UM-Dearborn's iLabs conducts its second annual survey of technology executives in southeast Michigan

October 12, 2009

DEARBORN / Oct. 12, 2009---Although most technology executives do not feel Michigan is an ideal place to start or grow a business, their opinions are not simply a reaction to the economic conditions in the state, according to a survey conducted by the University of Michigan-Dearborn’s iLabs, Automation Alley and the Detroit Regional Chamber of Commerce.   

The second annual Michigan Technology Climate Survey assessed opinions of technology executives in southeast Michigan regarding the current business climate facing Michigan’s technology firms.  This past spring, the survey queried 96 executives from Macomb, Oakland, Washtenaw and Wayne counties.

“The results indicate that executives believe there are structural issues--at the state level--that hinder technology growth,” according to Timothy Davis, director of iLabs, also known as the Center for Innovative Research at UM-Dearborn's College of Business

Consistent with last year’s results, this year’s survey found that 63 percent of executives say the business climate for technology firms in Michigan is worse than the rest of the country.  “The lack of confidence in Michigan has not changed, even given the worsening economic conditions throughout the state,” Davis said.  Only 10 percent claimed better conditions in 2009, compared to eight percent in 2008.

While the general perception of Michigan’s technology climate is not positive, the majority of executives that were surveyed lead stable firms.  Forty percent plan to maintain the size of their workforce and another 31 percent plan to expand their workforce. 

“The 20 percent who expect to see employment reductions is significantly greater than the 5 percent from last year’s survey,” Davis noted.  More than half of the firms planning to reduce their workforce cite a decrease in sales as a reason for layoffs.  Those who plan to maintain their workforce feel a lack of capital and market opportunities are hindering their growth along with uncertain economic conditions.  Executives who plan to expand their employee base will do so via an increase in sales and new products or services, according to the survey.

Executives are split on their revenue expectations for 2009, with 43 percent planning to see a decrease in revenue, while 34 percent expect to see an increase.  “Although 57 percent of executives expect their 2009 revenue to hold steady or increase, more than half feel that their expectations regarding revenue changes are not meeting their plans for growth,” Davis said.

The survey found that the majority of technology executives feel Michigan is ineffective when it comes to business development in the current economic situation.  "The technology executives do not believe that the state's policies are supportive of entrepreneurs nor do they have confidence in how the state is promoting economic growth," Davis said.

Almost half of the executives said they would be interested in utilizing services or training offered by the state, including promoting services, events and other opportunities to network with and learn from technology firms in the area.

With the current state of the automotive industry, close to 80 percent of the executives surveyed feel that reducing Michigan’s dependence on that industry would improve the state’s economy.  “In this digital age, it’s no surprise that shifting from a manufacturing-based to a knowledge-based economy is on the top of many executives’ minds,” Davis said, noting that 67 percent of executives feel this way.

Yet, although nearly 80 percent of executives feel that Michigan should reduce its dependency on the auto industry, 75 percent agree that Michigan’s economic future is clearly linked to the auto industry.

All of the executives surveyed work for technology firms that have centralized operations within southeastern Michigan.  Sixty-nine percent identified their title as president, CEO, COO, or vice president.  An additional 26 percent identified themselves as director or manager of the firm.

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About University of Michigan-Dearborn
The University of Michigan-Dearborn is celebrating its 50th anniversary throughout the 2009/2010 academic year. Founded in 1959 with a gift of just over 200 acres of land and $6.5 million from the Ford Motor Company, UM-Dearborn has been distinguished by its commitment to providing excellent educational opportunities responsive to the needs of southeastern Michigan. The university has 8,700 students pursuing undergraduate, master’s, doctoral and professional degrees in the liberal arts and sciences, engineering, business, education, and public administration. With a faculty devoted to teaching, and students committed to achievement, UM-Dearborn has been shaped by its history of interaction with business, government and industry in southeastern Michigan, and is committed to responding to the needs of the region in the future.

 

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