Google Economic Impact Report: What Does It Mean For Michigan?

We all know that the internet represents a massive and fundamental shift in the way our economy operates.    However, when we talk about what Michigan needs to do to transform its economy, it rarely gets a mention.   A recent Google report provides insight into why the internet represents a huge economic opportunity for Michigan.

The fascinating report provides a state-by-state analysis of the economic impact of Google’s on-line advertising and publishing services, including the number of business and non-profits who use them.  In short, the report provides an telling glimpse into how much Michigan is participating in this huge economic shift to the internet.  The answers show hope and opportunity, but not without effort.

The hopeful part is that nearly 40,000 businesses/individuals in Michigan are using Google to either advertise on-line or generate revenue from traffic on their website.   So, this means 40,000 businesses/individuals are participating in the internet economy.   This is significant and this is widespread.  These are businesses of all shapes and sizes and from all sectors.

The opportunity lies in accelerating Michigan’s participation in this economic shift and getting ahead of the curve.   Using data from the report, the table at the end of the post calculates the level of Google’s impact as a percentage of state GDP and provides a ranking of states.   This takes into account the size of a state’s economy and provides a reasonable state-by-state comparison.    The data show that Michigan is in the middle of the pack.  However, what is most interesting is a comparison to Washington.

Washington is a smaller state (6.6M vs 9M) with a similarly sized economy (264B vs 326B) yet Google’s economic impact in Washington is 4x greater, as a percentage of GDP, than in Michigan.     This is a $2B difference in economic impact – no small change.   And, that is from Google alone.

The key point here is that major parts of the economy have been shifting on-line – the question is not if or when, but simply how fast.   States like Washington are moving faster and are getting the economic rewards.   Not surprisingly, Washington shows up as the #2 state on the Kauffman Foundation New Economy Index and they have one of the highest percentages of population on-line.

Michigan can catch up and it can speed up.  We now have leading-edge courses at  Wayne StateMSU, and Eastern Michigan University that provide graduates with the on-line skills necessary to help our businesses grow and compete on-line.   Michigan is also one of the states with the most non-profits taking advantage of Google Grants, Google’s in-kind advertising program.

These are positive signs but we need more of them and we need to integrate on-line competitiveness into our broader economic strategy.      If you have ideas or examples of how to do this, I would love to hear them.


Google Economic Impact State


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