Technology

Towns Chasing Workers, Not Just Jobs


One Midwestern region wants to attract intellectual capital to replace its shrinking manufacturing base

Factory cutbacks have taken a toll on Western Michigan. Sure, technological advances have led to improvement in the manufacture of products such as cars and furniture. But they also resulted in the need for fewer workers.

The region surrounding Grand Rapids lost some 27,000 jobs between 2000 and 2004, 90% of them in manufacturing. And service jobs that took their place pay, on average, about half as much. "Per-capita income is decreasing," says Greg Northrup, president of the West Michigan Strategic Alliance, an association of business and community leaders.

It's against this backdrop that Northrup and his group decided to take action. Their aim is to infuse the region with high-paying jobs in areas such as health care, but they're going about it in an unconventional way. They're hoping to lure workers, even if not enticing companies to physically relocate buildings.

Focus on Knowledge Workers

Come again? The alliance wants to woo virtual workers, or professionals who can work from their homes or other nonoffice settings, regardless of the employer's location. "The old model, where you used to chase people to invest in real estate might not be the most effective way to be successful," Northrup says. "There's recognition that if I can retain the intellectual capital of people doing work for companies in other locations, it brings value to our region."

Northrup & Co. applied for and won a $15 million grant from the Labor Dept. The funds will be spent on a dozen projects designed to help transition former factory workers to new careers and to attract knowledge workers—who may already have jobs with distant employers—to the region. Down the road, the plan involves marketing the region's worker capabilities, such as the ability to do health-care research, to companies outside the region, without asking them to physically set up shop.

It's an idea whose time has come, experts say. "A community that has talented people will draw work to itself," says Jim Ware, executive producer of Work Design Collaborative, a consulting firm that is working with West Michigan's Workforce Innovations in Regional Economic Development, or WIRED, program.

Clearly, a boom in virtual workers can add significantly to a local economy. Consider Steamboat Springs, located in Routt County, Colo. The county has a population of about 22,000 people. About 10% of Routt County households have at least one virtual worker, and about 86% of those virtual-worker households bring in more than $100,000 a year. Location-neutral businesses—whose owners live in Routt but whose customers live elsewhere—contribute $35 million to the local economy, creating $600,000 in sales tax revenue, according to a March, 2006, survey by the Routt County Economic Development Cooperative.

Shared Office Space

Local leaders say they'll need to make some changes to ensure Western Michigan is telecommuter-friendly. In late 2005, they came up with the idea to create business community centers that are inviting to people who may need to work outside their homes anywhere from a few hours to a few days per week. These work centers, still in the conceptual phase, are company-neutral locations where a mobile worker can, say, have a serious business meeting away from home and the office.

Such locales are known in industry parlance as "third places" and they can include coffee shops and bookstores—but they also range to the more professional community centers that Western Michigan envisions. "You've got to invent a different place for people to work—the coffee shop gets really old after a while," says Richard Florida, author of The Rise of the Creative Class.

To attract workers, Western Michigan also plans to market its other amenities such as competitive housing prices and its close proximity to Lake Michigan's shores. When a German automotive company relocated to Western Michigan, one worker sent an e-mail to colleagues in Germany expressing delight with the area's beaches. "He said, 'I get to live where other people vacation,'" says Northrup.

Expanding the Hubs

Yet it may take more than beautiful beaches to lure workers. Many mobile workers flock to a small number of destinations worldwide, many of them urban, says Florida. "Increasingly, we're not picking to live on a mountaintop or a lakeshore or where it's cheap," he says. "What we're doing is picking to live in places that are exciting, energetic, fun, and allow us to self-express and lead the life we want to live."

Mobile professionals are drawn to about two dozen places worldwide, 12 of which are in the U.S. They include New York, greater Chicago, Washington, D.C., San Francisco, Los Angeles, Austin, Tex., and Atlanta. "When people have more locational choice and more mobility, we're actually choosing fewer places," says Florida.

Western Michigan isn't on the list. But locals hope that with a few million dollars, a little ingenuity, and a lot of hard work, it will be one day.

Rachael King is a writer for BusinessWeek.com in San Francisco.

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