He may have the longest title on a business card in state government –Michigan Economic Development Corporation (MEDC) Chief Executive Officer, Michigan Strategic Fund (MSF) President and Chairman, and Department of Talent and Economic Development (TED) Director. While Steve Arwood is a man with many titles, he has been tapped by Governor Rick Snyder for one mission: Accelerate Michigan’s reinvention.
Appointed MEDC CEO in January, Arwood is charged with implementing and executing MEDC’s core mission of business development and attraction, community development, providing access to capital, and improving Michigan’s image and brand.
Arwood also serves as MSF President and Chair, where he oversees an 11-member board with broad authority to promote economic development and create jobs.
In addition, he leads the newly-created TED department created by Governor Snyder to ensure that the state can efficiently and effectively develop, administer and coordinate Michigan’s economic, housing, and talent development initiatives and programs.
Prior to joining MEDC last August as executive vice president and chief operating officer, Arwood served as chief regulatory officer and director of Licensing and Regulatory Affairs (LARA) where he led reforms of the state’s regulatory and licensing environment. Under his leadership, more than 1,500 unnecessary and duplicative regulations were eliminated across state government. He previously served as LARA deputy director overseeing the Unemployment Insurance Agency and Employment Security and Workplace Safety, which includes MIOSHA, Employment Relations and Workers’ Compensation.
He joined LARA in 2011 from Windlab Developments, USA, LTD, where he served as U.S. regional director. He has worked in wind energy development, conservation, and business development since 1999. He previously served as deputy director and other executive management positions at the Michigan Jobs Commission under Governor John Engler. He has also served as director for the House of Representatives Programs and Policy, and the National Federation for Independent Business-Michigan.
Below, Steve details for Expansion Solutions readers the new direction he is helping to chart for Michigan and makes the case for doing business in the Great Lakes State.
Q: Describe the Michigan of 2015 compared to where it was when you came back to state government in 2011. What has changed?
A: I have been around state government a bit, and I don’t spend too much time looking backward, but comparing our position as a state a few years ago—to where we are today—is truly amazing.
Not too long ago, when I talked to business leaders, the conversation revolved around core economic issues: the job-killing Michigan Business Tax, onerous business regulations, an unwelcoming business climate.
Over the past four years, Governor Snyder and lawmakers have made sweeping policy changes to re-engineer and improve our business climate.
They replaced the Michigan Business Tax with a streamlined corporate income tax. This propelled our national business tax climate ranking to #3 among the 12 most populous states, according to the nonpartisan Tax Foundation in Washington D.C.
And, in a move that will improve our corporate tax climate even more, we are phasing out the personal property taxes that small businesses pay on office equipment and manufacturers pay on industrial equipment.
This move will cut taxes by $500 million per year, create 15,000 jobs and increase private investment by $450 million.
Other major policy changes include eliminating more than 2,000 burdensome business regulations, revamping the state’s economic development toolkit, and becoming a right-to-work state.
So, in just a few short years, we’ve demonstrated to CEOs, site selectors, entrepreneurs and others, a commitment to making Michigan a business-friendly state.
We now have a strong, new economic foundation in place that has re-invigorated business and job growth.
Q: What indicators can you point to show that the economic development policies enacted in Michigan over the past four years are working?
A: It starts with jobs. More than 308,000 private-sector jobs have been created in the state since December 2010, and there are more than 180,000 jobs available in the state right now. Nearly 90,000 new manufacturing jobs have been created here over the last five years, which leads the nation.
As of the end of December (2014), Michigan’s unemployment rate is 6.3 percent, a dramatic decline from the recession rate high of 14.2 in July, 2009. Michigan businesses are hiring and people are rejoining the workforce at an accelerated pace.
We aren’t yet where we want to be, but we’re quickly moving in the right direction.
Other indicators show our policy changes are working, as well.
For two consecutive years, Michigan was ranked among the top five states for major new corporate facilities and expansions.
Michigan’s gross domestic product growth outpaced the national average last year. Our state output grew by 11.4 percent from 2009-2013, compared to 8.4 percent of the U.S. economy. State sales tax numbers trended up in 2014, and auto sales are the highest they have been in almost nine years.
Q: Going forward, what do you consider to be the number-one challenge in economic development?
A: Today, when I speak with business leaders, it’s not about taxes, or bureaucratic red tape, or our business climate—it’s all about talent.
They want to know where they’ll get it and how they’ll grow it.
In terms of both a challenge and an opportunity, talent is now the driver and the number-one issue going forward.
The future economic vitality of Michigan is dependent upon building a talented workforce, which starts with a quality education, includes career and college planning, and continues with life-long learning so workers can match their skills to those needed by Michigan businesses.
Thankfully, Michigan has a strong talent base from which we can build on.
Our state is home to 65,000 engineers, 70,000 R&D professionals, we have the fourth-largest high-tech workforce in the U.S., and More than 181,000 skilled trade workers (assemblers, fabricators, first-line supervisors, welders, machinists, inspectors, press machine operators).
Yet, like all states, Michigan is facing an increasing skills-gap in the jobs employers are looking to fill today and those that will be available in the future.
Currently, there are over 180,000 job openings in Michigan, with more than 80,000 jobs posted on MiTalent.org. Many of these are good-paying, middle-skill jobs in high-demand fields that require specialized training and skills but not necessarily a four-year degree.
We have to get in front of the curve and create a larger and more diverse talent pool to meet the needs of employers. Not just in middle-skills, but in all areas across the talent spectrum (skilled trades, IT, engineering, creative services, etc.)
The goal is to build a diverse talent pool, put people to work, and connect job seekers with employers.
Q: What is Michigan doing to accomplish this goal?
A: One of the governor’s top priorities has been to make Michigan a national leader in talent development by focusing on workforce training for the jobs of today and tomorrow.
He has laid out a vision for an effective, efficient government that provides meaningful services to “real people,” regardless of their stage in life.
To turn the vision into reality, he has created a new department, Talent and Economic Development, where economic, community, and talent development will be housed under one roof.
Under this structure, the three pillars of economic development—talent development, community development and business development—will all be part of one organization and share the same vision and goals.
As part of TED, the new Talent Investment Agency will coordinate all programs across the executive branch of government involving jobs preparedness, career-based education, skilled trades training, incumbent worker training, employment assistance, STEM training programs, and programs targeted at the structurally unemployed.
This is an effort of the entire state pulling in one direction, and on a much larger scale, to align education and workforce development initiatives with business demand.
We are one team focused on making Michigan a national leader in creating opportunities for students and adults to gain in-demand skills needed to fill job openings today and those in the future.