People count: Population growth causes basic economic growth

posted on January 19, 2017 2:04pm

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By: Kurt Schindler, Michigan State University Extension

Attracting people to live in your area is one of the most basic and important economic development strategies. It may also be one of the easiest to do.

It seems obvious to say it, but each time someone moves to your community, that is economic growth. That person is a new customer. They buy food and services, patronize local businesses, get their car fixed, attend activities, invite others to visit them, and more. Likewise, if people move away, that hurts the community economy. 

A state, county or community that is shrinking in population cannot grow. Also, consider that in the new economy, many people choose where they want to live, move there and then look for work or become entrepreneurs creating their own employment. And people choose to move to quality places

So, a new economy development strategy is to attract people. First, any growth in population equates to growth. Second, there are certain population groups that may be more important to target than others. For example, new retirees (baby boomers) bring with them a life-time of savings and skills. Also, retirees are one of the most prolific population groups that produce entrepreneurs – people who start new businesses and employ others. This should not be a surprise. This age group has a lifetime of experience and skills, and many have savings or connections for having the funds to start new ventures.

Another sought after group (which Michigan does very poorly) are EB-5 Visa immigrants to the United States. Those from other nations eligible for EB5 are well-educated and able to invest a significant amount of money into a new business. First and second generation immigrants to the United States are this nation’s most prolific group for starting new, very successful businesses that employ many people. These are highly prized immigrants in many parts of the country, but, for the most part, Michigan does not even pursue them. 

Educated youth (millennials) is a third desired group. This represents a talent pool – what advanced industry is looking for in a community where they might locate.

Remember, one of the characteristics of the new economy is that jobs follow people. People move to quality places. Currently millennials tend to seek urban, large city downtowns to live. That trend will continue for some years yet. It is a generalization. Not everyone fits that mold. The task for rural communities or small towns is to define their niche and target those people who seek the assets and attributes they have to offer.

The ultimate local goal for the new economy is to attract and retain these people-assets: well-educated youth, seniors, immigrants and entrepreneurs. For growth in the new economy, a community and region should have a deliberate, purposeful, formally-adopted population attraction strategy. Such a strategy may involve many of the same things the community does to attract tourists, attract medical staff to a local hospital, and more.

What attracts people to a town, county and region? The same things that have already been pointed out in this series: greenand blue infrastructure, vibrant downtowns, arts, culture, activity and things to do. But more specifically, it comes down to “place matters”. People are attracted to a place. The types of places which are popular and successful in getting new population have the following:

  • Entrepreneurial infrastructure – a community that is supportive of new businesses startups and has programs such as economic gardening in place
  • Diversity – communities that are tolerant of and socially welcome diversity of race, religions, beliefs and life-styles.
  • Green and blue infrastructure – natural areas, parks, trails, water resources and so on
  • Social infrastructure – a community with social activities, events and things to do
  • Public transportation infrastructure – a choice as to how one gets around the community, not just automobile, but also bike, walking, and public transportation to and between amenities
  • Variety of housing – a choice of different types of housing, not just single family homes on lots, but also housing downtown, apartment buildings, and so on (what is important is to provide choice)
  • Information technology infrastructure – high-speed internet
  • Collaborative capacity – a community that works together and has many collaborative and cooperatives efforts for accomplishing community-wide projects

In the next part, we will focus more on place, place matters and placemaking.

Those in Michigan State University Extension that focus on land use provide various training programs on planning and zoning, which are available to be presented in your county. Contact your local land use educator for more information.

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