Initiative helps create companies, jobs in Detroit area

Tom Walsh| Detroit Free Press

Four years ago, as the Great Recession was raining havoc on the U.S. economy and especially on auto-industry-dependent Michigan, 10 national and local foundations poured $100 million into an idea they called the New Economy Initiative for Southeastern Michigan.

The aim was to diversify the Detroit region’s economy, add talent and boost innovation in a place that had relied for far too long on Big Companies and Big Labor as engines of prosperity.

So how has NEI worked out? What impact is it having on jobs and the region’s culture?

These are similar to questions being more broadly debated this fall in the U.S. presidential election, where job creation — or lack of same — is the dominant theme.

So far, NEI has invested about $63 million of its $100 million into 64 projects and 57 organizations, David Egner, NEI’s executive director and president of the Hudson-Webber Foundation, told me recently. More than 360 companies have been started and 5,000 permanent jobs created, plus another 1,500 temporary jobs. Egner said there are plans in place for the rest of the initial $100 million.

Later this month, NEI’s governing council and 10 initial funders will meet to talk about what to do next. Aside from a possible second round of funding, NEI could expand to include more foundations and possibly corporations.

Programs so far have ranged from direct seed-capital investments into start-up companies, to collaborative efforts to align job skills with employer needs, getting business incubators to work together instead of competing, and creation of an Intern in Michigan program involving more than 1,000 employers and 12,000 students.

“We’ve doubled-down on entrepreneurship,” Egner said. But with modest-sized individual grants going to a multitude of projects, it’s difficult to track the overall impact and momentum from NEI.

John Swiatek’s entrepreneurial journey with Coliant of Warren is one example of impact from tapping into several NEI programs.

Swiatek was a Chrysler electrical engineer for 14 years before launching his own firm from his basement more than a decade ago. He worked on business plans with a local small-business assistance agency and tapped into finance expertise from a retired Duracell executive, later moving the business into a Warren headquarters office with eight employees in 2005.

Now Coliant, which makes Powerlet products that enable power sport enthusiasts to connect consumer electronic appliances to their motorcycles, snowmobiles and other vehicles, has nearly 20 employees and has exported products to 52 countries. Swiatek is opening a satellite sales office in Sterling Heights this week.

His growth has been fueled in part by several NEI-funded programs:

• Two microloans through the First Step Fund, a $5-million seed fund for early-stage ventures.

• Hiring a summer intern from the Intern in Michigan program, who improved Coliant’s website and spurred enough new sales to fund the position full time after the grant-funded internship ended.

• Coliant is working with Troy-based Automation Alley and the Michigan Economic Development Corp. on bids for defense-related work.

A key enabler of his growth, Swiatek said, is being able to tap into areas of business expertise — finance, marketing, law, international trade — beyond his own electrical engineering background.

Egner said the Detroit region had a long history of manufacturing savvy, but also a history of local communities, schools and companies competing — rather than collaborating — with one another. “The challenge has been how to function as a network, instead of competing entities,” he said, as NEI tries to nourish an entrepreneurial culture.

It took nine months of meetings, he said, to get the region’s four major business accelerators — Ann Arbor SPARK, Automation Alley, Macomb-Oakland University INCubator and Detroit’s TechTown — collaborating effectively, he said.

And it took 18 months of meetings, he said, to form the Workforce Intelligence Network (WIN), a coalition of eight community colleges, seven MichiganWorks agencies and employers to help align work force with employer needs.

The fruit of these efforts, Egner hopes, will ultimately be a seamless network of support to help entrepreneurs find the talent and resources to make Detroit a hotspot for innovation and growth as it was a century ago.

On one hand, he’s enthused by start-up activity that has sprouted lately around Quicken Loans Chairman Dan Gilbert’s digital-oriented investments in downtown Detroit and the medical and creative arts cluster a few miles north in Midtown. But he’s also wondering about how to connect the dots and link them into something more powerful.

“You can’t brand two districts, it’s got to be this one three-mile Detroit innovation corridor,” he said.

So much going on, so much left to do.

Contact Tom Walsh: 313-223-4430 or twalsh@freepress.com

SHARE THIS POST

Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest