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The Road Ahead: A Message from the President
The Mott Foundation’s home state is at a crossroads, trying to find the route that will lead toward a brighter economic future — one driven by entrepreneurism, cutting-edge research, advanced manufacturing processes and thoughtful use of its unparalleled natural resources.
Battered by the loss of manufacturing jobs, nearly every region in the state is dealing with high unemployment rates, declining tax revenues, housing foreclosures, struggling public schools, aging infrastructure and residential out-migration.
Meanwhile, the state government, beset with continuing budget struggles, seeks to create an environment that will foster business growth in today’s increasingly competitive global economic environment and will allow residents to find balance and purpose in their lives.
The view out my office windows in downtown Flint speaks all too well of Michigan’s current struggles. Prominent in the landscape are two brownfields that were once the sites of massive automobile manufacturing complexes. Elsewhere, boarded-up and foreclosed houses represent the lost hopes and dreams of the families who once lived there but fled Genesee County — and maybe even the state — as their fortunes changed.
However, equally visible from those same windows are the building blocks of this community’s future: the University of Michigan-Flint, Kettering University, Mott Community College, the Flint Cultural Center, first-rate hospitals and medical facilities, and a central business district undergoing a massive overhaul.
In many ways, our hometown is representative of the pluses and minuses faced by the state and its residents — frustration and despair versus opportunity and hope.
I have been a Michigan resident for almost 40 years, and this is the third economic downturn I’ve seen. The first two — in the early 1970s and early 1980s — were cyclical. In both cases, the state bounced back but did not totally regain its previous vitality. However, Michigan has not recovered from the 2000 downturn, and experts predict recovery won’t come anytime soon.
Given a seemingly endless onslaught of negative news, state residents can get discouraged. In this climate, we find it easy to overlook — or underestimate — the tremendous resources that can be tapped to help create a new future for Michigan.
These assets include one of the nation’s highest three concentrations of public research universities; 20 percent of the world’s fresh surface water; abundant advanced manufacturing capacity; geography that places us at the nexus of international trade among the U.S., Canada and Mexico; and spectacular shorelines, sand dunes and state parks.
We have arrived at a juncture where we must use these resources, coupled with our historic strength in manufacturing and our tradition of rolling up our sleeves and getting the job done, to participate fully in the global economy of the 21st century.
Let me suggest a number of paradoxes we must face to achieve that future.
First, new jobs are being created in many sectors in Michigan at a slower rate than in the rest of the U.S. Furthermore, traditional, well-paying manufacturing jobs — the basis of Michigan’s economic prosperity for nearly all of the past century — are disappearing so quickly that we have experienced a net job loss. Instead of focusing on attracting large-scale manufacturing operations, we need to capitalize on wooing midsize, small and niche businesses. These will be an integral part of our future employer mix.
Second, Michigan is the intellectual capital of the automotive industry, retaining a significant concentration of advanced manufacturing capabilities and, in southeastern Michigan, the largest concentration of automotive-related engineers in the world. At the same time, technology and more efficient manufacturing techniques have resulted in a need for fewer workers to design, produce and deliver a product.
Third, while we have world-class universities, we have far too many K-12 public school systems that are marked by staggering dropout rates. And many districts are failing to inspire and prepare students for the additional education and training required for today’s knowledge-based economy.
Fourth, in many ways Michigan was a leader in America’s early 20th century transformation from an agrarian to a manufacturing society. Today we recognize we must function in a globalized, competitive environment. We need to use our core competencies in advanced manufacturing and engineering to participate in the ongoing transformation of our aging manufacturing economy into a 21st century economy capable of global competition.
We recognize that there are a variety of efforts under way to address Michigan’s economic revitalization challenges. But we have limited this report to examining a sampling of the work being done by some of our grantees in this arena.
The state is home to more than 2,000 independent, community, corporate, family and operating foundations — located in large and small communities alike. There is no way we can tell the complete story of what all these foundations are funding to better their communities and improve the quality of life for the families who live there. However, we recognize that without their commitment and financial resources, life in their local communities would be diminished.
Of course, we went into this endeavor recognizing that foundations can’t do it all by themselves. The stark truth is philanthropy’s dollars are not large when compared with the state’s needs.
For example, in 2006, the state’s operating budget totaled more than $38 billion. (That figure rose to $42.4 billion in 2007.) The combined $24.2 billion in Michigan foundation assets from 2006 would not have been enough to cover the state’s expenses for that one year. However, Michigan foundations made $1.4 billion in grants that year, and much of that stayed in the state.
We believe that these philanthropic resources can be viewed as venture capital or catalytic resources. Fueling diversification and economic growth requires vision, imagination and an unflinching willingness to take risks, as well as funds to support what amounts to R & D (research and development) efforts. Foundations are well-positioned to do this.
In many instances, the Mott Foundation has been a partner in statewide efforts, and you will read about some of these in the material that follows. These partnerships cover a range of strategies, including testing new ways to develop training and career ladders for workers in fields with strong workforce demands, expanding the availability of education and training, and preserving our state’s unique natural resources.
Additionally, we have independently funded a number of economic development efforts, and have made major capacity-building grants to strengthen important institutions in Flint and Genesee County, as well as working with a variety of partners to reshape the region’s central business district.
However, space doesn’t permit us to describe in detail all the promising projects in Michigan — or even all the recent grants Mott has made to improve our home state — such as our $25-million grant to the University of Michigan in Ann Arbor toward construction of a new C.S. Mott Children’s Hospital, $2 million to UM for partial support of the Michigan Fund for Innovation and Entrepreneurship, $2 million to the Community Foundation for Southeast Michigan for the New Economy Initiative for Southeast Michigan, and the many grants we made in recent years to support the Flint Cultural Center Corporation and its member organizations.
We began work on this report in 2007, recognizing that we were writing about an unfolding story. By the time you read this, some individual components may have changed, but the broader context most likely will be the same for some time to come. The future of Michigan will be determined by the choices we make on the roads we travel.
William S. White
President