After the Great Recession, Grand Rapids experienced a great recovery. Our mid-sized city outperformed numerous economic metrics, climbing to the top of ranking lists and expanding at an impressive rate. Some of those top rankings included: #1 Mid-Sized Metro for Economic Growth Potential, America’s Hottest Zip Code, and #1 City to Raise a Family.

Unfortunately, that newfound prosperity was not shared by all. Less impressive are the rankings that did not get the same attention as the aforementioned ones: second worst metro in the U.S. for African Americans to succeed economically, #109 out 150 cities in the U.S. for single mothers to have ample job opportunities and earn a livable income while their children receive the best and most cost-effective care, and #101 out of 190 U.S. cities for Hispanic entrepreneurism.

In present day, Grand Rapids faces imminent challenges as industrial transformation, demographic transition, and the COVID-19 recession continue to impact all areas of our economy. As West Michigan’s leading economic development organization, The Right Place is committed to driving sustainable economic growth and shared prosperity for all in the Greater Grand Rapids Region.

In partnership with the Brookings Institution, The Right Place had the privilege of joining a cohort of cities across the country to participate in Brookings’ Inclusive Learning Lab to identify and explore the barriers that threaten to erode the competitiveness of our regional economy.

The Automation Disruption

Our region has many lower skill occupations that could be significantly affected by automation and artificial intelligence (AI). Out of 100 of the top metropolitan areas in the U.S., the Grand Rapids MSA was found to be the 7th most vulnerable to the effects of automation, while simultaneously being the metro with the 4th highest exposure to AI.

Ensuring that employees in low skill occupations have pathways to continue professional development and growth will be critical to attaining solid labor force participation rates and ensuring that no demographic is disproportionately left behind as Industry 4.0 continues to transform the landscape of work as it is today.

Changing Demographics

Education gaps among West Michigan minority populations
Figure 1

The Grand Rapids MSA is also undergoing a demographic transformation. Our labor force is aging, and individuals ages 65 and older will soon take up a larger share of our total population than we’ve seen in the past. It is projected that the share of working age individuals in our MSA will decrease from 62% (2017) to 56.8% by 2045.

Our community is also becoming increasingly diverse. By 2045, the Grand Rapids MSA is expected to see 130% growth in the size of our population of Hispanic ethnicity, 45% growth in the size of our Black population, and 142% growth in the size of our other racially diverse populations. Contrastingly, the size of our white population is only expected to grow by 4% in the same time period.

It is also vital to address how these growing populations have been deprived of opportunities to prepare for the next phases of our economic growth. Education gaps and inequitable labor market outcomes are a prevalent issue, as seen in Figure 1 and Figure 2.

Average monthly earnings in Grand Rapids MSA, minorities vs white employees
Figure 2


A Pandemic-Induced Recession

It goes without saying that COVID-19 has caused widespread disruption around the globe, and that is true for the Grand Rapids MSA as well.

During the Great Recession, small and mid-size manufacturers were especially vulnerable. These companies with >250 jobs experienced a 10% job loss nationally, and Grand Rapids alone lost nearly 100 manufacturing operations amid those economic hardships. During this time, small businesses accounted for 3.5% of jobs in Grand Rapids, but 18% of our job losses from 2007-2011.

Black and Hispanic residents were not only heavily impacted by the Great Recession, but in the 10 years after, the incomes of Black residents had not recovered. This led to explosive growth of the racial wealth gap, exacerbating the problem ten-fold.

Without proactive intervention, we expect to see similar data as a result of the COVID-19 recession. It is up to our community to work together to mitigate these damaging effects and support a recovery that is more rapid, inclusive, and healthier than the last.

The Right Place’s Role

For The Right Place, inclusive economic development is defined as strategically guiding the regional economy on a growth trajectory that increases the productivity of firms and workers and raises standards of living for all. When economies grow inclusively there are improvements in individual skills, accessibility to employment, investment, and quality of life for more of our community members. The result will allow businesses to recruit more qualified people, become more competitive, allow for more expansion, and create a growth cycle that is productive, resilient, and equitable.

Within our work, The Right Place will focus on three strategic pillars: helping companies create quality jobs and pathways to talent development resources, diversifying the pipeline of business ownership through growth of existing businesses and support for acquisitions, and continuing to produce research and convene our partners around a shared vision for the future of our regional economy.

Interested in watching the full webinar recording from this event? Find it here.