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Economic development Downriver is linked to Detroit's economy, which has declined while growth has increased in Oakland County. Historically, Downriver has benefitted from Detroit's position as an economic activity center. The decision of the Big Three auto manufacturers (General Motors, Ford and Chrysler) to base their operations in Detroit spurred economic development Downriver. The auto industry led to creation of the steel industry, which has been important Downriver.
Today, total production costs for many firms can be minimized by locating Downriver if Detroit is an economic center. Firms will generally find that transportation costs to the center of economic activity are relatively low, as they can locate Downriver along the I-75 north-south and I-94 east-west corridors. Firms near major economic centers can take advantage of this relationship by locating near transportation corridors. [7]
There has been a loss of this relationship Downriver as Detroit's economy has faltered. Former Detroit-based firms like AAA Michigan or K-Mart/Kresge are today based in northwestern Wayne or Oakland counties, further from Downriver than when they were located in Detroit. Transportation costs Downriver have increased in some instances as economic activity has moved north into Oakland County.
In many ways, Detroit is being replaced by Southfield, Troy and Auburn Hills as an economic center. Transportation and other economic advantages have been increasing for northwestern Wayne and Oakland counties while declining in the Downriver area.
Consider the example of a Southfield or Troy-based firm. Other companies doing business with the firm would find it to their advantage to be located close to Southfield or Troy to minimize transportation and production costs. Other firms then begin to locate in Southfield or Troy to take advantage of the business climate and other economic advantages.
The economic trend toward Oakland County has benefitted firms in communities like Auburn Hills, Farmington Hills, Novi, Rochester Hills, Southfield and Troy. At the same time, Downriver communities have been disadvantaged because they are two or three times as far from the center of economic activity.
Today, exploring the I-75 and I-96 Oakland County transportation corridors is a vastly different experience than travelling along Fort Street, I-75, Telegraph Road or West Jefferson Avenue in the Downriver area. [8] It is clear that Detroit's economic decline and the commercial rise of Oakland County has affected the Downriver area in a negative manner.
