Employers generally use common indicators when deciding where to create new jobs:

  • Cost indicators like taxes, fees, and energy prices allow site selectors to determine the costs associated with locating in a particular region.

  • Value indicators such as talent and infrastructure help site selectors know the value a region can offer 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.

Progress to Date

The state’s value inputs improved somewhat during 2017, but its talent and infrastructure gaps continue to pose significant long-term challenges. The state’s talent pipeline continues to be in jeopardy as educational results lag most other states, and it’s possible— even likely—that Michigan could face a critical shortage of skilled workers in the years ahead.

Michigan’s relatively weak infrastructure also remains a concern. While the state does have many competitive strengths—including a wealth of new and emerging technologies, intellectual property, and strong exports—Michigan’s value proposition must increase to impact site selection decisions over the long term.