Great Lakes state playing catch-up in effort to build water-based economy

Michigan may be the Great Lakes state, but its neighbors to the east and west are leading efforts to turn water-based technology, academic research and tourism into jobs and revenue.

Milwaukee and the province of Ontario are well ahead of Michigan’s efforts to capitalize on an $850 billion global freshwater economy, according to John Austin, hired by the state last year to shepherd its so-called blue economy.

“Michigan needs to catch up and leapfrog states and communities vying for the prize of water technology, research and education leadership, and who are marketing their water-based natural assets and sustainability/lifestyle ‘brand,’” Austin said in a report commissioned by Gov. Rick Snyder’s Office of the Great Lakes.

Austin, who is director of the Michigan Economic Center at the East Lansing-based Prima Civitas Foundation, said Michigan has all the assets necessary to support a thriving blue economy: abundant freshwater, a growing tourism industry, world-class research universities focused on water issues, and manufacturers capable of turning innovative concepts into marketable products.

Michigan ranked 12th nationally in the number of green (environmentally friendly) jobs in 2010, according to the U.S. Bureau of Labor Statistics. Austin said Michigan could and should be a leader in the blue economy.

"We know the economic development payoff of water restoration and water-based development efforts is tremendous," Austin said. “Michigan needs to get its share of this market."

Globally, spending on water-related technology and water shortage solutions is expected to reach $1 billion by 2020.

Milwaukee’s Water Council, which opened a first of its kind water business and research facility in September, aims to be the Silicon Valley of water. Its Global Water Center is a collaboration of business, government and academia focused to develop new technologies that address global water problems.

The city long known for beer and Harley Davidson motorcycles is also home to the University of Wisconsin’s Great Lakes WATER Institute, the largest freshwater research institute on the Great Lakes. That facility is undergoing a $53 million renovation.

Ontario has a $50 million program that supports the research, development and use of innovative water technologies. The province’s clean water industry employs 22,000 people and generates $1.8 billion in sales, according to government data.

About 800,000 Michigan jobs are tied in some way to the Great Lakes, according to a Michigan Sea Grant study, but there is no data on how many of those are in research, development or production of water technologies. Great Lakes-related jobs provide $49 billion in annual wages.

Michigan has provided grants to several water technology startups and Gov. Snyder recently worked with the other Great Lakes governors and the premiers of Ontario and Quebec to launch the Great Lakes-St. Lawrence River Water Partnership. The partnership will promote the region’s water-related companies, products and services to foreign companies and investors.

Jon Allan, director of Michigan’s Office of the Great Lakes, said Austin’s report would help inform the Snyder Administration’s overall water strategy, which is being drafted.

“We are working on place-making, economic development, growing water technologies and turning communities back to the water,” Allan said. “Our approach is to make sure our cities understand the relationship between their communities, their people and their water. There is value in that.”

A successful blue economy is built on three pillars, according to Austin: research and development of new water technologies in academia and the private sector; government support for water technology firms; and cities capitalizing on waterfronts to improve quality of life, promote sustainable water use and increase tourism. He said all three focuses could attract new businesses, skilled workers and private sector investment.

Lake St. Clair has the largest concentration of pleasure craft in Michigan.

“Milwaukee was probably the first community in the Great Lakes region to identify water as its competitive advantage,” Austin said. “Milwaukee began to organize around that eight or nine years ago; we’re a little late in developing some off these markets.”

But there are signs of progress, Austin said, including:

• The MEDC has provided more than $1 million in grants and worked with an Oakland County business incubator called H2Opportunities to support startup firms that are: turning sewage into energy in Flint; developing methods to keep clean groundwater out of municipal sewer systems in Detroit and Farmington Hills; and developing a small wastewater treatment system that could serve residents in rural communities.

• Several communities, including Macomb County, Muskegon, Marquette and Detroit have cleaned up and redeveloped waterfronts and redirected the community’s focus toward waterways. Detroit’s Riverwalk attracts more than one million visitors annually, Muskegon’s shoreline is home to popular parks and Grand Valley State University’s Annis Water Resources Institute; and Macomb County has launched a comprehensive economic development program that’s focused on Lake St. Clair and the Clinton River.

• Scientists at several Michigan universities have developed new water technologies that will help farmers in parched regions, improve water management on a massive scale in southern Florida, and give waterfront property owners new tools for combating invasive plants. The University of Michigan recently opened a $9 million Water Center, which will focus initially on improving Great Lakes restoration efforts.

“Industries want to see technology that’s been tested to make sure it works, but no one wants to pay for the tests, no one wants to take that risk,” said Gil Pezza, MEDC’s director of water technologies. “If we create ways to bring products to market, that will attract the attention of industry.”

Kayakers on the Clinton River showcase Macomb County’s efforts to create a local blue economy.

Some Michigan firms have already diversified into water technologies on their own, Pezza said.

In 2006, Cascade Engineering in Grand Rapids began manufacturing a simple, inexpensive water filter called Hydraid®. The gravity filter, which uses no electricity and can last up to 30 years, uses sand and gravel inside a plastic container to filter pathogens out of drinking water.

Cascade partnered with the private investment firm Windquest to create Triple Quest, a collaborative that works with non-profit organizations and private corporations to provide the filters to rural communities in the developing world.

The Hydraid®. filter can produce five gallons of clean water every half hour, said Marta Johnson, a project manager at Triple Quest. The firm has sold or distributed 58,000 filters to communities in 55 nations, and plans to ship another 58,000 filters by October 2014.

“That will allow us to impact the lives of one million people,” Johnson said.

Globally, the need for clean water is immense. More than 1 billion people lack access to clean water, according to government data, and that figure is expected to rise as the world’s population increases.

Johnson said Triple Quest and Cascade Engineering are studying the possibility of developing a simple, low cost water treatment system for urban areas in the developing world.

“Safe water is a huge concern for so many reasons,” Johnson said. “It’s essential for individuals and communities to survive and be economically successful.

Officials in Macomb County, north of Detroit, recently launched an ambitious blue economy initiative. That initiative has already attracted more than $20 million in government grants and private funding to improve beaches and boardwalks along Lake St. Clair, clean up portions of the Clinton River and increase public awareness of the county’s water resources.

“It’s amazing that some residents of our county who live three miles from the (Lake St. Clair) shoreline have never been on the lake,” said Gerard Santoro, Macomb County’s planning and economic development director. “We don’t have a major campground or hotel on the water.”

Lake St. Clair is home to Michigan’s largest concentration of marinas and pleasure boats, and the lake was recently named the best bass fishing lake in America.

Santoro wants Macomb County to capitalize on its waterfront the way San Antonio did with its popular Riverwalk, and Chicago did with Navy Pier. Those projects generate billions of dollars in economic activity in each city, according to government data.

“What would a walkable marina district or a recreational pier do for southeast Michigan and the image of Detroit?” Santoro said. “This area doesn’t have the greatest image nationwide or worldwide, but people are surprised when they come here — they don’t understand the bad rap.”

Austin said building Michigan’s blue economy begins with cleaning up polluted waterways and restoring shorelines damaged by industries that made Michigan a global economic powerhouse in the 20th century. State and federal agencies are spending hundreds of millions of dollars to clean up toxic hot spots in several Michigan harbors, restore coastal wetlands and rivers, and improve fish and wildlife habitat.

“Water is magical — people want to live and work near water,” Austin said. “But Michigan has this poor public image of being the Rust Belt, of being dirty and just kind of beat up. That is so different from the vivid reality when you see our incredible Great Lakes coastlines.”