The tech sector is shining as West Michigan’s economy recovers from the pandemic’s downturn | Bot To News


GRAND RAPIDS — West Michigan has rebounded well from a deep economic downturn in the early months of the COVID-19 pandemic, setting the region up for economic growth over the next several years.

This is one of the decisions published today in The Right Place Inc.the first report on the situation in the region.

Although job growth has lagged in the eight-county region, West Michigan has grown its workforce by 23,000 since 2020, when many businesses were closed by state orders. The region lost 22,500 people in the workforce in the middle of the recession in 2020.

“Over the last few quarters, we’ve seen a jump in the workforce and a return,” said The Right Place President and CEO Randy Thelen during the economic development organization’s annual event in Grand Rapids today. “It’s the kind of recovery you don’t see in the rest of the country.”

The region’s workforce has also “become smarter than it used to be,” with the number of people with a college degree increasing by 12 percent in four years. Across the region, 35 percent of the working population now has a bachelor’s degree or higher, according to The Right Place report.

The increased workforce and education levels mean West Michigan has “more workers and quality workers than we’ve seen in a while,” Thelen said.

The region’s gains came amid the pandemic, a softening of the economy until 2022, persistently high inflation, soaring interest rates, supply chain challenges and “a labor market that we’re still trying to sort out,” he added.

“These are economic times we’ve never seen before,” Thelen said. “Any of those things would be an economic challenge that will really challenge us as leaders.”

The State of the Region report also shows West Michigan created or retained 3,677 jobs — or 108 percent of The Right Place’s goal — from 2020 to 2022, paying $195 million in wages. West Michigan also saw $598 million in new capital investment, or 120 percent of the economic development organization’s goal.

The region’s population grew by 2.1 percent from 2019 to 2022, or a net increase of about 23,500 people. That growth rate exceeds the national average and fosters a larger talent base that employers need, Thelen said.

“In a world of population growth, that’s a significant number,” he said.

The region currently has around 1.1 million inhabitants.

West Michigan also has a cost of living well below the national average, though a shade higher than the state as a whole, according to the State of the Region report.

Of the 550 CEOs interviewed by The Right Place staff over the past year, 70 percent reported increased sales and 56 percent said their company plans to expand. More than four in 10 planned to increase worker training.

“We have built a great region. We must continue to build a great region,” Thelen told the audience gathered at the JW Marriott downtown. “We’ve been a little bit behind the curve in terms of the country over the last few years, but we see optimism in our business leaders, we see the potential for growth, and we think we’ll be ready to be stronger in the next two years.”

Employment and tech

Employment in the Grand Rapids area remains 3.8 percent below pre-pandemic levels, compared with 1.8 percent nationally, but better than Michigan’s statewide 4.5 percent.

Thelen said job growth is “an area where we still have some work to do,” despite what he called a “pretty amazing recovery” from the depths of 2020.

“We usually outpace the state,” he said. “We have some room to grow. We have to find a way to get back. We need to find ways to get more opportunities for more people to enjoy a higher quality of life with a higher quality of employment.”

However, Grand Rapids’ tech industry stands out in terms of hiring compared to pre-pandemic numbers.

Technology employment grew by 3.9 percent from 2019 to 2022 and now totals 35,600 jobs. In the past year alone, 2,100 new tech jobs have been created in the Grand Rapids area, Thelen said.

One of The Right Place’s core strategies is that the technology sector comprises 10 percent of jobs in the Grand Rapids area, which would require adding 20,000 technology jobs over the next decade, he said.

For the tech sector to grow, pay scales in the region need to improve, he said University of Michigan economist Don Grimes. Compared to other U.S. markets, tech jobs in Grand Rapids and Michigan are lagging behind, he said.

“Michigan pays IT workers like crap,” he said. “The pay scale will have to go up significantly for these jobs.”

In response, Thelen pointed to the relatively lower cost of living in the region compared to big tech markets like San Francisco and Seattle. He added that the wage gap is greater between West Michigan and the big tech clusters, “so we need to close that gap.”



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