Keynote Address:

Investing in Ohio

James Leftwich
Ohio Department of Development

Mr. Leftwich, who said he had been on the job for only four weeks, said that his new position came with “some big challenges.” The state had lost of 400,000 jobs in the recession, the second highest number in the country, and ranked 47th in economic growth. But he said there were already signs of improvement. A report by Ernst & Young had ranked Ohio third in terms of business climate for new investments. Another report from the Small Business and Entrepreneurship Council ranked Ohio 9th in the quality of tax climate for small businesses and entrepreneurs. “We know that’s not enough,” he said, “but it’s what we’re focused on.”

One encouraging program, he said, was the Common Sense Initiative, which evaluates regulatory guidelines that make it difficult to do business in Ohio. The department is creating Jobs Ohio, a private nonprofit that will focus on economic development. It will be funded through House Bill 1222 that transfers the assets of the state’s wholesale liquor system into the program, where the money is intended to provide a recurring source of revenue and to fund investments in promising opportunities. Jobs Ohio will not only spend locally but also invest in companies wanting to locate to Ohio. And it will develop strategies for delivering long-term returns, he said, establishing an investment portfolio that “feeds itself” by creating sustainable long-term opportunities.

“Jobs Ohio will also give us the opportunity to move at the pace of business,” said Mr. Leftwich, “not at the pace of government. I know that makes some folks a little uneasy, and it is a place of natural tension. So we want to move at the pace of business, but we also want to be deliberate, thoughtful, and smart about our investments.”



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OCR for page 72
72 BUILDING THE OHIO INNOVATION ECONOMY Keynote Address: Investing in Ohio James Leftwich Ohio Department of Development Mr. Leftwich, who said he had been on the job for only four weeks, said that his new position came with “some big challenges.” The state had lost of 400,000 jobs in the recession, the second highest number in the country, and ranked 47th in economic growth. But he said there were already signs of improvement. A report by Ernst & Young had ranked Ohio third in terms of business climate for new investments. Another report from the Small Business and Entrepreneurship Council ranked Ohio 9th in the quality of tax climate for small businesses and entrepreneurs. “We know that’s not enough,” he said, “but it’s what we’re focused on.” One encouraging program, he said, was the Common Sense Initiative, which evaluates regulatory guidelines that make it difficult to do business in Ohio. The department is creating Jobs Ohio, a private nonprofit that will focus on economic development. It will be funded through House Bill 1222 that transfers the assets of the state’s wholesale liquor system into the program, where the money is intended to provide a recurring source of revenue and to fund investments in promising opportunities. Jobs Ohio will not only spend locally but also invest in companies wanting to locate to Ohio. And it will develop strategies for delivering long-term returns, he said, establishing an investment portfolio that “feeds itself” by creating sustainable long-term opportunities. “Jobs Ohio will also give us the opportunity to move at the pace of business,” said Mr. Leftwich, “not at the pace of government. I know that makes some folks a little uneasy, and it is a place of natural tension. So we want to move at the pace of business, but we also want to be deliberate, thoughtful, and smart about our investments.”

OCR for page 72
PROCEEDINGS 73 RUNNING ‘JOBS OHIO’ LIKE A BUSINESS To run Jobs Ohio like a business, Mr. Leftwich said, would require several conditions. One is that it must be part of a network of regional partners, especially NorTech and Team NEO. This is meant to ensure that all entities share their understandings of market, competition, and risk, and to allow partners to take advantage of the same regional and state strengths. Another focus is a tool kit designed to make the right investments to grow the state economy. Perhaps the best-known of these tools, the Ohio Third Frontier, has already been a “tremendous asset” to businesses, universities, and local governments, he said, and provides a sound infrastructure to build on. The revenues from the liquor agreement should strengthen the Third Frontier, building on investments already made in technology commercialization infrastructure, networks, and the workforce. A key, he said, is to “be sure we’re meeting the workforce demands of businesses in the sectors where we want to grow.” One area his office studies is the current patterns of investment, and clues to the best ways to encourage venture capital investment. A primary need, Mr. Leftwich said, is to ensure that collectively “all these things work together.” Jobs Ohio would focus on targeted growth, including the growth high-tech jobs and emerging market opportunities. It would target not just the number of jobs but also the payrolls, per capita income, technology transfer, patents developed, and patents actually reaching the marketplace. “We work very hard with regional partners to make sure we leverage the resources both here and in other regions.” Finally, Mr. Leftwich said, a powerful tool was leveraging opportunities brought by Federal partners. These include the NASA Glenn Research Center in Cleveland; Cincinnati’s applied EPA research center; and Wright-Patterson Air Force Base in Dayton. Collectively these organizations represent more than $3 billion in research annually. “While they are producing intellectual capital for their own mission needs,” he said, “we need to apply and develop that capital for commercial applications as well. In this way we can grow our own industry base from the same intellectual capital being invested by Federal agencies.” DISCUSSION Dr. Wessner asked how much he planned to emphasize indigenous innovation—promoting innovation from existing clusters—and how much he would use the classic model of attracting new businesses and jobs. Mr. Leftwich said the state could “grow tremendously without going out to attract other businesses. Between our Federal agencies and university system we probably have $5 to $5.5 billion worth of research being conducted in the state. We first look hard at that, then how to fill in the gaps. Then we try to work with local businesses to grow them, rather than spending money to bring other companies in.”