Michigan Governor Rick Snyder

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Kirkpatrick: We are really excited to have the governor joining us now.
And this is a guy who really has done things differently. He won in a landslide victory in 2011, and during his campaign, promised to create an environment where small businesses could grow and create jobs, pledge to balance the budget without using accounting gimmicks, and he actually understood what he was talking about because he's a business guy, which is unusual for an American politician.
As a governor, he's eliminated the Michigan business tax; he's also eliminated the state's $1.5 billion deficit. So he's a local state guy; undergraduate degree, MBA, and law degree from University of Michigan. He was a tax accountant at Coopers & Lybrand, then joined Gateway Computer when I met him way back when, helped it grow to 10,000 employees, then he became a venture capitalist.
So, Governor Snyder, please come out and join me. We are so pleased to have you here.
[APPLAUSE]
So you told me backstage, you are a geek.
Snyder: A nerd.
Kirkpatrick: A nerd. Sorry. Okay. You said nerd.
Snyder: Geeks and nerds are cousins, but I'm a nerd.
Kirkpatrick: Nerds are good. You know, there aren't any nerds in American politics. I wish there were more. I just wanted to ask you what you think about our premise, because Techonomy's whole  mind-set is that technology is at the center of business and social progress, but that it is not sufficiently understood, particularly by leaders globally, and here at this conference, particularly by leaders in the United States, and we really want to push for more people to embrace technology as a tool for progress. How do you think about that?
Snyder: No, well, I appropriate that. Being a good nerd, I love that premise. What I would say is the context I would go with that is it's also taking technology in an understanding of human nature, because quite often, human nature doesn't evolve the way technology does. It is about how to merge those two and bring them together in a combination that's really effective.
One thing I have looked at in the past that I try to follow along is the adaptation curve concept. Quite often when you come up with new ideas and you're introducing something, technology would allow you to go at a rapid pace, but in some cases, you have to appreciate people take some time to get used to a concept. So that's where I come back to the concept of early adapter, fast followers, most people being in the middle, and then some people that tend to lag behind. And it's really how to merge those two worlds together.
The way I like the describe it, when I look at my—personally when I go out and read, I'll read a lot of futuristic stuff, but I also read a lot of history, because I'm looking to the human nature element of history to go with future tech trends.
Kirkpatrick: Well, you're actually dovetailing with our opening session when we had John Covington talking about technology and education.
One of the things we spent time talking about is STEM is critical, but you can't leave the humanities out, because you need people to know how to think, who don't forget to read history.
And, by the way, what Covington is doing is amazing. I really credit you guys with really rethinking what needs to happen. I just hope you can extend that further.
Mentioning that, do you hope that this approach that's been started at the very bottom, where the schools are in the greatest crisis, is an attitude that could spread throughout the state and even the country?
Snyder: I don't think it should require to look at the schools at the bottom. There's no reason that any school shouldn't look at embracing students in learning. I think by doing it at the bottom, hopefully that creates a case to really say it's a compelling empirical case of evidence to say you have taken kids that had the worst situation, now they are performing very well, but it's something that should go across the spectrum.
So one thing I would like to see with the educational achievement authority is the EAA is not intended to be a massive school district—a system of schools across the state, but hopefully a place of innovation, where traditional school districts could start doing student-centered learning, and they could learn from one another and start getting a synergy of continuous improvement.
I really like the concept of open-source, student-centered learning, is what it really should evolve to, because it is a revolution in education, and I think it's extremely exciting and a great opportunity. And I think it is the future of education. I like to call it the four any—any place, any time, any pace, any way.
Kirkpatrick: Sounds good.
Snyder: I'm told I was supposed to feel cheeky today.
Kirkpatrick: The cheekier the better. We like attitude, especially in politicians who actually understand something. That's what I'm so—I'm so excited to find a politician who actually has some understanding. I am not a big optimist about American politicians when it comes to what we call the Techonomy.
Snyder: That's one reason I ran for office. I believe we have a broken political culture in our country, and there are better ways to do it. And the point is, instead of just complaining about it, if you really believe something is broken; I was in a position in life where I can make a commitment to say I can't solve it myself, but at least hopefully there is an illustration of doing it a different way.
The easiest illustration is a phrase many people here refer to as positive action. I means I don't blame anyone, I don't take credit, I don't fight with anyone, what's the problem, what's the solution.
Because if you look at it, it's obvious that we polarized our political environment with people fighting all the time, and fighting or blame doesn't solve anything.
So, in particular, I'm proud of the fact that I think I have a pretty good track record of I don't believe I fight with anyone. Here's the problem, here's the solution, let's get it done.
Kirkpatrick: More power to you, baby, I got to say.
I just hope you keep repeating that and keep doing what you are doing because the country needs a lot more of that thinking.
So let's just go straight to the thing that came up toward the end of that session about Detroit. I mean, I want to hear you talk about a bunch of things, but Bruce was saying the thing he would say to you is don't spread financing like peanut butter over the state. Obviously, that's not entirely possible, but doubling down on what's changing in Detroit, can the state follow that advice and where do you see Detroit going forward from here?
Snyder: I think—well, it’s interesting, I just came back from China and one of the big things that came up—the Chinese asked over and over again, what about Detroit?
So I said there are two critical points that people really need to realize. First of all, the concept of going bankrupt, again, I didn't want to end up there, but we're there. It's really—this is the time to solve problems. This isn't about a new problem arriving. This is dealing with 60 years of accumulated problems.
Kirkpatrick: And admitting you've got a problem.
Snyder: And really being honest about it, and stop ignoring it and letting it build up. That's point one.
The second one is the comeback in Detroit has started several years ago. Because quite often people say, well, after the bankruptcy, is the city going to come back? That's backwards. The comeback has already been going on outside of the municipal government, outside the public sector. It's already been going on with the private sector.
You had Dan Gilbert here. I mean, how much has he invested in Detroit? The total investment is about $10 billion in midtown, downtown, the River Front over the last few years. There's about 12,000 jobs come into Detroit. A lot of these young people are living in Detroit now. The comeback is going on in spite of the way government was operating.
When we get government operating to get better services to citizens, think about the opportunity. That's really exciting. That's really cool. So I appreciate the comment that Bruce made last time. The only thing, I would modify it. I don't think it was complete from my perspective. He talked about investing in midtown and downtown; I don't want to forget the neighborhoods. I don't think that would be right. We need to include the neighborhoods in Detroit.
[APPLAUSE]
Kirkpatrick: I have a question on my list—how to connect the islands. Because one of the things I'm continually struck with in Detroit is there are these amazing things like this neighborhood is very intact, very vital with the DIA, et cetera, and Wayne State, but then it's not far away there's just, like, burned-out buildings. How do we think about—and Corktown, a cool little neighbor, but it's like you take three steps away and you are in, like, outer space.
[LAUGHTER]
What is going to happen to connect these islands? How can you incorporate the whole city?
Snyder: One of the things that is, again, a case of the work—that work's been done largely. Is it complete or finished? No. But one thing we should be proud of that people forget is—again, I'm highly involved in Detroit as governor of Michigan, but following a roadmap that was done by Detroiters, which is the Detroit City Future Plan. They spent a lot of time on a plan, and there is a plan done. So it's not like we are starting from scratch. I have this big book on my desk, at Cadillac Place.
So if you have a question, you open the book to say, well, this is what the people of Detroit thought was a really good answer, this is what we should be doing. So, I mean, let's recognize that we got a lot of great things done and follow that plan.
Kirkpatrick: Okay. But concretely, you brought this up yourself, you know, bringing in this whole community, the African-American community, not leaving them out as downtown—what—how is that going to be addressed concretely, and how are you thinking about it? What can we do; what can people like Dan Gilbert do?
Snyder: No, to go to that more specifically, David—and it's not just about the neighborhood issue, it really comes down to jobs in many cases. I'll give you an illustration.
One of the exciting things we have going on in Detroit that is more public-sector related is we have a couple billion dollars of infrastructure projects that are going in over the next few years. We have got the M1 light rail, we've got a Regional Transit Authority, we've got an Eastern Market Project, we've got a new arena, we've got a bridge.
I like this bridge idea particularly, if you didn't know that.
[LAUGHTER]
Well, we've got this bridge and, for example, the bridge—
Kirkpatrick: Is that funny because you always talk about it?
Snyder: Yeah.
Kirkpatrick: I'm a New Yorker. I didn't know that.
Snyder: There's this bridge to Canada. So it's about three years out before we start serious construction on the bridge, or so. Three to four years. And quite often, when you get an infrastructure project, the problem is, Detroiters aren't able to be hired, because they need additional training in terms of the skilled trades to be ready. Here we have a case where we know the bridge won't be there for three or four years, so we have a chance to do training programs and programs in a thoughtful way.
And an interesting part has come out. This is an issue we are trying to address with the federal government on workforce development. So the federal government's model, you can only use resources to train me when you say you have a job right today. And it's like that's kind of dumb. We know we're going to have these jobs in three years, four years, so figure out how to use the resource to get them into apprenticeship programs so they can work on the bridge. That's just one illustration of things we are doing now that previously hadn't been done to think ahead to, again, those are great jobs.
Kirkpatrick: This is like Community Ventures, really kind of a radical new approach to job training.
Snyder: Community Ventures, just made it up because I said we had to do something for the structurally—
Kirkpatrick: Talk about what it is.
Snyder: It is a program that's absolutely geared to say, let's try to find employment for the structurally employed, for people that have not had a track record of success working for one reason or another. Let's focus in on saying—put 1,000 people to work and let's learn from that in terms of what the barriers and issues are.
These are not make-work jobs. That's one requirement I had. I said one requirement: This cannot be a short-term, make-work job. It has to be a job, a sustainable job with an organization that makes at least $1, even if they are a non-profit, to make sure it is sustainable. That's what it's geared at. We had great participation from organizations. We have done over 1,000 placements; we have 880-so people working, about an 87 percent retention rate.
Kirkpatrick: These are people who would have been on the street, a lot of them.
Snyder: Yeah, people who didn't have a work history. The other part longer-term is, I don't want that to be viewed as a terminal point in terms of their employment career. So the thing is, you get them going in Community Ventures, say now can we do more traditional training programs on top to give them a path of upward mobility in terms of work.
And so it is exciting and great. We are having the University of Michigan hopefully track this, because we'd like to get it published in a real study; because often these programs, people question are they for real or not. I believe this is an awesome opportunity that then we can ramp up.
We have another one I'm excited about that can tie into this, called MAT squared. It's Michigan Advanced Technician training. This is something we brought back from Germany, from the trade mission, because Germany has probably the best apprenticeship programs in terms of skilled production people of anywhere in the world; but the German model wouldn't work here. They start at 14 and take a bunch of tests when they are kids.
So we modified it with German companies and with Oakland Community College and Henry Ford Community College. It's basically you apply, you get in, you are in this program for three years, you are working to get paid. You come out of it with a community college degree after three years. You have a guaranteed job and you have a work commitment for two or three years. That's awesome.
It's starting in mechatronics, the combination of mechanical and electrical production training. So they are going to be able to run sophisticated machinery. These are going to be great jobs, there are needs for these jobs out there, and we launched our first class this year. So we really want to ramp that up. And that's another great program to look to Detroit and the neighborhoods, along with many other parts of Michigan.
Kirkpatrick: What I was hearing from Mike about Community Ventures, it's another one like the Educational Achievement Authority, something that's really new that I don't hear happening in other parts of the country. I loved not funding the individuals, but funding the organizations that are going to create the jobs. Then he was saying they even called them in the morning to make sure they wake up to go to work. They are really hands-on with these people.
Snyder: I'll add one thing to that. We learn a lot. So one of the greatest barriers we learned about that, I don't think we appreciated before, because we were having trouble getting people in the program. And so we did work with a lot of people we were talking to. What is the barrier? It was transportation. It was actually how to get to the training site or how to get to work. So now I view that as—
Kirkpatrick: Great mass transit. Sorry.
Snyder: There's another topic.
Kirkpatrick: That was supposed to be funny.
Snyder: We are working on solving that now, in terms of how do we get people to the work site.
Kirkpatrick: Talk about your trip to China. I mean, I just came back from China. They get tech over there. They get development also. And you have probably the best airport in the United States here in Detroit, very hugely connected to Asia and China. Can the Chinese specifically help Detroit?
Snyder: They can do a lot. I think there's a huge investment opportunity in terms of large-scale investment. One of the other things I'm working on I would like to solve—I had a session here a while ago—immigration, in terms of finding more ways to get more immigration to the United States, in terms of keeping a lot of these bright engineers going to U of M, MSU. Wayne State turns out great engineers. How do we keep them here?
They are job-generators. It's a misunderstanding to think they take jobs. They add jobs. So if you look at that both from a people point and a dollar investment point, there's a huge opportunity for the Chinese to look to Michigan. That was part of my pitch to them. Detroit is the value place in the United States, in Michigan, and potentially the world in terms of a great value opportunity to say, come and invest now, because there's going to be great up-side.
Kirkpatrick: That's a beautiful argument. And I think they are going to get it, because they have done things like this in their own cities—the historic stuff like they do over there.
Snyder: But we need support from the community. We need people to be welcoming. People get excited about the concept, because in some cases, there had been a history here of saying we don't want Chinese. It's all bad. We need to work on that mind-set to say it is a global economy. Let's embrace investment from other parts of the world, whether it be China or someplace else.
Kirkpatrick: A lot of the leaders over there—they are going to look at 10 square blocks of open space, they're going to figure out a way to fill it with incredible stuff. They do that in every one of their cities.
I want to talk about tech for a minute. We always talk about technology, and generally I tended to cover information tech and Internet stuff, but technology is a broader field. You have an incredible core competency in Detroit, in Michigan, in the automotive industry. One of the things the McKinsey report talks about is doubling down on what you are already good at. How do we think of connection between the auto industry and becoming a tech capital for Michigan and Detroit?
Snyder: Fabulous question, because that's one of most misunderstood topics out there in many respects, when you talk to people. They tend to put autos in a separate silo from information technology. And that's a false premise. That's actually something we need people to get over. Quite often they will treat autos as—they think the Model T assembly line, let alone a high-tech environment involving robots and machinery.
One of the highest tech devices out there is the auto today. The computing power in an auto is absolutely incredible. One of the things we need to get people is to marry and embrace them. And one thing I'm proud to say—Michigan is the world's leader in the concept of intelligent vehicles.
We have the connected vehicle program in the Ann Arbor area with the Department of Transportation. If you look at smart vehicles, are a big part of our future. And that highlights the thing to say it is about information technology and bringing these all together.
The other one is we should be proud. Next September, we are hosting the Intelligent Transportation System World Congress right here in Detroit. So it might overlap well. Next September.
Kirkpatrick: Okay.
Snyder: We'll have a worldwide audience to talk about intelligent transportation. We need to embrace that. One thing we need to work with our young people is get them to recognize they can have a great career in the automotive industry. Many cases, people are looking at IT, but won't look at the auto industry, thinking it is not high-tech.
Kirkpatrick: There's such an obsession with software, too, and hardware really matters. And you are pretty good at that.
Snyder: One other illustration, just some numbers. One thing I mentioned that, when I was in China, is about $12 billion in industrial R&D goes on in Michigan each year in the automotive industry. $12 billion of R&D. We account for about 70 percent of all the R&D for the auto industry here in Michigan; but $12 million, compared to—add up the tech companies and how much are they putting into R&D, $12 billion is a huge number.
Kirkpatrick: Later today, Ford is talking about open innovation, the whole new approach Ford is bringing. Have we got any questions? Can we get the lights up a bit? We have time for one or two comments or questions for the governor. Okay. Good.
Are you going to go ask a question? We'll get to you first, quickly. Identify yourself.
Rodriguez: I'm Sergio Rodriguez, a student at Wayne State, graduate student.
Kirkpatrick: A student.
Rodriguez: Yeah. You made a comment about how there's a misconception about immigrants, how they are taking jobs rather than making jobs. Is the State of Michigan doing anything right now as far as any kind of immigration reform? Because it seems like everything is being put sort of on stall, and there's never much going on.
Snyder: We have been a leader on immigration ever since I have been governor. We have a program called Global Michigan to encourage that. We have great people in Detroit doing some work as part of this team. You can check around. I've got to be among the most pro-immigration governors in the United States in terms of pushing ahead, because I fundamentally believe it is a job-creator.
Think about how we have graduate students come in from other countries and we educate them; we give them world-class educations and tell them to get out. That's just dumb; because in fact, we should be embracing them to say, wouldn't you love an opportunity? And how many times do you hear that.?
When it's successful, it really works. Before I became governor, I did venture capital, and I was doing startups with university technology, and I had to go through those battles about helping keep people here as researchers. And when they do, it can be great for our state.
Kirkpatrick: Over here.
Bell: Hello. I'm Victoria Bell, and my company is Right Brain Connections. Also a graduate of Wayne State University. This is also home to the Confucius Institute, which was created by my teacher, Wu Ming. And what I'm thinking, when you are creating different programs that involve different cultures, maybe a better exchange program where actual families can come in, you might be able to have immigrants that come here for school and education actually stay, if some of their family members are allowed to come with them. And that just might be an option for exchange between—like you said, there's $12 billion in the auto industry. So China has a GM headquarters there, so maybe doing some type of exchange for a year or so, or six months, three months, might be assisting with helping that out.
Snyder: I appropriate that. One thing we should be proud of, the Confucius Institute is great. We lead the country in terms of number of Confucius Institutes of any state in the nation. A lot of it is getting people to go back and forth. I'm proud to say I have a senior in high school. She's in her fourth year in Chinese.
Kirkpatrick: That's pretty cool. Another question?
Faralisz: I'm Nancy Faralisz, with the Mobile Technology Association of Michigan, and—have you heard of us?
Snyder: Uh-huh.
Faralisz: Linda Daichendt, who started the organization, is doing a tireless job. We are the only non-profit trade association in the United States that's a full statewide organization, and I just wondered what your thoughts were on the organization and why we kind of feel like we haven't received the support that would be nice to receive.
Snyder: What does your organization do?
Faralisz: We are all about mobile technology across every industry, non-profit trade association, member-based. And it's a very, very cool thing, and it’s been pretty under the radar.
Snyder: I would say it's not that high on my radar. I would hope to learn more. I have heard of it, but we need to find ways to say, how can we promote it? I'd be happy to connect you with Mike Finney.
Faralisz: Yes, and we have been connected. Can I throw one other thing out? I also have a daughter with Down Syndrome, and heavily involved in that. When it comes to education and technology for pre-5s what are your thoughts on that?
Snyder: In terms of pre-K, we are one of the leaders in the country in terms of moving ahead. We created the Office of Great Start a couple years ago to really focus in, but one of the things I'm proud of, last year's budget and this next year's budget, we are removing the waiting list for preschool. We are going to hopefully have almost 30,000 new kids involved in preschool, providing funding for kids that have a need issue. So we'll take care of that, get that eliminated, and we'll be one of the leaders in the country.
Kirkpatrick: Let's take one more comment or question.
Langford: Thank you, Governor Snyder. I'm Addie Langford, from TechShop Detroit, a do-it-yourself fabrication studio in Allen Park. To dovetail the comment you made about when a job is available, it is actually too late to train someone, and how can we back up into the educational system?—So coming back to the educational panel from earlier, I wanted to let you know and invite you and especially Dr. Covington in the education panel to become a part of an amazing consortium that the Automation Alley Education Committee is building. They are wanting to pursue that issue.
So any other education people in the room who would like to bring higher education, high school education, to really address the issue that not everyone needs to go to college to a four-year degree program and how can we get people and parents—which is also a huge issue is the perception that manufacturing jobs are not enough for their children.
So we'd love to invite you to connect with either Carol Friedman at the Alley or Alicia Green in the education committee. Thanks so much. A life-long Democrat, straight ticket; felt a little naughty, voted for you. I'm so excited to vote for you again. So thank you.
[LAUGHTER]
[APPLAUSE]
Kirkpatrick: I'm going to get in trouble, but one more, real fast.
Wood: Governor, Barry Wood, economics journalist in Washington. Why is the pace of job creation in Michigan so slow? I know all the things you have said about Michigan being back, but it's not fast enough. Why?
Snyder: Well, I would say it's a national issue that I don't think we are doing that much worse than the rest of the country in terms of our unemployment rate. One thing we found—I don't know if you noted—is people are coming back in the work force in Michigan. One thing that slowed it down is our work force participation rate is starting to come back up.
I view that as positive in the sense that people are finding more belief that there is future opportunity. So we've created some pretty good jobs. In our state, we've created a couple hundred thousand private sector jobs. And that's the focus point, because the way I view it, private sector jobs are what drive the economy to support the public sector.
We had reduction in the public sector, but we had good growth on the private sector side. Do I want to see more? Yes. Looking at the whole nation, we have done better than most states. We are the comeback state, but also had people come back in the work force, which I view as a positive.
Kirkpatrick: Thanks so much. I don't know which party you belong to, but I wish more people belonged to it. I would like to join it, if it existed; but you are really doing great stuff. I wish we had more business leaders with tech experience in government, and the way you think is fantastic. Thanks for joining us. Thanks for the support that you have given to Techonomy too.
Snyder: Thank you.
[APPLAUSE]
Kirkpatrick: Now we are going to take a quick break. Be sure to stop by the Recharge Lounge just outside the auditorium. We have a lot to get to later on, so be back in your seats promptly at 11 a.m. See you in a few minutes.