Kyle Celebuski: I'm a student at Michigan State and I'm doing a project on the changes the MEDC has undergone during the Snyder Administration and I know that you are new and came in with the Snyder administration so I was wondering if you could tell me a little bit about why Governor Snyder brought you in to led the MEDC?
Michael Finney: Well I've worked with Governor Snyder at Ann Arbor Spark where he was the board chairman and the one who actually recruited me to come to Ann Arbor and we worked together for the past five years. Over those five years we got a lot of interesting things done in the Ann Arbor area, a lot of work with establishing programs, we had a lot of success with technology based companies and had a lot of success with talents so when he became governor he offered me the opportunity to assist in bringing some of the success we had at the regional level to the state level in addition to continuing a lot of the good things the MEDC was already doing.
Kyle Celebuski: I've found that some of the major changes you have brought with you are the new tax policy and the Pure Michigan campaign, could you tell me a little bit more about those?
Michael Finney: Well first the changes made to the tax policy was really led by the governor, with a lot of support from the legislature. So essentially we moved away from the Michigan Business tax which was fairly complicated and it was a very heavy tax in fact of the fifty states Michigan ranked forty-ninth overall, which is not a good thing, in terms of our business cost and tax and so being at the very bottom of the barrel and trying to improve business growth with our economic partners was obviously something that needed to be addressed. So after the changes were made Michigan is now number seventh according to the organization that measures these things in the United States. That is a very important factor and it really served us well as we are out trying to work with businesses on their growth decisions and location decisions, we can tell them that the cost of doing business here is dramatically better than it was just the previous year and in fact we are one of the best states in the country for them to consider locating in assuming cost is one of their key drivers, we also are going to change the way we do virtually everything. Typically we offered tax credits to companies and we moved away from that because the system was very expensive and very complicated and there tends to be what I'll call one upsmanship where you know we offer one dollar in tax credits and the next state offers two and the next state offers three and it simply just got to a point where we felt it needed to be changed. Now instead of offering tax credits we are offering a very simple tax system that is much more modest which has improved the overall competitiveness of our state versus other regions in the country. We have also made talent a primary focus of the organization; we know how important talent is to the overall success of businesses. It is rarely the case that a business will chose to locate some place strictly because of costs they almost always make the initial decision based on the availability of talent and so we decided that since that is the highest priority of businesses it needed to be our highest priority as well. So we made it a top priority for us to make sure we have the kind of talent businesses are looking for, working closely with their talent recruiters to make sure they have access to our graduates here in Michigan versus whatever other options they may have across the country.
Kyle Celebuski: Does that mean you work with schools or how do you develop talent?
Michael Finney: Well we work with all of the colleges and universities and we also are responsible for the workforce development agency here in the state. That work force development agency really is one of the primary connection points for job seekers and employers. We want to provide access to the people who are seeking jobs not only within the state but also those who are looking to come to the state and so we have come up with a creative programs to try to be more effective at finding people jobs. So for an example of what I'm talking about you can go to mitalent.org that our primary talent website and it shows a large number of jobs and will include various different employment professions. By looking at the site you will be able to tell how seriously we take this, it's more than just a job portal, it really helps folks understand what their options are for careers both today and into the future. There is an investment calculator that helps people in determining exactly how much they need to invest in education and how much the payback is. So those are kind of the processes we are going through and we have a variety of projects that are intended to bring young people to our urban communities so if they are interested in urban living they can expose them to our urban communities through our live to work series. We have done several projects in Detroit and Midland and we are going to move it around to various parts of the state where we will literally bus in students from twenty to thirty different universities, not just the public universities in our state but some private universities and a few from outside the state. So we are really trying to connect with our young talent in every way we can and I think we have on staff a couple folks who are actively working with our universities on a variety of different programs ranging from licensing and technology transfers for startup companies to internships to this live work series we have going on.
Kyle Celebuski: Now is the live work series new under the Snyder administration or was that previously around and you just expanded on it?
Michael Finney: No it's something that we brought form Ann Arbor. We started it there and now we have developed into a statewide program. Another program we call shifting gears, which again we started in Ann Arbor and we are expanding it on a state wide basis. Shifting gears is a program that is intended for mid-career people who find themselves in transition, a lot of that happened as a result of the downsizing that went on in the manufacturing and automotive industries. So we decided that rather than just letting these people leave the state to find opportunities, we would help them get connected to the startup world and perhaps new startup companies or small companies who are looking to become large companies. So we came up with this program and we have now have put nearly three hundred people through it and it has had an incredible success rate in the range of eighty percent where people find meaningful opportunities after they graduate the program. So it is a way of connecting mid-career talent with new opportunities which might be way different from the company they may have worked with in the past. Our last major effort is what we call Mich-Again. In Mich-Again we are essentially trying to identify pockets of individuals that have Michigan connections, they might have gone to our universities or they might have grown up here or have family here, but either way they have some connection to Michigan. We are reaching out to them all over the country and going to their location to host small gatherings to help sell them on returning to Michigan. We have like thirty employers who are actively participating in the program with us as well. Companies like GE and True Cardiovascular, who makes heart machines, so these are really interesting companies that are helping attract talent back and of course they are all in the hiring mode so it works out very nicely. We have a variety of things that we are doing to really help get talent reconnected to the state of Michigan and keep young people here who are going to our universities.
Kyle Celebuski: Can you tell more about the goals of the Pure Michigan Campaign?
Michael Finney: Pure Michigan has actually become one of the top ten tourism campaigns of all time and that's a big statement when you think about the "I love the big apple" and "Virginia's for lovers" and "what happens in Vegas stays in Vegas", these are all tourism campaigns that have slogans associated with them that are intended to have a positive impact. Pure Michigan represents that for us and potentially we see a fairly rapid increase in the tourism economy we have here in the state. What gets lost is that tourism is our third biggest economic driver in the state behind manufacturing and agriculture. So we tried to invest in that as aggressively as possible, we spent about 25 million dollars a year on various tourism programs and advertisements and on that basis we are bringing in tens of thousands of visitors who are spending millions of dollars in our state that otherwise would not be spent here. The Pure Michigan campaign as a tourism effort has been wildly successful and we have been looking to expand it to our business efforts as well. We think that the Pure Michigan Brand can work for our businesses efforts as well. So if you look at our information you will see that businesses are using it. We announced at the tourism conference that Coca-Cola has decided to use our Pure Michigan branding for everything they are doing here in the state of Michigan and many other companies who are doing exactly the same thing with our support. It has become an incredible brand that is positioning Michigan very favorably and we are just trying to maximize its use.
Kyle Celebuski: What do you mean when you said Coke is using the Pure Michigan brand?
Michael Finney: So we have Coca-Cola with their billboards and in store advertising around the state with Pure Michigan embedded in it. So essentially they are going to help promote Michigan while they are also promoting their own products, and they are doing this at no cost to us. There are many other companies doing the same thing. The coke brand has a couple of company owned distribution centers here in Michigan where they produce product so it makes sense for them but we have many other companies like Meijer is doing it and they are a Michigan based company, Hudsonville Ice cream is also doing it so we have both small and large companies who have both regional and national reputations that have decided to tap into the Pure Michigan brand as a way of helping themselves while also helping our state get more visibility.
Kyle Celebuski: Are there any other major projects that you are looking to implement in the future?
Michael Finney: We have just started to ramp up our efforts on the international market, working to bring additional business to the state of Michigan from various international locations. So at first we were primarily focusing on existing businesses through our ecomic program called Pure Michigan Business Connect. The program has a very heavy focus on providing the tools and resources to help existing businesses grow. We have also had a lot of success with loan and grant programs and with talent initiatives and other things. Now we have focused some of our attention towards international locations we just made a trip Indonesia last fall and just last week we made a trip to Europe, to Italy and Germany in particular, to meet with about a dozen companies who are interested in setting up locations here in the United States and Michigan is one of the options they are considering. That is the next big thing for us and combined with that is bringing companies which we call direct investment but then the other side of that which we call export where Michigan based companies who are looking to sell their goods and services to international locations. We are also working very hard to have programs in place to assist companies who are looking to export on a worldwide basis
Kyle Celebuski: After looking over what the MEDC does I was wondering do you focus more on like developing the work force and developing business connections or do you focus more on selling businesses more on that assets Michigan already has and what Michigan can offer?
Michael Finney: The nice thing about it is the way we have organized ourselves, we have an organization which is exclusively focused on developing the work force and we have an organization that is exclusively focused on business development. So we don't have to make choices we can do both, we have a team of people who work every day with their highest priority being what we should be doing to support talent and we have another group whose highest priority being helping existing businesses grow and helping international business locate here. So we don't have to make those hard choices over one or the other. Our resources based on the support we have gotten from the governor and the legislature has placed us in a position to allow us to do it all, if our resources get pulled back then we might be more limited but right now are resources are adequate to give a really high priority to all the things we are doing.
Kyle Celebuski: Are there any programs that were existing before the Snyder administration that you have kind of backed off or shut down?
Michael Finney: The tax credit is the biggest change. We are the only economic developer in the country that no longer offers tax credits as our primary tool. Some of the programs we have carried over from the previous administration are Pure Michigan tourism which started as a brand created by the previous administration and we have tried to carry that over to the business marketing as well. We are trying to maximize it and we actually stabilized the funding for it which could be very high one year and then drastically cut the next year which created this constant battle to promote tourism. We have now stabilized it at a twenty-five million dollar budget and we feel it has gone very well having taken it to another level with the business marketing. Another major thing we did was invite our regional economic development partners to participate with us in economic development planning and execution. Where the MEDC historically would pretty much do everything themselves, we now are doing the things that are really core to us but the things that are not necessarily core to us we will contract with our partners to do. A good example is the trip we made over to Europe just last week, the MEDC had some of our staff participate in the planning of that but the primary planner was the one of our regional organizations, The Right Place in Grand Rapids. They did the primary planning with support from our staff and essentially we contracted with them to do the entire trip. We find ourselves not needing to do everything because we are utilizing our partners who have wonderful capability. That is a big change since historically the MEDC would not have done it that way. Our partners like it because they are more engaged and instep with what we are doing, so they feel more a part of the process as opposed to just being told what was going to happen and reading about sometimes in the newspaper after it has already happened.
Kyle Celebuski: Have you brought in more partners or have you just expanded on the relationships you already had with partners who were already there?
Michael Finney: I would say there was a marginal effort to involve partners in the past and we created a real partnership where they have the opportunity to participate in our budget planning, our strategy planning, and the execution of everything that we do, which has never happened before. They may have been partners on paper in the past but it wasn't a really a partnership, a partnership is really about that connection and engagement and we have really created that between our partners.
Kyle Celebuski: Who are some of your partners?
Michael Finney: The Right Place in Grand Rapids, The Oakland County Economic Development, Wayne County Economic Development, Ann Arbor Spark, Saginaw future, Detroit Regional Economic Partnership, the Detroit Economic Growth Corporation, Battle Creek Unlimited, Top West Michigan first in Kalamazoo, A partnership in the UP, the Flint MC Regional chamber. So we really have the entire state covered from the UP to the Northeast Northwest to the center and South sections of Michigan. We really have fifteen what I would call strategic partners that participate in this process.
Kyle Celebuski: Now do you provide their funding or do they get separate funding from the state?
Michael Finney: Well most of them have their own fundraising efforts. They go out and raise money to support their cause. Some of them are county agencies like Oakland County Economic Development and Wayne County Economic Development, and organizations like Ann Arbor Spark and The Right Place are funded as private non-profits. We do provide them with some funding on the basis of programs which we chose to allow them to run the way they do it as opposed to just having them do it the way we would do it. So if one of the organizations has a project that they do well we might choose to contract them to provide that service and when we do we would obviously pay them for providing it. But in general we don't provide every organization in the state funding, they have to raise their own funding and because we have these strategic partners we have capabilities to contract them and provide funding through those contracts
Kyle Celebuski: Has your funding increased or decreased or stabilized since Snyder came into office?
Michael Finney: The funding for the MEDC has actually increased but it was because we went away from tax credits and we went to cash incentives so arguably our funding went down a little bit because we used to give out about 400 million dollars a year in tax credits and now we have 100 million in cash in our budget. So if you look just at just the state budget you'd see the MEDC's budget went up but the reality is the budget increase was entirely to provide cash incentives instead of tax cuts.
Kyle Celebuski: So do you use cash incentives to fund your projects or do you offer cash incentives to prospective businesses?
Michael Finney: Once we determine what are competitive advantage is at a certain location including all the resources like local taxes incentives and training incentives and so on then we will offer a cash incentive to try push the deal over the top so that it will land here in the state of Michigan.