Restructuring Needed For Job Growth

April 2, 2004
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GRAND RAPIDS — Twenty years ago a group of local business leaders started an economic development organization focused on the creation, expansion and attraction of jobs.

The organization came to be known as The Right Place Inc.

“They wanted a community that would create a fertile ground for small, homegrown businesses, as well as a fertile ground for new companies, both domestic and international, and they were willing to put their own money on the table,” recalled Right Place President Birgit Klohs.

Manufacturing has been the economic base in Grand Rapids for 150 years, Klohs told about 80 members of GlimaWest, the Interactive Association of West Michigan, at the organization’s recent meeting.

From the late 1980s to about 2001, Michigan created 30,000, good-paying manufacturing jobs and outgrew every state in the upper Midwest, she said. Many of those jobs are now gone and aren’t coming back.

“At the time that strategy was absolutely right on,” Klohs remarked. “Today we cannot just decide that all of that is bad and just let it all go. But I will be the first one to tell you that we are restructuring.”

Based on study and analysis of what has been happening locally, regionally and globally, the Right Place has come up with a five-year regional economic development plan to drive job growth in West Michigan.

The creation, retention, attraction and expansion of jobs remain the top priority over the next five years, she said.

Klohs noted that the Right Place makes retention calls on 240 to 280 companies per year.

“We don’t want our manufacturing companies to go somewhere else. The competition for those jobs is enormous. If we don’t stay in touch with these people, they’ll move away.”

The organization also does a lot to attract companies to West Michigan, she said, such as attending trade shows all over the country to pitch this region.

Another priority is identifying new growth opportunities.

Health sciences, advanced technology, homeland security and life sciences are the evolving growth industries in the West Michigan region and the state.

There’s a lot of “incredible” activity in the life sciences and biosciences going on in the Michigan Street Hill area, Klohs pointed out, adding that the Van Andel Research Institute is a gift that no one ever thought Grand Rapids would ever have.

The institute was built in a very strategic location right next to Spectrum Health and there’s now a lot of synergy developing on Michigan Street Hill, she said.

Adding to the synergy is Grand Valley State University’s Cook-DeVos Center for Health Sciences.

Part of the new strategy is to create and attract new and different kinds of jobs in the health sciences, which could be anything from spin-offs of the VAI to intellectual property coming out of Spectrum Health.

Kohls said that in just four years the VAI has become known as one of the world’s top cancer research centers and has attracted “truly world-class” talent.

“We have wet labs, we have venture capital, we have intellectual capital and we have cancer research. Who would have ever thought we’d have that kind of richness of a new enterprise forming up on the hill?

“We want to mine that intellectual property.”

The Right Place also is looking carefully at the aerospace industry’s potential to create high-paying jobs in West Michigan. The region already has the start of an industry cluster that’s developing some very high tech products, she said.

The Muskegon SmartZone, which is focused on the development of alternative energy sources, could prove to be another big job generator for the region, she said.

“If we’re going to have alternative energy devices, there are manufacturers here who can make them. So we’re trying to introduce manufacturers to that whole new plethora of what could be coming out of fuel cells.”

The Right Place wants to continue working with manufacturers but at a different level, concentrating particularly on the small companies that seem to need some help getting down the innovation path, Klohs said.

“We’re looking at a model of kind of conglomerating some of the small companies and leveraging knowledge. We’re working with Washington to see what kind of funds are available to stimulate that kind of innovative process.”

The use of urban redevelopment tools such as Renaissance Zones and brownfields, which offer tax incentives to encourage reuse of old properties and buildings, have “added incredible richness” to the urban landscape, Klohs remarked.

“We want to continue very much to focus on that urban redevelopment strategy.”

Klohs said The Right Place intends to continue to think regionally, as well.

As she pointed out, the metro Grand Rapids labor market now includes 13 counties, and the Grand Rapids combined statistical area (CSA) now includes Kent, Ottawa, Muskegon, Allegan, Ionia, Barry and Newago counties.

The U.S. Office of Management and Budget created the CSA classification in June 2003.

CSAs are composed of adjacent metropolitan and micropolitan statistical areas (MSAs) that have demonstrated economic or social linkage.

A CSA is automatically created when there is 25 percent or more employment “interchange,” or commuting, between MSAs, according to the Office of Budget and Management.           

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