The Economic Impacts of the New Economy Initiative in Southeast Michigan

Abstract

The New Economy Initiative (NEI) was created in 2007 as a project of the Community Foundation for Southeast Michigan, with the mission to "accelerate Southeast Michigan to a position of leadership in the new global economy." Twelve national and local foundations have committed $133 million towards this effort. Through 2015, NEI has awarded 259 grants worth$96.2 million to more than a dozen grantee organizations that are primarily focused on fostering entrepreneurship and early stage business in Southeast Michigan. These grantees provide a variety of services to local businesses and the entrepreneurial community, including access to capital, idea competitions, entrepreneurial networking, training programs and identification of best practices, and investments in neighborhoods and buildings that facilitate entrepreneurship.Overall, Southeast Michigan companies that benefited from NEI support generated $2.9 billion in inflation-adjusted (or "real") output,$1.9 billion in Detroit-area real gross domestic product (GDP), $1.1 billion in real wages and salaries, and$1.1 billion in disposable personal income over the period 2008 to 2015. Assuming these companies grow at average rates over the next five years, the economic impact between 2015 and 2020 would be another $1.5 billion in output,$1.0 billion in real GDP, $0.7 billion in wages and salaries, and$0.7 billion in disposable personal income