Blue Shield of Michigan.

Keeping Up with the Shifting Labor Market

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Filling the Skills Gap: An Open Dialogue on Workforce Realignment, hosted by the Ralph C. Wilson, Jr. Foundation, examined obstacles to hiring skilled employees in a rapidly shifting labor market and steps employers and others can take to address skills needs.

On Thursday, May 30 at the 2019 Mackinac Policy Conference, the session included panelists Washtenaw Community College’s Michelle Mueller, Michigan Regional Council of Carpenters and Millwrights’ Tom Lutz, DTE Energy’s David E. Meador, and National Skills Coalition’s Andy Van Kleunen. Detroit Public Television’s Stephen Henderson moderated the discussion.

Tuition isn’t the biggest problem in getting those skills, said Mueller. It’s lack of access to wrap-around services like transportation to and from school and work and childcare.

“Food insecurity is an incredible problem. We have a food pantry on our campus for the first time,” he said

Lutz said his company struggles to fill the jobs needed to complete projects. To overcome those challenges, it works with employers, Michigan Works! Association, and community partners to help applicants gain the skills necessary to get apprenticeships.

“We can bring tutoring right to them and give them times and opportunities to retake tests, (if necessary),” he said. The organization even has apprenticeships for high schoolers through its job fairs and summer programming. And to retain employees, it offers mentorship at journeymen and apprenticeship job levels.

Meador said Michigan has some 100,000 people it needs to put to work and 400 agencies trying to change the system to make that a possibility. For instance, DTE has 300 tree trimming jobs available. To fill those roles, it is starting a tree-trimming school in Detroit and another at a state prison to give people more opportunities and skills and put DTE on a greater path toward diversity.

Key Takeaways:

  • Fewer students are enrolling in high school, said Mueller. Programs need to deliver competency-based, contextualized developmental education that meets students where they are, allows them to move through curriculums as quickly or as slowly as they need and provides hands-on experiences.
  • Silos in funding need to be broken and then combined to concurrently provide more educational opportunities, job training, and basic needs.
  • Academia at all levels needs to rapidly respond to changing reading and math skills levels needed and improve foundational digital literacy skills.
  • Businesses must partner with schools and communities and discuss common skill standards and expectations; public dollars should then be directed toward those specific needs.
  • Companies need to understand that disabled individuals, such as those who are blind or on the autism spectrum, may be a great source of talent.

This article was written by Crain’s Content Studio for the 2019 Mackinac Policy Conference.

Barfield, DeVos, Van Elslander: Remembering the Legacies of Philanthropic Leader’s

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Michigan’s preeminent business people leave a legacy in their communities.

From the revitalization of downtown Grand Rapids, to the saving of a Ypsilanti neighborhood to securing the future of Detroit’s Thanksgiving parade, the sons of the men who made those contributions met in the same place for the first time on Thursday, May 30 at the 2019 Mackinac Policy Conference.

Impellem Group’s David W. Barfield, son of the late John Barfield; DP Fox Ventures LLC’s Daniel G.  DeVos, son of the late Richard DeVos, and A.A. Van Elslander Foundation’s David Van Elslander, son of the late Art Van Elslander, talked about the contributions of their fathers. WJR NewsTalk’s Paul W. Smith moderated the discussion.

John Barfield, who founded several companies under the name Bartech Group and was a longtime patron of the Parkridge Community Center in Ypsilanti, left an indelible impact in the neighborhood.

Richard DeVos co-founded the eminent direct selling firm AmWay and was notable for his efforts to develop Grand Rapids. From a symphony hall to a local college of medicine and more, DeVos’ impact was widespread.

Art Van Elslander started Art Van Furniture in a 4000-square-foot store and grew it to a company with more than 100 showrooms. He was most notable for writing a personal check that brought Detroit’s Thanksgiving Parade away from the brink of cancelation in 1990.

All three passed away in 2018. The panelists discussed the impact each left behind, and how it has shaped their own lives and the business they conduct.

Key Takeaways:

  • “We could not go anywhere in (Ypsilanti) where someone did not know him, black or white. He also had a personality that was very attractive to people. He was very kind, always willing to help, always willing to listen,” David Barfield said.
  • “I don’t think it’s about topping them or doing better than them; it’s carrying on what they started and continuing their legacy and teaching our children to carry that legacy as well,” Van Elslander said.
  • “My dad always came from the heart. His heart would sort of lead him where to go. His values, his dedication to his family and his business — that’s what drove him. Money didn’t drive him; fame didn’t drive him it just was a result of what he did,” DeVos said.

This session was sponsored by Consumers Energy.

This article was written by Crain’s Content Studio for the 2019 Mackinac Policy Conference.

Michigan’s Congressional Delegation Remains Unified on Critical Matters

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Michigan’s congressional leaders are working as a team to protect the Great Lakes, improve the Soo Locks, and maintain the state’s high-tech defense industries.

On Thursday, May 30, Sens. Debbie Stabenow (D-MI) and Gary Peters (D-MI) alongside Reps. Paul Mitchell (R-MI 10) and Jack Bergman (R-MI 1) on Thursday, May 30 at the 2019 Mackinac Policy Conference to discuss their shared priorities.

Stabenow and the rest of the delegation have spent years working to ensure Asian Carp, an invasive species, does not reach the Great Lakes by employing barriers in the Chicago River.

“Our delegation is laser-focused on protecting the Great Lakes,” Stabenow said.

That plan is to be implemented by the Army Corps of Engineers once funding is secured, as is another project with statewide impact — the Soo Locks, which in Sault Ste. Marie, located in Bergman’s district. But Bergman emphasized their cooperation didn’t begin with agreement on a few issues.

“It starts with building relationships before that issue arises,” he said. “Getting to know your colleagues, getting to know about them as human beings.”

That’s when a dialogue can begin in earnest, Bergman noted.

“We’re not a noisy delegation, we’ll get noisy in a room by ourselves at times, but when we come out, we pretty much come out on behalf of Michigan as a whole,” he said.

Those unified efforts can have an impact, Stabenow said.

“Sometimes you don’t have to be in the majority, you just have to have enough of a group — which we have — to be able to say ‘no’ if you’re going to be hurting the Great Lakes,” she said.

Key Takeaways:

  • While Michigan is the automobile capital, it has now also become the defense manufacturing capital, Mitchell said.
  • Stabenow noted how members of the Michigan delegation secured positions on defense-related committees in order to preserve jobs within Michigan, even adding 1,000 jobs as cuts were made nationally.
  • All the panelists — though they aren’t totally aligned — believe trade with Canada is a critical issue.
  • The Michigan Delegation also must work together to ensure regional partners in the Great Lakes support projects that impact Michigan and extend beyond its borders.

This session was sponsored by Ford Motor Company.

This article was written by Crain’s Content Studio for the 2019 Mackinac Policy Conference.

2020 Census: A Crucial Opportunity to Rebuild Middle Class, Boost Workforce Training

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The city of Detroit, like communities across the state, will approach Census 2020 like one of the greatest door-to-door field campaigns it has ever seen.

The stakes are high: More than 40% of Michigan’s budget comes from federal funds allocated by census data; for every person not counted, the state loses $1,800 a year. An accurate census is considered by many government and business leaders to be the key to rebuilding a middle class.

On Thursday, May 30, W.K. Kellogg Foundation hosted Today for Tomorrow: Michigan Opportunities with 2020 Census Partnerships at the 2019 Mackinac Policy Conference. Panelists included Detroit Mayor Mike Duggan, ReadyNation’s Jeffrey Connor-Naylor, DTE Energy’s Nancy J. Moody, Michigan Nonprofit Association’s Donna Murray-Brown, NALEO Educational Fund’s Arturo Vargas. The discussion was moderated by W.K. Kellogg’s La June Montgomery Tabron.

“We get one shot every decade, and we need to get this right,” Tabron said.

Duggan, who participated in the panel, acknowledged that the city was “preoccupied” during the 2010 Census and the implications were far-reaching.

“I know firsthand that racial undercount is real; for people of color, when the government comes to ask you questions about your life, you are less likely to answer,” he said.

For the first time, the census will be conducted electronically. Across Detroit, Duggan said, computers will be available at recreation and community centers. Census workers will take iPads with them when they go door-to-door to follow up with homes that have not filled out the census.

Panelists urged business leaders to start thinking about how they can help with census efforts. For starters, companies can encourage employees to fill out the survey as soon as it is distributed on March 15, which will soften the need for a follow-up door-to-door campaign. They can offer incentives to customers who fill out the census; they can also help by getting the word out to their clients about the importance of the census.

“The census is really the foundation of the business community’s decisions about where to open a new store or factory and what products to offer on shelves. On one hand we don’t want companies to make decisions with inaccurate info – also used to distribute effectively funds that help grow economy,” said Connor-Naylor.

Key Takeaways:

  • The City of Detroit has a goal to raise $3 million by the end of the year to fund its education and door-knocking efforts in the city; it has $500,000 in hand and an additional $1 million committed toward the cause.
  • Children have historically been under-counted in the census; often they are left off forms intentionally.
  • It’s against federal law for the U.S. Census Bureau to share individual census information with state, local or other federal institutions. There are many Detroiters who falsify their residency for automotive insurance reasons; they should not do so for the census, Duggan said.

This article was written by Crain’s Content Studio for the 2019 Mackinac Policy Conference.

Change Is Possible: Jeb Bush’s Lessons For Education Reform in Michigan

Read more from this Detroiter article about Jeb Bush’s education reform policies as Florida governor. 

Jeb Bush, former Florida governor, and founder, president and chairman of the Foundation for Excellence in Education, tackled the topic of education on Thursday, May 30 at the 2019 Mackinac Policy Conference.

He shared his experience in implementing education improvements in Florida during his time as governor and outlined the approaches Michigan should consider. In his pursuit to improve Florida’s educational standings and improve conditions and outcomes for the students he served, Bush learned the following lessons:

Elect people that are big and bold.
Education is a long-term commitment, not a box to be checked. Bush calls on leaders to be “all in” on education improvements. On casting education issues aside, Bush said, “That to me is the great civil rights challenge of our time.”

Fund reforms.
“You fund your priorities first. You make them the core of what you’re about,” Bush said. He continued to explain that politicians and other leaders need to invest in things like ensuring teachers can teach and that literacy programs get funded. “If you want to have continuous improvement, you need to fund the things that you want more of,” Bush said.

Reward success in policy.
Teacher bonus programs for student improvement incentivize strong performance, empower good teachers with deserved recognition, and increase the quality of education students receive. “You’re funding more progress, and you get a better result,” Bush said.

Implement consequences.
Consequences deter failure. Bush outlines a common pitfall of reform is that all students, teachers, and issues are homogenized, which removes the dynamic tension necessary to achieve continuous improvement. “Too many people are not reaching their potential because we don’t have the guts to say some things are working and some things aren’t,” Bush said.

Raise the bar.
Bush advises quick, decisive action to prevent circumstance and problems from stagnating. Higher expectations encourage effort and stronger performance from students. “Change is hard, but you’re never going to get to the place where you have rising student achievement unless you begin,” Bush said.

Celebrate progress.
Once improved practices are implemented, and results begin to emerge, Bush emphasized the positive impact of celebrating progress and its importance in sustaining those successes over the long-term.

Among all of these lessons, Bush emphasized the need for a change in mindset to encourage all students, saying, “All sorts of signals are sent to some kids that they can learn and some kids that they can’t. Getting rid of that would be a good idea.”

This session was sponsored by PNC Bank.

Launch Michigan Partnership Brings Philanthropic, Education, and Business Leaders to the Table

Tonya Allen, president and CEO of The Skillman Foundation; Paula Herbart, president of the Michigan Education Association; and Doug Rothwell, president and CEO of Business Leaders for Michigan took Michigan’s Center Stage to discuss The Education Crisis: Michigan’s Response with Richard L. DeVore, regional president of Detroit and Southeast Michigan for PNC Financial Services Group.

Michigan’s response to the education crisis? An unprecedented partnership between philanthropic, education, and business leaders called the Launch Michigan Coalition.

The Coalition has three main goals: make Michigan one of the fastest improving states for education reform, close the achievement gaps between students of all races and backgrounds, and make sure students leaving high school are prepared for college or a career.

“Michigan has had one of the biggest education gaps in the country for 25 years, and it’s because the adults are not willing to budge. In order to make change, we must be willing to have the uncomfortable conversations.” Allen said.

All panelists agreed that Michigan’s ineffective education system is everyone’s responsibility, not just the responsibility of the educators. Herbart represented the educators’ point of view.

“If you’re talking education policy, we need educators in the room.” she said. She emphasized that educators want to be a part of the solution.

Rothwell mentioned that despite all the work that is being done, there is no short-term solution to the challenges that Michigan’s education system is facing. This is a long-term journey, committed to long-term results.

“When was the last time you saw philanthropists, business leaders, and educators getting together to address this challenge? I think we are on the precipice of something very big.” Rothwell said.

Key Takeaways:

  • In Michigan, 1 in 5 teachers leave the profession after their first year.
  • Educators want lower class sizes to spend time with their students, more training for students falling behind, and more time to plan.
  • Phase one of the Coalition has four goals that they will work on over the first year: provide support to educators, develop an accountability system for everyone, develop a finance system to provide the resources, and provide a literate population.

This session was sponsored by PNC Bank.