Koeze Business Ethics Initiative Study Shows Differences Between Flint and Grand Rapids

GRAND RAPIDS, Mich. - Sept. 1, 2015 - PRLog -- A new study by the Koeze Business Ethics Initiative shows that the differences between Flint and Grand Rapids come down to social capital as much as economic organization.

The study points to overwhelming evidence that the presence or absence of social capital in a region makes a big difference in how individuals, particularly young people, fare in life. Social capital has real economic benefit – and in West Michigan is often associated with religious roots, social and moral norms around work ethic, fair dealings, stewardship and philanthropic spirit.

The study – “Social Capital, Economic Diversity and Civic Well-Being in Flint and Grand Rapids” – is led by Michael DeWilde, director of KBEI at Grand Valley State University’s Seidman College of Business, and Jerry Davis, a professor of management and sociology at the University of Michigan’s Ross School of Business. They shared preliminary results of the study with more than 50 business leaders from Flint and Grand Rapids on Monday.

DeWilde and Davis examined seven areas, from entrepreneurship to racial inequalities, in an effort to explore the differences and similarities of Flint and Grand Rapids – two longtime business powerhouses in Michigan. Through research and extensive interviews in both cities, DeWilde and Davis were interested in gaining a better sense of whether economic diversity is enough all by itself to help a region prosper, or if there might be other variables at play.

“Our intent is to better understand the factors that allow for long-term economic and civic prosperity,” DeWilde said. “We also wondered which of these factors may be unique to a given region and which may be transferrable. If we can pinpoint some of the elements that either hinder or help a region’s progress and well-being, we can better encourage practices and policies that will help ensure a city or region’s prosperity in the long-term.”

DeWilde added that often these days when people – businesspersons, government officials, academics, agency directors – ask what needs to be done to address our pressing social concerns, they are asking the question of building and extending social capital.

“Our research illustrates this idea that social capital plays an important role in economic development and diversity and, ultimately, the success of a region,” he said.

Other highlights from the KBEI study include:

·       Entrepreneurship – Entrepreneurship is key to any region’s success. Flint’s entrepreneurs were largely folded into General Motors’ structure as the city became a one industry town. This diminished the prospects that entrepreneurship would continue to flourish. Meantime, Grand Rapids’ small business culture allowed for cooperation and completion and led to innovation and continued entrepreneurship.

·       Immigration – Immigration plays a key role in any region that seeks to start and sustain new businesses. Foreign immigrants – Dutch, Poles and Germans – played a major role in shaping both the culture and economy in Grand Rapids, while Flint’s “immigration” pattern over the past 60 years was largely internal as workers came from the South or other parts of the Midwest to take factory jobs. Today, the conversation in Flint continues to focus on whether the city should develop the entrepreneurial spirit of those who are already there or should the city try to attract domestic and foreign investment to the region. Grand Rapids is looking to attract talent outside the region as part of its growth strategy and to fulfill professional needs.

·       Middle class – The earlier study’s conclusion that there are two middle classes continues to be true. Both large multi-national corporations and small to medium-sized privately held firms have helped and continue to help employees reach the exalted “middle class.” Large multi-national corporations tend to produce a “dependent” middle class while small to medium-sized privately held firms create an “independent” middle class. Middle classes that are classified as dependent are subject to forces beyond their control with very little recourse, while those that are independent are mobile thanks to a wider range of talents and work experiences. Independent middle classes are also much more likely to be civically engaged and have a social capital network that helps them and the families that compose the class survive tough times.

·       Racial inequalities – The black community in both Flint and Grand Rapids falls behind the white community in almost all measures. In Flint, however, there is an active conversation about the issue. Blacks in Flint hold prominent positions and are at the forefront of drafting policies and plans to get the city back on track. In Grand Rapids, blacks comprise 21 percent of the population but are largely still segregated and there are relatively few prominent black leaders recognized as such citywide.

This research was inspired by a 1946 study by sociologist C. Wright Mills and economist Melville J. Ulmer. The study concluded that small-business cities provide their residents a considerably more balanced economic life compared to big-business cities and that the general level of civic welfare is appreciably higher in small-business cities.

The earlier study also concluded that big-business cities suffer from instability of employment and wages, a deficit of retail facilities and a larger income gap between the few very rich and the poor. In addition, big-business cities have poorer scores when measuring health, housing, education and recreation, among other items. Finally, big-business cities bear the corrosive economic and civic effects of the “absentee-owner phenomenon” of cities dominated by one or two large corporations.