Beat Down Economics

The beating continues until morale improves.

That's the central message of a thought-provoking report just out from the University of Michigan titled Michigan's Economic Transition: Toward a Knowledge Economy.

The report doesn't ignore the fact that Michigan has shed more than 274,000 manufacturing jobs in the past eight years. But it does cite numerous trends to suggest the state is the midst of economic transformation. Not an economic meltdown.

The report highlights job growth in key 'knowledge economy' sectors such as finance, healthcare, and education. It notes the state is a leader when it comes to churning out highly educated scientists and engineer. It also ranks high in privately funded R&D; employment in high-tech sectors as a percentage of total state employment; and overall R&D intensity. It also provides evidence that Michigan ranks 1st out of 50 states in total jobs generated by new startup businesses.

These and other stats compile a convincing case that "Michigan is undergoing economic diversification during a period of transition from a dying economic model to an emerging one."

The trouble is media reports, policy debates, and popular opinion is dominated by the idea that the state is an economic disaster zone. That negative sense of pessimism and self pity, the authors suggest, now threatens to hold the state's resurgence down.

"If the way forward to a new economy requires talent, entrepreneurialism, innovation, risk-taking, and a more educated workforce," the report states, "then focusing only on negative news will hinder the state's ability to take the positive steps required to reach that brighter future."

"The sense of gloom has to be overcome," the report continues. "The self-image of a rust-belt wasteland has to be replaced by a more complete view of a state in transition. The new economy requires vision, optimism, and hope."