Guest column: Top challenge to business is cost of health care

By David Baker/Baker Strategy Group

Businesses play an essential role in Michigan’s economy. Business is the economic engine that pays people for their time and contribution and converts their work into products and services that customers need.

According to the 2010 Census, there are close to 175,000 businesses in Michigan (excluding the estimated 680,000 non-employee firms). Approximately 3,000 of these are large firms with more than 500 employees. These large businesses make up just 2 percent of the companies in Michigan, but employ roughly 50 percent of all Michigan business employees.

David A. Baker is managing partner of the Baker Strategy Group, an Ann Arbor-based management consulting firm.

Small businesses in Michigan play their own important role. More than 85 percent of businesses in Michigan have 20 or fewer employees, representing roughly 20 percent of all Michigan business employees.

A vibrant Michigan economy depends on these businesses of all sizes, so we all have an interest in making Michigan a great place to start and grow a business.

Collaborating to make Michigan a great place to grow a business is the hallmark of the first Michigan Economic Outlook Survey. The survey involved 3,000 people responding through 70 associations throughout the state, covering 351 cities and 78 of Michigan’s 83 counties.

There are naturally areas where the business, nonprofit and public sectors disagree: taxes, regulation and infrastructure spending, to name a few. However, there are several areas of agreement:

-- Michigan is not yet a great place to grow a business. The state is on its way forward, but we still have a way to go to be a great place to grow a business.

--  Businesses can do a better at providing work-force training and education.

-- The cost of health care is by far the top business challenge, even more so than the lack of available skilled labor.

-- As a state, Michigan must attract and retain top talent in order to create conditions that support business and job growth.

The survey results suggest the following recommendations:

* The public sector, especially local governments and schools, is struggling financially. A renewed Michigan economy requires businesses taking a leadership role by strengthening training and education in the workplace, designing jobs that attract skilled labor and contributing to and supporting nonprofits in the local community.

* Churches, charitable organizations and human services organizations help heal our communities and fill in where many municipalities are strapped. As more support is asked of businesses, nonprofits must demonstrate their effectiveness in fulfilling their missions in our communities.

* Reductions in business costs, such as personal property taxes, help boost Michigan businesses. The public sector needs to appreciate the impact of these changes. The biggest challenge that businesses now face is related to health-care costs. The public sector must collaborate with the private sector to find innovative ways to alleviate health-care costs across all three sectors.

Going forward, renewing Michigan’s economy will require each sector doing its part and collaborating to continue to make Michigan a great place to grow a business.