Oakland County, Michigan -- 1993
Chapter Three
Business to Business
Set about to explore the key aspects that contribute to Oakland County's vitality and prosperity and quickly you bump into an inescapable truth: Oakland is a vibrant mass of existing infrastructure, a rich web of business activity, home to thousands of professional people and institutions, people whose presence and steady efforts provide a wealth of service and support to the area, institutions that underwrite an extraordinarily healthy economy and future.
The "business" framework as it exists is truly a source of stability ... and the basis upon which Oakland County continued to rather dramatically embrace the future in 1993.
It was not by accident that Oakland County in 1993 had become the kind of county that most counties only imagine.
To the outsider it should be made clear: people from Oakland County do not wear its success on their sleeves. They don't have time for posturing. Quite frankly, there's too much work to be done. Which is not to say there isn't sufficient heart for taking time off to enjoy the rewards of hard work, imaginative enterprise and good old-fashioned business to business networking, interacting, riding win-win relationships into the next century. There is.
Not posturing, not getting caught up in what has really happened in Oakland County, most residents go about their way, pursuing business interests, pursuing their values, tending home and family, traveling near or far, caught up in a comfortable and tuned-in version of mainstream American existence. It is only from afar that the Oakland County imaging takes place. Seen "on paper," Oakland County is an extraordinary place ... where a dramatic surge in business activity, in research and development and in a broad range of meaningful commercial endeavor has been underway for more than a century ... with trumpets blaring since the 1960s and '70s.
Oakland County, from a business perspective, is Michigan's answer to the Sunbelt. The scope of activity runs from automotive to imaging, from Volkswagen of America to Jered Brown Brothers of the United Kingdom, from Orion to Walled Lake, from Madison Heights to Farmington Hills, from Lyon to Leonard, from Holly and Highland to Addison Oaks. It emcompasses electronics, embraces Pinifarina, exalts fasteners, fanciers of fine furs and seekers of multiple fortunes, starting right here, in the late-twentieth century.
To say Oakland has everything in a business sense is just about correct and yes, fairly exciting, given the fact Oakland County is just that -- a county, a 912-square-mile mix of the good, the very good, the promising, the promised and the promise of more to come. More being opportunity, for those, at least, tuned into the possibility. In Oakland, they are many.
Some of them are wholesalers, others function in the realm of professional and business services, including law firms, accounting practices, real estate companies, engineering and construction firms, architectural and engineering firms and insurance companies. In essence, they form the undergirding of our progress ... and they remain a constant dynamic in this leading economic hub.
Oakland County flourishes as these thousands of essential companies do -- through ardent attention to excellence, to customer comprehension and retention, to being attentive to what it takes to succeed, in southeast Michigan, in modern-day America and in the changing world we share with those whose support and interaction make Oakland County what it has become. And continues to become.
In its fullest sense, Oakland County in 1993 was a functional extension of free enterprise pushing through the challenges of economic restraint, sustained through open and interactive relationships with the interests of education and government. They say capitalism is an incentive system. Compete successfully and you're rewarded with profits. Typically, the competition occurs in the production and distribution of goods and services. In 1993, in what is referred to as Metropolitan Detroit, an increasing share of the capitalist swirl took place in Oakland County.
Businesses -- some 38,000 of them -- called Oakland County home in 1993. Their location? Just about everywhere. Primary commercial and residential hubs were Southfield, Farmington Hills, Troy, Auburn Hills, Royal Oak, Birmingham, Bloomfield Hills, Pontiac, Waterford and Clarkston. But business was everywhere, throughout burgeoning Oakland County.
In the southeast sector, new companies and old added spark to southeast Michigan's combustion of business activity in communities such as Ferndale, Hazel Park, Pleasant Ridge, Huntington Woods, Oak Park and Madison Heights. North, along the Interstate 75, Woodward Avenue and Telegraph Road corridors, cities like Berkley and Clawson, townships like Bloomfield and West Bloomfield and once-residential enclaves like Keego Harbor and the City of Orchard Lake Village emerged as important centers of business life, adding broad definition to Oakland County, circa-1993.
By definition, it is an area that extends for hundreds of miles, encompassing a massive number of identitities, images and aspects of reality. Comprehended in a moment, it is the diversity that embodies 1993 Oakland County. Certainly "interurbia" is a term that fairly accurately speaks to what happened to America after the rural and urban phases of our development as a country. Cities and suburbs have become contiguous, stretching for hundreds of miles. Since the late-1950s, population attracted to urban areas has been moving to fill in the open country existing between major metropolitan areas, creating new suburbs.
Called interurban sprawl, in some cases, it has also translated into a new order that in other cases -- including Oakland County -- has amounted to an amazingly coherent "system" of cities, towns and villages -- some 61 in total. Combined they comprise Oakland County, perceived far and wide as one of America's truly successful and dynamic boom counties of the 1990s ... and rolling with tremendous confidence and momentum into the next century.
Seen objectively, the business to business atmosphere in Oakland County in 1993 was not without its points of stress.
Downsizing in the automotive industry cast a certain shadow on the economic picture in Oakland County. In a Grubb & Ellis Market Report in the early-1990s, however, it was noted growth in the nonmanufacturing sector has been impressive, consistent, diversified and virtually robust.
"Key non-automotive industries -- chemicals, office furniture, plastics. lumber, machinery, business services and wholesale trade have flourished and created thousands of new jobs since the economic recession bottomed out in 1982," a 1990 Economic Overview reported. "New business incorporations (in Metropolitan Detroit) excced 20,000 for the sixth consecutive year and reliance on auto companies for jobs decreased 25 percent in the last decade; only nine of every 100 workers are on the Big Three payroll."
While dependency on the auto companies has decreased significantly, the Grubb & Ellis Market Report noted Detroit and its surrounding area continued to build on Detroit's strong manufacturing heritage. "Michigan continues to capture private investment dollars," the report stated. "From 1983 to 1988, Michigan posted $3.7 billion in total manufacturing investment, second only to California with $5.1 billion. And, for the second consecutive year, Michigan led the nation in investments in new manufacturing plants, warehouses and laboratories."
As automakers came to terms with issues related to over-capacity, Oakland County's economic base also seemed to come to terms with the need to fill the gap with tomorrow's jobs today, so to speak.
According to sutdies conducted by the Institute of Labor and Industrial Relations at the University of Michigan, Oakland County has the strongest urban economy in Michigan. Only three areas in Michigan exceed national average growth in total private employment since 1979: Oakland County, the Grand Rapids metropolitan area and the Ann Arbor metropolitan area -- and growth in Oakland County is well in excess of the other two areas.
By the late-1980s, Oakland County had over half the jobs in the metropolitan area in business services. Assessing the location of the region's office buildings, that came as no surprise to anyone.
Detroit's total office inventory surpassed 60 million square feet in 1991 and the Grubb & Ellis Marketing Report determined about that time that suburban locations accounted for nearly two-thirds of that space.
Clearly, Oakland County has gone about the task of restructing toward a more service-oriented economy. During the decade of the eighties, Oakland's work force grew more rapidly than that of any major economic area in Michigan, also greatly exceeding the national average, the institute study continued.
"Oakland has earned its membership in the club of large suburban communities nationwide which are out-performing the rest of the country by a wide margin," the institute's Economic Outlook for Oakland County in 1992-93 reported. Oakland also had a higher level of per-capita income than any other area in the state, and it has been the second-fastest growing in this category.
Oakland County has by far the highest level of personal income per capita in Michigan. In 1989, the last year for which data are available, income per person in Oakland County was $26,052, well above any other area in the state. This was about $8,500, or 50 percent, above the state and national averages.
Institute researchers confirmed what the man on Long Lake Road already knew: Oakland ranks among the top one percent of the counties on the nation. In a comparison with other counties, the University of Michigan researchers discovered that counties with some of the fastest growth in personal income per capita from 1979 to 1989 has some of the largest dclines in maunfacturing employment.
Measured strictly by jobs, 1993 was an impressive year for Oakland County. Michigan's economy grew at a faster rate than the nation's, and Oakland County continued to lead the state in nearly all economic categories. Modest economic rebounds following the 1991 recession were spurred by improved consumer purchases, homebuilding activity and vehicle sales responding to low interest rate regime and improved financing opportunities. Institute researchers pointed to reduced inventory stocks, continued strengthening of final demand increased production and employment.
Recovering, through 1993, seemed to be the operable phrase for the local economic picture. The Oakland County job market, most analysts agreed, would keep improving through the early-to-mid-1990s. Moderate employment gains were predicted with service industries expected to pick up a lot of the steam. "Oakland's position as the leading major economic area in the state, as as one of the leading counties nationwide, seems secure," concluded the Institute of Labor and Industrial Relations at the University of Michigan.
David Littman, senior analyst for Comerica Bank, said, "The economy here is still expanding." Employment statewide grew to a record 4,356,000 by 1992, the federal Bureau of Labor Statistics reported. Littman said job growth was stimulated by improved production in Michigan's automotive industries. Gains were also significant in the service sector, particulary health care jobs and in construction, where The Associated Press reported low mortgage rates spurred a rebound in housing. In the seven-county area that includes and surrounds Detroit, Oakland County was responsible for 40 percent of residential construction from 1985 to 1989, according to a U.S. Department of Commerce Bureau of Statistics report.
Based on research conducted by Oakland County's Department of Economic and Community Development, these revealing images of Oakland's business atmosphere surfaced in 1993:
* The vast majority of new business activity is an outgrowth of existing firms. More than 90 percent of the founders of new firms were involved with an existing company.
* The majority of new firms are providers of business services.
* More high tech firms are homegrown compared to low tech business.
* About one third of firms in manufacturing and business services export up to 40 percent of their primary product outside of the state; another third export up to 100 percent of their primary product. County firms appear to be primarily national in economic orientation. Most foreign exporting is done by manufacturing firms.
* High growth firms are mostly high tech firms. Four percent of county businesses can be cnsidered to be high growth. Approximately 80,000 people are employed in these firms.
* Ten percent of county businesses and employees are associated with emerging products or rapid growth. Steady growth or stable firms represent 80 to 85 percent of the businesses.
* About 10 percent of Oakland County firms are technology-based to a large degree. One third of the firms are not technology-based and one third describe themselves as low technology-based.
* Eighty percent of Oakland County firms employ one to five persons. These represent one quarter of the employment base. Five percent of the firms employ more than 100 people and account for over half of the existing jobs in the county.
Keeping Up To Date
The Oakland County Community Development Division was established in 1975 and works to revitalize communities, to eliminate deteriorating community conditions and to administer federal grants. Community Development is a dynamic, cooperative effort between County and the 48 participating block grant communities. Since the program began in 1975, Oakland County has received over $70 million to improve sustandard housing, revitalize neighborhoods and commercial areas. Also, the funds are used to expand economic opportunities for all citizens.
Looking Ahead
Not ready to rest on its laurels, county leaders in 1993 established a new Oakland County Business Roundtable. Formed by Oakland County Executive L. Brooks Patterson, the roundtable has Oakland County Community College chancellor Patsy Fulton as its co-chair and former General Motors Corp. Chairman Robert Stempel serving as its other co-chair. Among other leaders recruited to join this prestigious group are Kmart Corporation Chairman Joseph Antonini and Comerica Inc. senior vice-president David Littmann.
In an interview with The Detroit News, Fulton said the Business Roundtable was established to bring together educational entities, business and government to work together to prepare Oakland County and the State of Michigan for the 21st century. "For too long, businesses existed in isolation, education and government existed in isolation. We haven't looked at how to work together. With the limited resources we have, we must collaborate. Oakland County is still one of the healthiest areas in the nation but we can't rest on our laurels. Everywhere I go people are talking about how we have to look differently at the future than we have in the past. Look at what's happened with the Big Three. Look at the downsizing. Everyone realizes it's not business as usual in Oakland County."
Patterson said bringing business, education and government together to draft an agenda for the 21st century in Oakland County was directed "to make sure we are more than competitive to lead the state and the country into the future." Patterson cited the development of a new $38.5 million Science Center at Oakland University a forecast of 200,000 new jobs over the next ten years as definite signs that Oakland County has "tremendous potential" to continue to play a vital role in regional affairs.
The operative words, said Patsy Fulton, are vision and action. "We have to develop an Oakland County vision of the future, determine a strategy to get us there and embark on it. We have both the talent and the vibrancy to enter the 21st century," she said. "To succeed we must collaborate and I do see a collaborative effort."
In the Executive Summary to a report assessing results of surveying efforts involving 916 CEOs in the county, executives imput relative to the impact several issues have on their firm's growth. "The future of Oakland County depends on an economy that balances the requirements of the established automotive sector with the demands that new firms, especially high-tech and business service firms, have on the county's economy," the report began. "In steering this path toward future progress, Oakland County will need to balance economic growth and environmental quality against the resources that the county currently has to offer."
