Reputation — even that of a state — means everything, says Ohio Department of Development (ODOD) Director Bruce Johnson.
For years, Ohio’s primary strength has been its manufacturing sector, but Johnson says that’s not what the state needs to be known for now.
Fresh from a stint in the Ohio Senate, Johnson is working to apply Gov. Taft’s directive to turn Ohio into a high-value, high-tech business state. But it’s an uphill battle, he says, one that will take a great deal of money and marketing to win.
With its Rust Belt history, Ohio is not one of the first states high-tech companies consider, despite impressive research and development institutions like The Ohio State University, Battelle Memorial Institute and the Cleveland Clinic.
But that may be changing. Ohio is putting its money where its mouth is with the Third Frontier Project, a $1.6 billion, 10-year plan to expand Ohio’s high-tech research capabilities and attract start-up companies to create high-paying jobs for Ohioans.
“It’s wonderful if OSU discovers a new process that monitors the heart rate in patients diagnosed with heart disease,” says Johnson. “But if it doesn’t create jobs, then it’s not economic development.”
SBN sat down with Johnson about Ohio’s future as a high-tech business state.
How competitive is Ohio when it comes to attracting companies?
Ohio is very competitive and consistently ranks in the top 10 when it comes to factors like new product development and investment. We compete very effectively for growth and development companies.
Our strength is manufacturing, more than many other states, and we have a large number of transportation companies. With our location, we also have a large number of distribution companies.
What types of companies are most attracted to Ohio and why?
The types of companies attracted to Ohio cannot be categorized. Our economy is tremendously diverse. We’re not No. 1 in any one thing, we cross a broad number of categories.
Ohio hasn’t reached its full density, so we have a lot of room for development. That’s where we are and where we’ll continue to be. We are known for our manufacturing, and right now, the products we manufacture the most are automotive parts and rubber and plastics.
We also have a strong heritage in agriculture, but the number of employees in farming is declining, mainly because productivity is up. Farming is a commodity business, and with any commodity, you have to be as efficient as possible. Farming is a huge industry, but its growth is not going to be exponential — or even sustained in the future.
What types of companies is the state hoping to attract and why?
We like to say high-growth, high-wage and high-tech companies. We finished a study of how Ohio can best compete, and (found) it is where our research strengths intersect with our industrial strengths.
There are five primary industries which we feel we can compete the most effectively for: information technology; advanced materials; power and propulsion; biosciences; and instruments, controls and electronics.
It will require persistence in innovation. Building an innovation structure is as important today as building a communications infrastructure was to last century’s economy. The bottom line is, if they can do it in China, they will, for much less.
What are your current and future plans to attract these companies?
The governor has outlined a new strategy, and a major component in it is the Third Frontier Project. The project got its name because first we were an agriculture state, then we were a commodity driven state and now the goal is to become a state of high value added, high-tech companies.
We’re very focused on Ohio becoming an R&D center, so we’re dedicating $1.6 billion spread out over 10 years toward that goal. Our plan for this funding is to upgrade our innovation structure by developing ways to maximize collaboration between Ohio institutions like OSU and Battelle with industrial partners to make products.
We are also funding Wright Centers of Innovation focused on the five product areas and assisting in the commercialization of research, turning it into products that our citizens can produce and earn a wage. It is a long-term project, and its metrics include changing the average wage in Ohio, increasing the number of start-ups, federal research and number of grants received by the state.
We want our huge manufacturing base to turn this research into products. These products could be in health care, like a new heart monitoring device that we would manufacture in Ohio. We want to keep the production of these products here, and not in New Jersey or Tokyo.
What are your goals and biggest challenges?
My goal in the long run is to change the state’s reputation. Most companies could locate or invest somewhere else. The bottom line is that the decision is often driven by reputation — the preparedness of the labor force, the access to venture capital and the business climate.
We have incredible assets in those areas, but the perception is that we are caught in the Rust Belt. We have to change that perception to show Ohio has a dynamic business climate and our work force is prepared. Once people come here to investigate, we are much better off because our assets are impressive.
Everyone has heard of Research Triangle Park in North Carolina because they have done a good job marketing it. The Third Frontier Project will help to change our reputation and create success stories that will create more success. We can target investments to build a tax base and standard of living, but it will need marketing.
The marketing part is under discussion. We are working with regional economic development directors on tax structure improvements and to tell our story in a targeted way to business decision-makers — that we have a good quality of life and talent in the state where they can focus their investment.
Has the department’s focus changed since you took over as director?
No, the study commenced right after I got here, and we are putting the architecture in place to make Ohio’s economy more competitive in those high value added, high-tech industries. You have to be an innovation leader, that’s where the economy is going, and that innovation needs to become part of your culture.
The more researchers you have becoming entrepreneurs, the less dependent you’ll be on large multinational corporations.
How to reach: Ohio Department of Development, (614) 466-2480 or www.odod.state.oh.us