Dr. Jerry Callahan of the Van Andel Institute in Grand Rapids, Michigan. Photo Courtesy of www.vai.org

Reinventing West Virginia’s Economy, a Model From Western Michigan

(The Picket) West Virginia needs to leverage its population’s talents and experiences to promote new businesses and diversify the state’s economy, said Dr. Jerry Callahan of the Van Andel Institute in Grand Rapids, Michigan, in a public lecture about West Virginia’s future economic development.

Callahan had an audience of dozens at the Robert C. Byrd Center for Congressional History and Education Friday Sept. 6. There were town residents and businesspeople in attendance, but student interest was minimal.

Callahan spoke at length about how his native west Michigan reinvented its regional economy to better suit the realities of the modern world through using public-private collaboration and capital investment to promote new businesses and innovation. In contrast to eastern Michigan, including Detroit, which was also once a major player in the auto-manufacturing industry, western Michigan is now a hotbed for startup life science and biotechnology firms.

There are a number of similarities between West Virginia and western Michigan, according to Callahan, including similar population sizes and a past dependence on a small range of declining businesses. He believes that adopting a similar approach of promoting capital investment and concentrating talent to form new companies and industries in the region would have serious long term benefits for West Virginia as it has for western Michigan.

A notable exception to the similarities between West Virginia and western Michigan that Callahan was clear to point out was the difference in educational achievement between the two regions. Though they have similar high school graduation rates, West Virginian’s are less likely to have graduate or undergraduate degrees. Given that the eastern Panhandle sits against Maryland and Loudoun County, some of the wealthiest places in America, he said that including them in economic planning and making West Virginia an appealing place for people from those areas to work and live would be beneficial and improve the state’s talent pool.

Callahan said that West Virginia could try to expand its energy industry in new directions rather than focusing heavily on coal. Promoting advanced manufacturing might also be an area the state could focus on, given its strong blue collar workforce.

To create the necessary “gravitational pull” and attract people and money to the state, Callahan also suggested West Virginia could leverage R&D funding to promote investment in development, and create low tax tech zones to encourage business formation.

When asked about the state’s current brain drain problem, where many college graduates leave the state for opportunities elsewhere, he said that making West Virginia an attractive place to live is the best way to ensure they come back. Callahan suggested that young people leaving the state to acquire new knowledge and experience can actually be a good thing, saying that if West Virginia has opportunity for them in the future, they will want to come back to settle with their families, bringing all their new knowledge with them.

Callahan stressed that starting out with modest and attainable goals was important in keeping legislators happy and ultimately finding success. The initial phases of economic development in this fashion is a dice game where many more new businesses fail than succeed. He said that in these situations people need to redefine success, and instead of only looking at the failures, communities and businesses need to focus on what was learned and what resources were redeployed back into the community to its benefit. Eventually, there will be new firms that find long-term success, and feed the economy to promote the region’s continued success.

Ultimately, Callahan said, only West Virginian’s can determine what model and industries would work for their state, given its  economic situation, geography, and culture.

Dr. Callahan’s lecture was the second in Dr. Hendrix’s series of presidential lectures.

Demian Nunez is the managing editor of The Picket. He can be reached at dnunez01@rams.shepherd.edu.

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