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What’s Under the Hood?

May 14th, 2012 by Kenny McDonald

One of the best things about being an economic development professional is that we get to meet with hundreds of companies each year. Big, small, start-ups, foreign owned, public companies and private enterprises, companies led by consensus and those led by a charismatic founder. What a great way to gain insight about leadership and management. We are usually talking to them about the future of their business and their facility and talent needs.

Very quickly the discussion turns to the DNA of the company. What is driving your decisions about the business currently? What drives your company overall? In the best companies the answer comes quickly and is usually fairly simple. They are able to point to their core values and often they display an intense passion for developing the people that work for them. After many years of meeting with companies in this way, I can usually tell which companies have a clear direction and how we will be able to help them. Very quickly we can assess what’s under the hood, and how our team will be able to assist them in achieving their goals.

Turn this concept on its head. Our team also meets with community leaders from all over the Region. The process is much the same. What do you value? What is driving decisions in your community? What are the community’s core values? After many years of meeting with communities in this way, I can usually tell which have a clear direction, how decisions will be made, and how our team will be able to assist in these goals.

Let me say that I am usually very impressed with both the candor and the thoughtfulness by which both the company and community leaders answer these questions. I am often blown away by the creative ways in which they approach their business and their public duty. In seemingly mundane businesses and in small “places”, some of the most passionate leaders reside. As a business or civic leader – what’s under the hood of your organization?

Columbus 2020 Update
Congrats to Columbus for securing the Black Enterprise Entrepreneurs Conference and Expo to the Columbus Region in 2013. Thanks to so many for their leadership – especially Derrick Clay, Chairman of MORPC. Our team will attend the 2012 event in Chicago in one week. The Columbus 2020 team is back from the Northeast where another successful business mission was executed and more projects were identified. Deb Scherer, 2020’s director of International Business is off to Israel soon to attend the 2012 Bio-Med conference.

-Kenny McDonald

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A Must Read

May 7th, 2012 by Kenny McDonald

An insightful and fact-filled story appeared in the Washington Post this Friday. The incredible shrinking labor force, by Brad Plumer is a must read for those scratching their heads about jobs numbers, unemployment figures and political statements on both sides of the aisle.

A few facts from the article include:
- The labor force participation rate is at a 30-year low (63.6%)
- It has been declining for a decade and is predicted to continue to drop because of demographic and economic issues
- There are 3.7 job seekers for every opening (and at the same time seemingly no applicants at all for some mission critical positions in manufacturing, information technology, etc.)
- Of the people that have discontinued their search for work, 65% do not want to return to the traditional workplace, 35% very much do want to return to the workplace
- 41% of those out of work have been out of work for more than 27 weeks

Memo to the public/private leaders – economic development matters. These are fascinating and challenging times for the Columbus Region, the State of Ohio, our country and the world. Honest dialogue about these challenges and how to meet them requires your attention, engagement and talents. We appreciate everything you continue to do for our team.

Columbus 2020 Update
Congratulations to Quantum Health and their employees for their continued growth, announcing 525 jobs in Columbus last Monday. Kudos to the State of Ohio, Franklin County and the City of Columbus for their hard work to assist with this project.

Our team attendedthe Offshore Technology Conference last week in Houston. The oil and gas industry is white hot around various parts of the world and much of that spotlight is on Ohio. Our team is extremely excited about the meetings held in Houston with companies considering investing in Ohio (jobs and capital investment).

Our team is off to the Northeastern United States this week to meet with more than a dozen growing businesses considering expansions. We welcome the Brookings Institute’s Global Cities initiative to Columbus May 8th and 9th. This great initiative sponsored by JP Morgan Chase, will bring leaders including JP Morgan Chase’s CEO Jamie Dimon and the German Ambassador to the United States to our region.

Let’s have a great week.
-Kenny McDonald

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Small Pieces – Loosely Joined

April 30th, 2012 by Kenny McDonald

I recently attended a presentation at MIT where a technologist suggested a book called Small Pieces Loosely Joined by David Weinberger. At once, I knew I had to get this book. The title alone is worthy of my attention as a regional economic development practitioner. In fact, the phrase “small pieces loosely joined” sums up my feelings about how regionalism works very well.

Just like the web, regional collaboration changes our perception about what is possible, imperfect, and ever evolving. I’ve always believed regionalism requires that the small pieces (locally this means counties, cities, townships, villages) work hard to develop and maintain their history and character to reach their full potential. Occasionally, and increasingly more often as budgets tighten, the small pieces can only achieve their full potential by banding together in whole or in part with other areas to achieve this potential (regionalism).

In fact, it is a pretty apt description of the United States. Each state brings unique attributes to the table, each ruggedly individualistic, but occasionally and for certain functions these states band together in small groups (Midwest, Southeast, New England) or as a whole (national defense). It is a basic premise of America. Go it alone, take care of yourself, compete – and come together when/if necessary.

The Columbus Region is working very hard to do just this, and Ohio in a larger sense is doing the same thing through the JobsOhio Network – a collection of 6 regions throughout the state that have banded together to market/promote and conduct economic development for the benefit of the State of Ohio. Together we can do more than has ever been done before in Ohio, but our coalition and our economic development system will always be imperfect and ever-evolving. Small pieces – loosely joined.

Columbus 2020 Update
Columbus 2020 received an honorable mention as one of the top economic development groups in the country last week through Site Selection magazine. Congratulations to the great team, but, more importantly to our regional partners (200+ private sector companies and 26 public entities that make up our investors). You made this advancement possible and we appreciate it.

Last week our team visited the Hannover Trade Fair in Germany and the Industrial Asset Management Council’s spring event in Texas. More prospects were developed at both events and our team keeps pushing forward this week with another trip to Texas to meet with energy companies at the Offshore Technology Conference in Houston. Wish us luck!

This Wednesday the Brookings Institution, in a joint project with JPMorgan Chase, will host the Ohio Global Cities forum at The Ohio State University. The forum will explore how Ohio’s metropolitan areas can enhance their ability to compete globally by focusing on the interplay between advanced research, advanced industries, skilled workers, foreign direct investment and sophisticated export promotion and finance. You can register and learn more about this event here.

-Kenny McDonald

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Who is relying on us to perform?

April 23rd, 2012 by Kenny McDonald

In a few weeks the Brookings Institute will visit the Columbus Region on a worldwide tour of some of the most important metropolitan economies in the world. The Brookings Institute’s Global Cities Initiative, sponsored by J.P. Morgan Chase, our Region’s largest employer, is studying global competitiveness and wants to know what our Region is doing to address the market challenges of the 21st century.

As our team and others in our Region plan for the event, several questions come to mind. First, what is our Region doing to remain or become globally competitive?  Second, what are we not doing that we need to consider or can learn from other regions of the U.S. and the world? How does the global competitiveness of our Region impact our country’s competitiveness? Finally, what is our role in making the U.S.A. the best place in the world to do business, be educated, and live a quality life?

Chicago’s former long-time Mayor Richard M. Daley, who is deeply involved in the initiative, addressed a group last week and pointed to his own perspective as a Midwest Mayor. He pointed out that he wanted to study the Los Angeles region and understand what they were and were not doing, because a huge percentage of his economy was dependent on the flow of goods that come through Long Beach every day. If Long Beach gets sick, so does Chicago.

This made me consider the Columbus Region’s role in the economy as one of the top inland ports, a producer of talent for the world through our 50+ colleges and universities, our manufacturing base, and as a finance and insurance hub. If we don’t perform to our potential, who else are we holding up?

Add this to the many reasons I believe professional, innovative economic development matters so much. Our team is here to move the Region forward so that economic opportunities are created for our people and our businesses, but that isn’t all. Often we only think of this in our community or state, but it is important to understand and consider the obligation we have to continue to strive for excellence in infrastructure, smart economic development policy, and talent development. Companies and people in metropolitan areas around the globe are relying on us to deliver products and services so that their economies continue to move as well.

Columbus 2020 Update
Our team is back on the road this week in Hanover, Germany and at the IAMC conference in Austin, TX. Industrial Asset Management Council is a leadership group of corporate real estate leaders focused on manufacturing. It is critical that we continue to be present to understand our customers and educate others on the benefits of doing business in the Columbus Region and the State of Ohio.

Thanks to Dr. Mark Smith, President of Ohio Christian University and Columbus 2020 Board of Directors member. Dr. Smith will host us in Pickaway County on Tuesday along with leaders throughout the area.  OCU alumnus and world renowned leadership expert John Maxwell will speak. Just another reminder of the great alumni connections the Columbus Region has around the world.

-Kenny McDonald

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A world of data in our backyard

April 16th, 2012 by Kenny McDonald

According to the 2011 IDC Digital Universe Study the world’s collected information is doubling every two years. The on-demand, information technology, knowledge economy lives and breathes right here in the Columbus Region. A visit to Chemical Abstracts Service (CAS) last week validated that and reminded me once again of the important role the Columbus Region plays in the information economy. If you are a chemist, anywhere in the world, and need to search for information related to molecular data and the patents that surround it, then you turn to CAS and the search products they provide.   Powered by AEP’s electricity and brainpower supplied by The Ohio State University (just minutes away), CAS has transformed into a digital giant and a linchpin for global data management and research.

Travel ten minutes in any direction and you will find Battelle, the largest private research organization in the world, The Ohio State University, our nation’s most comprehensive university, and OCLC, or the Online Computer Library Center, the worldwide library system. Columbus businesses such as Manta and Information Control Corporation are organizing this data in meaningful ways for other enterprises, and creating jobs in our region along the way. Just an hour away in Dayton Teradata and Lexis Nexis are working on similarly important issues to aid in the management and storage of information. Add the huge alumni network of graduates from our 50+ college and university campuses in our region and you can begin to see that our region impacts the science and technology community in nearly every corner of the planet.

Columbus 2020 Update
The Columbus 2020 Board of Directors met this past week to discuss the strategy and emerging trends impacting our region’s economy. Growth in the energy, agribusiness, and manufacturing sectors were discussed. Our team and local economic development allies were fortunate to hear from KPMG regarding their recent Competitive Alternatives study – ranking Ohio’s cities as some of the best business locations in the world. Work continues this week with travel to Texas, New York and Boston to meet with businesses and location advisors considering our region.

-Kenny McDonald

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Remember Manufacturing?

April 9th, 2012 by Kenny McDonald

We live in an on-demand economy. If we want something, and can generally afford it, it can probably be purchased and used very quickly. Three functional parts of the economy need to work together to make our everyday purchases possible. First, the primary industries of mining, farming, and raw material extraction and refinement need to take place. The second function is manufacturing, in essence, taking the raw materials and processing them into something useful for consumers and other business processes. Finally, tertiary industries move the raw materials and finished goods to market and account for the sales, marketing and management of it all.

In recent history, because of internet technologies and great supply chain innovations, there has been an enormous focus on supply chain innovation and new ways to sell and deliver products. Perhaps overshadowed are great innovations in the primary industries (shale fracking technologies and agribioscience come to mind). Oh – and then there is manufacturing. We take for granted the constant and profound innovations that come from making both complex and everyday items better and less expensive.

There are nearly 1,800 manufacturing companies in the11-county Columbus Region, and over 80,000 people are directly employed by this sector of the economy. This sector experienced a 43% increase in productivity (output per worker) in the first decade of this century. Names like Honda, Anchor Hocking, DuPont, Rolls Royce, Worthington Industries, and Abbott Nutrition are among some of the brands that make products that are delivered around the world from Central Ohio. However, hundreds of the companies quietly make the components and machinery within the supply chains of the automotive, aerospace, food and consumer products industries.

According to the National Association of Manufacturers;

  • The United States is the world’s largest manufacturing economy, producing 21 percent of global manufactured products. China is second at 15 percent and Japan is third at 12 percent.
  • U.S. manufacturing produces $1.7 trillion of value each year, or 11.7 percent of U.S. GDP. For every $1.00 spent in manufacturing, another $1.35 is added to the economy.
  • Manufacturing supports an estimated 17 million jobs in the U.S.—about one in six private sector jobs.  Nearly 12 million Americans (or 9 percent of the workforce) are employed directly in manufacturing.
  • In 2010, the average U.S. manufacturing worker earned $77,186 annually, including pay and benefits. The average non-manufacturing worker earned $56,436 annually.
  • U.S. manufacturers are the most productive workers in the world—far surpassing the worker productivity of any other major manufacturing economy, leading to higher wages and living standards.
  • U.S. manufacturers perform two-thirds of all R&D in the nation, driving more innovation than any other sector.
  • Taken alone, U.S. Manufacturing would be the 9th largest economy in the world.

Columbus 2020
This week the 2020 Board of Directors meets to discuss the initiative’s progress and get an update on the regional economy. Our team is returning from the International Plastics Showcase held in Orlando, where we met with regional, national and international companies about doing business – or more business within Central Ohio.

-Kenny McDonald

 

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Connecting Places

April 2nd, 2012 by Kenny McDonald

The map of the world is constantly changing. History tells us that there is constant and evolutionary change caused by economics, politics, war, even luck. What seems to endure is the places created through this turmoil, the actors that shape these places and the enduring institutions and structures they create.

The economic map of the world we have today shows massive change over the years. Entire centuries were dominated by either Middle Eastern, Asian, or European dominance. European dominance was diminished by America’s growing power in the 1940’s and 50’s. The remaking of the American economy in the early 80’s challenged the U.S. to confront its structural problems within both business and government. What was considered massive debt (quite laughable given our current levels), and growing significance of emerging economies created urgency to America’s reform and our competitiveness rose.

What has endured is the connections that arose through this turnover. Personal relationships were forged, innovations were surfaced through the exchange of cultural ideas, and unbreakable bonds were created. Visit Shanghai and see the English and French influence, California and Texas and see the historical connections to what was the dominant economy of Mexico. Visit the Northwest side of the Columbus Region (Marysville and Dublin, Ohio) and see the influence of Japanese automotive manufacturing excellence and innovation. Formerly adversarial relationships transitioned to interdependent relationships through economic development.

Economic development is a people business, but it is also about connecting places on the globe. Travel to western Europe and you find that there is a special relationship with the United States, travel to India and see how the world’s largest democracy and the world’s most successful democracy share common values, travel to Asia and see a wary eye toward one another (part respect, part cultural misunderstanding).

We are absolutely convinced that it is important and necessary for people and places to connect. The Columbus Region is reaching out around the world not only to talk to growing companies, but to take what is best from those places and incorporate them into our businesses and communities. Apple’s trip to China this past week is a great example of bringing our values to other countries through our economic actions.

Businesses from the Columbus Region are also taking their culture with them around the globe and adding character and building understanding through their actions as employers.

Columbus 2020 Update
Columbus 2020 was in Michigan, Germany, and the U.K. last week working with clients and reaching out. Our team hosted clients and continued to interact with local businesses to gain understanding and take actions that make them more competitive. Our team travels to the NPI show in Orlando this week to meet with polymers companies (one of Ohio’s largest industrial sectors) and is taking action on several fronts along with its local and state partners to make the Region more competitive.


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It is not enough…

March 26th, 2012 by Kenny McDonald

We all work hard and care about economic development because it is a way to create better quality of life for our friends, neighbors, and future generations. It is not enough. It isn’t enough to create a dynamic economy, or to have beautiful parks, public art, and inspiring cultural amenities. It isn’t enough to have schools that rank well and a burgeoning international community. It is only enough when our most vulnerable feel safe, have fair opportunities for success, and the whole becomes greater than its parts. Acts of violence, hatred and even subtle acts of prejudice created out of a sense of fear have no place in healthy communities.

Economic development is the practice of creating a sense of abundance in our communities – the intentional act of making the economic pie bigger so that more people have access to shelter, security and a better life. Nonsensical acts like those in Florida last month and across the world each day will likely always occur, but the act of reaching out, of providing a helping hand, often in the form of economic opportunity, can alleviate some of these senseless acts and make the world a better place. Let’s commit to working harder to create a sense of hope and abundance throughout each and every community.

Columbus 2020 Update
Here we come New Orleans! We are so proud of our Ohio State Buckeyes for their achievement of reaching the Final Four. What a great way to showcase the whole university and the Columbus Region to the world. President Obama was at Ohio State this past week talking energy and learning about some of the great research going on right here in Columbus (he also picked The Ohio State University for the Final Four). Similarly, Licking County dedicated an entire day to understanding the economic opportunities being created by the rapid expansion in the oil and gas industry in Ohio. I applaud Rick Platt from the Licking County Port Authority and Central Ohio Technical College for putting on an informative event. Glad to be a part of it. We also applaud the efforts of the City of Columbus and several surrounding communities to work together so that the process of finding sites and understanding local programming makes more sense for both the private sector and local governments.

Finally, I want to welcome home, at least for a few days, Deb Scherer from the 2020 team. She has been in India speaking with dozens of growing companies considering the U.S. market, and deepening relationships with the business community in India established during 2011’s trip with Franklin County and Commissioner O’Grady.

Let’s keep up the great work. Only two more to go Buckeyes!!

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The Complete Package

March 19th, 2012 by Kenny McDonald

There’s no good idea that can’t be improved on.
Michael Eisner

I’ve touched on workforce a lot lately because it is an economic development topic that requires persistent action and improvement. Let us now return to our old friend – economic incentives. A recent article in Area Development touched on the subject very well. The debate between providing incentives to new and expanding companies vs. providing incentives to start and grow “local” companies has a long history.

I think it is a bit of a false argument, that states and communities should undergo a regular process to investigate whether all of the incentives that they offer for all types of business are working or not. Whether it is the services provided to companies through a process called economic gardening or the provision of incentive to growing companies, the answers are usually not very clear and require thoughtful discussion and analysis. Some incentives work, but take time to have an impact.  Others may work well, but have unintended consequences. On top of that, what works in one region may not work well for another.

I strongly believe that communities that understand that tax and government financing incentives are direct tools that must be used appropriately, but that the strongest incentives go well beyond that in a modern economy. Growing companies in a dynamic world economy require communities to invest and prepare the physical environment and the workforce, to advocate for smart economic policies that help their industries to grow, to tax them fairly, and to work with them to attract and retain talent.

With the many competing interests of strained government resources it will always be a challenge to offer the complete package for every type of company, but it is a goal well worth pursuing.

Columbus2020 Update
This week Columbus2020’s team returns from India having met with a number of growing companies and having strengthened international relationships in and important part of the world economy. Thanks to Deb Scherer for all of her hard work and due diligence.

Our team also hosted allies and investors at this weekend’s NCAA tournament at Nationwide Arena. Thanks to all that attended. Finally – congrats to our Ohio State Buckeyes for having advanced to the Sweet 16. Go Bucks!

Kenny McDonald

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Harvesting Talent

March 12th, 2012 by Kenny McDonald

Last week’s investor update focused on Ohio’s revamping of its workforce development/training system. The message – our system has become too complex for its customers (employers and job seekers), and it is an urgent and strategically important component of our economic development system. Message received. Our team can testify that talent and workforce development is at the top of our client’s priority list.

Let me give you an extreme example of how the economic development community is dealing with this issue. Rapid City, South Dakota, a growing city near the Bakkan Oil Reserves, has started to recruit workers or “harvest talent” from other states. This is nothing new, but its formality of the effort is. Western South Dakota is a sparsely populated area that is growing fast. Reports are that in Williston, North Dakota, the epicenter of the oil boom in that area of the country, McDonald’s is offering starting wages of $18/hr.

So, let’s bring this back to Ohio and other parts of the country that have large population centers and are starting to inch back to positive, healthy economic growth. What do we think of this? Do we want other regions to harvest our talent? Given our growing demand and the demographic changes we are seeing within our workforce – we need to nurture our crop of talent with extreme care, regularly rotate our crops so that we have a sustainable future, and we need to diversify so that we are not overly dependent on one sector or demographic.

All of the notes above point to a new phase of economic development which will include an unrelenting war for talent – the human capital necessary for companies to innovate, grow and prosper. This challenge is as fascinating as it is hard; thankfully we have great people throughout our state and our Region working on this problem.

Columbus 2020
Update First, The Ohio State University is in India this week (follow @presidentgee). Our team is also there meeting with growing companies with plans for the U.S. market. Our team is also traveling to Texas to speak with companies and location advisors this week with a group of our Region’s communities. Finally, we will be hosting business leaders and site location advisors at the first round of the NCAA Men’s Basketball Tournament here in Columbus at Nationwide Arena. Busy week!

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Activity Update

  • May 19 -25 – BioMed Israel with BioOhio, Tel Aviv
  • May 23 - 24 – IMN Data Center Forum, New York
  • May 23 - 26 – Black Enterprise Entrepreneurs Conference, Chicago
  • May 28 - June 3 – Memorial Golf Tournament
  • May 30 - June 1 – Area Development Consultants Forum
  • June 5-7 – Internet Retailers Exhibit, Chicago

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