“If you are a person and you are unemployed, what do you do?” Roberts said. “You sit back and say ‘what am I good at?’ I submit that a state is no different. When a state is unemployed, like we are now, we sit back and say ‘what are we good at?’ And I would argue Michigan is really good at a lot.”

Driven by talent

To jump-start the new decade, major changes to metropolitan infrastructure, the state’s growing industries and education might be the cure for a suffering state, experts said.

Last fall, state lawmakers balanced the $2.8 billion deficit for the 2010 fiscal year by eliminating the Michigan Promise Scholarship and slashing millions of additional financial aid funding.

To save Michigan, education funding must become top priority, said state Rep. Joan Bauer, D-Lansing, chair of the Higher Education Appropriations Committee.

“Michigan’s way out of this economic downturn is education,” she said. “It is education at all levels — even beginning with birth to five. It’s K-12; it’s higher ed; it’s universities.”

Bauer said jobs of the future require a college education, and without improved education at all levels, Michigan residents will lose out on these jobs.

Roberts said improving education would give companies incentive to bring their business to Michigan.

“We have to look at higher ed and how higher ed will attract people,” he said. “Instead of a K-12 system, have a K-14 system. K-12 plus the first two few years of higher education would be standard.”

Lou Glazer, president of Michigan Future Inc., said studies conclude successful cities are characterized by high proportions of adults with four-year degrees. Nationwide, Michigan is 34th in college degree attainment, he said.

“Michigan’s fundamental problem is being low on degree attainment,” he said.

Bauer said the only way to increase attainment is with better teachers and school systems.

“We have consistently put less and less resources into higher education, and we have to reinvest,” she said.

Stopping the brain drain

Increasing degree attainment is pointless, unless educated people remain in Michigan, Glazer said.

“Once you get educated, you can go any place, so we have got to have a place where talented people want to live,” he said.

More than half of young people that graduate from Michigan colleges and universities leave the state, said Sean Mann, founder of Let’s Save Michigan, an organization started last fall to find ways to improve Michigan.

“It isn’t because of jobs necessarily,” he said. “Two-thirds of young people are choosing where they want to live before they have a job.”

Michigan must improve metropolitan areas to attract young graduates, Mann said.

Urban areas such as Detroit, Lansing, Ann Arbor and Grand Rapids all have that potential, he said.

“We need to reinvest in these cities,” Mann said. “That includes development of better mass transit and increased funding for institutions that make cities strong culturally.”

As Michigan moves away from dependence on the auto industry, cities need to improve mass transit and walkability, Glazer said.

“The kind of neighborhoods young talent is concentrating in is these high density … walkable, vibrant neighborhoods and Michigan doesn’t have any of them,” he said.

East Lansing and Lansing city officials along with Capital Area Transportation Authority, or CATA, are working to develop new mass transit in the Lansing area, said Tim Dempsey, East Lansing planning and community development director.

“Better mass transit is certainly a quality of life factor that people are increasingly considering,” he said.

A new direction

By making Michigan’s urban areas more attractive, the state will attract a younger generation of entrepreneurs, Mann said.

“The way we approach economics is old. We look for the next big companies. Our approach in the next decade has to be encouraging entrepreneurship,” Mann said.

New jobs will not be industrial-based. They will be knowledge-based, Glazer said.

“What will do well in Michigan is broadly diversified — health care, finance, education, engineering,” he said.

Roberts said tourism and agriculture will be key industries in Michigan’s future.

State Rep. Wayne Schmidt, R-Traverse City, said these two industries can be partnered in the next decade through Michigan wineries, vodka distilleries and other forms of agritourism.

“We realized early on that tourism was going to be a key component in Michigan’s future,” he said.

Money makeover

Advancing education, updating metropolitan areas and expanding new industries requires funding, and Michigan economists already are projecting a $1.7 billion deficit for the 2011 fiscal year. To move the state into the next decade, lawmakers must consider significant restructuring of the state’s tax system, said MSU economics professor Charles Ballard.

“Basically our entire tax revenue system is out of date,” he said.

Many state leaders are proposing extending sales tax to services such as entertainment and cutting Michigan business taxes, Ballard said.

Spending reforms also need to be made to save money within state agencies and schools, Ballard said.

Doug Rothwell, CEO of Business Leaders for Michigan, along with other state business leaders, pitched a “Michigan Turnaround Plan” to state lawmakers Tuesday.

Although the plan includes tax and spending reforms, Rothwell said reviving Michigan will require bipartisan effort and sacrifice from lawmakers.

“We are at a crossroads right now,” he said “The problem we’ve had in Michigan is we have tried to latch on to one specific idea or the latest new fad and think that is going to improve things, but there is no silver bullet.”

Lawmakers will need a large dose of compromise to agree on the tax structure in the new Michigan, Rothwell said.

“If (lawmakers) can meet in the middle, that’s where there is an opportunity to really get things done.”