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Sunday, 07 June 2015 22:00

West Mich. leaders preach collaboration at Mackinac Policy Conference

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MACKINAC ISLAND — While Southeast Michigan leaders at this year’s Mackinac Policy Conference acknowledge that their region’s economy still has room for improvement, they’ve started to pivot from a focus on fixing immediate problems to tackling long-term solutions instead.

When it comes to pervasive issues like roads and talent, they might find some examples of public-private collaboration from West Michigan that could help point a way forward.

“I think we in West Michigan row in the same boat together,” said Ron Kitchens, CEO of Southwest Michigan First, a Kalamazoo-based economic development organization.

While the Detroit Regional Chamber sponsors the late May event and gears the discussions toward Southeast Michigan, business leaders from West Michigan — Kitchens included — said they also wanted to have their say and seize opportunities for bridge-building and collaboration with their colleagues across the state.

“I think we collaborate better than most areas of (a similar) size in the nation,” Kitchens told MiBiz at the conference. “I think we work with Southeast Michigan a lot because the economic development there is driven by governmental institutions, where West Michigan is much more private sector-driven.

In particular, Kitchens said he believes leaders from the east side of the state are increasingly looking at proven models around West Michigan to solve the talent crisis. One such example is Grand Rapids-based Talent 2025, a private sector-led initiative with higher educational representatives that’s addressing long-term talent concerns in the region.

The influence of West Michigan on the east side of the state has become more apparent in recent years, said Andy Johnston, vice president of government and corporate affairs at the Grand Rapids Area Chamber of Commerce.

Johnston, a long-time attendee of the Mackinac Policy Conference, noted that the New International Trade Crossing connecting Detroit and Windsor was a major policy push for a number of years at past conferences, an effort that included companies from West Michigan who rely on Canada for trade.

A number of local chambers of commerce endorsed the bridge — newly renamed as the Gordie Howe International Bridge — and Birgit Klohs, CEO of Grand Rapids economic development agency The Right Place Inc., sits on a six-member international Crossing Authority overseeing the $2 billion infrastructure project.

“This year there was a lot of talk about transportation,” Johnston said. “West Michigan (representatives) being up there is critical because it puts a West Michigan face to the economic development discussion that is happening. There’s not just one perspective.”

Filling Michigan’s talent pipeline for its growing industries and funding the state’s roads and bridges were among the main long-term issues discussed by conference attendees. While neither of those issues have quick or easy solutions, sources agreed that they each transcend any real or perceived divisions between businesses on the east and west sides of the state.

Moreover, with the bankruptcy of Detroit in the past, attendees’ outlooks were markedly improved from recent years.

“The biggest thing this year was the forward-looking perspective,” said Jeff Helminski, managing director of Grand Rapids-based private equity firm Blackford Capital Inc., who’s attended the conference for at least six years. “Past years have been about fixing problems. The broad discussion is now shifting toward longer-term issues with a greater sense of optimism.”

FOCUSING ON TALENT

MPC attendees and speakers also talked at great length about the state’s talent pipeline, particularly in the context of how to develop, attract and maintain workers to fill positions at Michigan businesses.

According to Blackford Capital’s Helminski, talent is the biggest issue facing the firm’s portfolio of manufacturing companies located across the Lower Peninsula. The private equity firm’s companies have struggled in recent years to attract the best people, particularly in some of the more entry-level jobs on the shop floor.

“I think part of it is the willingness to have manufacturing floor jobs,” Helminski said. “It’s not easy work and you have to maintain focus in a little bit of repetitive work. It’s a struggle to find enough people with the basic skill set.”

However, a report released at MPC by the Michigan-based University Research Corridor (URC) shows that Michigan is actually doing quite well with talent, particularly on the higher end of the job scale.

The report found the state’s research universities are “magnets for top-notch talent, attracting, developing and retaining highly skilled individuals to propel Michigan’s economy into the future.”

The three schools that make up the URC — the University of Michigan, Michigan State University and Wayne State University — account for 93 percent of all academic research and development in the state. Among the top eight university research clusters in the U.S., the URC schools rank first in medical degrees, second in advanced degrees for industries like engineering and life sciences and first in total degrees awarded.

URC Executive Director Jeff Mason thinks the new report shows the state’s efforts around talent are starting to show some signs of bearing fruit.

“You’ve got to look at the whole talent continuum,” Mason told MiBiz. “Whether it’s community colleges, career training, apprenticeship programs — all of that needs to work together and in combination. It’s all of those components that will create that talent pool that allows us to be competitive in the long term.”

The report also noted that 75 percent of native Michigan URC graduates stay in the state and 20 percent of out-of-state students remain in the state after graduation.

CONCERNS OVER MEDC FUNDING

Despite the general sense of optimism, leaders expressed concern about an idea to defund the Michigan Economic Development Corp. (MEDC) as a way to increase funding for the state’s beleaguered roads. Michigan House Speaker Kevin Cotter, R-Mt. Pleasant, has floated the idea in recent weeks.

However, defunding the MEDC would be a mistake, said Klohs of The Right Place.

“We have to have a statewide, consistent and dependable economic development policy,” Klohs said. “We can’t change direction in the middle of the stream — whether that’s defunding the MEDC or leaving it in place or changing the rules. Business hates nothing more than uncertainty. When we are working with a company, we have to be able to say, ‘These are the rules by which we play the game.’”

Cotter and other House Republicans have suggested shifting almost $200 million from the state’s economic development and tourism budget to help pay for road and bridge repairs. The proposal comes in the wake of voters rejecting the Proposal 1 ballot measure in early May that sought to raise more than $1 billion for infrastructure projects.

Klohs was hardly alone in expressing concern over the message that would be sent to the business community if legislators were to vote to defund the state’s leading economic development agency.

Both Gov. Rick Snyder and MEDC CEO Steve Arwood said at the conference that disarming the agency would make Michigan less competitive than neighboring states, according to a report in Crain’s Detroit Business.

A VOICE AT THE TABLE

Sources MiBiz spoke with at the conference agreed that the West Michigan region plays an important role in the state’s economic recovery and needs to have a voice in statewide policy discussions. While the region’s role will certainly play out in a number of venues beyond the Mackinac Policy Conference, West Michigan leaders said representing the region at the Detroit-centric event could only help create opportunities for more collaboration.
“I think a good portion of the programming has applicability way beyond Detroit,” Klohs said. “And we need a good Detroit to have a good Michigan and a good story to tell about the whole state.”

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