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The Right Place launches 10-year plan to grow tech sector in greater Grand Rapids

Posted By: MiBiz on September 6, 2022.  For more information, please click here to read the source article.

Economic development agency The Right Place Inc. has launched plans to transform the greater Grand Rapids area into a technology and innovation hub over the next 10 years.

The plan, which was publicly released today, calls for a 4-percent increase in tech employment in the region, which would require about 20,000 more tech-sector workers.

The plan details strategies for developing and attracting talent, building an ecosystem of entrepreneurship and innovation, and marketing the region to both tech companies and tech workers.

“It’s pretty clear across the national and global economy that tech is an absolute driver of economic growth,” The Right Place President and CEO Randy Thelen told MiBiz. “And as you look into the makeup of our economy in West Michigan, we’ve got a lot of things working in our favor — we’ve got a relatively diversified economy. But one area where we don’t measure up is in the tech economy.”

Currently, about 33,500 tech-related jobs make up about 6.1 percent of the region’s economy. That figure is closer to 10 percent in “aspirational regions,” Thelen said.

“If we want to be on par with some of the best of the best regions in terms of economic performance, we have to strive to get the tech economy to be a bigger part of what we do here,” Thelen said.

The Right Place’s plan — produced in collaboration with about 200 local leaders, including businesspeople, startup incubators, K-12 educators and higher education institution administrators — calls for partners across the region to work towards educating 12,000, reskilling 6,000 and attracting 2,000 new tech workers in the next decade. According to the plan, local institutions currently graduate about 480 tech graduates annually. That rate would need to more than double to meet the plan’s goals.

Thelen said he has already seen growth in the tech talent pipeline, including efforts like West Michigan Center for Art and Technology’s expanding tech offerings, upgrades to the Grand Rapids Urban League’s computer labs, and local universities growing their tech programs. “We’ve created some momentum by engaging in gathering leadership from across the region to help think up the plan, or dream up the plan, if you will. Now they’re working, already, on rolling up their sleeves and implementing the plan,” Thelen said.

The launch of Grand Rapids Tech Week is another element to the strategy that is already underway. Hosted by community partners in Grand Rapids Sept. 21-24, Tech Week is designed to showcase the region’s tech community.

Building on strengths

Regions that have become successful tech hubs in North America share focuses on innovation, multiple entry points and support for research and development and startups, according to a report by The Right Place. Although existing venture capital flow in greater Grand Rapids has increased in recent years, totaling $34 million between 2014 and 2021, venture capital investing in the region doesn’t measure up to aspirational markets like Nashville, which experienced $515 million over the same time period, or Salt Lake City, which totaled $691 million.

The plan’s strategic goals for talent development include scaling existing programs aimed at introducing K-12 students to STEM and increasing academic equity in education, and partnerships between education institutions and local companies to retrain or upskill existing talent. The plan also seeks to intentionally grow the diversity of the tech talent pipeline and form an education-focused subcommittee of The Right Place Tech Council, which focuses on helping software-oriented businesses in the region grow.

Since its founding in 2010, Ada-based software company Michigan Software Labs has benefited from the efforts of local universities. As the company has grown, it has also started recruiting from outside the region.

“The talent pool here has been fantastic. Our universities do a fantastic job of creating talent,” said Joshua Hulst, co-founder and managing partner of Michigan Software Labs. “But it’s also been really cool kind of seeing how West Michigan and the area that we represent has started getting that national attention and becoming a place that people want to move to as well.”

The Right Place’s plan calls for intentional efforts to draw “boomerang” talent back to the region and to attract new talent from the pool of more than 32,000 tech workers who have experienced layoffs this year.

“The tech economy has proven itself to be pretty mobile,” Thelen said. “As you look ahead, it’s not hard to imagine the tech economy making another move to the next tier of cities. … Here in greater Grand Rapids, we have to make sure we do our part to capture a portion of it.”

Local companies increasingly investing in advanced technology also creates an opportunity for growth in the sector, Thelen said.

Currently, Grand Rapids’ tech workers are much more concentrated in manufacturing than in other cities where I.T., custom software services, telecom, data and internet services lead the sector in employment, according to The Right Place report. Over the next 10 years, Thelen hopes to see tech and manufacturing continue to drive each other in the region.

In a survey The Right Place conducted of more than 100 local businesses, 72 percent of respondents said they plan to increase tech hiring over the next five years, which could add 3,200 new hires over the next five years. Nearly 80 percent of respondents noted technology as “highly important” to their business strategy, and 69 percent plan to increase their tech training and recruitment budget over the next five years.

Demand for tech talent in greater Grand Rapids is forecasted to grow across industry sectors in the coming years, with cybersecurity, A.I., cloud-based computing and machine learning leading the field.

Expanding the talent pipeline

As women, Black, Indigenous and Hispanic people remain underrepresented in tech, attracting a more diverse workforce will be a key component of the regional strategy.

However, because the region’s tech development is in relatively early stages, efforts to diversify the workforce have a unique opportunity to build from the ground up, according to The Right Place plan.

“If we want a more diverse talent pool — not just in tech, in all of it — then we need to be able to bring those community members in and show them the opportunities of tech. That’s where a lot of the talent is that goes unfulfilled,” Davenport University President Richard Pappas told MiBiz. “I think we need to be intentional about bringing more people of color into the tech world … and colleges and universities should play a huge role in not only attracting, retaining, and graduating them, but also placing them in great jobs.”

Davenport University is in the process of launching a Casa Latina program focused on better serving Hispanic students. The university also has above-average success in retaining first-generation students, said Pappas, who serves as co-chair of The Right Place’s tech task force.

But the educational piece of talent development will depend on a variety of partners, Pappas said. To reach the goal of 20,000 new tech workers, “it will take everybody from K-12, community colleges, public and private institutions to band together,” he said.

For higher education in particular, it also requires rapid innovation.

“Technology is changing so quickly,” Pappas said. “We in higher education have to stay ahead of the coin and have to see what’s coming before it comes. We have to be able to reshape our curriculum pretty quickly.”

Hulst said Michigan Software Labs has already partnered with local universities to help them determine what skills are needed for students entering tech fields.

Growing the region’s tech talent pipeline will require investment in talent at all stages of life, Thelen said.

In 10 years, if the plan goes well, “we’ll see a pipeline of talent that begins in middle school and works its way through high school. And for those who choose to get certifications, they can go one path, if they want to choose for a degree they can go another and ultimately end up with tremendous employment opportunities in that sector here in the region,” Thelen said.

The Right Place plans to publish an annual tech sector report to track progress and adjust strategies in response to successes and challenges. An independent assessment will also be conducted by a research and strategy firm.

“We’ve seen other regions that have sort of blazed a trail and proven that it can be done,” Thelen said. “And we know — given our history in health sciences, or history and advanced manufacturing — that when we set our mind to building out an economic cluster, we’re capable of doing it.”