Beyond the Big Three: A Tough Love Search for Detroit’s Future

“Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown,” President Obama said during his State of the Union address last night. “You didn’t always need a degree, and your competition was pretty much limited to your neighbors.”

“If you worked hard, chances are you’d have a job for life, with a decent paycheck and good benefits and the occasional promotion,” he continued. “Maybe you’d even have the pride of seeing your kids work at the same company.”

For the people of Detroit and Michigan, this America of years past holds special resonance. Yet the once almighty automobile industry that has defined this region for so long is a shadow of its former itself.

As the new editor of Xconomy Detroit, I offer a simple message: Get. Over. It.

That’s not to say we should ignore the Big Three, which have recently shown signs of a sustainable turnaround. And I’m sure plenty of Michiganders, most way smarter than me, are already going about the business of getting over the auto glory days, pinpointing Michigan’s ills and working on creative ways to overcome them. Indeed, more often than not, it’s the rest of the country that identifies Detroit more by its past than its future.

But having spent the majority of my career in the Midwest, I’ve observed a natural tendency among its people to lament over yesterday, an almost inbred nostalgia that cripples ambition and reinforces inertia. In Minneapolis, where I worked at MedCity News and the Star Tribune, that nostalgia manifested in sometimes odd ways.

People stubbornly called companies by their old names: Target was Dayton’s, U.S. Bancorp was First Bank, Wells Fargo was Norwest. I (half) joked I would punch the next person who told me Medtronic founder Earl Baaken invented the battery powered pacemaker in his garage as if it had happened yesterday instead of five decades ago.

Minnesota, though, enjoys the benefit of a highly diversified economy that includes 20 Fortune 500 companies, including retailers (Target, Best Buy), banks (U.S. Bancorp), manufacturing (3M), food (General Mills, Cargill), healthcare (UnitedHealth)and most importantly, medical devices (Medtronic, St. Jude Medical).

Michigan does not have that luxury. Ten of the state’s 18 Fortune 500 firms are related to the automobile industry. Only one (medical device maker Stryker Corp.) can be legitimately called a new school high tech company.

But Michigan has two important assets not found in Minnesota. The first is hunger: a burning need to develop a high tech economy beyond its historic core industry. The second is the presence of several major research universities versus just one in Minnesota.

The key to creating innovation and economic development, I strongly believe, begins with thriving universities, ones that can take the first critical steps in converting research into new companies and jobs.

During a visit I made to southeast Michigan in December as a first scouting foray for this new job, Xconomy hosted a party at a former Pfizer research and development center, now home to the University of Michigan’s efforts to accelerate ideas into viable startups. It was impressive, to put it lightly.

Last year, Michigan State University debuted a facility in East Lansing that houses both its technology transfer operations and Business-Connect, a new office that seeks to better establish relationships between the university and business community.

Wayne State University’s National Biofuels Laboratory is already producing innovations that will lead to new companies like NextCat. The Detroit-based startup is developing a way to convert inexpensive feedstocks like waste vegetable oil, animal fats, and residual corn oil into biodiesel.

That’s why I wanted to join Xconomy’s effort, which began last spring to shine a light on how Michigan’s universities, and its innovation community as a whole, can transform Michigan’s economy.

I feel there something brewing in Michigan, the possibility of a real and remarkable renaissance in innovation and technology.

I stress, however, that I’m not a mindless cheerleader. I support smart, realistic economic development, not crossed-my-fingers, built-it-and-they-didn’t-come programs that waste people’s time and money.

But if it does things right, this state could become a legitimate role model not only for the Midwest but the rest of the country in how a region can successfully reinvent itself for the 21st century economy.

All we need is a spark.

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