Insufficient Skills and Labor

Our printing and paper cluster faces several important challenges to its continued health and growth. Our troubled paper industry suffers from a declining labor pool and is unable to replenish itself with younger workers. The paper industry, like many manufacturers in the area, is struggling with a poor image problem among high school students and their parents. Many students do not realize that paper manufacturing has become a highly computerized industry. This technology-intensive paper manufacturing process requires new computer and math skills for production workers unavailable at local training institutions. Coping with insufficient skills in pressman and other printing positions have added management and on-the-job training costs for local firms. Both industries consequently seek enhanced cooperation with Western Michigan University, Kalamazoo Valley Community College, other vocational schools, and local high schools to better design curricula and position their industries as attractive career paths.

Continuous Technology Modernization

Paper and printing industries also face the need for continuous technology modernization. Old equipment at local paper mills (e.g. unintegrated paper and pulp processing) has resulted in higher costs and subsequently contributed to the lack of competitiveness that has plagued the regional paper industry in recent decades. At the same time, the printing industry is faced with rapid technological changes in printing processes creating a major expense to small and medium-sized firms.

Cost Competitiveness: High Input Prices

Part of the declining employment in the paper industry can also be explained by high regional business costs. Manageable costs for local water and waste-water treatment is crucial to the competitiveness of the local paper industry. In addition, local paper businesses cannot procure adequate cheap raw material inputs in the form of recycled waste paper. Underdeveloped collection channels and considerable out-of-state shipments of waste paper in Michigan deprive the local paper industry of this important and inexpensive input. Improved supplies of recycled paper would reduce imports and raw material use thereby increasing the value of paper output.

Stem the Exodus: Nurture Cluster

Linkages Locally

Over the years the region has experienced continual relocation of paper companies. To stem this tide, our region needs to explore the links between local paper and printing company capabilities and specializations in order to leverage business synergies. Nurturing enhanced linkages between local producers and suppliers can increase company ties to the regional economy by building new sources of advantage in specialized local supplier relationships. By creating an incentive to stay, these unique supplier-producer bonds can serve to anchor companies to the region.