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Sunday, 20 December 2015 22:55

Q&A: Birgit Klohs, President and CEO, The Right Place Inc.

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As the U.S. economy continues to improve, economic developers in West Michigan see increased competition from other states impacting their activity in 2016 — more so than in previous years. Birgit Klohs, president and CEO of Grand Rapids-based The Right Place Inc., weighs in on the changing economic development landscape and how the organization intends to keep West Michigan competitive.


Does the debate in Lansing over incentives for Switch’s data center showcase a change in economic development policy from economic gardening to hunting big deals next year?

It’s a change in tax policy. We have made changes to our tax policy under the leadership of Gov. Snyder and the legislature over the last five years. We have eliminated the personal property tax on machinery and equipment for manufacturers (and) done away with the Michigan Business Tax and created a new corporate tax. To me, amending the tax policy for the sales and use tax for an industry — not for Switch — is not going back or switching back and forth. It is trying to make sure that we level the playing field for a (rapidly) growing industry.


So it doesn’t have to be one or the other strategy in terms of economic development policy?

This is not either/or — and I’ve never thought in my world that I’m picking winners and losers. Hopefully, we pick winners who locate in West Michigan versus them landing in Indiana, Ohio or South Carolina — in which case we lose and they win.


How will economic development be different in 2016 with the Michigan Economic Development Corp. having lost a portion of its budget this year?

The MEDC has realigned its resources. Obviously, they had to lay off some people in that process but as far as we’re concerned, the agency is doing fine. They have adjusted to those budget constraints, they have made adjustments and we work as closely with them every day as we did before. It’s in many ways no different than what our companies had to do when they fell on hard times and had to make cuts that are not pleasant. You have to readjust. They’ve done that, and I think they’ve done that very well and are getting into a very good space.


In 2015, food processors seemed to stand out as a high-growth industry in the state. What industries are rising to the top of the pipeline in 2016?

At RPI, we look at what our strengths are and our strategic plan hasn’t really changed. It’s centered around five buckets or industry sectors… (But) the whole talent discussion around design is really rising to the top.


Why has design talent become an issue?

If you think about any product, regardless of what you make, it starts with someone having a design. West Michigan has a very deep design history predicated on 100-plus years of the furniture industry that transitioned from the home furnishings industry to the office furniture industry — but now also to other industries. … We look at the design industry as a component of our whole talent pool.


How will The Right Place work with rural communities for economic development in 2016?

We have a contract and just renewed it with Ionia County. We have a first-year contract with Montcalm County, and we just signed a contract for business (and) economic development and collaboration with Newaygo County. … Most assuredly, rural economic development is important to keep jobs in those small rural communities for the people of those communities. We are working collaboratively with the entire 13-county region.


What impact do you think the upcoming 2016 presidential election will have on economic development in West Michigan?

It always depends. … If the U.S. is perceived as a competitive and relatively risk-free place in which to do business, (then) that obviously helps the country and eventually helps us (in Michigan). … If I had a wish list for whoever gets in, it would be (that) we need to reform our tax code because it is entirely too complex. It is not good for business, and some of the European countries today have better tax structures than we do. I would say that should be very high up on the list of anyone who gets elected.


What major headwinds for 2016 are keeping you up at night?

What keeps me up at night is that the competition doesn’t sleep and how do we continue to position us in West Michigan for the investment that is coming to the United States. … Our local companies are obviously being marketed to by other states. How do we stay ahead of that? How do we make sure that our local companies know we are here to help them? Then what are the companies around the world that are looking for new locations? We need to make sure that we are in that mix.

Interview conducted and condensed by John Wiegand.

Read 2044 times Last modified on Monday, 28 December 2015 10:31

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