Lakeshore Economic Development Is Turning Corner

August 26, 2005
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Business Journal Staff Writer Elizabeth Sanders sat down recently with Randy Thelen, president of the regional economic development group Lakeshore Advantage, to talk about the economic climate of the lakeshore area.

Q: How do you evaluate the Holland and Zeeland area economy now?

A: I would say we’re continuing to make strides forward. It’s no longer one step forward (and) two steps back. We’re definitely making some progress. We’re seeing some turnaround, a strong turnout in the furniture industry, which certainly has rippled through the supplier base.

Last year the lakeshore region led the state in property tax abatement. We had more property tax abatement than any other county in the state. That really is a sign that we had a number of projects that are quieter and behind the scenes, but over time they add up, and those types of investments have similar spillover effects.

If you walk in downtown Holland or downtown Zeeland, you will see in the upper floors a lot of service-related companies. If you notice … the parking lots are full in downtown, not only from the retail trade but also from the office trade. We’ve seen a fair amount of service industry growth there, as well.

Q: What do you think the future of the area is? Is it going to be in manufacturing or is it leaning toward service-oriented businesses?

A: We certainly have a very strong manufacturing base right now and I think in round numbers that percentage is around 40 percent of our employment base. But that’s not to say those companies are traditional manufacturing companies. The majority of those jobs have already been converted to more technology-oriented work and service support within those manufacturing companies. Those numbers, I don’t think, are truly reflective of the type of work that takes place within some of our companies.

But I do think that going forward we will continue to have a base of manufacturing. We excel at it; we’ve got a great deal of expertise in finding better ways to build that mousetrap. And so we’re going to continue to have some basic manufacturing here in Michigan.

Our task going forward is, can we take that expertise and apply it in the new market? Can we apply it in the service area?

We’ve got a growing design engineering base of companies. I think that’s a real company strength for us, particularly here on the lakeshore. We’re seeing a growth in the health sector and health services. We have both of our hospitals expanding. It seems like every other corner, there’s a doctor’s office or medical facility of some type going up to serve the growing population.

We’ve become a financial center of sorts. We have a growing financial services sector and insurance sector.

We have a very competitive financial market here in West Michigan. In fact, we’ve heard from several of the bigger companies in the area that they have moved their banking to West Michigan because of that competitive pricing and the competitive nature of the market here.

Q: What impact do you think Lakeshore Advantage has had on the economy?

A: I’m always of the opinion that the primary credit for the expansion of jobs here goes to those entrepreneurs and the executive teams that are making those tough decisions: the Dick Haworths making that decision to grow here in Holland vs. another location; the Slikkers family at Tiara Yachts making those decisions.

Here at Lakeshore Advantage we’ve had an impact on making sure our companies here on the lakeshore have access to aggressive incentive packages to make those decisions easier.

Now we’re beginning to grow our services here at Lakeshore Advantage, and one of the things we’re doing is trying to find a way to bring the best practices that are inherent in some of our companies, bring those best practices out so some of our smaller and growing companies can learn from each other.

We have formed what we call the Lakeshore Innovation Council, which is a CEO-level group designed to bring those best practices to the forefront, bring some of those ideas so that companies big and small, manufacturing and service alike, can learn some of the best practices that are taking place within a Johnson Controls or within a Gentex.

We’re starting this effort along the lakeshore, but we certainly work closely with the folks in Grand Rapids and Muskegon.

For regions to be successful, there has to be a high degree of collaboration, not just among the economic development organizations but also among the business communities. That’s a big part of our agenda for this year.

Q: Why do you think collaboration is so important?

A: I would equate it to mentorship for an entrepreneur. … Often times the most successful small businesses will rely on a strong mentorship from other business leaders. That same concept is going to apply to companies big and small. If you’re leading a major company or you’re leading a company of 10, having access to the expertise of other companies in the region can help open your company up to new ideas and to new methods to improve your company.

Q: What would you like to see in the area in the next few years?

A: While we believe manufacturing will continue to be a major portion of our economy here, there is a need to continue to see additional service sector job growth here. I think our best efforts are going to be to take some of those skills that are inherent in manufacturing and apply it to new fields and apply it in different ways. The growth that we’ve seen in design engineering is one way that’s happening.

We also have a number of firms that have taken their marketing expertise and are serving clients from across the county and around the world. I think it’s one thing to start a service company to reach our local region; we’re working with service companies that are looking to find markets across the country and around the world.

Q: Why is reaching a global market important?

A: Historically, the economic developers have targeted the manufacturing sector because manufacturing brings in the sales dollar from outside of the region. It helps grow the pot of money and the pot of dollars within the region. Some service companies are circulating those existing dollars within the region; they’re serving the local market and not attracting the outside dollar. For the service industry to have major spillover and multiply our effect along the same lines as manufacturing, we need to have that same mindset that has them bring in those outside dollars from outside of the region.

Q: What else is on your mind?

A: I know there has been a lot of coverage in the last five years of the downturn in the furniture industry and the closing of LifeSaver, etc. If you look at the numbers, our unemployment right now is getting better and better. We’ve seen over the last year sizable investment from major companies here in the area that’s led to additional invest from their supply base that’s added a good number of jobs to the region. We have a growing health sector, service sector. I think, not just here on the lakeshore but for all of West Michigan, we have taken our economic hit, but in relation to the balance of Michigan we are arguably the strongest part of the state right now. Whenever we talk about the downturn, we need to keep some of that in perspective.    

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