States Business Outlook Not Rosy

December 9, 2005
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GRAND RAPIDS —The national trend suggests that knowledge-based industries rather than manufacturing is where Michigan should be headed.

Whichever way it heads, challenges will arise in the form of an aging and more culturally diverse work force, and an increased demand for more skilled and better educated workers, says Grand Rapids Chamber of Commerce President Jeanne Englehart.

Englehart was one of a dozen speakers at the Women’s Economic Development Outreach (WEDO), a recent half-day event designed to connect women business owners and aspiring entrepreneurs with information and resources to help grow their businesses. National City was lead sponsor of the 2005 WEDO Tour, which made stops in Detroit, ClintonTownship, Novi, Battle Creek, Lansing, Grand Rapids and Traverse City

In 2000, 61 percent of the work force was in the Baby Boomer age range or older, and it’s predicted that their representation will shrink to 40 percent by 2010 and to 20 percent by 2020.

The work force is changing in other ways, too. It is forecast that in 2010 Michigan’s population will be 77 percent white, 15 percent black, 5 percent Hispanic and 3 percent Asian. In Grand Rapids the population mix is expected to be 79 percent white, 8 percent black, 10 percent Hispanic and 3 percent Asian. The Grand Rapids-Muskegon-Holland Metro Statistical Area will have doubled its population of Hispanics compared to the state as a whole.

“That tells us that we need to work on filling the gaps in the work force,” Englehart said. “We need to understand that we are now multilingual workplaces. English is a second language for many of the people coming in and filling jobs.”

Englehart said metro-area businesses need to put out the welcome mat and embrace the different cultures entering the community. She talked about the chamber’s diversity initiatives and its Multi-Racial Association of Professionals (MAP) program, which is a networking group for individuals who have come to Grand Rapids from different cultures.

“MAP helps them get engaged in the community so that they stay here. We have heard from businesses that they work hard to attract people from different cultures into their work force, only to find that they leave because they never felt welcome. They never felt the community engaged them.”

Grand Rapids and other West Michigan communities tend to be perceived as white, middle-class communities, and that perception has to change to reflect the true mix of race and cultural backgrounds here, she said.

Another challenge ahead is the increased demand for employees with higher skills — both technical skills and critical thinking skills.

“We know that business people are looking for a different skill set than may exist, so we have to find a way to increase those skills in this community so we can fill those gaps.”

The final challenge is education.

Englehart pointed out that 35 percent of new job growth requires some level of post-high-school training. The educational system needs to be shored up at all levels in terms of greater accountability and measuring student achievement. 

“Do evaluations of workplace readiness skill sets — and don’t just look at whether they passed geometry, ” she said.

Englehart acknowledged that the business outlook for Michigan isn’t exactly rosy. There are concerns about future consumer spending and high gasoline and heating prices, she said, but there are still a lot of opportunities out there.

The SBA’s annual report for Michigan indicated that businesses with fewer than 10 employees created 28,540 new jobs last year, while businesses with more than 99 employees cut 68,178 jobs last year.

“We’re seeing that the one- or two-partner businesses and the small family businesses are really going to be the backbone of Michigan’s economy because we don’t see the service sector growing. The resources are out in our community for people to start businesses. That’s where we really see it’s going to be healthy; it’s just going to take time

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