From a historic industrial giant to a cutting-edge leader in technology and innovation, Michigan is writing the next chapter in its story. With strategic investments and a bold vision, the state is shaping a thriving ecosystem for tech and entrepreneurship.
As Ben Marchionna, Chief Innovation Ecosystem Officer at the Michigan Economic Development Corporation, says: “Michigan boasts a rich industrial heritage that not only provides a solid foundation for innovation but also ingrains in us a deep understanding of how to build and create at scale.”
These investments and support not only led to a 1000% growth in venture capital funding from 2016-2020 but also earned Michigan a top 10 spot in CNBC’s 2024 Top States for Business.
Contributors to the Rise of Michigan’s Tech Ecosystem
Michigan’s future relies on innovation and technology. To continue to grow in those areas, the state is fostering a culture where ideas flourish.
“Michigan's competitive edge comes from a synergistic blend of industrial prowess, academic excellence, affordable living, and a forward-thinking approach to innovation and economic development,” Marchionna explains. “We're not just competing with other states; we're setting new standards for what a dynamic, resilient, and innovative economy can be.”
This competitive edge allows Michigan to strategically invest in the thriving tech scene by nurturing its tech ecosystem in key areas.
Education
At the heart of Michigan's innovation is the University Research Corridor (URC) — a collaboration between the University of Michigan, Michigan State University, and Wayne State University. Together, these institutions drive $2.87 billion in annual R&D, fueling breakthroughs in life sciences, mobility, and beyond. Driven by a combination of these research institutions and a strong corporate R&D ecosystem, Michigan ranks eighth in total R&D performed as a percentage of state gross regional product.
Michigan’s universities fuel innovation and startups rooted in new technologies. In 2024, the University of Michigan launched 28 startups ranging from robotics to healthcare technology. To support early-stage ventures, the state offers initiatives like the Michigan University Innovation Capital Fund (MUICF), a pre-seed venture fund for public university startups.
Similarly, the Michigan Translational Research and Commercialization (MTRAC) Program helps transfer new technologies from the research phase into the commercial market. The program set up five innovation hubs across the state to support projects from universities, hospital systems, and nonprofit research centers.
These programs reinforce the state’s commitment to entrepreneurship, innovation, and economic growth.
“The state's steadfast commitment to building innovation hubs and investing in state-of-the-art infrastructure is cultivating an environment where tech growth isn't just possible — it's inevitable,” Marchionna says. “Entrepreneurs are being given the resources they need to turn visions into reality, and we’re continuing to sharpen our focus here.”
Entrepreneurial Culture and Funding
Startups in Michigan have a solid and rapidly expanding support system, both from entrepreneurial communities and official programs. Detroit was recently named the #1 emerging startup ecosystem in North America (and #7 globally).
In 2023, the Michigan Venture Capital Association (MVCA) reported over $1 billion invested in Michigan-based portfolio companies. The majority of funds went to Series B or later rounds, but pre-seed funding had the highest deal count.
This funding activity is built on the foundation established between 2016 and 2020 when Michigan was the fastest-growing state for venture capital investment. At that time, DuoSecurity, a cybersecurity startup founded in Ann Arbor, was acquired by Cisco for $2.4 billion, becoming Michigan's first unicorn, a startup valued at over a billion dollars. Since DuoSecurity, other unicorns have emerged from Michigan — Llamasoft, Rivian, OneStream, StockX, May Mobility, and Groundspeed Analytics — demonstrating that Michigan is successfully building the foundation for high-growth startups to thrive.
State Support
In 2005, Michigan enacted SmartZones to spur technology development and business creation. Since their inception, 20 SmartZones have catalyzed technology development by offering startups the resources needed to launch and scale — from funding opportunities to building business structures, developing products, and more. Supporting founders and startups with the necessary tools and funding reflects Michigan’s commitment to entrepreneurship and its role in the tech ecosystem’s growth.
Michigan’s Growth Office launched two new programs in 2024: Pitch MI and Make MI Home.
PitchMI is a statewide pitch competition where the state will invest $100,000 into the winner’s innovative mobility solution. Make MI Home is a first-of-its-kind regional talent retention and attraction pilot program focusing on either retaining current residents or attracting new ones to make Michigan their home. In October 2024, more than $600,000 was awarded to five consortiums across the state for their innovative growth programs.
“We're creating spaces where ideas can flourish, and entrepreneurs have the resources they need to turn visions into reality. But perhaps the most critical ingredient is the grit, resilience, and unyielding determination of Michiganders themselves,” Marchionna says.
Affordability and Cost of Living
Affordable living paired with vibrant cities like Ann Arbor, Detroit, Grand Rapids, and Traverse City offers young professionals a rare mix: career growth and a thriving quality of life. The cost of living in Michigan is more reasonable than the traditional tech hubs of the coasts.
“This makes Michigan an attractive destination for startups and young professionals seeking both career opportunities and a high quality of life,” Marchionna remarks.
As more young professionals settle into these cities, the entrepreneurial and tech communities will only continue to grow.
Michigan’s strategic investments across key areas like education, business development, and innovation prime the state for renewed growth.
“By capitalizing on these strengths, Michigan is beginning a new shift from an industrial manufacturing economy to a high-tech economy, positioning ourselves as a leader in innovation and technology,” Marchionna says.
The Road Ahead: Prospects and Opportunities
“In the next few years, I envision Michigan solidifying its position as the innovation hub of the Midwest and becoming America's ‘Scale-up State,’” Marchionna shares. “In ten years, I anticipate that Michigan can rival traditional tech hubs, not just in startup activity but also in attracting global talent and hosting groundbreaking research and development projects.”
His vision is predicated on Michigan’s ongoing investment and strategic initiatives that foster increased venture capital activity and stronger collaboration between universities, corporations, and government.
Ben sees initiatives like the Innovation Fund, a $60 million project, as a way to help hundreds of new Michigan-based companies launch and create thousands of jobs. This fund will provide crucial support to early-stage startups, ensuring that innovative ideas have the resources they need to thrive.
Industries With Growth Potential
While Michigan’s strong automotive and manufacturing industries remain important, new technologies and emerging industries will help propel the tech ecosystem forward.
The state is driving growth in key areas like semiconductors, AI, electric vehicles (EVs), and renewable energy through strategic investments, grants, and training programs. For example, Michigan hosts one-third of U.S. battery production, with $28 billion invested by manufacturers between 2018 and 2023. By 2030, it’s projected to be one of the top three states in EV battery manufacturing.
Similarly, renewable energy and climate innovation is an industry ripe for innovation. Michigan launched its Michigan Climate Investment Accelerator in 2024 to attract billions of dollars to finance the development of clean energy projects for consumers, businesses, nonprofits, and local governments statewide. A new report from Climate Power shows Michigan continues to be a national leader in clean energy and electric vehicle manufacturing, with clean energy jobs growing nearly twice as fast as economy-wide employment.
“This diversification strengthens our tech ecosystem and opens up new opportunities for innovation and economic growth,” Marchionna points out. “Inclusive growth across all communities will help us tap into the full spectrum of talent and ideas, driving innovation and economic prosperity for everyone in Michigan.”
