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GRDadof3

Will $1 Billion in medical development in GR spur the economy?

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I'm sure we've discussed this before, but the Press has on its FRONT PAGE a story about the $1 Billion in medical developments underway in GR right now, and how much it will (or won't) spur the economy. Stocked with the usual pessimism.

http://www.mlive.com/news/grpress/index.ss....xml&coll=6

One thing they bring up is that with each medical job created, 1.7 spinoff jobs are created. Whereas with each assembly plant job, 2.5 jobs are created. I can't believe that people seriously throw this stat out anymore. With the 300,000 manufacturing jobs lost in Michigan in the past 5 years, the spinoff jobs from manufacturing have to be in the negative category. I would say if you invested in manufacturing and built an auto supply plant today in GR with 100 workers, there would be 0 spinoff jobs in 5 years because there will be jobs lost at that plant and others.

How does everyone else feel about the exploding medical industry in GR? Headed in the right direction? Need to be majorly expanded? A nice start?

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I think its a nice start, however, I think Jay Van Andel also touched on it a bit in the article, that the commerical end will be really important. As said, I am really waiting for the commercial shoe to fall to see if it will be a highly sucessful venture vs being succesful.

Will we medical manufactoring start up in the area?

Will we see local offices of Merck, Perrigo, etc to take advantage of the research/med school?

As the article mentioned, would locally drivern venture capitolists help push start ups off the ground?

Could the Grand Angels fill this void? It looks they have placed investments in the industry in the past.

Angels Give BioMed Firm A Lift

Are there any other options for locally funded venture capitolists out there?

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I don't know too much about venture capitol, but I am pretty sure that doctors and others in the medical industry have disposable income. If they live and shop downtown they can spur the econmy.

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It is a good start.

It is a done deal that there will be tons of spin-off industries in GR? Not honestly.

What would be the need? Nothing that can be done face to face cant be done just as well from across the country or around the world.

Need a medical part? Order it online and have it arrive via overnight delivery. Why would you build a whole plant here?

Need to hold a conference? Video uplink.

There may be some boom from these projects, but it will be 20 years before we see it. No different than with the furniture industry.

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Need a medical part? Order it online and have it arrive via overnight delivery. Why would you build a whole plant here?

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They wouldn't need to build a whole plant; they would contract it out. Medical industry widgets are already being made here anyway. You've got local manufacturing outfits running lean -- less overhead. Local outfits with many skilled manufacturers. You have local manufacturing delivering their product overnight -- without expensive shipping. I'm sure there are plenty of reasons why local manufacturing would be the right fit for Medical Mile.

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What I am still a little fuzzy on is how much of this will create spinoff business, and how much will be for just meeting the needs of the local population. For example: VAI would be classified as an economic driver, but will the new cancer center and children's hospital have the same effect? I see it as just servicing the community.

And as far as helping downtown, it seems that it is being designed to be detached from the rest of the area. The auto dependency and pedestrian unfriendly design lends itself more to people driving to work, doing their jobs, and then getting in their cars and driving home. Hopefully, I am wrong.

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I think that the Children's Hospital will certainly be a driver, compared to the other components as the cancer center that will be meeting local needs. There are only 4 Children's hospitals within the state...

Devos - Grand Rapids

CS Mott - Ann Arbor

Bronson Methodist - Kalamazoo

Children's Hospital of Michigan - Detroit

I am not sure of the extent of the services offered at the Kzoo Childrens Hospital, but I certainly believe that GR will pull from its metro and as far north as Traverse City potentially.

Edited: Thanks GR Urbanist... that would be one amazing museum!

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I think that the Children's museum will certainly be a driver, compared to the other components as the cancer center that will be meeting local needs.

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Detroit got kicked in the teeth because it is a one horse town and that horse being the failing American auto industry. Heeding that lesson from the Motor City, I don't want Grand Rapids making that same mistake with Health Care and Life Sciences. What if one day some time in the future, Health care takes a nose dive or Grand Rapids was out competed by another city or foreign nation in this sector? Its great that health care and life sciences is taking off in this city. In fact, I hope it continues to prosper here. But Grand Rapids needs to put out more effort to bring in other industries in addition to what is happening to Health Hill in order to really build a robust and diverse economy that will hold its own well into the future.

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What I am still a little fuzzy on is how much of this will create spinoff business, and how much will be for just meeting the needs of the local population. For example: VAI would be classified as an economic driver, but will the new cancer center and children's hospital have the same effect? I see it as just servicing the community.

And as far as helping downtown, it seems that it is being designed to be detached from the rest of the area. The auto dependency and pedestrian unfriendly design lends itself more to people driving to work, doing their jobs, and then getting in their cars and driving home. Hopefully, I am wrong.

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I also think the numbers comparing spinoff jobs between health sciences/manufacturing may be misleading due to the fact that most medical professionals will make a higher salary. My opinion is this development is going to be huge for this city.

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I'll preface this comment by saying I know very little about insurance and how hospitals make profit (or non-profit).

What worries me about hitching our economic cart to the Medical Corridor horse is that it appears to be linked so much to our current health insurance structure. The more people that get treated and the more expensive that treatment is gets passed on to individuals, employers and government. The percent of individuals without health coverage continues to rise in the county and west Michigan (close to 12% for 18-65 year-olds). People without coverage still can get treatment by hospitals- but that bill gets passed on to everyone in one way or another. Additionally, you don't have to look far to find businesses (and local government) complaining about health care costs and the increases. It is sort of a double edge sword, a great medical facility is great for the local economy but it hurts the local economy at the same time- especially if the hospitals are mostly serving local people from local employers. If we are heading for a health insurance collapse, will we be any different than Detroit?

Diversify - Diversify - Diversify

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I'm sure we've discussed this before, but the Press has on its FRONT PAGE a story about the $1 Billion in medical developments underway in GR right now, and how much it will (or won't) spur the economy. Stocked with the usual pessimism.

http://www.mlive.com/news/grpress/index.ss....xml&coll=6

One thing they bring up is that with each medical job created, 1.7 spinoff jobs are created. Whereas with each assembly plant job, 2.5 jobs are created. I can't believe that people seriously throw this stat out anymore. With the 300,000 manufacturing jobs lost in Michigan in the past 5 years, the spinoff jobs from manufacturing have to be in the negative category. I would say if you invested in manufacturing and built an auto supply plant today in GR with 100 workers, there would be 0 spinoff jobs in 5 years because there will be jobs lost at that plant and others.

How does everyone else feel about the exploding medical industry in GR? Headed in the right direction? Need to be majorly expanded? A nice start?

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I'm with bwindi25 that we need to not only grow the medical research and services sector, we need to diversify. Even in the Detroit area, medical service companies and hospitals are in big trouble because many of their clients had health insurance through the Big 3. We can have all the state-of-the-art facilities here, but if people can't pay for them, they will not be sustainable. Companies MUST work harder to find buyers for their services outside of the Grand Rapids metro area, so that that money will flow INTO the area in the form of increased demand for services and products, increased revenue and increased profitability.

In addition, we desperately need more venture capital in this area. I keep reading about the shortage of venture capital, despite the huge number of people who would like to launch different ideas. I mentioned this in the economy thread, but even David Van Andel suggested that if you have the means, it might be time to take out a "second mortgage" to help fund venture capital. I know it may sound crazy, but especially if you like more risky small cap stocks, why not take that money and invest in local people? Obviously this does not apply to people who don't have the means.

But we can't put all our eggs in the medical basket, but I don't think we're "subsidizing" a great deal of medical development, so I don't think we (collectively) are doing anything wrong. I just don't think we can all sit back and admire Healthcare Hill and believe it's the white knight.

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I agree, but all of these things. The scale of Spectrum, VAI, MSU Medschool, the offices being built, The Relocation of a great many GVSU students downtown, aren't all of these, instruments that could have a huge impact on something far more big? VAI alone has the financial backing, and venture capitol, to either create, or attract something HUGE that could easily pour money in from outside sources.

If you ask me, this whole thing is a giant economic experiment by the Amway billionares. The first thing that happened was the creation of Spectrum Health, which is heavily influenced by the Devos'. One of Spectrums hallmarks in the health care sector is how efficiently it operates. After the formation of Spectrum, the Van Andels built a world class research institution accross the street. Then heavily Devos influence Grand Valley State University, starts pouring hundreds of millions of dollars in New facilities, in what had otherwise been sleepy downtown. Other local Philanthrophists get in on the action, Lacks cancer center, Meijer heart center ect. RDV (which stands for Richard Devos) announces plans for, and almost immediately starts construction on a $120 million massive office complex.

MSU announces plans to relocate it's college of human medicine in Grand Rapids. You can't tell me that these hugely successful billionares are pouring this money into this for the hell of it. They are working in conjunction with each other, and are planning to either venture into a whole new industry, or are going to attract one altogether. Think about it, pharmecuticals is a chemical industry. Alticor produces chemical products, who's to say they wouldn't be able to adjust their facilities to manufacture medicine?

thus ends MJLO's conspiracy rant for the afternoon.

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How many cities are doing things like this? I don't see this as being a longterm solution to our economic woes. Right now its the laborers who are losing there jobs. A decade or two from now when only the wealthiest can afford health care you'll see nurses and pharmacists on the dole. When hardly anyone can afford insurance how long will all these hospitals and research facilities stay open? Maybe these empty buildings will be the next cool movement in loft condos. I'm sure there is some kind of clever marketing scheme Rooks could come up with.

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Talk about taking lemonade and trying to squeeze it back into lemons.

Conspiracy? Only the rich will have health insurance?

Don't you think if DeVos, Van Andel, Meijer and the Cooks wanted to pool their money together to do something evil (like creating sharks with laser beams on their heads!) they would. What you are seeing is old men leaving their mark on the city they've supported for so long.

This discussion has gotten very obtuse. Cities die when they don't change or are bypassed by it. You should love that we are shaking off our old skin and moving forward. If we don't, we will be like almost every other metro area in this state: stagnant.

Joe

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Cities die when the middle class disappears no matter how their income is made. Since the thread is about development spurring the economy any speculation on the sustainability of the industry wholly appropriate.

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Your speculation is stated more like fact -

A decade or two from now when only the wealthiest can afford health care you'll see nurses and pharmacists on the dole. When hardly anyone can afford insurance how long will all these hospitals and research facilities stay open?

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The world has always been mad. I do think the current activity on Michigan Hill is going to bring people in from other places and increase activity downtown but I don't think it will be huge boon to the overall economy of GR. Help yes, spur no. Sustainable, I hope and doubt. Pretty buildings, definitely. Theres always that.

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I think the point here is that what is happening to Health Hill is not the end all beat all answer to sustain our city's growth into the future. What would be a good answer is that in addition to Health Hill, the city and surrounding Metro area should be attempting to attract other industries to diversify the local economy.

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my comment was only in reference to that everyone talks like this is it. When the current projects are done, nothing else will happen. I just don't think with all of these other things in order, that this is all that everyone has planned. There has to be more to come.

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Agreed. The next "big company" that will influence GR's future is probably already here, in a small office or someone's garage. Look at Meijer, Amway, Steelcase. I'm sure nobody, including the founders, ever imagined that their companies would grow so big and become so influential over the years.

Homegrown companies seem to take care of their own backyard better than transplants, or companies that have been acquired by someone who see Grand Rapids

Joe

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