Business leaders rely on a standard set of indicators when deciding where they will locate or expand their operations:

  • Cost indicators like taxes, fees, and utilities allow site selectors to determine the expenses associated with locating in a particular region.
  • Value indicators such as talent and infrastructure help site selectors know what kinds of unique assets a region can offer in exchange for the business costs to be paid.

Locations that offer more value for equal or lower costs are more attractive to businesses. States that are not competitive on costs are not seriously considered by site selectors. When cost indicators are favorable, however, it is value indicators that are capable of helping keep a location competitive. When comparing two or more regions with similar cost structures, the region with better infrastructure, talent and innovation capabilities will often win.

Ultimately, business site selection decisions have a major impact on job creation, income levels, and economic productivity. That is why Michigan must monitor its own cost/value input indicators to ensure the best possible balance for business attraction, retention and expansion.

The 2016–17 Building a New Michigan Plan shows three major areas of work needed to help transform the state’s economy over the long term.

Michigan must work to compete, invest and grow in ways that ensure its cost and value indicators are as competitive as possible.

This report groups indicators in each of these three priority areas so leaders can see clearly where additional action may be needed. 

Progress to Date 

In 2015, Michigan was improving or holding steady in slightly more than half of the 50 plus indicators used to measure the cost of locating here and the value provided.

Michigan has made the most progress on cost inputs; however, more work is needed as other states and nations continue to improve their own cost structures and offer additional economic incentives.

The state’s value inputs remain mixed, with talent and infrastructure gaps continuing in 2015. Educational attainment remains low and, with a population that continues to age out of the workforce, new skilled workers will be needed to attract the business opportunities Michigan needs. Michigan’s infrastructure also experienced continuing stagnation, with national rankings in the bottom fifth of all states. While key strength areas—innovation, R&D and exports—remain solid, they are not enough to drive site selection decisions in Michigan’s favor without improvements in other core value inputs.