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Southeast Michigan’s GDP grew 14 percent since 2009

From: Crain’s Detroit Business

By: Amy Haimerl

December 11, 2014

Detroit Regional Chamber releases its first state of the region report, giving stats on education, entrepreneurship, income and more

The Detroit Regional Chamber released its first-ever regional report card Wednesday evening at an annual gathering of members.

The report pulls together data for the region as a whole – not just by individual cities or counties – to show how Southeast Michigan compares to the nation and other region.

“With more than 5 million people and 300,000 businesses, we are a formidable region,” said Sandy Baruah, CEO of the chamber.

The big news is that the region’s GDP grew 14 percent between 2009 and 2013, second only to Dallas’. Additionally, unemployment fell, 150,000 new private sector jobs were created and per-capita income is up 3.8 percent.

“Our results weren’t surprising to me,” Baruah said. “We beat the national average, but were not the market leader. Of all the particular numbers, I would love to see us move the per-capita income number. If you look at what drives quality of life, it really is per-capita income.”

While the report doesn’t indicate what industries created the 150,000 new jobs, growth in per-capita income suggests that at least some of them are outside of the low-wage service sector, which is where much of the job-growth has happened across the country.

For example, low wage jobs accounted for 22 percent of the losses during the recession but account for 44 percent of employment growth over the past four years, according to the National Employment Law Project.

“When you look at the industries that have been hiring the most, they are primarily higher income industries — manufacturing, engineering, really the things that Southeast Michigan is known for — and some health care, too,” Baruah said.

The 10 fastest-growing occupations in the region, according to the report are:

Architecture and engineering
Production
Computer & mathematical
Transportation & material moving
Life, physical and social science
Installation, maintenance and repair
Business & financial operations
Building & ground cleaning/maintenance
Management
Health care support

Entrepreneurship
One of the bright spots in the report was Michigan’s meteoric rise in terms of entrepreneurship rankings. The “climate” ranking, according to MiQuest data, jumped from 41st in 2008 to sixth in 2013. That means the region actively works to support entrepreneurs and make them a critical part of economic development. Helping that along is the fact that the state ranks first in the country for private lending to small businesses.

“A lot of traditional employers shed jobs in the 2006-2010 time frame, and frankly, out of all recessions comes a spike in entrepreneurship,” Barium said. “That describes some global numbers, but that doesn’t explain why Michigan’s rate has accelerated so dramatically.

“What explains that delta is the culture focus that has occurred from the governmental level and the private sector level on the subject of entrepreneurship.”

A significant amount of capital has been invested in the region to build area small businesses, from the new Automation Alley accelerator program for advanced manufacturing to funding for the Build Institute to train budding entrepreneurs. Add to that Dan Gilbert’s investment in a high-tech culture and companies through Bizdom Detroit and Detroit Venture Partners, and the city is committed to building small business owners of all varieties.

Education

An area of weakness for the region – and state – is education. Despite having several nationally ranked high schools and universities, just 30 percent of the Detroit region’s residents have a bachelor’s degree or higher, which lags behind the national average and other similar regions.

“This highlights our on-going challenge of education,” Baruah said. “It really showed that we’re lagging. What’s interesting is that our achievement levels are lagging while our assets are very high. That’s an interesting conundrum for us as a state.”

But this isn’t just about Detroit public schools; the achievement gaps show a greater issue across the region.

“Everyone thinks about education being an inner city problem,” Baruah said. “I think one of the reasons why some people are so concerned about more strict testing and accountability is that th4ey don’t want to wake up and find that their local school isn’t as good as they think it is. But we already know that they aren’t as good. You cannot attribute these rankings to our poor inner city.”