Detroit Could Be the Next Silicon Valley

On August 20, panelists from 12 small Michigan-based technology and marketing companies met with U.S. Representative John Dingell at Washtenaw Community College in Ann Arbor. The meeting purpose was to discuss the small business perspective of Michigan's technology issues and economic growth. It was great to personally hear that half of the companies are hiring. Not so great to hear -- many are having a hard time finding talent and our federal and state policies are expensive.

The co-hosts of the roundtable were Google, the Small Business Association of Michigan, the Michigan Small Business and Technology Development Center, and the Michigan chapter of SEMPO, a global non-profit organization for search engine and marketing professionals.

The roundtable's three strongest themes were:

  • Michigan is a great place to start a business and we need to support our own businesses
  • Savvy entry-level tech talent is hard to find
  • Government needs to take some important actions

For some perspective, according to a recent White House National Economic Report on small businesses and entrepreneurs, 28 million small firms employ 60 million Americans, half of the private sector workforce. These small firms are heavily skewed towards technology-focused industries. The opinions of the leaders at the event are a reflection of a very large and important slice of the economy.

Michigan Is a Great Place to Start a Business

Overwhelmingly, small-sized companies (employees under 300) said Michigan offers many positives for entrepreneurs. There was a strong request for more promotion of the Mitten's great business benefits. Participants put low-cost real estate, quality engineering talent, creativity, and a family-friendly environment in the state's pro column. Not mentioned -- but important to note -- is three Michigan cities rank in the nationwide top 10 for growth in several sectors.

Yan Ness, CEO of Online Tech, asked Dingell for aid. "We need help with economic gardening, growing our home-grown Michigan businesses instead of wooing foreign business to come to Michigan. Michigan is a great place to work and live. I can tell you Silicon Valley is not compatible with raising a family," he shared.

Savvy Entry-level Tech Talent Is Hard to Find

Dingell agreed with Ness' assessment and said other markets admire Michigan's engineering talent. Yet, there was a persistent discussion theme about talent deficits in new professionals. Tom Beck, president of Enlighten, explained what many outlined, "We need talent with creative ability that understands the big picture and strategy. They also need to be able to work across disciplines. For example, a good new hire knows how to develop and design a website, program flash, and understand business."

Another issue mentioned at the end of the event is the lack of females in the technology fields. I was one of only two female industry representatives.

Government Needs to Take Some Important Actions

Policy was a hot topic that Dingell also actively discussed. There were three areas of concern:

  • Internet (remote) sales tax
  • Patent laws
  • Online customer data collection
Internet and mail order non-compliance with the Michigan sales tax has been a problem for years. It is a serious loss of
in revenue for Michigan and is a disadvantage to local businesses that have a physical presence and pay their state sales tax. The Michigan Legislature needs to pass
to equalize the marketplace. To the dismay of the many companies present that are getting hit financially by frivolous patent suits, Dingell told the attendees to forget about updating patent law and to use trade secrets instead. The 57-year congressman advised those in attendance that the patent courts lack expertise and move extremely slow. "Technology changes so fast, you will still be in court and the technology will be outdated."

President Obama's newly approved America Invests Act was touted by the administration, in part, as a way to help entrepreneurs avoid litigation. I guess we can forget about that recent legislation.

Dingell also gave what seemed to be an unsympathetic ear regarding the expenses the failed system is costing many of the small business panelists saying, "I don't mean to be insulting, but $750,000 is nothing." Perhaps on an individual basis, this isn't much to our federal government. However, the aggregate dollar impact is probably in the hundreds of millions. And, this amount can break a small business. This mindset isn't what we need to move the economy forward.

Another very complicated policy area is data mining and consumers' desire for greater control of their personal information. Everyone recognized the many economic benefits of effectively using mined data. However, many at the table also want to protect their own privacy. If businesses and policy leaders aren't able to collaborate and resolve consumer concerns surrounding the collection of consumer data, there could be harsh federal repercussions at the end of this year. Pending legislative action could cost many businesses -- small, medium, and large -- hundreds of millions of dollars.

Pure Michigan: The Next Silicon Valley

Linda Girard, Founder and CEO of Pure Visibility, Inc., summed up the panelists' mood at the end of the day, "We (Michigan) can be a model for the U.S. in the area of digital ethics. We can be the next Silicon Valley. We just need to work together to make it happen."

I hope we do it.