MSU Extension Economic Development

A partnership of several Michigan universities conducted research (see Part one: A new economic age and playing field), and presented findings to state and local governments, to begin implementation in Michigan. The Land Policy Institute and Michigan State University Extension were both involved in this effort. Much of the activity since 2010 has focused on working with numerous communities to shift gears and succeed in the new economy. It has allowed us to see, first-hand, these strategies work.

Before going into the successful strategies, lets further explain what the new economy is and how it compares with what Michigan’s economy used to be.

First, there has been a shift in what is most important for businesses when choosing where to locate. In the new economy, a community that is rich in talent and ideas is most important. Today’s competitive market requires innovation, adaptability, and a community and labor force that has the talent and ideas to change and remain competitive. This replaced what used to be most important: low cost (low tax, tax breaks, pre-built industrial parks).

Second is a community or region’s ability to attract educated people. Why? Because “educated people” is the best measure one has to determine if a community is rich in talent and ideas. In the new economy, one of the major economic development strategies is to do things that result in educated individuals wanting to come and live in their town or region. This replaced what used to be the strategy of attracting companies and factories.

Even factories need educated or knowledge workers. Advanced manufacturing is where the United States is competitive. In the mid-late 2000s, MSU Extension educators, working on this topic, toured parts of Ford Motor Company’s Rouge industrial complex. The UAW worker that was our tour guide pointed to the Ford F-150 pickup truck assembly line and indicated all workers on that assembly line have a bachelor degree, the technical equivalent, or more. 

Third is the realization of and action on the reality that physical and cultural amenities are key in attracting talent and knowledge workers. Those knowledge workers are who bring to a community the richness and talent in ideas, measured by level of education. That is what new economy businesses consider most important. It means that things like vibrant downtowns, theater, nature centers, green and blue trails, natural areas, forests, farms, historic features, arts organizations, and much more are the most important basic things for economic development. In many ways, things a community does to attract and accommodate tourists is now what is needed for attracting the talent to a community.  Often, the strategies used by hospitals to attract doctors to a community are now the strategies that need to be used for the knowledge worker as an economic development strategy. In the old economy, that was not the case. A high-quality physical environment was a luxury, costing money, and a negative for a cost-conscious economic development effort.

Bend, Oregon, is an example of this. Bend is where the spotted owl resided and, upon protection of that species’ habitat, the logging industry in Bend saw a major downturn. That was also when the new economy shift was happening in Oregon. The town’s economy rebounded to a point many times stronger than it was with logging – by promoting their natural environment and outdoor life: “If your business is in Bend, you can be on vacation at 5 p.m. every day.”

Fourth, knowledge workers choose where they want to live. Then, the majority of them move there. Once they have arrived, then they find work or become entrepreneurs and create their careers. New economy businesses follow that talent to those regions where they are choosing to live. So, the economic strategy is to be the community that has the attractive qualities in your region where people choose to live. That is done with physical, cultural amenities, and natural resource play areas. So, knowledge workers, educated people, choose to locate there. That is how a community becomes a region that is rich in talent and ideas, which attracts new economy businesses.

There are additional comparisons between the old economy and new economy. The table illustrated with this article compares the old and new economy. Each illustrates a significant shift from the economy Michigan had prior to 2009 and now. 

Those in Michigan State University Extension that focus on land use provide various training programs on planning and zoning, which are available to be presented in your county. Contact your local land use educator for more information.