Michigan's truly visionary business leaders recently gathered in Lansing for the 12th Annual Sustainable Business Forum Conference. Never heard of it, you say? Well, each year leaders of the state's emerging green economy convene for an event that is typically as interesting as it is disappointingly under attended. This year was no exception.
That's too bad because the theme of the event was "Survive or Thrive: Revitalizing Michigan through sustainable business innovation." The gathering featured a veritable smorgasbord of forward-thinking business executives moderated by University of Michigan Professor Tom Gladwin. Panelists, who included West Michigan civic leaders such as Fred Keller of Cascade Engineering, Brian Cloyd of Steelcase, and Don Goeman of Herman Miller, talked about a variety of economic, ecological, and social issues – the basic pillars of the so-called triple bottom line.
They all, however, tended to put one common theme on the table. Michigan is falling behind states like California and Oregon in the race to change the rules of the development game and promote sustainability. The slow pace of change is holding back job growth, slowing industrial achievement, and dragging down the state's competitiveness. And reluctant state lawmakers, the business leaders said, must stop avoiding fundamental economic changes.
I attended the conference, and thought you might like a sampling – along with some analysis, of course – from the buffet of ideas presented by those who participated. Hold out your plate.
Pursuing Energy Innovation
Fred Keller, CEO of Grand Rapids-based Cascade Engineering, said Michigan must promote green energy with much more urgency. He urged the state to adopt the goal of harnessing wind power to generate 20 percent of the state's energy supply by as early as 2025. Industry experts agree the goal is reasonable and can likely be met if not exceeded.
Wind power today accounts for less than one percent of Michigan's total electric capacity. What if it were twenty? Think of what it would mean to take twenty percent out of the fossil fuels column and put it in the renewable energy column. Cutting edge green power sources would become more cost competitive. Coal would begin to look more like a minor player. And benefits would include less ozone pollution, less mercury in the Great Lakes, less carbon dioxide, more money staying at home, and a rush of new high-tech jobs. After all, someone needs to design, build, and install the new windmills.
That’s a lot of bang for the buck. Also a giant leap toward energy independence.
Jim Croce, executive director of NextEnergy, Inc., was asked if he was happy with results of the state's 21st Century Jobs Fund, Governor Granholm’s program to direct state spending towards knowledge-based industries. Is there too much concentration on life sciences and automotive technology, one audience member wondered? Croce said the state needs tighter focus as it invests to help modernize the economy.
“It’s too diluted right now," Croce said of the state's new economic development program. "It must be deliberate and focused. Pick one or two things.” His overall assessment of Michigan’s investment in alternative energy: “Fair.”
I’m with Croce. I’d like to see more vision and focus from state leaders and spending programs, especially when it comes to wind and solar power. But I’m afraid that political choices will tend to rule the public awards and subsidies. And, if we throw Michigan taxpayer dollars into such politically popular red herrings as corn ethanol or clean coal, what will we have to show for it in twenty years? My hunch is “not much.”
Advancing a New Business Model
Robert Stempel, chairman of Rochester Hills-based Energy Conversion Devices, blasted the Michigan legislature for its complacency and inability to set a new course for the state's obviously outdated business model.
“They must be prepared to act," said Stempel, who is also the former chairman and CEO of General Motors. "There’s going to be a new chapter here. Michigan went from reliance on the fur trade to the lumber industry to automobiles. We survived. But today the rate of change is measured in 100’s of days, not 100’s of years. The legislature must move faster.”
Remember Stempel’s car – the Oldsmobile Toronado? A big, different, pace-setting, make-your-mouth-water kind of car. Energy Conversion Devices' mission is to drive innovation in alternative power and information technology. So now Stempel is all about solar photovoltaics, and trying again to get slow movers out of his way. And who is slower than the Michigan legislature?
During the afternoon breakouts, conference attendees discussed challenges and barriers. The obstacles to economic reinvention, the group basically agreed, do not stem from a lack of technological capacity, financial means, work ethic, or even human ingenuity. Rather, they have more to do with a void of leadership, creative policy, commitment, boldness, and cooperation – qualities the legislature seems to hold in micrograms these days.
Terry Cullum, director of environment and energy at General Motors, said it was not his company's fault that Toyota is now the world’s biggest car company. GM, he said, is obligated to pay pension and health-insurance tabs for a generation of retirees and those are costs the foreign competitors don’t share.
“We are not sustainability laggards,” Cullum vehemently said.
Sure we’re not. One gets the impression from the Detroit Three today that, if only those pesky American laborers and retirees would go away, normalcy would come rushing irresistibly back to the American auto industry – and to the state of Michigan.
General Motors was the world’s largest corporation in 1963, with assets totaling something on the order of $30 billion. If GM had a rough year, so did Ford and Chrysler, and there was nothing and no one to step into the breach. Toyota was the 93rd-largest non-American company in the world in 1963.
Many are still trying to address the problem of Michigan’s economic downturn as though we were living in the 1960’s. “Make cars that people want to buy,” goes the nostrum. But this is not just another postwar economic downturn. In fact, the auto industry is never going to belong to Michigan again in the way it did in the 1960’s. Kiss all that goodbye.
What's needed in regions like West Michigan, Southeast Michigan, and Grand Traverse is the foundation for a new business model that establishes Michigan as the best place to live and work. Obsolete development practices and divisive governing practices are ruining cities, degrading scenic beauty, making life more difficult for families, and diminishing the state's once proud standing in the world.
The philosophy and practice of sustainability represents a strategic response to these challenges. Business leaders in attendance at the conference agreed that swift action to adopt sustainable development practices ultimately will spark innovation, promote prosperity, and ensure the stewardship of land, air, water, and community. All that's needed, they said, is coordinated and willing support from government, academia, and other civic institutions.
And there’s the bill of fare. See you at the table next year?