State Economic Development Policies

Jean Carter Ryan

Deputy Director Ohio Department of Development Economic Development Division
Ohio Department of Development Economic Development Division

Knowledge is the only instrument of production that is not subject to diminishing returns. - JM Clark
Ohio Department of Development Economic Development Division

Economic Size and Population

Ohios Gross State Product was $381 billion in 2002
Ohio ranks 24th in the world in economic output Ohio ranks 3rd among the 50 states in mfg. GSP

Ohios Population of 11,435,798

Seventh largest state Dispersed between 8 large urban centers and 15 micropolitan centers
Ohio Department of Development Economic Development Division

Competitive Industry Base

Ohio is ranked
#1 in growth of exports over past 3 years 2nd in the production of cars and trucks 1st in the number of automotive suppliers 1st in the production of steel products 1st in the plastic and rubber industry by employment 3rd in the number of manufacturing employees (850,000)
Ohio Department of Development Economic Development Division

Ohio Ranked
2003 Governors Cup Winner
Site Selection

2004 Governors Cup 3rd Place

Site Selection

4th in photonics mfg. (1,700) 159,000 high tech workers w/payroll of $8.9 billion (2003)

Ohio Department of Development Economic Development Division

Technology Rankings
Ohio is ranked
#1 with the most best hospitals 03-04
US News & World Report

500(+) companies with bioscience focus headquartered or have a major presence in Ohio #2 in total research funding for materials engineering #5 in specialty chemical research #7 in Small Business Innovation Research grants 2 of top 10 nationally recognized polymer programs University of Akron, Case Western Reserve Ohio Department of Development
Economic Development Division

Outstanding Workforce
The labor force in Ohio exceeds 5,630,000; larger than the total populations of 31 states Ohio has 177 institutions of higher learning; every Ohio resident is within 30 minutes of advanced education, which graduate 51,000 students per year
Ohio Department of Development Economic Development Division

Strategic Location
Ohio is within 600 miles of:
60% 50% 63% 63% 70% 80% of of of of of of the US population the Canadian population US manufacturing establishments US retail operations North American manufacturing corporate headquarters
Ohio Department of Development Economic Development Division

Wealth of Transportation Resources

Ohio has the 4th largest interstate highway system in the U.S. Ohio has 6,500 miles of railroad (more than any other state) Ohio has 184 public airports The same amount of freight traffic goes through Ohios ports as goes through the Panama Canal
Ohio Department of Development Economic Development Division

Ohios Challenges The Economy

Over the last 4 years, Ohio lost over 260,000 jobs. 210,000 lost in manufacturing alone and yet at the same time major private investment has exceeded $25 billion in over 3,200 projects.
Ohio Department of Development Economic Development Division

Ohios ChallengesThe Economy

As recently as the 1960s our per capita income was well above the national average (more than 10%). Now were 5% below the national average. Last year every Ohioan is earning $1,500 less than the average American (loss of $30.7 billion in income).

Ohio Department of Development Economic Development Division

Ohios Challenges Competitive Position

Economy.com analyzes Ohios economic performance on an annual basis. Year after year, high taxes comes out as a weakness in their analysis.

The Small Business Survival guide ranks Ohio 40th in terms of our business climate, an index that is largely based on taxes. Richard Vetter of OU found in a study that low-tax states grew nearly one-third faster than high tax states.
Ohio Department of Development Economic Development Division

Ohios Response
Marketing Tax Reform Third Frontier Workforce

Ohio Department of Development Economic Development Division

Marketing
Focus on sectors play to Ohios strengths Develop sector expertise Provide qualified leads and tools to grow business Sellohio.org

Ohio Department of Development Economic Development Division

Marketing
Criteria for Ohio brand
Compelling story to attract new business from targeted industries Relevant and aspirational for current Ohio businesses Supports regional ED efforts Ideally excites and motivates Ohio residents
Ohio Department of Development Economic Development Division

Tax Reform
Reduce the rate, broaden the base Simple, fair, transparent Living with tax code of yesterday; a system that has failed to keep up with realities of today and has left us behind other states in achieving economic prosperity of tomorrow
Ohio Department of Development Economic Development Division

Tax Reform
Focus on outliers
Personal property tax Personal income tax Corporate franchise tax

Ohio Department of Development Economic Development Division

Tax Reform
Cut Ohios personal income tax by 21 percent phased-in over 5 years. Eliminate the corporate franchise tax over a 5-year phase-out period. Eliminate the tangible personal property tax on M&E beginning two years from now and implemented during a 2-year phase-out period. Inventory & FF 5-year phase-out.
Ohio Department of Development Economic Development Division

Tax Reform
Impose a new tax on businesses known as a commercial activities tax. This tax would be assessed based on revenues that businesses receive from the sale of goods and services in Ohio. The first $1 million of a business revenue would be exempted. The tax rate would be approximately .25 percent. This new tax is designed to create a large tax base and impose a small tax rate on it. It is estimated that 70 percent of small businesses will not pay this tax.

Ohio Department of Development Economic Development Division

Tax Reform
Exclude banking and insurance operations from the scope of this reform. Double the sin taxes on tobacco and alcohol immediately. Retain a percent of the sales tax scheduled to end on June 30, 2005.
Ohio Department of Development Economic Development Division

It is not the employer who pays wages he only handles the money. It is the product that pays wages. -Henry Ford

Ohio Department of Development Economic Development Division

Third Frontier
R&D = More D less R
Wright Centers
Advanced Data Management Fuel Cell Regenerative Medicine Genome Institute - $65 million in federal, industrial & nonprofit funding

Save & improve lives

Ohio Department of Development Economic Development Division

Third Frontier
Industry driven Focus on commercializing products
3rd Frontier Action grants
Diagnostic Hybrids (130 employees/Athens) On Inc. 500 fastest growing companies list

Innovation Ohio Fund

Cardinal Commerce develops software authentication systems for the credit card industry. Financial transactions over cell phones creating 127 jobs.

Spin-off companies
Ohio Department of Development Economic Development Division

Workforce
Goals
Demand-driven workforce system 1-Stops integration Business Plans

Initiatives
Healthcare worker shortage Manufacturing Workforce Council
Ohio Department of Development Economic Development Division

The winds and waves are always on the side of the ablest navigators.
- Edward Gibbon

Ohio Department of Development Economic Development Division

For more information

Jean Carter Ryan Deputy Director Ohio Department of Development Economic Development Division 77 South High Street Columbus, OH 43215 Jryan@odod.state.oh.us (614) 466-2317 1 (800) 848-1300 Fax: (614) 644-1789 www.odod.state.oh.us
Ohio Department of Development Economic Development Division

Websites of Interest
www.sellohio.org www.jobsforohio.com www.thirdfrontier.com www.ohioworkforce.org www.ohiosites.com www.business.ohio.gov www.odod.state.oh.us

Ohio Department of Development Economic Development Division