New-model economy emerges in Michigan
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This, says Dr. Herman E. Koenig, professor of systems engineering at MSU (the first of the land-grant colleges), is explicitly called for in the Morrill Act, which established those colleges and their agricultural extension services. But the industrial extension services were never developed - partly for lack of funds, but also, he says, because of the way American business developed. ''Industries grew into large firms with their own research-and-development teams. They didn't need anybody from the university to tell them what to do.''Skip to next paragraph
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Dr. Koenig says the newly built university-to-industry ''bridges,'' the Industrial Technology Institute and the Michigan Biotechnology Institute, are the industrial extension services that never got launched before. These institutes, he adds, are coming at a critical time for many of Michigan's businesses.
We've all read about how the major automakers have had to face the realities of new technology and global competition.
Less well known is that Michigan has some 2,400 small to medium-size manufacturing businesses, mostly suppliers to the auto industry, mostly in need of modernization. They are facing many of the same problems as the Big Three, but without the same resources to meet them. ''All of these firms desperately need assistance, strategic planning...,'' Koenig says. ''It is a challenging opportunity. These firms have had no engineering capability; they have no marketing or design capability.''
In times past, these firms didn't need any. ''They just got blueprints from the Big Three,'' he says, and were assured of a growing market for their products every year. But now the automakers are putting their suppliers in competition with one another, and these manufacturers are having to rethink the way they do business.
Mr. Ince of the Michigan Technology Council identifies machine vision, including laser-based systems, as a natural high-tech area for Michigan companies. These systems can be used in automobile manufacture, particularly to do quality-control work: An electronic ''eye'' can inspect a weld, for example, to ''see'' that it is done right. Ince says there are some half a dozen Michigan companies in this field and a dozen-plus in robotics - which also has big potential markets in the auto industry.
Interestingly, Michigan has not done much to recruit companies from outside - usually a staple of local economic development. ''To recruit companies would be an uphill battle,'' Ince says. The state has taken steps to improve the business climate, especially the venture-capital scene. Some $400 million of the $8 billion in pension fund money the state manages for state and local government employees is available for (largely indirect) investments in start-up companies.
''Michigan is not a poor state,'' says Donald N. Smith, director of the IST's industrial development division. ''But we looked at where our money was going and we found it was going out of state, to Chicago and New York.'' Since 1978, a number of laws, state and federal, have been changed to make it easier to launch businesses. ''The venture-capital situation here has improved 1,000 percent in the last five years,'' he says.
That is a steep improvement over a very small base, however. There are still some problems to work out.
One state official observes: ''It's my opinion that the entrepreneurial atmosphere here is dampened by big institutions: big labor, big government, and big business, which have dominated Michigan over the years. .. That entrepreneurial spirit existed when Henry Ford - the first - was here.''
Back then, he contends, ''the guys on the assembly line thought about setting up their own plant.'' This is the case today in entrepreneurial areas like Silicon Valley, but ''the guys on the GM assembly line in 1984 are definitely not thinking of setting up their own manufacturing plant. Their lights have been turned out.''
But this is changing, he insists. There is a new spirit of cooperation. People are saying, ''Let's help the auto industry, but it's not the be-all and end-all. There are lots of other folks.''
Says MIT's Dr. Birch, ''The future of Michigan is in small companies.''