National Academies Press: OpenBook

Building the Ohio Innovation Economy: Summary of a Symposium (2013)

Chapter: Keynote Address: Investing in Ohio

« Previous: Panel III: Innovation Clusters and Economic Development
Suggested Citation:"Keynote Address: Investing in Ohio." National Research Council. 2013. Building the Ohio Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13538.
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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.”

Suggested Citation:"Keynote Address: Investing in Ohio." National Research Council. 2013. Building the Ohio Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13538.
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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.”

Suggested Citation:"Keynote Address: Investing in Ohio." National Research Council. 2013. Building the Ohio Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13538.
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Page 72
Suggested Citation:"Keynote Address: Investing in Ohio." National Research Council. 2013. Building the Ohio Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13538.
×
Page 73
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Since 1991, the National Research Council, under the auspices of the Board on Science, Technology, and Economic Policy, has undertaken a program of activities to improve policymakers' understandings of the interconnections of science, technology, and economic policy and their importance for the American economy and its international competitive position. The Board's activities have corresponded with increased policy recognition of the importance of knowledge and technology to economic growth.

One important element of STEP's analysis concerns the growth and impact of foreign technology programs. U.S. competitors have launched substantial programs to support new technologies, small firm development, and consortia among large and small firms to strengthen national and regional positions in strategic sectors. Some governments overseas have chosen to provide public support to innovation to overcome the market imperfections apparent in their national innovation systems. They believe that the rising costs and risks associated with new potentially high-payoff technologies, and the growing global dispersal of technical expertise, underscore the need for national R&D programs to support new and existing high-technology firms within their borders.

Similarly, many state and local governments and regional entities in the United States are undertaking a variety of initiatives to enhance local economic development and employment through investment programs designed to attract knowledge-based industries and grow innovation clusters. These state and regional programs and associated policy measures are of great interest for their potential contributions to growth and U.S. competitiveness and for the "best practice" lessons that they offer for other state and regional programs. STEP's project on State and Regional Innovation Initiatives is intended to generate a better understanding of the challenges associated with the transition of research into products, the practices associated with successful state and regional programs, and their interaction with federal programs and private initiatives. The study seeks to achieve this goal through a series of complementary assessments of state, regional, and federal initiatives; analyses of specific industries and technologies from the perspective of crafting supportive public policy at all three levels; and outreach to multiple stakeholders. Building the Ohio Innovation Economy: Summary of a Symposium explains the of the study, which is to improve the operation of state and regional programs and, collectively, enhance their impact.

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