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Illustration: Rebecca Zisser / Axios

ANN ARBOR, Mich. — On the outskirts of the University of Michigan campus, there's a sight that instantly shows how much the area has changed: A sensor-connected car steered by an Xbox controller roams the streets of what is known as "M-City" to test self-driving and other connected-car technologies.

Why it matters: Michigan is known for its auto industry expertise but experienced a steep decline a decade ago when Detroit — its biggest city — lost half its population as manufacturing jobs left in droves. Detroit is fighting its way back to build a burgeoning tech scene. Ann Arbor, only 40 minutes away, is taking a complementary path: It's harnessing the university's high-tech talent factory and the state's auto factory history to be at the forefront of next-generation vehicle development.

Self-driving car city: M-City is a public-private partnership funded by 70 members including major car manufacturers, chip makers, wireless and insurance companies. Every year, it receives about $1.2 million to research things like how humans will interact with self-driving cars and how cities will need to be designed for them.

"There's a lot of disruption happening in a very short time frame," said Greg McGuire, M-City Lab Director. "We're running living laboratories" to test capabilities and effects.

  • Ann Arbor is also wirelessly connected using vehicle-to-vehicle communications technology called DSRC so that intersections and vehicle can communicate with each other.
  • 2,000 privately owned vehicles are "driving" around Ann Arbor broadcasting messages back and forth 10 times a second.
  • McGuire said a few cars will be deployed on campus next month to research how students, bicycles and other cars interact with them.

The problem: There aren't enough investors tuned in to Michigan startups, and not enough Michigan-based investors in general. As more and more Silicon Valley companies move into the self-driving car market, Michigan has stiff competition for investment, talent and attention. A lot of the university's graduates are now realizing that if they don't take the opportunity to start companies to tackle components of self-driving cars, Tesla or another Bay Area startup will, said Emily Heintz, associate director of the Michigan Venture Capital Association.

By the numbers: 78% of the total capital invested in Michigan startups last year came from out-of-state investors, according to the association. More than half of the state's venture capital currently goes to Ann Arbor-based startups.

  • Currently, there are 141 venture-backed startup companies in Michigan, an increase of 48% over the last 5 years.
  • But an estimated $504 million of additional venture capital will be needed to adequately fund the growth of those companies over the next two years alone, per the MVCA.
  • Every $1 invested in a Michigan startup by a Michigan-based venture capital firm attracts $4.61 of investment from outside Michigan.

Another problem: Old-fashioned Midwestern humility, as Michigan Governor Rick Snyder puts it. Even though Michigan is one of the better-performing Midwestern states when it comes to startups, he says, people don't know about it. "We have to do a better job telling our story — no one else is going to tell it for us."

Go deeper

Kids’ screen time up 50% during pandemic

Illustration: Sarah Grillo/Axios

When the coronavirus lockdowns started in March, kidstech firm SuperAwesome found that screen time was up 50%. Nearly a year later, that percentage hasn't budged, according to new figures from the firm.

Why it matters: For most parents, pre-pandemic expectations around screen time are no longer realistic. The concern now has shifted from the number of hours in front of screens to the quality of screen time.

In photos: D.C. and U.S. states on alert for pre-inauguration violence

National Guard troops stand behind security fencing with the dome of the U.S. Capitol Building behind them, on Jan. 16. Photo: Kent Nishimura / Los Angeles Times via Getty Images

Security has been stepped up in Washington, D.C., and state capitols across the U.S. as authorities brace for potential violence this weekend.

Driving the news: Following the Jan. 6 insurrection at the U.S. Capitol by some supporters of President Trump, the FBI has said there could be armed protests in D.C. and in all 50 state capitols in the run-up to President-elect Joe Biden's inauguration Wednesday.

17 hours ago - Politics & Policy

The new Washington

Illustration: Sarah Grillo/Axios

The Axios subject-matter experts brief you on the incoming administration's plans and team.

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