A Plan For Ohio’s Economic Future

 

 

Ohio’s emergency budget balancing act contains a provision for a legislative committee to study state economic development efforts.  To help the committee in this vital work I offer the following suggestions.  All of these ideas are based upon the theory of “The Tipping Point” a seminal book dedicated to the premise that small change can make a big difference.

 

1.              Appoint competitiveness Czar:  Economic development success is based on many factors, but competitiveness is the glue that binds each of these factors.  One strong person focused on this single issue but with the charge to pursue competitiveness across department boundaries with the ability to catalyze opportunities in Ohio’s private sector would give Ohio a unique advantage.

 

2.              Encourage universities and local governments to repeat the process:  Ohio universities are said to be the key to transition from industrial to information economy.  But in truth Ohio colleges leave this mission to chance, that’s why technology developed here seldom results in economic development here.  Ohio’s liquid crystal leadership is a good recent example.  Ohio moves agricultural competitiveness from college to farm with extension agents.  It’s time every Ohio university has the same dedication to turning the laboratory of innovation into the engine of prosperity.  Throwing money at the Board of Regents with a PR driven Third Frontier Fund will not create growth minus this linkage.

 

3.              Reform taxes to encourage growth:  In the real world of job creation, most of us ride the bus, very few of us drive the bus and fewer still build the bus.  Without builders and drivers there are no bus riders.  Ohio’s personal income tax with nine brackets ranging from .7% to 7.5% makes Ohio very unattractive to the people we count on the most, bus builders.  Illinois, Indiana, Michigan and Pennsylvania all have a flat tax that makes bus riders pay more than they might in Ohio, but bus builders pay far less.  Competitiveness dictates that we flatten Ohio’s tax code to be more rewarding to wealth creators if we desire a greater share of future economic growth.

 

4.              Teach entrepreneurship in schools: Ohio’s schools function in a manner designed to meet the needs of the industrial era.  The postindustrial world requires new skills, foremost is entrepreneurship.  The National Foundation for Teaching Entrepreneurship finds that inner city kids most likely to leave school without skills live in an environment that breeds natural entrepreneurial attitudes.  When skill is added to attitude lives are changed and communities blossom.  Ohio should plant this seed of prosperity statewide at once.

 

5.              Target Retirees:  The fastest growing demographic group in America is the retiree.  In many respects, Ohio is well suited to serve the needs of this fast growth market.  Appalachia in particular, where scenic rolling hills, low cost of living and low crime rates are matched with friendly people and many outstanding universities that offer continuing education and entertainment, could benefit greatly.  But Ohio must eliminate one of the nation’s most onerous death tax policies, so it makes sense for Ohioans to stay here for retirement.  Eliminate this tax, utilize the university alumni lists to woo retirees with ties to Ohio, recruit developers to create retiree condo communities near campus and you will see Appalachia boom now and in the future as these retirees leave bequests to the Ohio universities that have enriched their lives, and as active retirees serve as angel investors to startups founded by ex-students seeking a life in the college towns they’ve grown to love.

 

 

6.              Police the campus area:  Ohio’s urban universities are being damaged by proximity to very high crime areas.  Given their supreme importance to the entire state’s economic competitiveness, Ohio must not rely solely on the ability of the cities to police these campus area neighborhoods.  Special appropriations from the state to cities must be granted for heavy police presence in these neighborhoods with the capital improvements budgets used to build substations in each of these neighborhoods.  The return on this investment will be attraction and retention of good students who can go anywhere and currently avoid Ohio’s urban universities.

 

7.              Solve a biotechnology industry problem: Ohio’s plan to enter the biotechnology industry through research grants to universities and the creation of biotech research centers is marred by the fact that Ohio fulfills no market need with this plan.  However, the biotechnology industry has hundreds of products in the final stages of testing.  Currently these products are made in small batches for these tests, but FDA approval brings world exclusivity on lifesaving products, once the company can find an FDA approved site to manufacture their product.  This is where Ohio should invest its meager resources in biotechnology, at the crucial point where need is great and payoff will be immediate.  In research we will be competitive with the best biotech minds in the world, in manufacturing and distribution we can be collaborative with these minds.  The jobs created by this strategy will be science related and high paying which is why the state needs to enter this field in the first place. The payoff for this strategy is short and the odds of success are high.  Investment in biotech research will take 10 to 15 years to payout and the odds of a big success with $1.6 billion are low given the current $500-800 million cost to take a biotech product from the lab to the market.

 

8.              Create an online Ohio marketplace:  Most corporations are currently purchasing most of the goods and many of the services they require on the Internet.  They have built marketplaces to link their entire supply-chain.  Ohio should utilize this technology at once, but extend the service so each state based company can sell their products, via the internet, through this marketplace.  The result will be more jobs and sales made via the internet the state can verify and collect sales taxes on.

 

 

9.              Encourage Intrepreneurs:  Ohio’s corporations must be encouraged to incubate corporate entrepreneurs, who utilize the assets of their company to create new firms in Ohio.  Columbus City Center could be revitalized by new retail concepts spawned by the creative minds currently working in the Limited empire, if they were encouraged to formulate new business and test these businesses here.  Ohio could grant a five-year tax holiday on these new enterprises as a method to spur this sort of activity.  Ohio must find a way to eliminate the movement of fast growth subsidiaries to competing states.  Cincinnati based Scripps Howard benefits from the great success and rapid growth of the Food Network and Home and Garden Network, but none of these information industry jobs are in Ohio.  Competitiveness requires that we capture the growth of our top companies.

 

10.           Prepare for Internet 2:  Ohio’s empty downtown office buildings should be given matching state grant’s to be wired for the next generation of Internet service.  The high speed Internet 2 will spawn many businesses opportunities in the digital media industry.  Ohio should work quickly to build an infrastructure suitable to capturing this growth.  The state matching dollar program will prompt business to invest ahead of market demand and create the means to keep rents affordable for emerging businesses in this space.  This simple action can put Ohio ahead of the next Internet driven business boom.

 

 

11.           Recruit Artrepreneurs:  Artists are to decaying cities what the marines are to battle, the first into the worst.  Ohio cities are filled with space suitable for both the creation and sale of fine art.  The state can create a master plan for urban zoning that shows how changes to local laws will cause this category to explode.  Moreover, Ohio can promote this strategy to artists and Ohio college students as an economic development strategy.

 

12.           Require sports marketing assistance:  Ohio has spent hundreds of millions of dollars on new stadiums throughout the state.  The managers of these facilities sell valuable advertising space to corporations.  Ohio should require advertising space from these facilities to be devoted to an economic development marketing message, thereby linking these buildings to the state’s competitiveness strategy.

 

 

13.           Build schools to be a competitiveness aid:  The new schools being constructed throughout the state should be seen as a key competitiveness tool.  This would require devotion to utilizing Internet 2 and to space within the school where community workers could be retrained through this technology.  Done right Ohio has a competitive advantage in the emerging digital economy.  Done wrong and Ohio schools will be like Orlando’s TD Waterhouse Arena, the last facility built before a design change that is now standard and a facility that was obsolete from birth as a result.

 

14.           Utilize non-traditional teachers:  Ohio can quickly improve its competitiveness by making it easy for degreed subject specialists to be certified to teach in our high schools.  The addition of teachers with professional experience outside the classroom would enrich our schools and enlighten our students.  Moreover, this would facilitate our retiree strategy by allowing for early retirement to Ohio schools for professionals looking to make a change but not yet ready to retire.

 

 

15.           Create a foundation sales force:  Ohio can and should seed many of these ideas with its own budget.  But it should also recognize the world is filled with foundations looking to fund world changing ideas so as to help take them beyond their community of origin.  If the competitiveness Czar has one good pro who can lead a team of foundation pro’s working on an as needed basis, with their time donated by their Ohio employer, the state will have a force multiplier beyond our imagination.

 

The best possible work the soon to be established committee on economic development methods could perform, is to establish that competitiveness is a mission that is never done, extends beyond all current departments and is most dependent upon the resource of human imagination and will.