Ohio's business renaissance
Ohio is on the verge of regaining its economic place in the nation and the world, a state economic development official says.
Addressing attendees of the Wapakoneta Area Economic Development Council annual meeting, JobsOhio President and Chief Investment Officer Mark Kvamme outlined three major areas that should key Ohio’s business renaissance in the 21st century.
“The thing that was really interesting to me as I toured the state and talked to a lot of different folks — as well as being very fortunate to grow up in a place that creates a lot of wealth — is I actually think Ohio is about ready for a new renaissance,” Kvamme said during his speech Tuesday afternoon.
Kvamme, who grew up in California, talked about five areas — energy costs, location, work force, agriculture and banking and finance — but stressed the first three areas as reasons for his belief.
“Energy does matter again — access to inexpensive energy does matter,” Kvamme said. “Energy is very, very important for powering multiple different industries.”
Data regarding the feasibility of extracting oil from shale in Ohio is becoming more encouraging and would provide Ohioans and Ohio businesses with access to an inexpensive form of energy.
“We are already starting to see the difference this type of energy can make in Ohio,” Kvamme said. “A group came out a couple of weeks ago at the governor’s energy conference that they believe in the next five years that 200,000 jobs will be created in Northeast Ohio around this industry.”
He pointed out the fact the last time an oil refinery was built in the region to help provide fuel was in the 1950s — so a changing landscape regarding energy is forthcoming.
“The second reason is, and another reason why people came here at the turn of the last century, is location, location, location,” Kvamme said. “We have 60 percent of Americans, 60 percent of all manufacturing capability within 600 miles of Ohio.”
He explained that is one reason manufacturing dominated in the early 1900s until the cost of labor increased in the 1960s, 1970s and 1980s compared to the rest of the world. At this point, executives decided to manufacture their products in other places in the world, such as China and Mexico, because labor became such a large percentage of product cost.
“What has happened in the last couple of years is that logistics costs are more expensive than the labor costs and a lot of that is because of high tech manufacturing,” said Kvamme, who noted state officials are talking with large manufacturer of appliances that may be interested in a local Job Ready Sites and relocating back in the United States. “Location is going to matter again for the state of Ohio. I actually think making things is going to be very important again whether it is piping, whether it is steel, whether it is appliances or whether it is cars.”
For Kvamme, Ohio is an ideal location because of the interstate highway system, the roads, the rail, the river and the Great Lakes ports.
A third reason is executives are realizing how things are built is as important as what and where they are built.
“Having a skilled work force is very, very important,” Kvamme said. “One of the things that is very nice about Ohio is we have a very skilled work force. One of the side issues is we have an aging work force, but we have a very skilled work force.
“What else is really exciting is we not only have that but we have an educational system that is very strong,” he said. “We have some phenomenal capabilities here, so we can educate the people and we have some people who want to work.”
He specifically mentioned The Ohio State University, Cleveland State University, the University of Cincinnati and the University of Toledo among a list of many as meeting the skilled labor force and providing high tech advances for companies.
He also pointed out Ohio is a strong agricultural state, with strength in farming and food processing. He also remarked Ohio is strong in banking and finance, with four of the top 20 banks located in Ohio.
“So when you combine all these things together — low cost of energy, the location, the work force — we have the seed corn for some amazing opportunities,” Kvamme said in front of a screen depicting JobsOhio and its goals. “Whether we like it or not, we have to compete globally. I think we do compete globally and our companies to be successful have to be cost effective compared to the rest of the world.”