By Bill Ferguson Jr.
Ohio is taking a wire brush to its Rust Belt reputation, generating an economic renaissance that has created almost 400,000 jobs since the end of 2010.
In the 1980s, as Midwest manufacturing began to stagnate, Ohio took a hit. As a new century dawned, more than one million Ohioans worked in manufacturing; by 2010, just 612,000 factory jobs remained.
The state was forced to adapt in the post-industrial age to an information-age economy based on technology, biotechnology-health care, logistics and other cleaner, greener industries.
Manufacturing isn’t dead in Ohio. It’s now called advanced manufacturing, and it’s one of nine industries targeted by JobsOhio, the state’s private, nonprofit economic development company created by Gov. John Kasich through the Ohio General Assembly in 2011. “When people say manufacturing, the range of manufacturing is putting food products together, putting automobiles together, putting pharmaceuticals together, lots of things,” Aaron Pitts, senior managing director at JobsOhio, says. “We happen to have a legacy in being competent at that.” Manufacturing accounted for roughly 692,000 jobs at the end of 2015 in Ohio.
Pitts says he cringes at the term Rust Belt because it doesn’t accurately reflect how the Midwest and other traditionally heavy manufacturing areas function now. “There’s been a secular decline in manufacturing overall in the United States, and Ohio hasn’t been immune to that,” he says. “Our existing manufacturers are increasingly becoming more technical. They require a range of skill that is different than before. We still have the know-how, the work ethic, all these advantages, and our people are evolving with the companies that are operating in this space.”
Gone are the dirty shop floors: “You would’ve gotten very greasy 20 years ago, 30 years ago, and now you might wear white gloves to put transmissions together,” Pitts says.
Many people say advanced manufacturing is so clean that you can eat off the floor. It’s just one example of the economic challenges brought on by an expanding global economy, challenges that Ohio is embracing. It’s important for the state to adapt to such change and remain at the forefront of the new economy.
Other primary industries—some old, some new—that JobsOhio officials are focused on growing: aerospace & aviation, automotive, biohealth, financial services, food processing, information technology, logistics & distribution and shale energy & petrochemicals.
In its annual report released in March, JobsOhio reported record results for last year: 330 projects with 23,602 new jobs and $6.7 billion in new capital investments. It also said it helped retain 54,233 jobs in 2015. In 2014, the company said it assisted 276 companies that committed to creating 21,377 jobs, retaining 52,140 jobs and adding $6.1 billion in investments.
JobsOhio thrives partly from its network of regional economic development partners: the Appalachian Partnership for Economic Growth in southeast Ohio; Columbus 2020 (central); Dayton Development Coalition (west); Regional Economic Development Initiative (REDI) Cincinnati (southwest); the Regional Growth Partnership (northwest); and Team NEO (northeast). JobsOhio derives its revenue through a contract with the Ohio Department of Commerce’s Division of Liquor Control to operate the JobsOhio Beverage System liquor business.
REDI Cincinnati is doing its part to attract jobs to Southwest Ohio. In 2015, REDI helped attract 7,497 jobs to the area, including:
- Barclaycard US, part of the Barclays international financial services firm, committed to a new call center in Hamilton that will create 1,500 jobs.
- ADVICS Manufacturing Ohio Inc., an automotive brake-parts producer, expanded for a third time, adding a 216,000-square-foot operation in Lebanon and 260 jobs.
- Assurex Health Inc., a pharmacogenomics company, decided to locate a new headquarters with research-and-development operations in Mason.
“Greater Cincinnati is quickly becoming an important player in Ohio’s economy,” says Kimm Coyner, managing director Project Team and JobsOhio at REDI. “Just this year, the U.S. Federal Bureau of Economic Analysis named the region the fastest-growing economy in the nation. We’re home to a vibrant startup scene and more Fortune companies per capita than New York, Chicago or L.A.”
According to the U.S. Bureau of Labor Statistics, Ohio nonfarm payrolls stood at 5.452 million jobs at the end of 2015—up 384,000 in five years and the most since 5.449 million jobs were tallied in April 2006, before the Great Recession. Ohio’s Gross State Product stood at $576.1 billion at the end of 2014, up from $478.4 billion five years earlier, the latest U.S. Bureau of Economic Analysis statistics show.
JobsOhio is focused on two areas, Pitts says: job retention and expansion, and job attraction. “A big part of our role is to make sure that companies that are employing people here are happy here and looking to do their next investment in Ohio,” he says. “They’re living here, they’re working here. We want them to do more here.”
As an example, he points to Kroger Co., which had a 649-person back-office project in 2015. “As a national provider, they have options. They can go across the river to Kentucky,” says Pitts, adding California and New York as options for Kroger. JobsOhio provided assistance, and the Ohio Tax Credit Authority approved a 10-year jobs-creation tax credit for the project.
Attracting new jobs to the state takes a different strategy. Many companies work through advisers that help them find suitable locations. JobsOhio’s role is to show “the Ohio value proposition: where we sit in the world, our business friendliness, our abundance of natural resources, our logistics infrastructure.” JobsOhio also hires consultants in Europe and Asia to generate interest in locating in Ohio.
After generating the interest, local representatives become important. Pitts says Cincinnati, Columbus and Cleveland “are kind of small-market major-league cities” in which companies get easy access to government and business leaders.
REDI’s Coyner adds: “Greater Cincinnati, and Ohio, can provide companies with very business-friendly environments in which to
Besides selling the state’s attributes, economic development officials use another—at times controversial—tool: incentives, such as tax breaks or other financial help. “Incentives are one dimension of how we compete,” Pitts says. “We think it’s overplayed. It’s really this: If you’re looking to set up shop in Ohio, you’re not going to come here because Ohio gives you a bunch of money if it’s not right for your business. Our incentives are performance-based. So if you deliver this payroll and these jobs, we will remit to you things like a job-creation tax credit or a training grant or a low-interest loan that helps you get established here and grow here.”
Pitts says if a company promises, say, 50 jobs at $100,000 each, that’s $5 million in payroll that will generate sales, property and income taxes to the state and locality. Plus, there’s a multiplier effect in the secondary jobs such a project would generate, such as construction, restaurant and retail workers. Coyner calls incentives icing on the cake: “If a company is considering Greater Cincinnati versus another similar region elsewhere in the nation, when all else is equal, a favorable incentive package can help tip the balance.”
In a world that daily gets more connected, Ohio’s job of selling itself becomes even more important. “We’re in the middle of the United States, flyover country,” Pitts says. “Our culture doesn’t really value bragging [about] ourselves, so people don’t know about Ohio. We’re the seventh-largest state in the country, and we’re the 21st-largest economy in the world if we were an independent country. We’re kind of big, and we’re kind of modest.”