Running a business in any location can be influenced by several factors. These factors include the available infrastructure, timeliness of approvals, crime rates, complimentary business services, labor costs, and so on. At that, the level of education, health care, and even entertainment options are equally important as these areas also make people want to live and work in a particular city or community. Each place has its peculiarities that should be taken into account when developing business ideas. This report includes a brief analysis of the business environment in Kalamazoo (Michigan) and outlines some incentives that can facilitate the development of the business as well as the city.
We will write a custom Term Paper on Future of Business Environment in Michigan specifically for you
301 certified writers online
Some Factors Affecting Business Development
Labor Cost and Associated Variables
The labor cost is an important factor that may affect the development of a new business (Bluestone, 2014). The labor cost can be measured as an average weekly salary. It is necessary to note that this measurement can vary in terms of the industry and qualifications of the employee. It is vital to make sure that employees will be paid competitive salaries as the financial component is one of the major factors attracting high-profile professionals. It can be difficult to provide the highest salaries as any business should be competitive, and it is essential to minimize costs, which makes business owners provide average wages and motivate employees by non-financial incentives.
In Kalamazoo, the mean hourly wage is $21.44, which is lower than the average federal wage (slightly over $24) (Bureau of Labor Statistics, 2016). These figures mean that people earn reasonable wages (which can be beneficial for new businesses that do not have enough funds to pay high salaries) but may want to move to other locations where salaries are higher. Importantly, the most developed industries in the city include trade and transportation, manufacturing, and education and training (Bureau of Labor Statistics, 2017). It is noteworthy that the infrastructure of the city is well-developed and appropriate for manufacturing.
According to the Bureau of Labor Statistics (2017), the level of unemployment has decreased during the past months and is only 3.1%. It is also noteworthy that people’s income and expenditure show that such areas as entertainment, food, and restaurant business are likely to increase in the future (Bureau of Labor Statistics, 2015). The rate of people having income between $30,000 and $100,000 is quite high (slightly over 46,5%), but almost 18% of people still live below the poverty line. Therefore, it is important to take into account the buying capacity of people living in different communities.
The areas that show the most remarkable growth (business, manufacturing, education) suggest that a large part of the population of Kalamazoo has a high-school education or higher education. For instance, 20.4% of the population have a high-school education, 27.8% have some college education (without a degree), and 18.5% have Bachelor’s degrees (“Kalamazoo, Michigan education data,” 2016). These characteristic features of the population have already attracted investors in many spheres. Zoetis, a leading animal health company, plans to invest over $64 million to develop its manufacturing and supply facilities (Jennings, 2017).
The most promising business areas are education and manufacturing. The global trends should also be taken into account when developing business ideas. Innovation and technology have become the pillars of contemporary society. The recent decisions made by the federal government concerning the environment can also lead to an increase in entrepreneurial effort in the sphere of environmental protection and research (Barrett, 2017).
The pace at which decisions are made is quite high, and the city’s government commitment to certain values is remarkable. For example, the Kalamazoo government is committed to decreasing the city’s carbon dioxide input and to the development of various incentives that would address major environmental issues (Barrett, 2017). Importantly, the city’s officials address students and educational establishments regarding them as the major force implementing the change. The quick and predictable decision making of the government is one of the factors contributing to the successful development of a company (Bluestone, 2014). Such an efficient government can characterize Kalamazoo, so it can be rather easy to start and run a new business in the area.
Incentives Contributing to the Development of the City
It is necessary to note that the level of expenditure on education is not very high, although a large part of the population has college education and degrees. The explanation of this interesting fact is associated with an incentive launched in Kalamazoo several years ago. The Kalamazoo Promise is the incentive involving donations of anonymous donors to the educational sphere. In simple terms, donors pay for the education of young people living in the city (Coate, 2017).
The program provides payments for tuition (from 65% to 100% depending on the years spent in Kalamazoo high schools). The program is associated with an increase in the rate of people having higher education. Moreover, the incentive allows underprivileged groups to access various educational opportunities and increase the chances of obtaining good jobs. The program can potentially contribute to the development of many areas of the economy as well as the entire city. The unemployment rate can decrease, and the financial wellbeing of the population can improve considerably.
Business Opportunities and Incentives
The potential of the city is remarkable as it has a significant rate of the median age of its population is 34, the rate of education attainment (high school and higher) is over 93%, decreasing unemployment rate and increasing investment from various federal and local companies and individuals. The governmental focus on environmental sustainability and investment into the educational area unveils numerous opportunities in such spheres as innovation, technology, as well as food and services. A successful business can provide services and products related to technological advances. The business can manufacture devices that can potentially address some environmental issues.
It can also be profitable to produce devices and provide services associated with the educational sphere. For instance, the production of devices for or provision of services to young learners or students of colleges can be a successful business idea. At that, running a small restaurant or providing associated services in or near educational establishments or campuses can also be profitable since the number of students in the city is likely to increase.
To help such businesses develop and contribute to the development of communities, the city’s government should come up with certain incentives. The educational incentives (like Kalamazoo Promise) can be expanded to reach larger populations. At that, it is important to encourage young people to obtain degrees rather than simply attend college. A similar incentive can be funded by the government, but it will have stricter rules funding students committed to succeeding in the academic and further professional life.
It is also necessary to support the development of small businesses, especially associated with such areas as technology, environment, innovation, and education. Reduced taxes, access to funding, and federal programs and incentives can be beneficial. The city’s government should collaborate closely with educational establishments and fund research in the sphere of the environment. The commitment of major officials and the entire population to environmental sustainability can become a stimulus to Kalamazoo’s development. The city can become one of the hubs of environmental research and innovation. The city has the necessary resources, including infrastructure, manufacturing facilities, educational establishments, and research institutions.
On balance, it is possible to note that Kalamazoo is characterized by significant business potential. The city’s population is young and committed to contributing to the development of the community and the entire nation. Recent incentives have enabled the population to obtain higher education, which is likely to translate into the development of the high-profile labor force. Innovation in the sphere of manufacturing and education can become the key to the individual and the city’s success.
Get your first paper with 15% OFF
The production of innovative devices applicable in the sphere of education and food products and services can be profitable as the resources are available (infrastructure, quite low mean hourly wage). Small restaurants and companies providing associated services can also contribute to the development of the city as this sphere is developing at a high pace. Finally, the government has done a lot to achieve such success, but it can do much more. For instance, entrepreneurs can obtain access to various programs (involving funding) and reduced taxes.
Barrett, M. (2017). After Trump pulls out of Paris pact, Kalamazoo vows climate action. Web.
Bluestone, B. (2014). What makes working cities work? Key factors in urban economic growth. Web.
Bureau of Labor Statistics. (2015). Consumer expenditure survey. Web.
Bureau of Labor Statistics. (2016). Occupational employment statistics. Web.
Bureau of Labor Statistics. (2017). Economy at a glance. Web.
Coate, P. (2017). Kalamazoo and New York: Different models of college scholarship programs. Web.
Jennings, K. (2017). Zoetis plans $64.5 million investment in Kalamazoo and Portage. Web.
Kalamazoo, Michigan education data. (2016). Web.