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From rust to resolve: can Michigan regain the 'upper hand'?

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Michigan, down for so long, rediscovers its inner strength and beauty

Michigan has been in the news a lot lately. But that hasn't been good. When many people think of Michigan, they think of shuttered auto plants and the devastated stretches of Detroit, which never recovered from the 1967 riots. Michigan's dubious claim to fame is that it is the capital and heart of the rustbelt, a situation only made worse by the declining fortunes of the US auto industry. Unemployment in the state hovered at 15.2% as of August, well above the national average of 9.7%.

Mackinac Island, Michigan View, photo by Joe McKendrick

But finally, the state isn't taking its misfortunes lying down. In fact, the state government is pumping money into efforts to both attracting new businesses and tourists.

For example, the state said it has been able to attract information-intensive companies such as Google and ePrize to set up facilities or expand within its borders. The net result was 1,500 new high-tech jobs. The state's business theme is "The Upper Hand" (clever play on the state's resemblance to a pair of "mits"), and they have signed on actor and resident Jeff Daniels as a spokesman.

And despite a rampant deficit, the state has boosted its tourism budget, and is exploring the possibilities of tourism making up for lost industrial dollars. The Economist just ran a nice piece on this latest impetus.

This is a strategy that may pay off, because I've always felt Michigan was a well-kept secret when it came to tourism. I live on the East Coast, but I've always found Michigan to be a fascinating place to travel. It's blue-water lakeshore coastlines rival the scenic panoramic vistas seen in New England or on the West Coast, and the Upper Peninsula has a natural remoteness that reminds one of Alaska.

Midwesterners I speak with are familiar with spots such as Sleeping Bear Dunes and Pictured Rocks National Lakeshores, but folks from other regions seem unaware of these attractions. Traverse City is every bit as attractive as Virginia Beach (but with less traffic and humidity) as a waterside resort town.

The state's effort to turn to tourism has gained some traction, but there is still work to be done. As The Economist explains:

"Numbers so far present a mixed picture. Each dollar spent on advertising in other states from 2004 to 2008 prompted more than $40 of spending at local businesses and $2.86 in new state tax collections, according to a study commissioned by Michigan’s government. But Michigan cannot escape the gloom of its local market. In 2008 travel spending fell by 2% nationally but by 10% in Michigan. From January to May of this year, the occupancy rate of Michigan’s hotels was more than ten percentage points lower than the national average, according to Smith Travel Research.... At the very least, the campaign, which has been widely praised for its lovely look, provided a small boost to the state’s image. One ad made even Detroit seem lovely, with a narrator cooing: 'It seems when we get to a place where no one knows us, we become most ourselves.' Michigan may not have found itself quite yet, but it is doing its best."

Re-inventing an organization or an entire state takes time and hard work, but it's smart business to build upon existing strengths and core competencies. Michigan is one of those places suffering so long economically -- thanks to a dependence on declining heavy industry -- that down looks like up. But Michigan has some things many other states find in short supply. Natural beauty and an eager workforce are such things. The state also has an abundance of fresh water -- something in very short supply among the fast-growing southwestern states. If the state learns to effectively leverage these advantages, things may turn around quickly.

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure