Demand for manufacturing may set stage for 'Michigan moment'

Posted on February 27, 2012

Bruce Katz seems an unlikely prophet until you hear his message: Old Economy manufacturing in Michigan isn’t the dead end of the past generation so much as the platform for a new era of growth, innovation and competitiveness.

Ridiculous fantasy rooted in an election-year partisan political agenda? The academic ravings of the Brookings Institution analyst that he is? An unconvincing spin on an inexorable tale of decline unspooling since the early days of the Nixon administration?

Not so fast, particularly because manufacturing and the innovation that drives it isn’t really Old Economy at all — as a test-drive in a Chevrolet Volt extended-range hybrid or the latest hip implant from Stryker Corp., to name just two of many examples, ably attest.

The Big Mitten’s recovery from the nastiest recession since the Great Depression ranks second in the nation, powered in part by the Detroit auto industry’s surprising revival. Michigan and key metro areas like Detroit and Ann Arbor outpace the nation in patent applications, an educated immigrant population and a diverse set of companies driving export growth.

“The next economy will be oriented toward innovation, particularly in the manufacturing sector,” says a Brookings study prepared in partnership with Business Leaders for Michigan and released Thursday. “The next economy will demand and reward global engagement, including exports to take advantage of growing global demand.”

Adds Katz, vice president and director of Brookings’ Metropolitan Policy Program: “Your base is a pretty darn good base. You are what other states want to be. The U.S. economy is shifting in ways, post-recession, that play to the strengths of this state. This could be a Michigan moment.”

Excuse me: “You are what other states want to be” and “Michigan moment?” Here in the factory of the “Lost Decade,” the epicenter of 2 million jobs lost, the home of the poorest major city in America? Here where too many young people still don’t finish high school, too few complete college and not enough seem to understand that the good ol’ days are gone for good?

Yep, here, if you can loose the shackles to the past, shed the zero-sum games of us-vs-them confrontation and grasp that an emerging set of 21st-century values could be skewing in favor of what this place does best: researching, designing, engineering and building products for sale around the world.

Here if the cultural bias against educational achievement and in favor of cradle-to-grave corporate coddling can be relegated finally to the past, where they belong. Here if disparate constituencies — business and higher education, organized labor and non-profits — can coalesce behind a vision that sees wealth creation in making things.

Making things, real things, of steel and electronics, chemicals and pharmaceuticals, is cool again. A generation of tilting toward the post-industrial economy, exemplified by a go-go Wall Street culture rewarding creative destruction while the rest lived with the consequences, is undergoing an unforgiving reappraisal.

So are the clueless consumerism and I-deserve-mine entitlement saddling personal and public balance sheets with too much debt too quickly; the post-industrial narcissism exemplified by Facebook-überall and the belief that politicians can make smart business decisions; the sense that functioning, prosperous societies can stay that way by sating their appetite for manufactured goods from markets outside their own.

Emerging foreign rivals aren’t challenging American supremacy in investment banking or social networking. They’re challenging the auto and aerospace sectors, the high tech and clean energy plays, the innovation and research advances that together combine to keep the United States the world’s largest exporter. Still.

That’s an opportunity that a growing number of business leaders and economists see with increasing clarity. Their vision is not enough to persuade regular folks that this time could be different — but it can be. The world is changing, and a battered Michigan has a great chance to be part of it.

Daniel Howes, Detroit News