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Economic Development Matters Blog

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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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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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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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The United Marketplace of America

February 6th, 2012 by Kenny McDonald

“Our supply chain is a weapon of mass competition,” Matt Rose, BNSF Railway

There are many things that united America, the pursuit of freedoms, common enemies, the bill of rights, declaration of independence, and the U.S. constitution. Another is the country’s incredible infrastructure – the transcontinental railroad, the interstate system, our air traffic control system, the electrical grids and natural gas pipelines, and today’s modern telecommunications and digital infrastructure to push bits and bytes throughout the marketplace.

Parts of this infrastructure are decaying and in need of repair or worse yet, are obsolete. However, America’s infrastructure is still the envy of the world for its sure breadth and how it has created a united marketplace for global goods with common standards and rules of commerce. I will emphasize that it is not perfect, and other markets are catching up or surpassing the U.S. in individual areas. China’s high speed trains are enviable, Europe’s public transportation system is quite impressive, and – get ready – Estonia leads the world’s countries in download speeds.

Each piece of this infrastructure needs investment, and in some cases massive investment, if we are to continue to present to the world one united marketplace. Record levels of investment are happening in some areas. According to the Association of American Railroads over $20 billion was invested in 2011 alone. Investments by CSX and Norfolk Southern in Ohio are great examples of how this is having an impact. Likewise, our metropolitan public transportation systems are changing, brought on by demand, demographic changes, technology that reduces the cost of implementation, and environmental advantages for metros that invest in these areas.

Transportation investment is directly related to economic development success for our country and our Region, and while budget realities and competing priorities are obstacles to traditional investment they can also be a trigger for creative solutions. Let’s choose the latter and create an enduring advantage for future generations.

Columbus2020
This week the Columbus2020 team will be participating in the Jones Lang LaSalle Academy in Phoenix and will meet with a few Phoenix based companies. The team will also travel to New York City for an internationally based trip to meet with a number of consulate’s offices and trade associations, in part to prepare for our India and China missions.

Kenny McDonald
Chief Economic Officer

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