In 2025, Michigan rose to 6th place in CNBC’s “America’s Top States for Business” ranking, marking its highest position since the index began. This improvement follows a 15.35% increase in active businesses since 2021—surpassing the national average growth rate of 10.68% by 44%. A key driver behind this momentum is the Michigan Economic Development Corporation (MEDC), a quasi-public entity that supports business attraction and expansion through grants and contracts. Last year alone, the organization generated $2 billion in economic output while allocating nearly $100 million to support over 250 small enterprises across the state. Despite these achievements, some Republican legislators are advancing proposals to dismantle the agency over concerns about accountability and unmet job targets.
Critics point out that while the MEDC pledged approximately 123,000 jobs over two decades, only around 11,000 were confirmed as delivered. However, eliminating the entire institution could jeopardize ongoing economic initiatives and discourage future investments. Governor Gretchen Whitmer’s office has warned that disbanding the MEDC might undermine confidence among existing and prospective businesses, potentially threatening current employment. A more constructive path forward involves enhancing oversight mechanisms rather than opting for full dissolution. Implementing stricter eligibility checks and monitoring protocols during grant disbursement could ensure public funds are used efficiently and project outcomes are more reliably achieved.
One high-profile setback involved a $23 million investment in a $2.4 billion electric vehicle battery plant project with Gotion, a Chinese technology firm. The initiative collapsed after the company failed to maintain on-site operations for nearly 120 consecutive days. While the failure stemmed from Gotion’s actions, stronger performance tracking by the MEDC might have allowed earlier intervention. Improved monitoring systems could help prevent similar losses in the future.
Beyond industrial projects, the MEDC has played a vital role in academic and entrepreneurial ecosystems. In early 2024, it awarded the University of Michigan a $5 million grant to launch the Michigan University Innovation Capital Fund and Consortium—collaborative efforts involving multiple state universities aimed at advancing research and startup development. These programs support student-led ventures and contribute to long-term innovation capacity. Terminating the agency would place millions in university funding at risk, disrupting research pipelines and entrepreneurial growth.
Additionally, past MEDC-backed ventures like Duo Security—a cybersecurity firm that grew from two employees to 300 jobs with a $2.5 million grant—demonstrate the agency’s potential for transformative impact. Abolishing such a body now could deter new companies from choosing Michigan as a base, reversing recent gains. Rather than discarding a functioning framework, policymakers should focus on refining accountability structures. As residents and students benefit from the jobs, research opportunities, and business diversity fostered by the MEDC, advocacy should center on reform, not repeal. The organization represents a long-term asset; its future promise outweighs current shortcomings.
— news from The Michigan Daily
— News Original —
Don’t eliminate the Michigan Economic Development Corporation, fix it
In July 2025,CNBC ranked Michigan 6th in its “America’s Top States for Business 2025” list. This is the highest Michigan has ranked since the list was created, moving from 9th to 6th in one year. This upward trend is due to the expansion of diverse businesses across the state. Since 2021, Michigan has experienced a 15.35% increase in the number of active companies, which is 44% higher than the national average of 10.68%. This growth is attributed to Michigan’s success in fostering long-term business growth. A likely reason for this success is the Michigan Economic Development Corporation, a“quasi-government agency” that oversees outreach efforts for Michigan businesses through contracts and grants. n nIn other words, this agency uses investments to incentivize businesses to come to Michigan to grow the state’s economy. In many ways, this method has led to great success, raising $2 billion in revenue last year while investing nearly $100 million in over 250 small businesses across Michigan. n nHowever, due to concerns over taxpayer dollars and the MEDC’s failure to meet its specific job creation goals, Republican lawmakers in the Michigan state legislature are preparing bills to eliminate the organization. n nWhile flaws exist in the MEDC’s ability to to track job creation projects to ensure they materialize, it would be unwise to completely abolish an agency with crucial long-term investments. Instead, we should be focusing on efforts to improve its effectiveness. n nThe primary concern with the MEDC is job creation. While the agency has promised about 123,000 jobs over the past two decades, it has only delivered about 11,000. Even though this guarantee never came to fruition, dissolving the entire organization is not the solution to this problem. Gov. Gretchen Whitmer’s office explicitly responded to the Republican Party concerns by affirming that eliminating the MEDC would discourage Michigan businesses, which would put existing jobs at risk. n nA more productive solution — one that both preserves existing jobs while creating new ones — would be to create more robust accountability mechanisms within the agency. Particularly, reinforcing internal regulations to ensure that grantees meet all eligibility requirements before they are given money. By having a more strict grant approval process, the agency ensures that taxpayer dollars are being used effectively while reducing the possibility of job creation projects underperforming. n nOthers claim that the MEDC’s large-scale projects have fallen apart. An infamous failure was a $2.4 billion electric vehicle plant deal with a Chinese tech company, Gotion. While the agency invested $23 million to start the project, it’s now asking Gotion for the money back. However, the failure of this deal was not due to the faults of the MEDC but of Gotion, which had no on-site activity for almost 120 consecutive days, essentially abandoning the project. Nevertheless, greater accountability oversight capabilities within the MEDC could have prevented this failure or at least mitigated its effects. For instance, the MEDC should have been consistently tracking Gotion’s activity on the project instead of allowing 120 consecutive days of no progress to slip under the radar. n nWhile it’s extremely easy to focus on the shortcomings of the MEDC, the benefits this organization has had on the University of Michigan and the Ann Arbor community are immense. For instance, at the beginning of 2024, the University received a $5 million grant to establish the Michigan University Innovation Capital Fund and Michigan University Innovation Capital Consortium. These two organizations aid economic research through a partnership with the University, Michigan State University, Wayne State University, Western Michigan University and Michigan Technological University, boosting economic development statewide. n nThe list of the different projects the MEDC has invested in with the University is extensive, which not only exemplifies the agency’s commitment to nurturing academic research but also its initiative aimed at investing in young startups led by undergraduate and graduate students. The elimination of the MEDC by Republican lawmakers, however, would put millions of dollars of grants invested in research and entrepreneurship at Michigan universities, including the University, at risk. n nBeyond academics, the MEDC has successfully attracted new and lucrative businesses to Michigan. For example, in 2016, the agency gave Duo Security, a cloud-based technology company, a $2.5 million grant, which helped the company develop from two full-time employees to creating 300 jobs. n nAbolishing the agency now would harm these ongoing projects and remove incentives for businesses to come to Michigan. While Republicans in Lansing believe that this agency is broken beyond repair, they actively ignore historically successful projects that have diversified business presence and ongoing projects that will be economically impactful in the future. n nAs students living in the state of Michigan, we depend on the academic research, the diverse businesses and the job opportunities this agency provides. As Republicans draft harmful bills, it is our responsibility to urge our state representatives to speak out in favor of reforming the MEDC rather than abolishing it. The agency is a long-term investment in the future of Michigan; its future opportunity outweighs its short-term flaws. By supporting the improvement of this agency, we invest in the greater future it has for Ann Arbor and Michigan as a whole. n nMadeleine Burke is an Opinion Columnist who writes about local politics in her column “The Ann Arbiter.” You can reach her at madeleb@umich.edu.