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Business and Economic Leaders: Government Does Well When It Invests in People

The role of government at the local, state and federal level is not to fix every problem. That responsibility falls largely on the ingenuity of its citizens. However, in removing barriers to regulation, the government can lay the foundation for a more prosperous economy that serves all citizens. That was the key message a panel of business, economic and government experts reiterated during the University of Michigan Dearborn’s Executive Speaker Series on Oct. 11.

The panel, titled “What Really Drives the Economy?” featured Detroit Regional Chamber President and CEO Sandy Baruah, AT&T Michigan President David Lewis, Paul Traub, senior business economist for the Federal Reserve Bank of Chicago, and state Rep. Patrick Green (D-Warren).

“The role of government is to set a regulatory environment, not to create jobs. It is critically important for government to set the foundation where jobs can be created. The debate is how much and how should government be involved,” Baruah said. “Government creates a common set of rules, i.e., quality standards, minimum wage, safety standards, etc. How much government does beyond that is up to the people.”

Baruah said consistency in policy practice is critically important.

“Every time we have a change in the presidency, we go through a whiplash that is not good for business,” he said. “States must have relatively consistent economic development policies over multiple administrations.”

Traub agreed, adding that the role of state and local government is to create an environment where business want to flock to.

“Uncertainty is not good. The role of local government, whether it is funding infrastructure or leveling the playing field for business development, can keep the waters less choppy.”

Pointing to Detroit’s recovery from bankruptcy as a positive example of government intervention, Baruah said he does not believe the city would have experienced a renaissance without the leadership of Gov. Rick Snyder and others.

“The Governor took a huge risk and Detroit and Michigan are better because of it,” he said.

Panelists said one area where they would like to see more government intervention is in education policy and investing in the state’s talent.

“State support for higher education has dropped dramatically. That is a problem when we’re engaged in a war for talent,” Baruah said.

Other Key Takeaways:

  • Taxation rates are a value proposition for business. They are like buying a car. You can’t charge Cadillac taxation rates but provide poor services.
  • AT&T is ready to invest in 5G technology in Michigan but the regulatory environment cannot be too restrictive. “The more you regulate, we aren’t going to sit idly by,” Lewis said.
  • Michigan must become more offensive when it comes to keeping manufacturing jobs in the state. There are 250,000 fewer people working in Michigan than there were in 2010.
  • The adaption period of groundbreaking technology is getting shorter and the flexibility of government and business will be critical to the state’s competitiveness.
  • The easier government can make it for people to gain 21st-century skills, the better society will be, whether that is lowering barriers to higher education access or providing reskilling incentives for employers.
  • There is a role for government to play in infrastructure investment and widespread broadband internet accessibility. Similar to electricity and the interstate highway system, the government must step up and invest in services that benefit all people.
  • While elected leaders create policy, it is up to the people to elect individuals who will serve their best interest.