Transformative placemaking should be the driving force for successful economic development.The key to growing high-wage jobs in Michigan is attracting college-educated and skilled members of Generation Z after they finish their education. Michigan cannot get prosperous again until and unless we become a talent magnet for these young people. Focusing on traditional economic development priorities while failing to concentrate young talent in the state will ensure Michigan remains a permanently low-prosperity state.

Because young talent is the most mobile, economic development policies should be squarely focused on creating the kinds of places where highly-educated young people want to live and work. Attracting and retaining highly-educated young people is the state’s primary economic imperative – both keeping the young talent that grows up here and attracting young talent from any place on the planet.

The data show that highly-educated young people are increasingly concentrating in regions with vibrant communities, central cities, dynamic neighborhoods, and ex-urban small towns that:

• Offer an attractive, attainable, safe, and welcoming landscape.
• Incorporate a mix of walkability, good transit, and density.
• Are amenity-rich with artistic, cultural, and outdoor activities.
• Concentrate professional and social networks in diverse, open communities.

Michigan’s current economic development playbook focused largely on business attraction is endangering the long-term health of our economy and the economic well-being of households because it does not incorporate the value of place. To recreate a Michigan with lots of good-paying career opportunities – we need to strengthen and create more vibrant neighborhoods in our central cities and small towns that can attract and retain young talent. These neighborhoods – our country’s best talent magnets – vary in many ways, but all share common characteristics: they are dense, walkable, high-amenity neighborhoods, with parks, outdoor recreation, retail, and public arts woven into residents’ daily lives. And they offer plentiful alternatives to driving.

There are 14 percent fewer recent college graduates living in Michigan than graduated from Michigan institutions. Other states, including Illinois and Minnesota in the Great Lakes, are able to retain and attract more recent college graduates than recently graduated from a college within its borders. What do they all have in common? All have talent-magnet central cities filled with vibrant, dense neighborhoods.

Tami Door, CEO of the Downtown Denver Partnership, writing in 2012 got it exactly right. Today, of course, the future workforce is Generation Z. She wrote:

“Employers will follow the workforce. For a city to remain economically competitive in the future, it must attract the millennial generation, the future workforce. Nationally, employers recognize that the millennial generation is more likely to choose to live and work in or near an urban center. Mountains and oceans have become secondary to downtown amenities.”

Tami Door, CEO of the Downtown Denver Partnership

For Michigan’s population to get younger and more talented will require significant public investment. Those public investments must be designed explicitly to provide the infrastructure and amenities that Generation Z demands. This is not a set of recommendations that can be done on the cheap or by tinkering at the edges. The states that have won in the transition to the high-wage knowledge economy are those that have invested deeply and sustainably in the infrastructure and amenities of their central cities.

If we make the tough decisions and the big investments, we can see a Michigan with a growing population, prosperous citizens from all backgrounds, and neighborhoods that rival the best in our nation.

But that future only happens with decisive action to successfully transition to the high-wage knowledge economy by investing in our young people and creating vibrant cities that attract talent from across the globe.

– Warren Call, president and CEO, Traverse Connect

– Lou Glazer, president, Michigan Future Inc.

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Now is the time to make fundamental change in the state’s economic development playbook. What we have been doing has not worked. Michigan’s per capita income has fallen from around the national average at the turn of the century to a record low thirteen percent below: falling from 18th in 2000 to 38th in 2022. Mid-course adjustment in what we have been doing is not the path to returning Michigan to high-prosperity: a place with a broad middle class.

More than anything else Michigan needs more high-wage jobs. Six in ten Michigan jobs pay less than what it takes to be a middle class household of three. Our research has taught us two fundamental lesson: (1) Talent is the most important asset to high-wage enterprises and (2) creating places where mobile talent wants to live is an economic development imperative.

So we are proposing that Michigan create, fund, and implement a Neighborhood Talent Concentration Initiative. Explicitly designed to generate more high-wage jobs by creating places where young talent wants to live and work.

The most consistent predictor of a state’s economic success is the share of its adults – particularly young adults – with a four-year degree. Where young talent goes, high-wage, knowledge-based enterprises follow, expand, and are created. The new path to prosperity is concentrated talent.

And because young talent is the most mobile, economic development policies should be squarely focused on creating the kinds of places where highly educated young people want to live and work. The data show that highly educated young people are increasingly concentrating in big metros with vibrant central cities that feature high-density, high-amenity, walkable, active street life neighborhoods. Every high-prosperity state that is not fossil fuels extraction driven has at least one big metropolitan area anchored by a vibrant central city where both the metro and the city have a high proportion of young adults with a BA or more.

Michigan is losing the competition for young talent, endangering the long-term health of our state economy and the economic well being of Michigan households. There are 14 percent fewer recent college graduates living in Michigan than graduated from Michigan institutions. California, Washington, Colorado, Texas, Minnesota, Illinois, Georgia, New York, and Massachusetts ––which all have large central cities filled with vibrant, dense neighborhoods–– are the only states with more recent college graduates living in the state compared to those who recently graduated from a state college.

Attracting and retaining highly-educated young people is the state’s primary economic
imperative. First and foremost retaining young talent that grow up here and then attracting
young talent from anyplace on the planet. The new economic reality is if we remain anywhere near minus 14 percent in the proportion of recent college graduates who choose to live here compared to those that graduated from here Michigan will be one of America’s low-prosperity states permanently.

To change this picture, we need to create more of the kinds of neighborhoods in our central cities that attract and retain young talent. These neighborhoods – our country’s talent magnets – vary in many ways, but all share common characteristics: they are dense, walkable, high-amenity neighborhoods, with parks, retail, and public arts woven into residents’ daily lives. The Neighborhood Talent Concentration Initiative will provide large grants to support the development of talent-magnet neighborhoods in Michigan’s central cities, at scale.

The overarching goals of the Neighborhood Talent Concentration Initiative is to:

• Address the economic development imperative of increasing Michigan’s population of young professionals and young skilled workers by creating high-density, high-amenity, walkable, vibrant street life neighborhoods or districts
• Create business ownership opportunities for local residents

The $500 million initiative will fund no more than twenty transformational public space development projects in central city neighborhoods or geographically concentrated districts. Priority will be given to cities with high potential of concentrating young professionals and young skilled workers at a large scale.

Projects supported by this initiative would be comprehensive neighborhood/district-wide plans, rather than discrete initiatives centered on a particular building or parcel, designed for walkability, density, vibrant street life and business opportunities for local residents. Eligible projects will assist and support existing businesses and to the extent possible protect existing local business investment and provide assistance for local resident business opportunities. Eligible projects will contain and support facilities that house or present cultural arts programs, performances, and exhibitions and on the streets presentations of cultural arts programs, performances, and exhibitions 

Grantees will be community based not-for-profit organizations, though applicants would be required to partner with local government, philanthropy, relevant corporate and civic partners, and relevant community-based and not for profit organizations. Active involvement in the project planning by Generation Z is strongly encouraged.

Elements of a qualified neighborhood/district plan might include:

• Projects that alter the design and use of roads away from cars and towards pedestrian-friendly uses like walking, biking, shuttles/communal transit, and last mile options;
• Public art and cultural spaces;
• Parks, outdoor recreation, open spaces, and greenways;
• Commercial corridor activation, including innovative plans to fill vacant retail spaces with locally owned businesses and improve streetscapes;
• Transit projects, including rail and bus-rapid transit;
• Mixed-income housing

Simply funding the Neighborhood Talent Concentration Initiative is not enough. In addition to create these talent-magnet neighborhoods the Department of Transportation, MSHDA, MEDC, the Department of Natural Resources and the Michigan Arts and Culture Council must create and implement Neighborhood Talent Concentration Initiative Support Funds to provide funding for the relevant components of the selected projects.

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But not in metro Lansing. A terrific new report from Capital Area Michigan Works! on behalf of the region’s impressive Talent Infusion Strategy Team and Advisory Committee touches all the bases needed to make retaining and attracting young talent a regional priority. Their work is worth checking out by Michigan’s other big metros. The authors understand the strategic importance of young talent. As they write: The decline of the 25- to 34-year-old group should be alarming to us. Moreover, we are not a fast growing metropolitan center overall and the key to becoming one is attracting young people.

The report includes a detailed data analysis. How has metro Lansing done from 2000-2010 in terms of concentrating young talent? Their honest assessment: not too well. And particularly not well compared to other regions across the country with a similar sized population and a major university.

Just collecting the data is impressive. But the report continues with a description of the work the region has done researching what young talent is looking for when they make a location decision. As they write the bottom line is: it’s all about placemaking! Most of the group believes engaging young talent is very much about creating a robust and vibrant place: Greater Lansing should continue to work on all the things that make the region a better place to live. In other words, if we make it a better place to live, “they will come,” and they will stay. Expanding the arts and culture scene, improving the region’s appearance and amenities and providing a lively entertainment culture are a few examples. Further, creating a pipeline to jobs and career opportunities is equally important …

One particularly creative initiative is the effort to make metro Lansing a place where Chinese students want to stay after college. The report highlights: … international placemaking efforts got under way when it was learned that there were few opportunities in the region that represented the street culture so familiar to Chinese students at MSU. As a result, Gillespie Group launched the China Creative Space, a proposed creativity center to create an atmosphere for cross-cultural collaboration and innovation among students, entrepreneurs and the community at large.

Wow! A Michigan region that has organized a Talent Infusion Strategy Team, done a detailed analysis of the region’s success in retaining and attracting young talent, researched the location preferences of young talent and is working to make Chinese students welcome. Metro Lansing is on the right track.

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The Millennials, more than any previous generation, are concentrating in big metropolitan areas anchored by vibrant central cities. For Michigan to prosper it’s central cities – particularly Detroit – must be places where young mobile talent wants to live and work.

Through fundamental policy change the Snyder Administration can help create that quality of place. It largely requires changing the direction of three state agencies.

MSHDA can be a major player in the creation of vibrant urban neighborhoods. But far too often they are not both because of their almost sole focus on low income housing and their rules and regulations that prefer to invest in suburban style development even in urban neighborhoods. We need an explicit change in its mission to include both low income housing and creating vibrant urban neighborhoods. And to change its policies to favor development consistent with walkable urbanism.

The Department of Transportation probably is the most important state agency for creating quality of place. It also probably is the agency with policies that most work against creating the kind of neighborhoods young mobile talent are looking for. Its funding formulas favor rural, rather than big metro, roads as well as vastly favor roads over others forms of transportation (transit, bikes, walking). Its rules and regulations, like MSHDA’s, are written for suburban and rural, not urban settings.

We need changes to the funding formula that would base road funding on population not road miles and that would provide transit funding at the constitutional maximum of 10%. Also design standards for urban roads need to be completely overhauled consistent with walkable urbanism.

The M1 light rail line may well be the single most powerful tool for creating a Detroit that can compete for young talent at scale. Getting it funded and built needs to be a state priority.

Parks and outdoor recreation are amenities that matter to young talent. The state’s natural resources department (no matter what its name) through its land trust fund can fund the creation of new parks in our cities. But that too would take a change in policy which currently heavily favors rural and wilderness locations. Beyond the trust fund, special parks like Belle Isle could benefit from conversion to a state park. We need to charge the department with responsibility for expanding parks and outdoor recreation opportunities in our big metros, particularly their central cities.

Finally the arts. State support for the arts peaked in the Engler Administration at a little more than $25 million annually. Not a big amount, but with a big impact. It is a key amenity for young talent. Restoring state funding for the arts, possibly with a challenge to corporations and foundations to match, is an essential ingredient of a quality of place agenda.

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Two recent articles demonstrate the global nature of the challenges. The first from Reuters is titled “Lack of skilled workers threatens recovery: Manpower”. It is about the global shortage of skilled trades. In a recent post I wrote about manufacturers here and across the country having jobs available and not finding qualified candidates. Not surprising it is a global challenge. With machines now and in the future doing more and more of the work human used to, skill requirements are constantly being raised. And no country has yet figured out how to prepare, at scale, workers for those jobs.

The second from the New York Times is titled “Loss of Young Talent Thwarts Malaysia’s Growth”.  Sound familiar? Talent is increasingly mobile. And the competition is not Detroit and Grand Rapids vs. Chicago and Seattle. Talent from across the globe can and will go anywhere. Particularly young talent which is the most mobile.  And as Rick Karlgaard, the publisher of Forbes says, ” … where the go, robust economic activity will follow”.

The article quotes the World Bank reporting that a lack of human capital is a “critical constraint in Malaysia’s ambition to become a high-income economy.” It’s true for Malaysia, us and everywhere else. The places that do best will be those who retain and attract talent from anywhere on the planet. Nothing else comes close in determining how prosperous a country/state/region will be.

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Clearly one barrier to making Detroit’s growth a priority is that most Michiganians don’t believe the city’s success is important to their future. We have not learned the lesson that it’s highly unlikely that we can have a prosperous state economy without metro Detroit working and for metro Detroit to succeed we need a vibrant city of Detroit. The other barrier which may be tougher to break through is, even for those who understand the centrality of Detroit to the region’s and state’s success, there is a prevailing sense that it can’t work. That the disfunction of the city is so bad that it is beyond repair. This pessimism about Detroit’s future is overwhelming outside of the city, but deep seated in the city as well.

So we end up with shrinking the city as the priority. Too much land, too few people, too little demand – now and in the future – for that land so we need to turn large sections of the city into open space or farms. Shrinking the city may be necessary, but not as the goal. Rather as a means to a very different end.  A way of freeing up resources to invest in the actions that will grow the city.

Detroit’s problem is not that there is no demand for central city living. The last two decades have seen a rebirth of urban neighborhoods that were written off as dead across the country. They have largely been revitalized by a combination of immigrants and college educated households – mainly young and without children. Detroit’s problem is that it has not participated at any scale with these trends. Detroit needs an agenda to take advantage of the renewed demand for city living.

We will explore in future posts in more detail what a growth agenda for Detroit should look like. As we laid out in our Revitalizing Michigan’s Central Cities report in 2003 the pillars of the agenda need to be a culture that is welcoming to all, the delivery of high quality basic services and being development friendly. None are strengths of the city today.

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No one asked that question for the past century when we paid special attention to high paid factory workers. And for more than a century as we continue to pay special attention to farmers. We did both because we thought their success enriched us all.

Today the role that high paid factory workers played for the past century is now being played by mobile talent. Young professionals will do fine wherever they go. But if they choose not to live and work in Michigan its the rest of us who are the losers. Because, to quote Forbes publisher Rick Karlgaard, “where they go, robust economic activity will follow”.

So the overly simplistic answer to why pay special attention to young professionals is: its the economy stupid! We close all our presentation with the tag line: either we get younger and better educated or we get poorer.

Michigan’s demographic trends are that we are aging far quicker than the country and that we are stuck in the mid thirties in college attainment. In a knowledge-based economy, that is a recipe for being one of the poorest states in the nation. An important reason – and the most promising way to reverse those trends – is we have not created the kind of places where our college educated kids and grand kids – and their peers from across the planet – want to live and work.

Some facts from our Young Talent in the Great Lakes report make crystal clear the magnitude of the challenge. Metro Detroit and Grand Rapids have fifty percent fewer young professional households than metro Chicago and Minneapolis. That is a 35,000 household gap in metro GR and a 140,000 in metro Detroit. Its hard to imagine any other demographic group with that kind of disparity.

Why do metro Chicago and Minneapolis matter? They are the most prosperous regions in the Great Lakes. With per capita incomes roughly twelve percent higher than metro Detroit and twenty five percent higher than metro GR. And the major reason for that gap: the proportion of adults with a four year degree. Its by far the single best predictor of prosperity.

The maps in the report dramatically depict why vibrant central cities matter. Young professionals – the most mobile of all demographic groups – before they have kids are increasingly concentrating in central city neighborhoods that are high density, mixed use and walkable. When they have kids they move to the suburbs. But because mobility declines dramatically as you get into your thirties and have kids, its the suburbs of the city they live in, not Michigan’s, where most will raise their kids.

The numbers: in the City of Chicago there are 226,000 young professional households; 43,000 in Minneapolis and St. Paul combined; in Detroit 15,000 and in Grand Rapids its 10,000.

So young professionals are the group we are having the most difficulty getting to live here and they are the most important to future economic success. That is the reason to make them a priority. Somehow we have failed to understand what seems like common sense, that if we don’t create a place where our own college educated kids want to live, we will not have a vibrant economy in the future. Its that simple!

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