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www.michiganfuture.org

Michigan’s transition to a knowledge-based economy

Third Annual Progress report

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Our goal

A high prosperity Michigan

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What state do we want to emulate?

State Per capita income (08)

Unemployment (09)

Poverty rate (08)

Education attainment (08)

West Virginia

$31,634 7.9 % 17.0 % 17.09 %

Minnesota $42,953 8.0 % 9.6 % 31.52 %

Michigan $34,953 13.6 % 14.4 % 24.75 %

U.S. $40,166 9.3 % 13.2 % 27.67 %

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Most prosperous states

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Connecticut Maryland

New Jersey Virginia

Massachusetts Alaska

New York California

Wyoming New Hampshire

Traits of prosperous states

• High proportion of wages from knowledge industries

• High proportion of college grads• Big metro with higher per cap income than state• Largest city in that metro has high proportion of

college grads

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What is the knowledge economy?

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goods producing5%

information5%

trade, transportation, utili-ties8%

financial activities12%

professonal & business services

17%

education20%

health services20%

leisure, hopitality & other services

3%

public administration10%

Michigan’s income rank aligned with our college attainment rank

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15

20

25

30

35

40

Per Cap Income % 4 year degree

18

34

36

34

2000

2008

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Most prosperous regions• San Jose/San Fran.• NY/Newark• Washington/Baltimore• Boston/Worchester/

Manchester (NH)• Hartford

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• Seattle• San Diego• Denver/Boulder• Minneapolis• Houston

Major metros smarter

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Under .2 m

.2-.5 m .5-1 m 1-1.6 m 1.6-3.5 m 3.5 m and up

10%

15%

20%

25%

30%

35%

23%24%

25.04% 25.63%

29.82%

33.00%

Education attainment by metro population

Major metros richer

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under .2 m

.2-.5 m .5-1 m 1-1.6 m 1.6-3.5 m 3.5 m and up

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$33,304 $35,304 $35,734

$37,470 $39,490

$45,667

Per capita income by metro population

Metro Pittsburgh Prosperous Again1969-2008

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 400

0.2

0.4

0.6

0.8

1

1.2

PCPI Pittsburgh CSA relative to U.S. Index Manufacturing's share of Pittsburgh eanings

Year

Ind

ex

Va

lue

(1

97

7 =

1.0

fo

r m

an

ufa

ctu

rin

g s

ha

re)

Metro Detroit vs. Metro Minneapolis and Pittsburgh

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2008 Rank among 55 metros 1 million population or more

City Per cap income

Education attainment

Share of wages from knowledge industry

Minneapolis 9 7 10

Pittsburgh 16 29 17

Detroit 37 37 33

Metro Grand Rapids vs. Metro Minneapolis and Pittsburgh

City Per cap income

Education attainment

Share of wages from knowledge industry

Minneapolis 9 7 10

Pittsburgh 16 29 17

Grand Rapids

53 45 54

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2008 Rank among 55 metros 1 million population or more

Metro Lansing vs. Metro Madison

City Per cap income

% bachelors degree or more

Share of wages from knowledge industries

Madison $ 43,455 37.70 % 61.87 %Lansing $ 32,943 28.58 % 61.87 %

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2008 data

High education industries growing most in U.S.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

3.99%

1.30%

7.57%All industry

Low education

High education

(2008 average wage)

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Em

ploy

men

t ch

ange

200

1-08

$45,564

$33,888

$60,138

High education industries doing best in Michigan

-14.00%

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

-9.06%

-13.72%

-1.88%

All industry

Low education

High education

(2008 average wage)

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Em

ploy

men

t ch

ange

200

1-08

$44,244

$36,223

$55,136

High education industries doing best in Metro Detroit

-18.00%

-16.00%

-14.00%

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

-11.43%

-17.88%

-2.42%

All industry

Low education

High education

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Em

ploy

men

t ch

ange

200

1-08

$49,154

$39,312

$60,744

(2008 average wage)

High education industries growing in Metro Grand Rapids

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

-2.02%

-5.55%

4.89%

All industry

Low education

High education

(2008 average wage)

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Em

ploy

men

t ch

ange

200

1-08

$39,052

$34,633

$47,020

High education industries growing in Metro Lansing

-14.00%

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

-5.75%

-12.24%

1.43%

All industry

Low education

High education

(2008 average wage)

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Em

ploy

men

t ch

ange

200

1-08

$41,447

$32,319

$50,182

Recession accelerates trends

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2007

.12

2008

.01

2008

.02

2008

.03

2008

.04

2008

.05

2008

.06

2008

.07

2008

.08

2008

.09

2008

.1

2008

.11

2008

.12

2009

.01

2009

.02

2009

.03

2009

.04

2009

.05

2009

.06

2009

.07

2009

.08

2009

.09

2009

.1

2009

.11

2009

.12

2010

.01

75

80

85

90

95

100

105

Employment in High and Low Education Attainment Industries, Michigan and the U.S., 2007.12 to 2010.01

US High US Low MI High MI Low

Date

Ind

ex

va

lue

(1

00

in D

ec

. 20

07

)

Our conclusion:

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The places with the greatest concentration of talent win!

Younger college grads

Blue = With children

Red = Without children

Young talent is aggregating in urban regions

Our recommendations•Align Michigan culture with the flat world realities•Create places where talent wants to live•Ensure success of vibrant higher ed system•Reinvent K-12 education to align with new realities•Develop new public and – more importantly – private sector leaders

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Bottom line

We must get younger

and better educated

or

we will get poorer

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For more information about Michigan Future, our reports or what the media is saying,

please visit our Web site at:

www.MichiganFuture.org

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