Monday, February 10, 2020
Your Personality Based on Your Coffee Type
Thousands of times I walked through offices and never once thought about how the coffee type one drinks says something about their personality. The type of products we pick are often a reflective of our needs and self-image. The video does mention a survey but didn't see a referral to where you can find more information on the study. Next time you see someone making coffee you might think about how their personality is associated with how they like their coffee. 😬
Monday, February 3, 2020
GR Tourism Industry Worried About Future-Discusses Impact of Pure Michigan
More discussion on Pure Michigan and tourism within the state. This video provides a perspective from Grand Rapids.
Friday, January 31, 2020
GM's President Mark Reuss Discusses $2 Billion in Electric Investments
The market is changing and shifting and GM just got on board with global consumer trends in a big way! Self-driving and electric cars are going to change the market in fundamental ways as other types of technologies follow suit. A growing trend over the past few decades increased the demand for renewable energies and cleaner cars. The technology and investment interests seemed to have matched at this time on our path to a more efficient data driven way of existence. This transition may be a good thing for Michigan as investment dollars move into a changing industry. It is an opportunity for the U.S. to draw in more interest and secure Michigan as next generation vehicles. There may well be a much much bigger market than automobiles a decade or so down the road as alternative clean forms of energy hit a very large up coming global middle class.
When large companies like GM invest this much capital into an area, they plan to be there for a while. They are geographically "invested" so to speak and will likely encourage their suppliers to invest as well (a type of pack investing). These suppliers may not have any choice if they want to continue to supply to these large manufacturers. Thus the system engages in a type of butterfly effect of innovation.
Furthermore, under a boon scenario we may find other global manufacturers following suit; albeit a little bit smaller. Who knows? Other large automotive manufacturers may find that the want to compete and so something similar thereby creating synergy. Synergy occurs when companies that are geographically centered compete and collaborate in a way that they enhance each other and make quick innovations in a kind of "race".
If synergy of development can be found growth with explode (in theory) as all of the resources of the system are brought into to match innovative capacity. Resources move, adjust, sift through, and enhance all of the systems through the physical and social intellectual capital of the area. Detroit has the basic infrastructure build off of older manufacturing models and this could lead to a higher local platform if multiple companies invest at once in a big way.
Industries that use similar technologies also need to access to specialized human capital, networks of similar businesses, and innovative opportunities through shared resources. For many companies, finding places where the right environment exists where they can nestle into existing business networks to increase break-out sustainability is important. Thinking like a system can change the dynamics.
We often think of production as something the company did in isolation. Not so. There success is in relation to all of the elements and networks being ready to accept rapid growth. It is people and their abilities that put these resources and structures together in a way that build powerful companies and at times empires. We are a type of mound building species that constructs just to reach to the stars (Think of the next generation of space shuttles will look like and how commercialization is going to rely on more renewable solar type energies to increase reach. Could Detroit meet that need in 30 years?).
The question investors might want to ask is , "What other electric businesses might use some of the same technologies, infrastructure and skills GM will need?" Perhaps electric motorcycles, bikes, scooters, robots, etc, etc.... Companies conduct their own analysis of their prospects. It is their function to improve shareholder wealth while still contributing to the advancement of society. Matching opportunities and attracting companies that need access to those resources is a great way to bring back manufacturing.
1. Are there other large manufacturing companies that are willing to do something similar to GM? They do need to stay competitive so it is likely others are thinking about further investments.
2. Are there other types of foreign and domestic companies that may find the infrastructure and environment (finance, political, education, etc...) ripe for their manufacturing capitalism?
When large companies like GM invest this much capital into an area, they plan to be there for a while. They are geographically "invested" so to speak and will likely encourage their suppliers to invest as well (a type of pack investing). These suppliers may not have any choice if they want to continue to supply to these large manufacturers. Thus the system engages in a type of butterfly effect of innovation.
Furthermore, under a boon scenario we may find other global manufacturers following suit; albeit a little bit smaller. Who knows? Other large automotive manufacturers may find that the want to compete and so something similar thereby creating synergy. Synergy occurs when companies that are geographically centered compete and collaborate in a way that they enhance each other and make quick innovations in a kind of "race".
If synergy of development can be found growth with explode (in theory) as all of the resources of the system are brought into to match innovative capacity. Resources move, adjust, sift through, and enhance all of the systems through the physical and social intellectual capital of the area. Detroit has the basic infrastructure build off of older manufacturing models and this could lead to a higher local platform if multiple companies invest at once in a big way.
Industries that use similar technologies also need to access to specialized human capital, networks of similar businesses, and innovative opportunities through shared resources. For many companies, finding places where the right environment exists where they can nestle into existing business networks to increase break-out sustainability is important. Thinking like a system can change the dynamics.
We often think of production as something the company did in isolation. Not so. There success is in relation to all of the elements and networks being ready to accept rapid growth. It is people and their abilities that put these resources and structures together in a way that build powerful companies and at times empires. We are a type of mound building species that constructs just to reach to the stars (Think of the next generation of space shuttles will look like and how commercialization is going to rely on more renewable solar type energies to increase reach. Could Detroit meet that need in 30 years?).
The question investors might want to ask is , "What other electric businesses might use some of the same technologies, infrastructure and skills GM will need?" Perhaps electric motorcycles, bikes, scooters, robots, etc, etc.... Companies conduct their own analysis of their prospects. It is their function to improve shareholder wealth while still contributing to the advancement of society. Matching opportunities and attracting companies that need access to those resources is a great way to bring back manufacturing.
1. Are there other large manufacturing companies that are willing to do something similar to GM? They do need to stay competitive so it is likely others are thinking about further investments.
2. Are there other types of foreign and domestic companies that may find the infrastructure and environment (finance, political, education, etc...) ripe for their manufacturing capitalism?
Wednesday, January 29, 2020
Selecting Gifted Students for Advanced Placement in Higher Education
Advanced intelligence is often associated with what society calls gifted thinking that leads to new ideas and ground breaking research that tackles problems in novel ways. Such problem solving is often based in multiple standpoints and cognitive leaps that seam to reach towards logical intuition. The term gifted is often misunderstood and has a lot of cultural mysticism conceptually blended with it. To some it means genius and to others it could mean peculiar. The selection and enhancement of the gifted can lead to greater development of society. Moving beyond standard assessment occurs when we consider the thinking patterns of this population and find better methods of selecting them. Colleges that can discover gifted intelligence and place them into advance programs not only do themselves a favor but contribute to the development of society through contributions to intellectual capital.
Let's try and understand what gifted intelligence and thinking patterns mean. While there are lots of physiological advantages (a few disadvantages) to being gifted, it is an inherently different way of existing that is specifically unique to that population. Some of the biggest difference is in the way in which the gifted experience their environment, make decisions, and solve problems based fundamentally on the increased intake of the senses. The biological difference in sensory perception creates fundamental shifts in deep seated thinking patterns that push for constant redevelopment throughout the course of one's life. Understanding the underlining structure of thinking and the meta-cognitive ability of this population is helpful as an identification tool.
Does Selection and Enhancement Help Society?
First, we kind of need to know why they should be identified and whether or not it has any real beneficial. The world is a difficult place that doesn't do well accepting differences in people. There are racial, religious, national, educational, income, and a umpteen differences between people. In some cases these are profound differences while in most cases these are only superficial perceptions. The gifted are physiologically and often psychologically differentiated from their peers in a way that can make it awkward interacting with some people. This is likely why they seem to push societal norms.
Without proper guidance their skills are wasted and buried under the inaccurate expectations of culturally anchored ideas of "success". Minority gifted are minorities of minorities while even wealthy gifted may feel like "fish out of water". Most of this population think about issues differently and often "out of step" with friends and family. Being outside the bell curve means they have little positive validation of their experiences through others. Selecting them, even when they hide their talents, is helpful for encouraging them toward constructive activities that can have beneficial effects on society.
First, let us understand the meaning of advanced intelligence. Spelling, long prose, math problems, etc... are only data points that could indicate advanced intelligence. They are not the sole measurements in and of themselves. A person who has little education could have advanced intelligence as highlighted by the gathering of wisdom and knowledge throughout their lives to create new integrated selves that can be applied to complex problem solving. They just didn't have access to education and resources that make them "sound smart" on an IQ test. Being educated at an Ivy league school, or your local community college, or trade also does not indicate intelligence. It often simply indicates access to resources and social class.
We may want to delve deeper into how information is processed and how it comes to its own conclusions.....
Giftedness and Metacognition:
Outward behavior is a sign of inward thinking. Understanding how the Gifted think further increases the chance they will be discovered and guided to constructive paths. Dr. Steinberg from Yale believed that metacognition was a better approach of assessment versus psychometric assessments. The way in which a person thinks is a clearer indication of high intelligence when compared to other models and measures ofbunderstanding (Sternberg, 1981). Their thinking depth and pattern reflects their neural networks and root understandings about life.
To make an assessment we will need to delve deep into the way the gifted think from an elemental level. Metacognition, or thinking about thinking, is one sign that a person's perspective and reflective abilities are high enough to create the potential for advanced thinking. It is a method of viewing problems by creating broad strategies based on the category of problem. They can then mix and match strategy to category. Unlike, normal people who use existing methods the gifted often reach to the end of that thinking and then make a cognitive leap to the next platform of understanding by expanding those thinking structures.
The Structure of Gifted Thinking:
A measure of general intelligence is based on a Triarchic Theory that states that highly developed people can use practical, creative and analytical approaches to solve problems. This population is unique and can switch through different modes of thinking to view problems from multiple angles and methods. Perspective changing allows them to see a problem from radically different vantage points to select those strategies that seem to make the most sense.
Underneath all cognition are elemental components that compose basic structure of thinking. Metacomponents allow us to plan, monitor and evaluate information (Vinney, 2019). It is an overriding ability to master one's environment through accurateordering of very root knowledge components (Intelligence, nd). These components can be adjusted, reconnected, disconnected and applied to solve a problems.
We learn these components throughout our lives. Some of us learn faster than others but almost all of us continue to learn. An overriding framework impacts our way of processing information and reacting to stimuli in our environment. Most of what they do is likely to be subconscious as it is the core of more complex thought processes. As an adaptive species the way in which these components help create thought and action that makes a big difference in survival.
Can You Select Advanced Thinking Students?
It is very possible to select advanced thinking students based on how they interpret information and solve problems. The strategies they employ to tackle problems, cross checking multiple perspectives, and the utilization of innovative flow. Specifically one may want to look for people who make cognitive leaps and find new ways of solving problems that may be unique but still logically supported.
There is no reason why they can't be selected online in much the same was as they are selected on the ground. Similar skill sets will apply to problem solving in a number of different physical and virtual environments. The difference being that in the online world there is a higher data foot print now that the Internet is part of our daily lives. Online schools, assessments, and activities can highlight the potentiality for advanced thinking.
From an educational standpoint, it is entirely possible to create problems and activities that require new and unique solutions. Those that provide similar previously learned answers when compared to those who provide new answers will be of importance. Isn't even so much who wrote the best report or who has the most colors in the display. It is that they created a logically supported new way of resolving a business problem (or any problem).
While it is difficult to say where the future of Higher Education will go it is likely that there will be many more self-reflective assessments that develop the whole person. Some of these are going to indicated advanced potential. It is up to the higher education institution to start these previously undiscovered and underperforming candidates for advanced education that lets them master their gift(s).
Heylighen, F. (ND). Gifted People and their Problems.
http://pespmc1.vub.ac.be/Papers/GiftedProblems.pdf
Intelligence (nd). State University. Retrieved December 17,2019 https://education.stateuniversity.com/pages/2104/Intelligence-TRIARCHIC-THEORY-INTELLIGENCE.html
Shore, B. M., & Dover, A. C. (1987). Metacognition, Intelligence and Giftedness. Gifted Child Quarterly, 31(1), 37. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=edb&AN=53626741&site=eds-live
Sternberg, R. J. (1981). A Componential Theory of Intellectual Giftedness. Gifted Child Quarterly, 25(2), 86–93. https://doi.org/10.1177/001698628102500208
Vinney, C. (2019). Understanding the Triarchic Theory of Intelligence. Thought Co https://www.thoughtco.com/triarchic-theory-of-intelligence-4172497
Let's try and understand what gifted intelligence and thinking patterns mean. While there are lots of physiological advantages (a few disadvantages) to being gifted, it is an inherently different way of existing that is specifically unique to that population. Some of the biggest difference is in the way in which the gifted experience their environment, make decisions, and solve problems based fundamentally on the increased intake of the senses. The biological difference in sensory perception creates fundamental shifts in deep seated thinking patterns that push for constant redevelopment throughout the course of one's life. Understanding the underlining structure of thinking and the meta-cognitive ability of this population is helpful as an identification tool.
Does Selection and Enhancement Help Society?
First, we kind of need to know why they should be identified and whether or not it has any real beneficial. The world is a difficult place that doesn't do well accepting differences in people. There are racial, religious, national, educational, income, and a umpteen differences between people. In some cases these are profound differences while in most cases these are only superficial perceptions. The gifted are physiologically and often psychologically differentiated from their peers in a way that can make it awkward interacting with some people. This is likely why they seem to push societal norms.
Without proper guidance their skills are wasted and buried under the inaccurate expectations of culturally anchored ideas of "success". Minority gifted are minorities of minorities while even wealthy gifted may feel like "fish out of water". Most of this population think about issues differently and often "out of step" with friends and family. Being outside the bell curve means they have little positive validation of their experiences through others. Selecting them, even when they hide their talents, is helpful for encouraging them toward constructive activities that can have beneficial effects on society.
First, let us understand the meaning of advanced intelligence. Spelling, long prose, math problems, etc... are only data points that could indicate advanced intelligence. They are not the sole measurements in and of themselves. A person who has little education could have advanced intelligence as highlighted by the gathering of wisdom and knowledge throughout their lives to create new integrated selves that can be applied to complex problem solving. They just didn't have access to education and resources that make them "sound smart" on an IQ test. Being educated at an Ivy league school, or your local community college, or trade also does not indicate intelligence. It often simply indicates access to resources and social class.
We may want to delve deeper into how information is processed and how it comes to its own conclusions.....
Giftedness and Metacognition:
Outward behavior is a sign of inward thinking. Understanding how the Gifted think further increases the chance they will be discovered and guided to constructive paths. Dr. Steinberg from Yale believed that metacognition was a better approach of assessment versus psychometric assessments. The way in which a person thinks is a clearer indication of high intelligence when compared to other models and measures ofbunderstanding (Sternberg, 1981). Their thinking depth and pattern reflects their neural networks and root understandings about life.
To make an assessment we will need to delve deep into the way the gifted think from an elemental level. Metacognition, or thinking about thinking, is one sign that a person's perspective and reflective abilities are high enough to create the potential for advanced thinking. It is a method of viewing problems by creating broad strategies based on the category of problem. They can then mix and match strategy to category. Unlike, normal people who use existing methods the gifted often reach to the end of that thinking and then make a cognitive leap to the next platform of understanding by expanding those thinking structures.
The Structure of Gifted Thinking:
A measure of general intelligence is based on a Triarchic Theory that states that highly developed people can use practical, creative and analytical approaches to solve problems. This population is unique and can switch through different modes of thinking to view problems from multiple angles and methods. Perspective changing allows them to see a problem from radically different vantage points to select those strategies that seem to make the most sense.
Underneath all cognition are elemental components that compose basic structure of thinking. Metacomponents allow us to plan, monitor and evaluate information (Vinney, 2019). It is an overriding ability to master one's environment through accurateordering of very root knowledge components (Intelligence, nd). These components can be adjusted, reconnected, disconnected and applied to solve a problems.
We learn these components throughout our lives. Some of us learn faster than others but almost all of us continue to learn. An overriding framework impacts our way of processing information and reacting to stimuli in our environment. Most of what they do is likely to be subconscious as it is the core of more complex thought processes. As an adaptive species the way in which these components help create thought and action that makes a big difference in survival.
Can You Select Advanced Thinking Students?
It is very possible to select advanced thinking students based on how they interpret information and solve problems. The strategies they employ to tackle problems, cross checking multiple perspectives, and the utilization of innovative flow. Specifically one may want to look for people who make cognitive leaps and find new ways of solving problems that may be unique but still logically supported.
There is no reason why they can't be selected online in much the same was as they are selected on the ground. Similar skill sets will apply to problem solving in a number of different physical and virtual environments. The difference being that in the online world there is a higher data foot print now that the Internet is part of our daily lives. Online schools, assessments, and activities can highlight the potentiality for advanced thinking.
From an educational standpoint, it is entirely possible to create problems and activities that require new and unique solutions. Those that provide similar previously learned answers when compared to those who provide new answers will be of importance. Isn't even so much who wrote the best report or who has the most colors in the display. It is that they created a logically supported new way of resolving a business problem (or any problem).
While it is difficult to say where the future of Higher Education will go it is likely that there will be many more self-reflective assessments that develop the whole person. Some of these are going to indicated advanced potential. It is up to the higher education institution to start these previously undiscovered and underperforming candidates for advanced education that lets them master their gift(s).
Heylighen, F. (ND). Gifted People and their Problems.
http://pespmc1.vub.ac.be/Papers/GiftedProblems.pdf
Intelligence (nd). State University. Retrieved December 17,2019 https://education.stateuniversity.com/pages/2104/Intelligence-TRIARCHIC-THEORY-INTELLIGENCE.html
Shore, B. M., & Dover, A. C. (1987). Metacognition, Intelligence and Giftedness. Gifted Child Quarterly, 31(1), 37. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=edb&AN=53626741&site=eds-live
Sternberg, R. J. (1981). A Componential Theory of Intellectual Giftedness. Gifted Child Quarterly, 25(2), 86–93. https://doi.org/10.1177/001698628102500208
Vinney, C. (2019). Understanding the Triarchic Theory of Intelligence. Thought Co https://www.thoughtco.com/triarchic-theory-of-intelligence-4172497
Sunday, January 12, 2020
A Recession Caused by Consumer Debt?
Consumer debt has steadily over the past few decades. As with all big pools of debt there is a chance of market changes and corrections. A little video for people who like economic stuff below. While this is anecdotal, a marina manager shared some knowledge on how during The Great Recession of 2007 a lot of boats got abandoned because there was no cushion for people.
Wednesday, January 8, 2020
Two Tricks for Calming Jumpy Horses-A Bucking Challenge!
Let me say that I have met a lot of people who love a challenge. They come latte in hand into their offices and work everyday while looking out the window. When its their time off they take on challenges like horse riding, training, trail riding and enjoy being away from the hustle and bustle of big city life. Horses have a lot of benefits for business people who need some time outdoors working with something they can see results. Research indicates people who like outdoor activities like horse riding are more intuitive and introverted than others (Cashel, et. al. 1996). For them, there is something about the basics of it all.
The first thing I would look at are the causes of bucking. It could simply be a nasty horse that doesn't want you on her or it could have another cause like pain or improper tackle. In the first case, the horse needs more consistent riding and firm command to extinguish bad behavior. In the second case, the horse might have something hurting him and adjusting its equipment can make a difference.
Bucking can be dangerous because it can throw the rider and cause serious injury. The horses value is also much lower if she cannot be ridden without having a problem. Even with some riding experience I'm a little nervous when I get on her and that likely makes things worse. Dangerous horses are a major liability and they must learn to enjoy riding or be all cost for the owner.
Research indicates that a lot of this jumpy behavior is based on reflex and impulse (Friese, Hofmann, & Wiers, 2011). To limit and eventually extinguish this behavior there should be more emphasis on immediately stopping dangerous reactions and helping the horse calm down. Beyond lunging the horse to remove excess energy, and habituating her to the environment, you may also want to use the one rein stop.
You can also get a feel for the horse by paying attention to your horses snorts to see if he/she will be willing to let you ride. Not kidding! 🤣 The snorts of your horse indicate its happiness level (Stomp, et.al., 2018). The frequency of snorts gives a peak into the horses state of mind and this could impact how it acts in the arena. It will snort more when in a good mood so just keep it in mind.
If you are destined to ride then consider these two tricks......
1. One Rein Pull: If few things are working for you try the one rein pull. You are turning the horses head to the side of her body in an effort to keep from losing control. This should be used only if you have no other option to protect yourself, others and the horse from injury. It will still be a bumpy stop but the horse will be force to cross over its hind legs.
2. Environmental Familiarity: Horses can be jumpy because they are unsure of their surroundings. It is as though they walked into a busy street and keep reacting to everything around them. Walk them around the area a number of times and prepare them for training at those facilities. Let them create a memory map of where they are and encourage them to sniff, stand, look around, etc... until they don't care. You may want to do this everyday until you reduce environmental impacts.
I might add as a side note that around Rapid River Michigan (and Bark River) you can find some pristine land with super cheap housing for horses. That is assuming you want to buy some land in the area and make a new life out of it. Its about 15 minutes out of town. The cost of boarding at a local ranch in the area is $235 with hay and grain but doing so yourself is much cheaper. I always thought someone could set up a fairly large horse ranch take in rescues and rehabilitate for the larger markets of Detroit, Milwaukee, Chicago (all under six hours drive). Just a thought for people who like that stuff.
Friese, M., Hofmann, W. & Wiers R. (May, 2011). On taming horses and strengthening riders: Recent developments in research on interventions to improve self-control in health behaviors. Self & Identity (3), 10. Retrieved https://doi.org/10.1080/15298868.2010.536417
Stomp, M., Leroux, M., Cellier, M., Henry, S., Lemasson, A., & Hausberger, M. (2018). An unexpected acoustic indicator of positive emotions in horses. PLoS ONE, 13(7), 1–23. https://doi.org/10.1371/journal.pone.0197898
Friday, January 3, 2020
Pure Michigan Campaign-The Value of Return on Investment to State Taxes
"Business has only two functions-Marketing and Innovation" (Milan Kundera). Pure Michigan, a state sponsored national marketing campaign launched in 2008, created a buzz highlighting the attributes of the Lady of the Lake state. Law Makers are confounded on precisely how much (or little) the campaign has contributed to her prestige and prosperity. Expert numbers span the spectrum leaving doubts and in turn a line item veto that removed the program from state budgets. This article is an effort to shed light on the merit of state-sponsored marketing in Michigan and what policies will improve the transparency and functioning of the program.
To assess the program's value we must ask ourselves two fundamental questions about Pure Michigan to better ensure the money is wisely spent. 1. Does it have a positive ROI? and 2. Does it have a negative ROI? A positive ROI could mean we should invest in it because it brings additional revenue while a negative ROI means its wasting taxpayer money.
Let me say that I'm not indifferent to the outcome. Working on some of my own economic theories, scientific literature has supported the idea that marketing state attractions can lead to multi fold benefits of lifestyle and tax generation. I'm also a resident of the Upper Peninsula of Michigan where much of the economy relies on tourism dollars. Yet I am also a man of science and believe that people should do their very best to understand such issues themselves through critical review.
Lets take a look and see what we can find....
Net Loss? Not everyone is so sure that the campaign earns what the contractor says it earns. They take the alternative perspective and believe it looses money and wastes tax payer dollars. The Michigan Center for Public Policy that advocates for research and education believes the numbers provided are over inflated and not accurate. It is suspected that significant costs, such as the costs of production, were not included in the calculations (Michigan Center for Public Policy, 2018).
To determine what an economic study indicates, and whether or not the numbers are meaningful, we can review the research questions and design. "The devil is in the details!" Strong designs seek to draw the most direct conclusions based on the simplest and most reasonable methods of data extraction, analyze and reporting. When the design is simple and parsimonious it often leads to better useful results.
Using numbers provided by one company to make determinations over millions of budgeting dollars and impact on people's lives can be risky. One of the ways to help ensure that numbers are not "way off base" is to put them within the context of other impact studies that calculated state & local taxes. Below you will find a table with four studies. The more studies you include, the more data and information you can get on ranges and benchmarks. For the purposes of this literature piece...good enough!
We already calculated the new ROI of $3.6 so we can use that to add in the local taxes. Calculation based on Self-Calculation derived from State Auditor Adjustments. State/Local ROI A/ Audit=($3.6 Self Calc.X44)/66=$2.4. New ROI $3.6+Local Taxes $2.4=$6
Six dollars ($6) per ($1) dollar invested is still a pretty good return on investment. As a state we have to decide if we want to include Pure Michigan funding in future budgets. We can conduct a political and strategic analysis to determine the most likely outcomes. However, in this case, I'm only going to conduct a generic strategic analysis in order to solidify my own thoughts.
Decision trees help us formalize our ideas, data and judgments to make choices from a lot of information. The one provided below is limited simply because it would take a lot of market research to collect all the data to make a market projection. Companies have included political analysis, environmental information, percentages, other research, competitor information, etc.... all to better understand the most likely options.
Ahmed, A. (2010). Measuring return on investment of tourism marketing. University of Minnesota Extension. https://conservancy.umn.edu/bitstream/handle/11299/167913/MEASURING%20RETURN%20OF%20INVESTMENTS.pdf?sequence=1&isAllowed=y
Hicks & Lafaive, (2016). State of Michigan. Office of Auditor General. Letter. https://audgen.michigan.gov/wp-content/uploads/2017/12/Pure-Michigan-Letter.pdf
Insights Strategic Marketing & Research 2017 (2017) Advertising Effectiveness & ROI (2017). https://travelwyoming.com/wp-content/uploads/uploads/industry/Wyoming%202017%20Ad%20Effectiveness%20FINAL.pdf
Lafaive, M. (January 9th, 2020). "Lawmakers Should Not Resurrect Pure Michigan Subsidy Program". Mackinac Center for Public Policy. Retrieved https://www.mackinac.org/lawmakers-should-not-resurrect-pure-michigan-subsidy-program
MEDC (2016) Report: Pure Michigan campaign is working.https://whtc.com/news/articles/2017/mar/24/pure-michigan-campaign-is-working/
Michigan Center for Public Policy (2018). New Pure Michigan Return-on-Investment Figure Won’t Include All Costs. Retrieved
New Hampshire (2017). 2016-17 Advertising Effectiveness & ROI. Insights Strategic Marketing and Research. https://www.visitnh.gov/getmedia/e1245092-c83b-4604-b69b-1c3ea8bb5171/NH-2016-17AdEffectiveness.PDF
To assess the program's value we must ask ourselves two fundamental questions about Pure Michigan to better ensure the money is wisely spent. 1. Does it have a positive ROI? and 2. Does it have a negative ROI? A positive ROI could mean we should invest in it because it brings additional revenue while a negative ROI means its wasting taxpayer money.
Let me say that I'm not indifferent to the outcome. Working on some of my own economic theories, scientific literature has supported the idea that marketing state attractions can lead to multi fold benefits of lifestyle and tax generation. I'm also a resident of the Upper Peninsula of Michigan where much of the economy relies on tourism dollars. Yet I am also a man of science and believe that people should do their very best to understand such issues themselves through critical review.
Lets take a look and see what we can find....
Pure Michigan = Positive or Negative ROI?
Net Return? There are those who feel the Pure Michigan initiative is well worth any state monies spent because of its financial returns. ROI on Pure Michigan was reported as $8.33 in 2016 (MEDC, 2017), $8.88 in 2017, and $9.28 in 2018 (SmareInsights, 2019) On the surface those are some pretty compelling numbers. Put a dollar in and wallah we generate wealth! (sort of)
There almost always is some alternative numbers and ideas out there. Critical thinking requires us to think through the positive and negative numbers to make an assessment. As a bonus we can provide improvements to the program that could raise its value to stakeholders.
There almost always is some alternative numbers and ideas out there. Critical thinking requires us to think through the positive and negative numbers to make an assessment. As a bonus we can provide improvements to the program that could raise its value to stakeholders.
A review entitled An Analysis of State-Funded
Tourism Promotion found that for every $1 million in state funding there was only $20K return for the hotel industry (Hicks & Lafaive, 2016). They looked at a number of studies and data from 48 contiguous states over a period of 39 years. That is a pretty compelling argument to ignore; even if focused on the benefits of hotels. One of the researchers and auditors provided additional context to his arguments (LaFaive, 2020).
In January 2020 a report came out sponsored by the Michigan Economic Development Corporation to determine advertisement effectiveness. An interesting read.
In January 2020 a report came out sponsored by the Michigan Economic Development Corporation to determine advertisement effectiveness. An interesting read.
How Study Design Impacts Results
Bad designs lead to even worse decisions! It is imperative that important research that impacts the people of a state lead to useful results. The ultimate purpose of research is to answer questions so we as a human species can make better choices. How we measure and interpret data influences its value for strategic justification. Collecting and interpretation often rests on multiple research studies that create a body of knowledge on the topic.
This mini review is not the final word on the topic and new information provides better conclusions. Since I'm not trying conduct a full scientific review the goal is to collect a "quick" review of similar studies and make a few basic calculations to come up with a reasonable ROI. There will be plenty of people who disagree due to the important nature of the topic.
It should also be noted that unbiased research is indifferent to the results. That means that a positive finding is as beneficial as a negative finding (at least in theory) because both are added to a body of knowledge. The body of knowledge is what other researchers use when they try and understand a problem and continue to investigate findings. Beware of research that is designed to find a specific result because it will skew all decision making based off of its findings.
It should also be noted that unbiased research is indifferent to the results. That means that a positive finding is as beneficial as a negative finding (at least in theory) because both are added to a body of knowledge. The body of knowledge is what other researchers use when they try and understand a problem and continue to investigate findings. Beware of research that is designed to find a specific result because it will skew all decision making based off of its findings.
One of the ways to ensure that results have some validity is to put it within the context of other literature that pertains to the same topic. In this case, most of the analysis seem to use the data of state and local taxes generated per dollar spent and the amount of money visitors spent each time they traveled to Michigan. While the approach seems valid adding another metric or two might counter the limited perspective of the data.
Miscalculated Costs According to the Auditor General
The Office of the Auditor General released the results of their report and found that a number of costs were not included that would have reduced return on investment (Ringler, 2017). They also found that state taxes were calculate, but local taxes were not, which would have increased the ROI.
1. Media Placement $3 Million (-)
2. Media Production $4.3 Million (-)
3. Production Monitoring $2.3 Million (-)
4. Pay-per-Click Advertising Costs $500,000 (-)
5. Public Relations $581,000 (-)
6. Partner Contributions $6.2 Million (-)
7. Local Tax Generation not collected (+)
======================================
Total: 16.9 million not included costs + unknown local taxes collected.
At this point we need to start doing some calculations. My disclaimer is that I'm not an accountant and if there is a better, or more accurate way, to complete these calculations let me know. Within the Auditor Generals findings we see that for 2017 Campaign Expenses are $12.9 million, State Tax Boost was $107.3 million, providing an ROI of $8.33 (Calculate as 107.3/12.9=$8.32). If we add the expenses that were originally not reflected in initial calculations we have ($16.9+12.9)= $29.8 million in total expenses.
It would make sense to calculate the new ROI (107.3/29.8)=$3.6. That is a much lower number than what was originally reported. The new number is still beneficial and worthy of serious consideration on its own. The ROI should go up a little more if we include any benefits to local taxes. This is somewhat dependent on whether it is enough money to be worth the calculation to substantially improve ROI. (*It might be worth someones time to research and calculate*.)
Someone Forgot About the Locals!
Right now our calculations are [($107.3+Unknown Local Taxes)/$29.8] =
something greater than $3.6.
Reviewing studies that separate out the impact of state and local taxes provides us a "rough" benchmark. More direct data for Michigan would further clarify local and state tax impact from tourism dollars. Because we do not have access to the raw data used in the study, we will do the best we can to find a number that "sort of" works.
To obtain a basic benchmark we can add up the 4 studies and get a simple average. More studies mean greater accuracy. (55%+44%+36%+42%)/4=approximately 44%
- Study 1: Colorado conducted a 15 month advertisement campaign in 2007 and came out with 62.4 million state taxes and $76.9 million local taxes (Ahmed, 2010). That calculates out to something like 55%.
- Study 2: We can look at similar states in the region to determine how their tourism taxes are dived up. A report in 2019 discusses the economic impact of federal, state and local taxes in the adjoining state of Wisconsin (Tourism Economics, 2019). State taxes in 2018 were $879 and local taxes were $703. ($879+703)/703=44%.
- Study 3: Here is an old study in 1994 from the U.S. Advisory Commission on Intergovernmental relations that indicated, "State governments collected 64 percent of total state and local travel tax revenues in 1991; local governments collected 36 percent ( U.S. Advisory, 1994)".
- Study 4: In 2006, Virginia report stated that there were $7.2 million and local taxes $5.2 million. That calculates out to approximately 42%. We can also include an impact study of domestic travel to the state in 2018 that showed that between state and local 44% of taxes were collected by local governments (U.S. Travel Association, 2019).
What the Research Says?
Using numbers provided by one company to make determinations over millions of budgeting dollars and impact on people's lives can be risky. One of the ways to help ensure that numbers are not "way off base" is to put them within the context of other impact studies that calculated state & local taxes. Below you will find a table with four studies. The more studies you include, the more data and information you can get on ranges and benchmarks. For the purposes of this literature piece...good enough!
- Study 1 A study reviewed the impact of state spending on 11 states, including Michigan, from 2000 to 2010. The studies were conducted by SMARI, Longwoods and in one case Minnesota Department of Trade & Economic Development.The average ROI is 4.3% with a range of $2.4 to $20 (Ahmed, 2010).
- Study 2 In 2017 Wyoming put their Tax ROI from advertising dollars at $10.28 (Insights Strategic Marketing & Research, 2017).
- Study 3 A 2016 to 2017 $8.50 per dollar invested (New Hampshire, 2017).
- Study 4: Oklahoma posted $7 state and local taxes ROI for 2015 and 2016 (Oklahoma, 2017).
The Upper and Lower Range of Pure Michigan ROI
Lets start with a base number. The average for Pure Michigan 2006 to 2016 based on a review without local tax included (Ringler, 2017) Average Pure Michigan ROI= $5.49. We will then add in the 44% from state taxes to obtain a total. Local Taxes=(5.49X44)/66=$3.7. Once we add together the average ROI and the Local Taxes we have an upper limit based on an average. Upper Limit Average=$9.19
We already calculated the new ROI of $3.6 so we can use that to add in the local taxes. Calculation based on Self-Calculation derived from State Auditor Adjustments. State/Local ROI A/ Audit=($3.6 Self Calc.X44)/66=$2.4. New ROI $3.6+Local Taxes $2.4=$6
The range for the combined state and local tax impact is $6- $9.2 ROI for 2016-2017. New numbers may change this but by using the State Auditors report we can sort of come to a closer government supported number.
Standing back and taking a birds eye view of the problem it would seem that overly optimistic projections had an impact on perceptions. It is hard to ignore the State Auditor's recommended adjustments as they have a responsibility to be as objective as possible. The public trust rests in the government function and after calculating their recommendations, and adding in the projected local taxes, we come out with approximately $6 return for each dollar invested (ROI).
Personally, I like $6 as a conservative number when calculating costs, profits, expense, etc... We are dealing with a lot of unknowns and numbers can be significantly skewed based on the design of the study, how data is extracted, which data is extracted, and how it is calculated and reported. Going conservative leaves a greater likelihood that people will work with caution and think through options.
Mostly, I like it because it is based on some calculations brought forward by the State Auditor and implicitly accepted by Longwoods. The auditors report indicates a number of missed expenses but also recognized that local taxes were not included in their calculations. That leaves me with the understanding that Longwoods agrees in part to the findings or otherwise a rebuttal would have been issued.
Personally, I like $6 as a conservative number when calculating costs, profits, expense, etc... We are dealing with a lot of unknowns and numbers can be significantly skewed based on the design of the study, how data is extracted, which data is extracted, and how it is calculated and reported. Going conservative leaves a greater likelihood that people will work with caution and think through options.
Mostly, I like it because it is based on some calculations brought forward by the State Auditor and implicitly accepted by Longwoods. The auditors report indicates a number of missed expenses but also recognized that local taxes were not included in their calculations. That leaves me with the understanding that Longwoods agrees in part to the findings or otherwise a rebuttal would have been issued.
State Strategic Choices
Six dollars ($6) per ($1) dollar invested is still a pretty good return on investment. As a state we have to decide if we want to include Pure Michigan funding in future budgets. We can conduct a political and strategic analysis to determine the most likely outcomes. However, in this case, I'm only going to conduct a generic strategic analysis in order to solidify my own thoughts.
Decision trees help us formalize our ideas, data and judgments to make choices from a lot of information. The one provided below is limited simply because it would take a lot of market research to collect all the data to make a market projection. Companies have included political analysis, environmental information, percentages, other research, competitor information, etc.... all to better understand the most likely options.
Options (no particular order)
1. Nix Pure Michigan. If we don't believe the numbers, don't feel it provides any benefits to the the people of the state lets get rid of it. In this case, $6 dollars indicates the program does have value. A decision to remove would likely be based on limited resources and trust in its function. We are dealing with comparative advantages of programs (i.e. roads or marketing).
2. Adjust the Funding. There are options here that include partial funding. For example, the state may want to provide a matching budget to public sponsored funding. For example, if the business community can come up with $30 million the state would match that $30 million. Another option could be to provide tax incentives to businesses that put money into state sponsored funding.
3. Leave "As Is" with Some type of Budget: Utilize the budget for last year, increase, or reduce it. Lawmakers could decide that the value of the program is worth the expense and may choose to provide a budget.
The value of research is often based in its practical utility. Research rests on creating models and we should use what we learn to continue to improve the model. In this case, we have some value that may have not been realized and we have better alignment of marketing messages with short-and long term needs.
Future Considerations
1. Adjust the message to include the key marketing components of tourism (short-medium strategy) and investing (long-term strategy).2. It is possible to determine the long-tail value of marketing such systems. Someone should determine that value.
3. Encourage corporations to include key aspects of the two marketing components into their own marketing campaigns to create wider reach and recall of the total message.
4. Encourage clusters to market and attract businesses, talent, and resources to enhance their clusters.
5. Create better audit functions through either state or subcontracted firms that are willing to review the research and numbers.
6. Calculating the long-tail of marketing (year over year improvements) and Federal tax influence can provide a broader perspective.
**If you have better numbers, or a similar study and want me to link to it as another perspective let me know**
3. Encourage corporations to include key aspects of the two marketing components into their own marketing campaigns to create wider reach and recall of the total message.
4. Encourage clusters to market and attract businesses, talent, and resources to enhance their clusters.
5. Create better audit functions through either state or subcontracted firms that are willing to review the research and numbers.
6. Calculating the long-tail of marketing (year over year improvements) and Federal tax influence can provide a broader perspective.
**If you have better numbers, or a similar study and want me to link to it as another perspective let me know**
The Context of Research
I'm working on my own research related to transactional clusters that rests in part on Creative Destruction, Theory of the Firm and Social Networking Theory to foster innovative growth in industries. Part of literary section focuses on pack (coordinated) advertising as well as coordinated investments. Effective advertising can lead to the enhancement of Michigan based industries (or any other state) that improve economic prospects. Its not a finished (or completely edited) work but you may read here.
Ahmed, A. (2010). Measuring return on investment of tourism marketing. University of Minnesota Extension. https://conservancy.umn.edu/bitstream/handle/11299/167913/MEASURING%20RETURN%20OF%20INVESTMENTS.pdf?sequence=1&isAllowed=y
Hicks & Lafaive, (2016). State of Michigan. Office of Auditor General. Letter. https://audgen.michigan.gov/wp-content/uploads/2017/12/Pure-Michigan-Letter.pdf
Insights Strategic Marketing & Research 2017 (2017) Advertising Effectiveness & ROI (2017). https://travelwyoming.com/wp-content/uploads/uploads/industry/Wyoming%202017%20Ad%20Effectiveness%20FINAL.pdf
Lafaive, M. (January 9th, 2020). "Lawmakers Should Not Resurrect Pure Michigan Subsidy Program". Mackinac Center for Public Policy. Retrieved https://www.mackinac.org/lawmakers-should-not-resurrect-pure-michigan-subsidy-program
MEDC (2016) Report: Pure Michigan campaign is working.https://whtc.com/news/articles/2017/mar/24/pure-michigan-campaign-is-working/
Michigan Center for Public Policy (2018). New Pure Michigan Return-on-Investment Figure Won’t Include All Costs. Retrieved
Oklahoma Come See for Yourself (2017). OTIA Board. https://www.otia.info/docs/OTIA_Board_Presentation_2.9.2017.pdf
Tourism Economics (2019) The Economic Impact of Tourism in Wisconsin. http://industry.travelwisconsin.com/pdfs/wi%20economic%20impact%202019%20final.pdf
U.S. Travel Association (2019). The Economic Impact of Domestic Travel On Virginia Counties 2018. A Study Prepared For Virginia Tourism Authority Doing Business as Virginia Tourism Corporation. https://www.vatc.org/wp-content/uploads/2019/09/2018-Economic-Impact-of-Domestic-Travel-on-Virginia-and-Localities.pd
U.S. Advisory Commission on Intergovernmental relations that indicated (1994). Revenue Diversification. https://library.unt.edu/gpo/acir/Reports/information/M-189.pdf
U.S. Advisory Commission on Intergovernmental relations that indicated (1994). Revenue Diversification. https://library.unt.edu/gpo/acir/Reports/information/M-189.pdf
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