Agribusiness mega giant Archer Daniels Midland confirmed in mid-December it would move its global headquarters, with about 50 employees, to Chicago from Decatur, Ill., but also indicated it would not bring its new technology center and more than 100 jobs with it, preferring to take that operation to a region offering tax breaks.
Michigan Future President Lou Glazer noted in a Business Journal interview that scenario is likely to be repeated — not because of tax breaks but because patterns in the U.S. economy continue to show that most regional economic gains are in fields requiring college-educated “knowledge jobs,” while traditional manufacturing jobs continue to decline and move to low-cost areas. The “knowledge jobs” (higher pay, stronger growth), he noted, are going to areas where such talent is concentrated.
Such a pattern also showed up in the Grand Rapids area this year and is noted among the 30 Newsmakers of the Year. Wolverine World Wide keeps its headquarters in Rockford but has moved its manufacturing operations elsewhere. Perrigo is keeping its headquarters in Allegan, but its production facilities will build out in Ireland through its merger process.
The Grand Rapids Business Journal 2013 Newsmaker group represents growth in technology and services sectors, which also are telltale of the new economy.
As businesses and corporations progress, the pattern is becoming well established, even while expectations and public policy remain framed in old economy ideas.
Carol Lopucki, state director of the Small Business Development Center, this month told the Business Journal the agency would no longer carry a ‘T” (for Technology) in its moniker, again reflecting the foothold of the new economy.
Lopucki told the Business Journal, “The ‘T’ designation (first used by North Carolina) was added in building a statewide technology commercialization assistance program. We were the first SBDC to successfully pass the rigorous A-SBDC technology accreditation.”
Lopucki noted, “Our tech team of nine has in the past 12 years served 1,967 innovators, provided 52,846 hours of business development assistance, and assisted innovators in raising $358,979,222. We’ve managed and continue to manage the state’s Emerging Technologies Fund for five years, and have launched and managed for two years the state’s Business Accelerator Fund. We’ve become a critical part of the entrepreneurial ecosystem.”
She and others in Small Business Development Centers across the U.S. are now working with Congress to better define what has occurred, and to grandfather the “T.”
Glazer pointed to General Motors as a “symptomatic example”: GM spent $1.3 billion in capital expenditures and retained or moved 1,000 jobs. Its $1.3 billion Hamtramck plant will provide 50 new jobs. Research shows the U.S. lost 6 million manufacturing jobs but gained 37 million new service-sector (knowledge) jobs.
Such is the new reality by which the local economy, too, will move forward. The legacy of the old economy in the Grand Rapids region is its dismal education rate showing 24 percent college-educated adults.
That must change for this region to prosper in any New Year.