Michigan Governor Jennifer Granholm to help identify opportunities to diversify the state’s economy. “Earlier today, Under Secretary Johnson talked about the mantra for engineering being design under constraints,” Mr. Parks noted. “Well my job was design under crisis.” Michigan had the nation’s highest unemployment rate, losing close to 1 million manufacturing jobs. It is seven times more reliant on the auto industry than any other state.

The state decided to look for opportunities both external and internal to the auto industry, Mr. Parks explained. State officials spent a lot of time studying industrial acceleration and clustering models around the world, Mr. Parks said. They were especially intrigued by Sweden’s success with a model known as the “triple helix.”27 After identifying opportunities, teams were formed for each sector and Governor Granholm mentioned the strategy in her 2008 State of the State address.

To develop their cluster strategy, state officials began by identifying Michigan’s strengths and areas “where we can compete and win,” Mr. Parks explained. One core asset is manufacturing, thanks to the auto industry. “We are very good at manufacturing across most sectors,” he said. Michigan also has R&D to support manufacturing. Eighty percent of R&D in autos in the United States is within 50 miles of the Renaissance Center in downtown Detroit. Michigan also has natural resources and the Great Lakes.

Michigan has targeted six industrial clusters, Mr. Parks explained. They are advanced energy storage, solar power, wind turbine manufacturing, bio-energy, advanced materials and manufacturing, and defense. Each leverages state strengths. While Michigan doesn’t have as much sunlight as Western states for solar power, advantages include its immense manufacturing expertise and local materials companies such as Saginaw-based Hemlock Semiconductor, the world’s leading supplier of polycrystalline silicon. Wind projects envisioned for the Great Lakes give Michigan an added edge in wind-turbine manufacturing. The auto industry makes Michigan a logical place to make lithium-ion batteries.

After deciding on clusters, the MEDC formed cross-functional teams to develop roadmaps in each sector. Teams included people from universities, industry, venture capital, and other fields to help identify market opportunities and necessary value chains.

The MEDC also created some tools, Mr. Parks said. For example, Michigan has a $1 billion incentive program to catalyze a new industry in batteries. The MEDC used companies in which it invested to help recruit suppliers and support industries needed for a complete cluster. As it goes along, the state is monitoring

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27 Triple Helix in the study of knowledge-based innovation systems refers to interaction among universities, industry, and government. The Triple Helix concept has been championed by Henry Etzowitz. See Triple Helix: A New Model of Innovation, Stockholm: SNS Press, 2005 (in Swedish), and The Triple Helix: University-Industry-Government Innovation in Action, London: Routledge, 2008.



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