Economic Development and Lakeshore

Lakeshore growth outshines Midwest

September 29, 2017
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(As seen on WZZM TV 13) Since 2010, Lakeshore Advantage has compiled an annual report on the economic outlook of Ottawa County. This year, it decided to enlist other agencies to add data from Muskegon and Allegan counties.

The 2017 West Michigan Lakeshore Region Business Intelligence report found the Allegan-Muskegon-Ottawa region outpaces the U.S. Midwest in business growth, sales, research and development by wide margins.

The lakeshore also scored higher for community strengths, such as quality of life, employee work ethic and business climate.

Jennifer Owens, president of Lakeshore Advantage, said her organization agreed to collaborate with counterparts in the other two counties at their requests.

“We have a very strong regional collaborative, and Ed Garner, who actually just left Muskegon Area First, realized this was a valuable tool and wanted to extend it to Muskegon,” she said. “We also got a heads-up from Allegan County and they said, ‘Yeah, we want to be in, too.’ Then the Grand Haven chamber wanted in, too.

“They collected their data, then provided it back to us, and we analyzed it.”

The expanded geographical footprint allowed for comparison of the West Michigan Lakeshore Region to the U.S. Midwest, defined in the report as Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio and Wisconsin.

Project partners included Allegan County Economic Development Commission; The Chamber of Grand Haven, Spring Lake and Ferrysburg; Lakeshore Advantage; Muskegon Area First; Talent 2025; and the West Coast Chamber of Commerce.

The report is the analysis of 117 interviews with the region’s primary employers on the economic strengths, growth opportunities and barriers to growth they face. Primary employers are defined as those that export goods and services out of the region and bring wealth back into the community.

The survey administrators used a seven-page, 38-question evaluation and analysis tool called Synchronist to conduct the interviews — the same survey used by the rest of the Midwest.

“It’s a structured conversation,” Owens said. “In the report, when we’re comparing (the lakeshore) head to head with the Midwest, those questions are asked to the Midwest in the same way. The Midwest data is provided by the national research organization, and it’s collected in the same way we do, with face-to-face interviews with the business leaders and CEOs.”

The report found that 94 percent of West Michigan Lakeshore Region company leaders indicated their sales were either increasing or stable, compared to 66 percent of Midwest companies.

Sixty-eight percent of West Michigan Lakeshore Region companies reported international sales, versus 26 percent of Midwest companies.

Seventy-five percent of West Michigan Lakeshore Region companies indicated they planned to expand in the next three years, compared to 50 percent of companies in the Midwest.

The anticipated private investment for the West Michigan Lakeshore Region in the next three years is $258 million, and the number of jobs projected to be created during that period is 1,906 for all three counties (see chart).

West Michigan Lakeshore Region companies flexed muscles in the area of research and development investment, with 82 percent of them saying they invest in R&D, versus 49 percent of Midwest companies.

Ninety-one percent of West Michigan Lakeshore Region companies interviewed said they released a new product or service in the past five years, and 82 percent plan to do the same in the next two years.

Owens said the constant discovery in the lakeshore region was an energizing finding for her.

“I think one of the a-ha (moments) for me … is we have a very strong base of manufacturers who contribute to R&D in developing new products,” she said. “That continual innovation and ‘what’s next’ is what continues to drive the region and make it strong.

“We also have a diverse base of industries. One of the great benefits of the West Michigan lakeshore is we have a diverse pool of industries: food processors, office furniture, automotive and aerospace — not just one sector.”

In addition to strong sales and R&D, the West Michigan Lakeshore Region also fared better than the Midwest in the areas of business climate, workforce and quality of life.

While talent was cited as a strength of the West Michigan Lakeshore Region for business, it also was identified as the primary barrier to growth in the region.

“If you look at the lakeshore versus the Midwest, talent is the No. 1 barrier to growth,” Owens said. “We have a strong manufacturing base but that could be standing in our way. If the access to talent isn’t improved, we’ll need to bring more people in, because jobs are growing at a faster rate than the population. We need to train high school and college students in skilled trades.

“We will see more and more companies invest in automation improvements and productivity to overcome those barriers. It will make companies stronger, but workers will have to have advanced skills and training to work with advanced devices.”

Owens said this was the first year since 2010 the topic of housing has appeared significantly in interview responses. And she said it came up at the West Coast Chamber of Commerce Early Bird Breakfast on Sept. 12, where she presented the report.

“One of the things (asked) at the chamber event was, ‘What are the other barriers?’ Another major barrier that wasn’t showing up in the data right away, because it was a combination of two questions, was workforce housing,” Owens said. “Employers not only are trying to attract people into the region, but once they get them in, there are little to no apartments or entry-level housing.

“We launched Housing Next about two months ago, which is an initiative to address this issue in Ottawa County. We think that’s a pretty major barrier going forward for the whole lakeshore, not just Ottawa County.”

Dana Kollewehr, director of community and economic development with The Chamber of Grand Haven, Spring Lake and Ferrysburg, said the report acted as a gut-check for the chamber.

“The opportunity to interview and analyze responses from our employers, and then to see how we compare to the U.S. Midwest makes us stronger and more attractive as a place for business,” she said. “This report and its analysis provide invaluable information on our primary employers and how we can assist their future growth.”

Nora Balgoyen-Williams, Allegan County Economic Development Commission director, said the one-on-one interviews with employers were especially helpful for her agency.

“It’s icing on the cake to gain a deeper understanding of our strengths and weaknesses through this comparison of our region to the U.S. Midwest,” she said.

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