What has changed since all the brouhaha and hype? How many ventures opened? How many ex-Pfizer jobs saved?

Hmm?

My podcasting partner, Mike Brennan, has been doing interviews with various people about this, which we’ll be releasing this week in our podcast.

While we should welcome large corporations who want to bring business, jobs and tax dollars to Ann Arbor, I think we need to put more effort into helping small business and startups. Full disclosure - I have been small business owner and serial entrepreneur since the 1980’s. In addition, any tax breaks we offer should always be encorceable in terms of insuring that we actually receive what was promised. Much of what goes on here could be made a lot clearer to help the voters understand both the benefits and problems that go into these complex decisions. In sales they teach you to not leave any money on the table when making a deal. The hard part is that this becomes a little like poker when you’re trying to estimate what it will take to get a company to locate. This is why we should work hard to diversify our portfolio and not rely on a poker game with only a couple of huge companies.

A problem faced by startups in Michigan is the difficulty of getting Venture Capital. And Biotech startups tend to need a lot of capital for setting up research facilities. etc. However, if you look at what has been happenning with web 2.0 Internet startups, those companies are being formed with an order of magnitude less capital than in the 1990’s. More full disclosure - I am doing business in this space. I have been attracted to this space partly because it is now so much easier to launch an Internet company than it was previously.

There are also many tools available for free or very low cost that the workforce and managers in Michigan should be learning. I strongly belive that a little government money being spent on educating people about these tools and how to use them would be well spent. Information flow and management among teams working in web 2.0 companies has improved greatly over older approaches. I expect to be meeting with the City’s IT staff more to discuss how as a City we can be more efficient and make information more easily available. A small example is the Google calendar I have added to this site. When I joined City Council I discovered there was no “shared calendar.” There was en email sent by another Councilmember that listed all of our meetings for the year. So, I would have to search for that email in my Outlook account to know about meetings and each Councilperson would have to do the same. I took those dates, entered them into my City public calendar on Google and then was able to copy and paste “calendaring sharing” HTML into a widget on this site. I was able to do this without having to read or understand any of the HTML. Your average person will not take the time to set this up. But anyone can now see a lot calendar information easily from my site. So a small effort on my part is multiplied and evidenced in the benefits of many people having more and easier access.

To sum up, I don’t so much have easy answers to the problems we face as a City. But, I have faith that using tools to open up the process to more people, will result in better decisions. In this regard, I highly recommend reading The Wisdom of Crowds by New Yorker columnist James Surowiecki who “explores a deceptively simple idea that has profound implications: large groups of people are smarter than an elite few, no matter how brilliant—better at solving problems, fostering innovation, coming to wise decisions, even predicting the future. This seemingly counterintuitive notion has endless and major ramifications for how businesses operate, how knowledge is advanced, how economies are (or should be) organized and how we live our daily lives.”

Without start-up funds all the dreams about new biotech springing up to replace Pfizer are just that - dreams.

Right now there just isn’t enough venture capital available to ex-Pfizerees to really do much except leave town. Business retraining means little to nothing in an environment of startup cash famine.

I think keeping the Pfizer facility on the tax roles should be a high priority. I am concerned Pfizer will either demolish the site or donate it to the University of Michigan. I liked the mayors idea of using the site to incubate small bio-tech companies.

A previous Council around 2001 voted to give $84 Million in tax breaks to Pfizer in exchange for a promise by Pfizer to add 600 jobs and $600 Million in investment. The employment level at the time was around 3000 people at the Ann Arbor Pfizer campus. It is my understanding that Pfizer never received any tax breaks due to the fact that immediately after the agreement was signed, Pfizer started reducing employment at the facility down to 2100 recently. Could you explain your views on providing tax incentives to wealth corporations in exchange for phony promises of job growth? Have tax incentives to private corporations ever really helped a community?

January 22, 2007

Granholm Says Economic Plan Already Positioning State in Life Sciences

21st Century Jobs Fund will help offset Pfizer R&D job losses

LANSING - Governor Jennifer M. Granholm today called news that Pfizer is moving research and development operations out of Michigan a “devastating blow to Pfizer families” but said the state’s economic plan and its 21st Century Jobs Fund are already positioning the state to grow jobs in the life sciences and other 21st century industries.

“While this is a devastating blow to so many Michigan families, the state’s economic plan and our 21st Century Jobs Fund are already at work positioning the state as a leader in life sciences, alternative energy, homeland security and defense, and advanced manufacturing,” said Granholm. “Our plan will help ensure there are diverse jobs in this state to keep Pfizer’s employees here, provide opportunity for all Michigan’s people, and attract the talent needed to keep the best companies in the new economy. Despite Pfizer’s business decisions, there are 21st century companies - including bioscience companies - that are choosing Michigan as a place to grow and create jobs today.”

Granholm noted that Michigan has 120 new life sciences companies since 2000 and said the state will work to keep as many of the highly talented Pfizer workers as possible in Michigan. These highly skilled workers and the jobs they perform are the jobs the state is committed to in the 21st century.

The company was quick to point out that today’s announcement is a bottom-line business decision, and there is nothing any state could have done to change the outcome. The announcement, said the company, is part of a world-wide restructuring that will result in closing operations in other parts of the United States and around the world.

In addition to the state’s broad economic plan and the 21st Century Jobs Fund, the Governor pledged to assist Ann Arbor economic development officials in their efforts to do everything possible to help retain workers affected by today’s decisions.

Last fall, Granholm announced $135 million in 21st Century Jobs Fund awards, including $71.5 million to companies in Washtenaw County where the bulk of the Pfizer job losses will be experienced. Included in the funded projects is $8 million to Ann Arbor Spark for the Michigan Pre-Seed Capital Fund that will provide funding to entrepreneurial ventures or high-tech start-up companies. Those companies will receive $50,000 to $250,000 to help them with patent research and application, proof of principle development, prototype development, market analysis, and other activities. A match is required for all funding.

In a statement to the Governor, Pfizer CEO Jeff Kindler noted that Michigan is a great state and explained that while the company’s presence in the state will change, it is proud that Michigan will continue to be home to more than 4,000 Pfizer colleagues at manufacturing and animal health facilities in the state.