Selecting the USA

The wave of the future is not the conquest of the world by a single dogmatic creed, but the liberation of the diverse energies of free nations and free men.
-John F. Kennedy

This week, our team will join JobsOhio and state and local economic development groups around the country at the second SelectUSA Investment Summit. President Obama will speak about our great advantages as a nation including our rule of law, our affordable energy, our productive workforce and our great research universities.

The summit also brings together companies from around the world considering investment into the United States. Leaders of these companies are entrepreneurs and business executives faced with the daunting task of navigating the world’s largest and perhaps most complicated market. The U.S. is a competitive place often split into regional marketplaces and differing state and local systems of commerce.

It is the economic developer’s responsibility to help companies navigate these issues, introduce them to others that have gone before them, and introduce them to private and public partners who can assist in making an informed decision. It is not our responsibility to woo them to our market, to give them unfair advantage against domestic companies, or to sell against other locations.

It is an exciting time for the United States. We have great advantages and we must work to maintain and increase those advantages so that companies continue to invest and create high-wage jobs in our communities.

You can watch the SelectUSA Investment Summit here, or follow the conversation at @SelectUSA and #SelectUSA.

-Kenny McDonald

Columbus 2020 Update

  • In addition to the SelectUSA Investment Summit, the Columbus 2020 team will be in Washington, D.C. meeting with the Brookings Institution this week. Back at home, we’ll host a company evaluating the Columbus Region.
  • Next week, our team will travel to Toronto for a business development mission.

Enduring Goals

At the height of the recession and the beginning of the Obama administration, a goal was set to double U.S. exports. Given that only 1-2% of companies in the United States export products or services, it is an important and achievable goal. The National Export Initiative has brought new ideas, resources and people to the table to discuss how to help companies compete globally.

Much progress has been made. However, because of recent fluctuations in the currency markets, this goal is being questioned. While it is right to examine goals both nationally and locally, economic development requires a long-term view. Economic conditions constantly change — goals should not.

Helping our companies expand and compete around the world is necessary to level the playing field and to create jobs at home. Evidence shows that when companies grow internationally, they create high wage jobs and careers in our communities, innovate more as they adjust to fit other markets, and become more stable as they diversify their revenue streams.

Becoming more competitive is always important. Just as an athlete does not lose the benefits of her training if she doesn’t win the race, companies are better off when they prepare for international competition. Even if they choose not to serve international markets, their international competitors may come to our shores. There is simply no downside to helping our companies become more globally competent.

The goal to double U.S. exports was — and is — a priority, and we have to get better if we are to grow our economy. The Columbus Region has accepted this challenge and is working collaboratively to achieve greater competitiveness and an increase in global trade and investment. Currency fluctuations, oil prices and geopolitics will factor into our success over time, but the goal will endure and is well worth pursuing in a smart and aggressive way.

-Kenny McDonald

Columbus 2020 Update

  • This week, the Columbus 2020 team will host companies evaluating the Columbus Region.
  • Next week, our team will travel to Washington, D.C. for the SelectUSA Investment Summit.
  • The Columbus Region February 2015 Economic Update is now available. Findings in the report include 124 active projects and a regional unemployment rate of 3.9 percent. Visit columbusregion.com/reports for the full report.

Trust Wins

Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.
-Stephen Covey

It is often said that economic development is a team sport. Having been a practitioner for 20 years, I can tell you that is a certainty which cannot be overstated. The most misunderstood, abused and essential ingredient of any successful team is trust. It cannot be bought or manufactured, it can only be earned, and it can dissipate in an instant. Given all that, how do we ever achieve it?

Thankfully, the formula for building trust is straightforward. Members of a team must be transparent about their goals, operate with integrity to achieve, show that they are fallible in their efforts, hold each other accountable and understand that they cannot achieve success alone. We all know that moving your community forward is not as simple as setting a direction and saying “go.” Residents, community stakeholders, community leaders and their staffs must trust enough not only to follow, but to work together. Here’s a brief video about the importance of trust from Patrick Lencioni, author of The Five Dysfunctions of a Team and other management books.

Trust is the oil that makes the economic development engine work. Is trust being built in your community efforts? Is it eroding? What is one step you—or we—can take this week to build greater trust to achieve economic development goals?

-Kenny McDonald

Columbus 2020 Update

  • Last week, Columbus was named the No. 7 metro for economic development projects in 2014 by Site Selection magazine. The Columbus Region moved up yet another spot this year, and Ohio repeated its No. 2 ranking as a state. Thank you and congratulations to our expanding companies, and to our state and local partners! Other Ohio cities recognized include Akron, Ashland, Cincinnati, Dayton, Findlay, New Philadelphia-Dover, Toledo and Wooster.
  • This week, the Columbus 2020 team will meet with companies and attend the Forbes Reinventing America Summit in Chicago. At home, we’ll see you at the 2015 Experience Columbus Annual Meeting.

It Takes Two. Or Three, or Four…

If we did all of the things we are capable of, we would astound ourselves.
-Thomas Edison

Innovation is a complex game. Many inventions are only great if they come at the right time, are executed by the right people, and perhaps get wind in their sails from the right type of economy. A recent Harvard Business Review article on why German companies are so innovative tells only part of the story.

First, Germany makes things, just as we do in the United States, but Germany has an even greater focus on manufacturing. This is critical if you are going to apply technologies to the marketplace. The act of making a product simply puts innovation closer the things that customers use. Manufacturing is inherently innovative — requiring science, technology, skill, and trial and error.

Second, half of Germany’s economy is reliant on exporting. It is a fact that the more you export, the more you innovate. You have to constantly adapt your product or service to new markets and customers, who help provide feedback and require customization.

Third, innovations can only be applied if there is a marketplace in which to connect them to the world. I would argue that without the unrelenting innovation of the American capitalist system, there would be less motivation to innovate and little capital for the research, development and application of new technologies. Without venture capital, few technologies take flight.

Finally, while technical institutes like Fraunhofer (see their 11 basic principles here) and EWI (our own successful version of this model founded right here in Columbus) are wildly impressive, they first require basic research. That research is often conducted at American research universities, such as The Ohio State University, and by government sponsored research at the NSF or private organizations such as Battelle. Without this basic research there would be no Internet, and far fewer medical and industrial breakthroughs that have led millions out of poverty and to a better, more productive life.

We can learn from Germany’s model, and we can accelerate our own cycles of innovation, but none of us can do it alone.

-Kenny McDonald

Columbus 2020 Update

  • Our team continues to travel to the world to uncover opportunities for the Columbus Region. We just returned from a business development mission in the U.K., and we’re now in Japan on a business development mission with partners from the City of Dublin.
  • Mark your calendars for the first annual Trust Belt Conference, which will be held in Columbus May 31-June 3. Over three days, governors, mayors, university presidents and Fortune 500 CEOs who are leading Midwest communities and companies will come together to tell their story of economic transformation.

It’s Time to Build

Leaders don’t create followers, they create more leaders.
-Tom Peters

Great companies are built by those who create new markets and innovate old ones. Communities are built by those who develop the policies and infrastructure that allow commerce to flow and creators to create. Public-private partnerships exist to bridge the gap and allow projects to develop that wouldn’t otherwise occur. All of these things attract people and investment. All are required for success, and they’re more important and more possible than ever before.

The ability to start and scale a company has been aided by technology, support from the community and the free flow of information around the world. Communities don’t have to rely on a single company or the vision of a few to create a great place. Public-private partnerships are strong and business and government are working together as never before, especially at the local level.

There are those in the world who want to return to a different era. An era during which only a few had the information, know-how and access to capital to achieve great things. There is no returning to that era. The lid is off the bottle. So what should we build today?

  • The world’s best workforce — trained and motivated talent that helps companies innovate and compete globally
  • The world’s best infrastructure — pathways that allow goods and ideas to move globally
  • The world’s best companies — innovators that serve customers and solve real consumer problems globally
  • Resilient communities — places that inspire pride in their citizens, and are able to attract people and capital globally

We have few excuses and many obstacles. Let’s begin.

-Kenny McDonald

Columbus 2020 Update

  • Great news for travelers came last week when Southwest Airlines announced that they’ll add add nonstop service to Boston and Oakland from Port Columbus International Airport. The new flights begin in August and fares are on sale now.
  • This week, the Columbus 2020 team will embark on two international business development missions—one in the UK, and another in Japan. Partners from the City of Dublin will travel with our team in Japan. We’ll also be in Puerto Rico for the Site Selectors Guild 2015 Annual Conference.
  • Back at home, our team will host several companies evaluating the Columbus Region.

In Appreciation of Business

To be successful, you have to have your heart in your business, and your business in your heart.
-Thomas Watson, Sr.

Business has always been exciting and has always required leaders to adapt to the economy. Today’s economy takes the need to adapt to a new level. Change is constant, swift, and has global consequences. Fortune 500 companies can be knocked off their perch by startups in a matter of months, social media can ruin a good reputation overnight, and technology is creating business models previously unimagined. Are businesses better than ever before? Are business leaders better than ever before?

Some would argue that business has always been disruptive and “only the paranoid survive.” Others would argue that the pace of change is faster and more severe than ever before. Every era has its share of transformational leaders, but perhaps today’s leaders are the ones under the most pressure, 24 hours a day and seven days a week.

This week, reach out to a founder, entrepreneur or business leader. Someone who meets payroll. Someone who makes the hard decisions to invest when others say it can’t be done. Someone who creates new ways to add value to our economy through very personal efforts. Thank them for their contributions to your community and all that they do to change lives by providing jobs and investment in a changing world.

-Kenny McDonald

Columbus 2020 Update

  • Last week, JPMorgan Chase and the Columbus Foundation released reports detailing their findings on workforce issues in the Columbus Region. The report from JPMorgan Chase, the Columbus Region’s largest private sector employer, is part of their $250 million, five year New Skills at Work Initiative. It looks at how the skills gap is poised to affect the regional job market overall, while the Columbus Foundation’s report presents a deep dive into the opportunities for youth who are currently disconnected from education or the workforce.
  • Next week, our team will participate in two important discussions for international business: Sourcing Capital and Trade from Asia, and the Columbus Chinese Chamber of Commerce Forum. The first will provide insight into export opportunities, sourcing business and private capital, and using EB-5 financing. The second is a discussion on the possible formation of a Columbus Chinese Chamber of Commerce.

Linked Together

The weakest link in a chain is the strongest because it can break it.
-Stanislaw Jerzy Lec

A networked world means that what happens someone else’s economy matters more than ever. A natural disaster or a man-made economic meltdown in another city or country can have tremendous impact on the companies and industries in our own backyards.

We don’t have to look beyond our shores for an example. Regular strikes at the Port of Long Beach are impacting supply chains across North America and the cost of everyday goods.

Long Beach is the largest port in the United States and ranked among the largest logistics centers. Many goods that we purchase and parts that arrive on our shores for final assembly come through this important port before they are transported by rail or truck to markets across the U.S.

When this major West Coast port is unpredictable – as it is now – companies must adjust their supply chains to receive goods through eastern and southern ports. While these ports are expanding and very capable, they do not provide a complete solution to the issue. These adjustments cost precious time and ultimately, they unnecessarily raise the price of products you and I purchase every day. Solutions are being sought for this issue, and the Panama Canal expansion will have some impact. But ultimately, we need a productive and predictable Port of Long Beach.

-Kenny McDonald

The Columbus Region’s supply chain industry accounts for an estimated 75,000 jobs locally and is considered one of the most complete logistics industry clusters in the United States. Learn more here.

Columbus 2020 Update

  • This week, the Columbus 2020 team will host companies evaluating the Columbus Region.
  • Our team will attend the Columbus Business First Power Breakfast featuring the City of Dublin’s Dana McDaniel and Terry Foegler. We’ll also be at the Columbus Chamber Annual Meeting featuring Jamie Dimon, chairman of the board and chief executive officer of JPMorgan Chase & Co. JPMorgan Chase is the Columbus Region’s largest private employer, and Dimon will share insights on business in an exclusive interview conducted by George Barrett, chairman and CEO, Cardinal Health.
  • Congratulations to Jack Partridge, outgoing president of Columbia Gas and chief policy officer of NiSource Inc., who will receive the Columbus Award at the Chamber’s Annual Meeting.

Tax Matters

The Ohio Tax Conference assembled in Columbus this past week. While it may appear as a mundane gathering to many, taxes are a critically important topic that warrants dialogue and debate by tax professionals, elected leaders, public administrators and businesses.

Much like school and healthcare systems, taxes impact everyone and we probably all have an opinion about how they should or should not be applied. Tax rates and policies can often impact which businesses select your state or community over time. While tax structure is rarely the only reason a business chooses to operate or grow in a community, it is usually on the list of important variables. Tax policy can also reflect what your state or community values most, and which industries or business functions it believes are most important to the health of the area. Do your tax rates and policies favor entrepreneurs, manufacturing or other industries?

As an economic developer, there are common questions that come to mind about taxes. Does the tax and how it is applied allow us to effectively compete? Is it applied equitably? Is policy flexible so that if the tax isn’t applied equitably, it can be mitigated? Another important question is emerging, as demographic changes created by baby boomer retirement and other workforce issues affect company location decisions: Does the tax system attract talented people to live in the state or community?

A perfect system of taxation does not exist for all business models. Tough compromises and decisions have to be made by political leaders, and they should be informed by business leaders, economic development officials and others. Taxes are necessary to build the infrastructure and community services used by people and companies to facilitate commerce and increase the quality of life. We appreciate the leaders who deal with these issues everyday and the many firms that help us interpret and understand these policies for our clients.

-Kenny McDonald

Columbus 2020 Update

  • Our thanks to the many of you who joined us for the Columbus 2020 Investor Update last Thursday. The discussion focused on the Columbus Region’s place in the global economy and we released Columbus Global Connect, a plan for foreign trade and investment developed in partnership with the Brookings Institution and JPMorgan Chase.
  • Congratulations and thank you to six companies that announced expansions in our region last week — Aspen EnergyBenchmark EducationJ&R Schugel TruckingLaserflexPrecision Tower Products and Vantage Point Logistics. Together, the expansions represent $13 million in capital investment and 199 new jobs.

Community Service

When successful entrepreneurs are interviewed about their journey, they will often tell you of the trials and failures first. In fact, they often note that without these setbacks they would not have achieved success. They speak about how they couldn’t get a customer, or financing, or even any respect for their ideas. The will to stick to principles and to overcome obstacles takes not only a special person and team, but a special purpose.

In an interview at the World Economic Forum last week, Jack Ma, founder of Alibaba, explains his drive to serve his customers and the people of his country. These ambitions helped him and his team launch the largest IPO in U.S. history, and brought 100 million people to their service EACH DAY! I highly recommend you make time for the 45-minute video interview with Jack Ma – I consider it a must-watch for entrepreneurs and leaders in both business and government.

Economic development organizations are here to serve both communities and clients. Just as Jack Ma indicated, we must serve those constituents with absolute integrity and provide leadership when tough things needs to be done. We must not be deterred from our goals, and we must provide balance when things go awry.

-Kenny McDonald

Columbus 2020 Update

  • This week is the culmination of nearly 2 years of work developing a global trade and investment plan for the Columbus Region, which we will launch on Thursday at the Columbus 2020 Investor Update. With the help of the Brookings Institution, JPMorgan Chase, dozens of economic development peers from around the country, and companies and communities within our region, we will launch an essential plan to increase foreign investment and trade. Deborah Scherer and Jung Kim from the Columbus 2020 team did great work to make this plan a reality, and they will lead our efforts to execute it going forward.
  • This week, we will also present at the Columbus Metropolitan Club Forum about a related subject – how to continue and increase trade and investment with Canada, our closest and perhaps most important national partner.
  • Congratulations to the Greater Columbus Sports Commission, Experience Columbus and our partners at the Columbus Blue Jackets and Worthington Industries for hosting one of the very best events in sports, the NHL All-Star Game. The weekend was a real celebration of both hockey and the Columbus Region.

Economic Security = National Security

The recent terrorist acts in Europe have brought to light the difficult subjects of immigration, race, religion, and yes, economic development. As John Hope Bryant stated at the HOPE Global Forum in Atlanta last week, “the most dangerous people in the world are those without hope.” This does not justify these murderous acts against innocent citizens, but it does serve as a call to action right here at home.

When our economy is strong, we are able to not only stay on the offense against resilient enemies, but to negotiate better deals with our allies. Economic growth fortifies our neighborhoods family by family and it strengthens the United States’ ability to stand against those who wish to limit freedom. Economic strength in real dollars helps create infrastructure and a military to protect us and generates hope for a better future.

Especially on this day when we honor Martin Luther King, Jr., it is important to be reminded of the power of opportunity. In his final book, Where Do We Go From Here: Chaos or Community?, he wrote extensively about the cycle of poverty, the far worse condition of hopelessness and the many challenges of broad-based economic development. Perhaps he would be proud of how far we’ve come on certain issues. I’m certain he would observe that we still have much work to do. Let’s honor him with our commitment to create economic security for our neighborhoods, our cities and our country.

-Kenny McDonald

Columbus 2020 Update

  • Congratulations to The Ohio State Buckeyes on winning the National Championship! Your winning season reflects the standard of excellence achieved every day in the Columbus Region.
  • It’s another special week in Central Ohio as Columbus hosts the NHL All-Star Game at Nationwide Arena.
  • This Friday is the last day to register for the Columbus 2020 Investor Update on January 29, featuring the Columbus Region Global Trade and Investment Strategy and 2015 Global Economic Outlook. We’ll be joined by the Brookings Institution and International Strategic Analysis as we take a look at the Columbus Region and its role in the global economy.