SOUTHWESTERN MICHIGAN COMPETITIVE ADVANTAGE – INDIANA GROWS MANUFACTURING JOBS

Southwestern Michigan (SWM) economic development strategy may need to be revisited based on latest Wall Street Journal findings about where Midwest manufacturing jobs are being created.

While SWM lost over 16,000 manufacturing jobs since 1980 and has had little success in repopulating them recently, maybe it’s time to rethink SWM’s past approach to economic development and begin emphasizing partnerships within a larger multi-state regional economy.

The Upjohn Institute’s regional labor economist George Erickcek recently made a convincing statement that SWM is not a single regional economy focusing on Benton Harbor/St. Joseph as the metropolitan city center.

In his March 19, 2012 presentation before the Stronger Economies Tomorrow (SET) local economic development strategy group, he clearly outlined his feeling that SWM’s economy is pulled outward toward the stronger economies of Kalamazoo, Elkhart, South Bend and LaPorte/Michigan City. 

He presented census data showing that a large portion of the employed population travel outside their home county for jobs. 

His claim is substantiated by 2010 employment data reported by the US Census Bureau.  Today, more than 50% of SWM’s employed residents travel outside their county to work – 38% in Berrien, 80% in Cass and 66% in Van Buren.  It’s easy to comprehend that a sizable portion may be commuting to Indiana as their place of employment.

He further noted only the Twin Cities of Benton Harbor & St. Joseph functions as a unified self-contained economic unit. He further opines that the strength of the Twin Cities area economy may be insufficient to override the “outward pull” of these stronger surrounding economies.

This challenges current governmental economic development thinking shaped on the premise that economic development in Michigan should be guided by state policies and intrastate geography.

It’s an obvious fact that residents needing jobs and their geographic labor market don’t respect state policy or boundaries – people will gravitate to their job “of choice” regardless of whether it’s in the county they live, another Michigan local or the State of Indiana.

Based on a new understanding of where people work, the question arises – What should Southwestern Michigan’s economic development and job creation strategy be?

The notion of aligning economic development strategy with Indiana may not be as far-fetched as one may believe, especially for the Benton Harbor/St. Joseph Twin Cities Area and southern Berrien and Cass county communities.

According to the Wall Street Journal article, “Over the past decade Indiana’s performance has been better than other Rust Belt States.  Its manufacturing employment is down 20% compared with drops of 26% in Illinois, 29% in Ohio and 35% in Michigan, per Moody’s Analytics.”

“Indiana’s efforts to attract manufacturing jobs are encouraging so far.  The number of Indianans employed in manufacturing at the end of 2011 was up 7.6% from two years before to 472,500 compared to 3% nationally after plunging during the recession.”

Indiana, as the Wall Street article states, has been more “recession proof” than Michigan and seems to be better positioned for manufacturing economic recovery, especially automotive related employment which historically benefited Southwestern Michigan communities bordering Indiana.

Corroborating this claim is data from the Using US Census that reports the number of jobs by employer showing that between 2000 and 2009 Michigan lost 18% of its manufacturing employers and 43% of their manufacturing jobs compared to Indiana’s loss of 9% of their manufacturing employers and 31% of their manufacturing jobs.

Maybe it’s time for the Southwestern Michigan political and business leadership to “take stock of economic realities” and recognize that for Berrien and Cass counties to achieve an economic sustainable future it’s time to rethink how we wish to grow – what we need to do.   A 30-year history of status quo and distrustful separatist local government mentality cannot remain the predictor for a growing future economy attractive to new residents and job creators.

Here are my thoughts of actions which should be considered –

1.  Grow the Twin Cities area economic dominance by increasing household growth.

2.  Conceptualize a new economic region somewhat larger than now established – one that overlaps state borders.

3. Consider an economic development strategy based on a new economic vision based on connection with regional centers of population.

4. Reformulate local and county government growth policies and incentives that stimulate population and household growth.

5. Consider how to improve transportation access – the journey-to-work trip – to job centers located in regional population centers.

6. Establish a goal of creating a world class small metro city center that can serve as a population and job attractor in the new global economy.

7.  Educate Southwest Michigan’s population with trends that facilitate growth – such as migration, diversity and tolerance.

8.  Make education and post high school learning an inbred family vision and goal for all youth.

9. Identify and train leaders with common understandings and bonds – mitigating political isolationism and status quo biases.

10. Form a multi-geography business driven economic development organization, with leadership connectivity to leaders in the larger regional economy.

It’s takes bold action to break away from tradition and move into uncharted territory which fosters new roles and relationship demands upon community leaders.

As the political pundits voice during every election season………If not now …when……if not us…then who!

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