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Beyond Bankruptcy: How Detroit Has Used Data to Encourage Opportunity, Investment, and a Resurgence of Its Auto Industry

From: EMSI

By Laura Pizzo

July 28, 2015

Even though “failing forward” has become clichéd jargon around conference tables, it’s still both exciting and encouraging to watch someone (or something) rise out of a slump and come back stronger. And there’s no better example than Detroit, Michigan: the nation’s underdog upstart.

In 2013, Detroit declared bankruptcy and became the media’s go-to example for struggling cities. But despite great difficulty, it has managed over $2.4 billion in investment and development since January of that year. And in many key economic categories—including gross domestic product, private sector job growth, and per capita income—the Detroit region is now outperforming national averages. So how did Detroit do it? How do you attract, retain, and expand industry in a region associated with economic collapse? How does an entire region fail forward?

In a pair of reports (State of the Region and Michigan is Auto), the Detroit Regional Chamber used EMSI’s labor market and education data, among other sources, to market its region, demonstrate economic progress, identify shortfalls, and strategize for the future. The reports, along with a recent Forbes article on Detroit’s recovery story, make for excellent attraction and retention tools, increasing the region’s reputation and leading it further into prosperity. These materials also provide helpful marketing examples to other regions that are facing similar financial challenges.

Michigan is Auto

The Detroit region remains synonymous with the auto industry. An impressive 63 of the top 100 automotive suppliers to North America are headquartered in Michigan, and the state is ranked No. 1 for North American car, truck, and motor vehicle production, according to the Detroit Regional Chamber.

Despite great strides toward its recovery, the region has not been able to reach 2001 levels for jobs in automobile manufacturing, largely due to increased automation and improved technology that make it easier to manufacture goods with fewer workers.But technological shifts encourage growth in more highly skilled occupations, such as engineering and IT. In fact, architecture and engineering jobs grew 28% between 2009 and 2013, computer and mathematical jobs grew 14%, and management jobs grew 9%—demonstrating that the quality of jobs in Detroit is improving, even if the region has not caught up to pre-recession job counts (see chart).By showcasing this data, Detroit tells a compelling story about its economic recovery and also improves the image of its regional workforce, which has historically been steeped in traditional manufacturing.

And More Than Auto

Although automobile manufacturing is a driver industry for Detroit’s economy, it is not the only one. In fact, there are a number of thriving industries in Detroit (see chart).

Here are some quick facts about some other prominent industries in the region, which can be shared to help further diversify the region’s economy:

  • Health Care: This industry seemed to be recession-proof in the Detroit region, likely due to the region’s baby boomers and aging population. A steadily growing industry, health care jobs have climbed from 302,000 in 2009 to 323,000 in 2014 (and are projected to grow to 360,000 jobs by 2019).
  • Aerospace and Defense: 33% of the global top 100 aerospace companies have a presence in the Detroit region, and, in 2012, more than $4.7 billion in defense contracts were awarded to the region’s defense-related businesses.
  • Transportation, Distribution, and Logistics: Each day, more than 11,000 trucks cross through Detroit and Port Huron (the busiest northern border crossing on the continent). Michigan State University has the No. 1 undergraduate program and the No. 2 graduate supply chain management/logistics school in the nation, helping to ensure a successful future for this regional industry.
  • Information Technology: The Detroit region is an emerging information technology hotbed with nearly 73,000 jobs in more than 3,000 IT companies.

How Detroit Retained and Continues to Attract Businesses

The reports and article demonstrate how compelling labor market and education data can help market a region to new and existing businesses. Here are a few data points that the Detroit Regional Chamber has used to help attract industry, jobs, and investment as well as bolster the brand of the Detroit region:

Workforce

Michigan ranks No. 1 in concentration for mechanical engineers and industrial engineers and No. 2 for mechanical engineering technicians, offering a highly skilled and competitive workforce for automotive industries as well as other STEM industries. Michigan has also led the nation in manufacturing jobs created between 2010 and 2013, adding nearly 73,800 jobs (30,270 jobs specific to automotive manufacturing).

Wages

Paired with its skilled workforce, Michigan’s competitive wages make it a solid value option for manufacturing talent:

  • Average hourly wage in Michigan: $20.08, in nation: $22.20
  • Average hourly wage in private manufacturing in Michigan: $20.94, in nation: $22.63
Supply Chain

Detroit boasts a strong existing supply chain. For example, the city is home to roughly 1,000 tool and die shops, which is critical infrastructure for manufacturers. (For more on supply chain analysis and the Detroit region, read this article.)

Education 

Although overall educational attainment in the Detroit region is below that of peer regions, local education programs are well-suited to meet the needs of automotive industries as well as other manufacturers. Michigan has 16 universities and colleges with nationally ranked undergraduate engineering programs, four of which also have nationally ranked graduate programs.

Location 

An international gateway, Detroit sits along the second-busiest border crossing in North America and is the No. 1 exporter to Mexico. It is also home to the world-class Detroit Metro Airport. Its ideal location and infrastructure allows the region to export an impressive amount of goods (in 2013, the Detroit region exported nearly $54 billion in goods, or 72% of Michigan’s total merchandise exports).

Incentives

In 2012, Michigan passed laws that made it the 24th right-to-work state, reduced its corporate income tax to the lowest in the Midwest, and eliminated its personal property tax on industrial property. More recently, Governor Snyder signed legislation that allows manufacturers to test driverless cars on Michigan roads, and the state has dramatically decreased its business regulations.