New Year brings familiar challenges for economic development
A gap in skilled talent remains top of mind.
Economic development organizations such as Grand Rapids-based The Right Place Inc. and Zeeland-based Lakeshore Advantage seek to drive economic prosperity in the West Michigan region by attracting, retaining and expanding businesses and providing support for job seekers and potential talent.
In 2015, The Right Place helped facilitate 16 projects that resulted in more than 1,320 new and retained jobs, $169.9 million in capital investment and $44.2 million in new payroll to the region.
In Ottawa County, Lakeshore Advantage brought more than $10.5 million in value to lakeshore-based businesses and more than $250 million in new private sector investment between Jan. 1, 2014, and Dec. 31, 2014.
However, challenges remain for the upcoming year.
During the 2016 Economic Outlook for West Michigan held earlier this month, Birgit Klohs, president and CEO at The Right Place, indicated three challenges and opportunities for 2016: available sites and buildings, access to broadband, and talent and low unemployment.
Klohs said The Right Place is working with organizations such as Hello West Michigan, community colleges, Michigan Works and Talent 2025 to identify where gaps remain, what skills are needed, and then communicate the information to their partners.
“It is both ends of the spectrum: on one hand, making sure people understand the skills required for today’s work environment, and on the other hand, how do we get people back into the workforce and train them,” said Klohs. “It is a challenge across the state. There are more than 90,000 job openings in Michigan, and we need to find the talent or train the talent and look at those populations that are not engaged in the workforce.”
Michigan’s unemployment rate is around 5 percent, while the Grand Rapids metropolitan statistical area is at 3.3 percent with 18,500 individuals unemployed, according to the 2016-2017 Employment Forecast for Grand Rapids-Wyoming prepared by George Erickcek, senior regional analyst at the W.E. Upjohn Institute.
Ottawa County’s unemployment rate is also below what is considered full employment with a rate of 3.1 percent as of April 2015, according to the United States Bureau of Labor Statistics.
Jennifer Owens, president and CEO at Lakeshore Advantage, said the county currently has the lowest unemployment rate in the state, and the primary focus for the region for the next year will be addressing talent development and attraction.
“We are working closely with our school districts, our universities, our employers and our HR professionals to develop solutions that make sense to attract talented professionals into the region and also develop the talent our employers need to make sure the significant amount of time going into worker recruitment is alleviated,” said Owens.
To address the issue, Owens said the organization is identifying where the most significant gaps are and looking to attract professionals with past ties to the region.
“We will be spending some time researching the in-demand positions in partnership with Talent 2025, and the next step will be working very closely with, more than likely, our university and college systems to look at concentrations of those professionals who are not currently located in our region,” said Owens.
Last year Lakeshore Advantage began developing a video series that profiles various jobs in the manufacturing industry; a next step might be to highlight specific in-demand positions to share with local school districts.
“We are working closely with at least one, maybe two, of our superintendents to pull that together … so we can make sure students understand what the careers are for the future,” said Owens.
Owens said she is excited about the tremendous amount of employment opportunities.
“We have phenomenal companies that are innovating, creating, automating — and every single one of them is looking at a very strong 2016,” said Owens. “So our organization is really looking forward to coming alongside them and helping them to achieve those great visions and outlooks, and make sure those results, jobs and investment are in the region.”
Owens mentioned another trend occurring now and potentially in the future is the number of mergers and acquisitions as employers reach the stage where they need to join together or sell to move up to the next level.
“Looking forward, I see that will continue, and we need to see it as a way to develop a new relationship with these larger companies that may be taking on a West Michigan employer,” said Owens.
Klohs indicated a lot of companies in the West Michigan region are operating on a global scale and must be aware of issues such as exchange rates, political risks and investment risks.
“China’s industry still has a growth of 5, 6 percent, but that is a long way from 10 and 12 percent; Brazil’s economy has completely tanked; commodity prices are awkward. So those are all things companies 10 to 15 years ago, when you were a mid-size company, didn’t need to pay attention to,” said Klohs.
“You need to be very cognizant of what is happening politically, what is happening with the currency, and what is happening with commodities.
“Internationally, things are very interesting right now, and that includes political risk in some of the countries and the unstable situations in some places around the world,” continued Klohs. “You have to be very, very smart about how you do that.”