The Color of Money: Diversity Improves Economy

Seven years ago, Vandana Pednekar-Magal moved from India to West Michigan, entering a place that has long been known for its homogeneity.

But things are changing, and she's noticed it. The area is becoming more diverse, with hundreds of new Indians like herself moving here, among many other cultures.

“In the '70s, there were about four or five families,” says Pednekar-Magal, a journalism professor at Grand Valley State University. “Now there are over 300 in the greater Grand Rapids area.”

In fact, from 2000 to 2005, the Asian Indian population has increased 70 percent in Kent County, from 1,440 to 2,443 according to Census Bureau figures. Meanwhile, the population of whites has been flat.

All Asian communities combined increased 15 percent over that same five-year period and those who identified themselves as Hispanic – which is not considered a race, but an ethnicity – increased by 30 percent over that time.

This growing diversity isn't just good for Pednekar-Magal and people of other cultures that are increasing. Regions that offer a wide array of cultures and people are the most successful economically, and one of the keys to Grand Rapids' success in the long-term is embracing and leveraging diversity.

The overall change is subtle – whites made up 82 percent of the county population in 2005 and 83 percent in 2000. But it's important, says Charles Ballard, a professor of economics at Michigan State University and author of Michigan's Economic Future.

“Creative people seem to really like and thrive in an environment that is diverse,” Ballard says. “A diverse environment is more accepting than one that is not diverse.”

Smart, interesting and innovative people are attracted to areas that are tolerant of cultural differences. These knowledgeable and creative people are valuable in today’s economy because they stimulate growth, Ballard says.

Pednekar-Magal says that there are now enough Indian families to have a couple of cultural organizations but not enough that she has seen an increase in any other amenities such as grocery stores or restaurants.

“The local businesses have sensed the various cultural communities in the area and are catering to their basic needs,” Pednekar-Magal says.

Still, Grand Rapids and the region don't yet have the density of Indians to bring specialized groceries like those found in Chicago, New York or Ann Arbor. Pednekar-Magal says the skills that accompany a diverse workforce bring much to the economy.

“Every community offers something of its own to the economy,” Pednekar-Magal says. “It’s especially beneficial to local businesses.”

That's why universities, including GVSU, put so much effort into recruiting people of diverse backgrounds, she says.

“We live in a more globalized world, which is why GVSU wants to internationalize,” Pednekar-Magal says. “They want their students aware of other cultures outside of their own communities. If individuals are exposed from the start, it will make it much easier to adjust in the future.”

Birgit Klohs, president of The Right Place, a regional, public/private economic development organization serving greater Grand Rapids, pointed out that the generation growing up right now is the most diverse ever in the United States. This group is multiracial, multicultural, and multiethnic. Millennials, as demographers call them, comprise about 70 million people born from 1977 to 2003.

Klohs says we really do not have choice whether or not to embrace them – they are here. Our future success as an economy and as a country is dependent on them.

“They are our future,” Klohs says. “These are smart, educated people and they want to participate. We must embrace them to go far.”

Lou Glazer, president of Michigan Future Inc., an economic think tank that comes up with ideas on how to improve the economy, says recruiting and retaining young talent is a key for any area that wants to succeed.

“Talent in itself is diverse and this young group values diversity,” Glazer says. “For this reason, it is important that communities value diversity as well.”

Ballard says that in the last 50 years, international trade has been one of the major engines of economic growth. Trade among countries has increased and, he says, those able to take advantage of these connections are in distinct advantage economically.

“If you’re able to interact with someone else who is different from you,” Ballard says, “you can learn from them.”

Learning from and connecting with others is vital to economic growth. If you cannot, or will not, communicate with others than you are cutting yourself off from any growth, Ballard says.

“For example,” says Ballard, “South Korea made aggressive efforts to connect with other countries and is now one of the fastest growing economies. North Korea, on the other hand, cut itself off from much of the world and its economy is very poor.”

Diversity brings with it the ability to take advantage of special skills that others contribute to the community, he says.

“Different groups have different skills,” Ballard says. “The more skills the better.”

It is these individual niches that makes diversity positive for the economy. Ballard says this is how we learn from others.

“Take restaurants for example,” he says. “As people from various cultures arrive in a community, that population is exposed to foods they didn’t know about before.”

The effects of diversity aren't limited to restaurants. Music, literature, arts, sciences, inventions, etc. are all positively affected by the knowledge that comes with learning from those who are different from you.

“A variety in goods we consume is valuable to consumers,” Ballard says.

How important is diversity – racial, cultural, ethnic, ways of thinking? Just look at the communities that are doing well. These are places attractive to everyone from around the world.

“Communities can’t afford to write off certain groups of people,” Glazer says. “It will only retard their economy.”

Photos:

Murals depicitng cultural and racial pride around Grand Rapids

Photographs by Brian Kelly - All Rights Reserved
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