Something Big?

Ten years from now, will we look back on Alibaba’s IPO as a seminal moment in business history? Will it mark a moment in time that changed global trade, shopping habits and the balance of power in the world of technology? It is hard to imagine, given that most people in the U.S. have not even visited the Alibaba website, but it may be true. (More about China-based Alibaba is here.)

Foreign companies enter the U.S. market all the time and they have almost exclusively been from developed nations. For China, Alibaba’s IPO is a proud national moment. While China represents a giant economy and has progressed fantastically in the past 25 years, it is still a developing country and an enigma to many in the western world. Alibaba isn’t the only Chinese company that is globally competitive, but last week’s massive IPO ensures that they will have the scale to make an long-term impact. Not to mention that they dominate China’s marketplace – a marketplace that our own technology companies want to grow.

Will this moment cause the United States to accelerate innovation, think about immigration differently or change consumer buying habits? The U.S. has exported products and technology, music and shopping concepts around the world for a long time. Will the reverse also be true as Chinese companies bring their business models to our market? Does that scare us or make us better?

-Kenny McDonald

Columbus 2020

  • This week, the Columbus 2020 team will be in Washington, D.C. for meetings with the Brookings Institution on foreign direct investment as part of the Global Cities Exchange. We will also meet with companies and consultants in Chicago.
  • Next week, our team will hold a Columbus 2020 Investor Update in celebration of MFG DAY and Ohio Manufacturing Month. Learn more and RSVP here.
  • Last week, the Columbus Chamber announced that Jamie Dimon, chairman of the board and chief executive officer of JPMorgan Chase & Co., will serve as Keynote Speaker at its 2015 Annual Meeting. Mark your calendar for February 12.

How Dynamic Are You?

Local, state and national economies are in a state of constant change akin to a living, breathing organism. The economic health of a place is often debated, and it is true that economies change based on how well nourished they are and what conditions the surrounding environment provides. While only slightly different, economic dynamism takes the debate to a new level. I think we can all agree that we would like to be called dynamic, rather than merely healthy.

An ongoing study by Grant Thornton of how dynamic economies are across the world is quite fascinating. The analysis looks at 22 factors within five critical areas: business operating environment, science and technology, labor and human capital, financing environment, and economics and growth. Singapore was recently ranked as having the most dynamic economy in the world.

Looking at each factor for your state or local economy is instructive about how to become a more dynamic economy. One thing that most would agree on is this – an environment where entrepreneurship thrives is more dynamic than an environment where it does not. This recent post from the Manhattan Institute for Policy Research quotes Columbus Region entrepreneur Sharon DeLay of BoldlyGO, and makes a great case for why entrepreneurship is the foundation of productivity and the creation of a more dynamic economy.

-Kenny McDonald

Columbus 2020 Update

Never Forget

This week thirteen years ago, our world changed. The events of September 11th are seared in our memories. Thanks to the men and women of our military, and thanks to sacrifices made by families in our country and allied countries around the world, we are safe, secure and able to pursue our dreams. It is our responsibility to remember the innocent lives that were lost over a decade ago, and those that have been lost protecting our freedom.

It is also our responsibility to take advantage of that freedom. Whether you are starting a business, teaching kids to read, furthering your education at night after a long day at work or simply showing up to work every day – these acts fly in the face of those that sought and seek to diminish freedom around the world.

Visit the Ohio Department of Veterans Services to learn about resources available for veterans or better yet, hire a veteran through Ohio Means Veterans Jobs.

-Kenny McDonald

Columbus 2020 Update

  • Last week, our team joined state, local and private sector partners to celebrate and congratulate Columbus Castings. The company announced the addition of 550 jobs to their South Side manufacturing facility – the largest steel foundry in North America. The nearby Reeb Elementary School will be reborn as the Reeb Avenue Center, and will serve as a training ground for new workers.
  • This week, our team – along with Logan County, Union County, the City of Dublin and the City of Marysville – will join JobsOhio and REDI Cincinnati at the Midwest U.S. – Japan Association Conference in Des Moines.
  • Our team will also join the rally on Wednesday, September 10, to welcome the NCAA Women’s Final Four site selection committee. The committee is visiting Columbus as they consider host locations for 2017 to 2020.
  • The Columbus Region Logistics Council is hosting its fall logistics job fair on Friday, September 12, at Columbus State Community College. Click here for a list of participating employers and to register.
  • The next Columbus 2020 Investor Update will take place on October 3. In celebration of Ohio Manufacturing Month, the event will feature keynote speaker Jeffrey Rothfeder, author ofDriving Honda: Inside the World’s Most Innovative Car Company.

Development is Still a Priority

A recent edition of China Daily included an article and an editorial, both in praise of former Chinese paramount leader Deng Xiaoping, that captured my attention. The first article, “Entrepreneurs benefit from legacy of Deng” discusses Deng’s “reform and opening-up” of the Chinese economy in the ’70s and ’80s. The first sentence sums up the pre-Deng environment – “In 1963, businessman Nian Qiang’s father was caught selling fish on the streets and sentenced to a year’s imprisonment for ‘speculation.’”

The editorial served as an even more poignant reminder. The headline, “Development is still priority,” is not one that you would often see in a U.S. publication. Of course development is a priority. When it ceases to be a priority and when communities and people cease to pull together in order to grow their economy and improve their standard of living, they move backward – and backward is almost always dangerous.

This week let’s commit ourselves to forward movement, and the development of more prosperous and inclusive communities. With so many places across the world moving in reverse, let’s remember that development is still a priority in the United States of America – the greatest country in the world.

-Kenny McDonald

Columbus 2020 Update

  • This week, the Columbus 2020 team will attend COTA’s 2014 Luncheon Meeting. Click here to learn more and register for the event, which will include a keynote address by Therese W. McMillan, acting administrator of the Federal Transit Administration.
  • The Ohio State University will hold its Columbus Welcome Event today. The 7,000 first year students will experience a high energy, multi-media production featuring key community leaders, alumni and current students who will encourage students to take advantage of the opportunities beyond campus.

Start Us Up, Again

I don’t spend my time pontificating about high-concept things; I spend my time solving engineering and manufacturing problems.
-Elon Musk

Start Us Up, Again

In the ’80s and ’90s, there was tremendous energy in our society about the personal computer and the software that made it possible to do things unimagined previously. Remember Microsoft’s inspiring “Start Me Up” launch for Windows 95? That was a big deal – a seminal moment.

The information technology movement inspired a generation to create a whole new economy that has transformed our world in every imaginable way. It changed the way we communicate and the way we travel, and has helped democratize the world as never before. I am equally inspired by the movement underway to use that technology to “make stuff.” My hope is that the Maker Movement described in this documentary trailer will inspire a new generation to improve the standard of living for billions of people around the world and once again transform our economy.

There are dozens of examples within the Columbus Region of this movement. Beam Technologies, a company that just expanded here is a great example of the convergence of information technology and manufacturing design. If you want to see the Maker Movement in full effect, visit the Columbus Idea Foundry. It is an amazing place where ideas can be transformed into reality – how cool is that?

For more on this revolution in manufacturing, please download this official report from the White House.

-Kenny McDonald

Columbus 2020 Update

  • Last week, Ascena Retail Group held the grand opening of their shared services center and expanded distribution facility in Etna Township. The expansion, an example of state-of-the-art technology and automation, will result in more than 375 new IT and distribution jobs. Congratulations and thank you to Ascena, Grow Licking County and the community.
  • This week, the Columbus 2020 team will travel to Atlanta and London for company meetings.
  • Back at home, our team will host companies evaluating the Columbus Region.
  • Plans are commencing to coordinate manufacturing tours this October in recognition of Manufacturing Month. If you have interest in opening your facility to school-age children, parents and community leaders, please contact Patty Huddle at ph@columbusregion.com and 614-225-6065.

The Greatest Market in the World

There is a basic tenet of economic development often gets overlooked in the dearth of economic data and economic punditry: Companies need to sell their services and goods, and they need a competitive, reliable marketplace in which to do it.

The U.S. comes in at No. 5 in the World Economic Forum’s annual competitiveness ranking. I would suggest that North America is the greatest market in the world for companies to start, scale and sustain themselves over the long-term.

The combined GDP of North American countries is over $20 TRILLION. The United States is clearly the alpha dog – accounting for 80 percent of the combined GDP. Mexico, Canada and a number of smaller markets contribute the other 20 percent. Some believe Mexico’s market reforms could substantially increase their economic power. Given that so many global companies look at North America as one market, Mexico’s growth would create an even more powerful continent. We have shared economic interests with our North American neighbors – for example, Ohio exports more than 50 percent of its goods and services to Canada and Mexico.

We don’t often use the term “North America” in the U.S., but the rest of the world increasingly sees this continent as one diverse marketplace and source of natural and human resources. The growth of the trade corridor from Canada to Mexico has exploded since NAFTA was signed in the ’90s, and it continues to expand and evolve as a market. Canada and Mexico both have aggressive trade policies with various parts of the world that the U.S. does not. Workplaces are diverse and range from Silicon Valley to the oil sands of northern Alberta, from Wall Street to the maquiladoras and “co-production” manufacturing facilities in Mexico.

What does this mean to the U.S.? It means that we have a tremendous advantage when competing with markets around the world. It also means our neighbors require that we continue to compete and evolve. There is a gravitational pull created by growing companies, and there are capitalists who want to grow and protect their fortunes. I wouldn’t trade that for anything in the world!

-Kenny McDonald

Columbus 2020 Update

  • Last week, the Democratic National Committee was in town to evaluate Columbus as a potential location for the 2016 Democratic National Convention. Congratulations and kudos to Experience Columbus, the Columbus Partnership and others who did an outstanding job of hosting the group and showcasing Columbus. You can see pictures from the visit and follow the latest news on the Columbus 2016 Facebook page.
  • This October, Columbus CEO magazine will publish a special supplement in partnership with Columbus 2020. The advertising deadline has been extended – this week is your last chance to reserve ad space. Click here for more information.
  • This week, the Columbus 2020 team will attend Walmart’s 2014 U.S. Manufacturing Summit in Denver.
  • Back at home, our team will host companies evaluating the Columbus Region.

Community Credibility

Character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing.
-President Abraham Lincoln

It seems that no one has credibility anymore. Just read the headlines or watch the news for five minutes to hear claims and counter-claims of those on the screen. Countries don’t believe each other, elected leaders don’t trust government bureaucrats, people don’t trust their elected or business leaders, and consumers are wary of those tracking their every move in an effort to sell them more stuff. Even institutions and people operating with great integrity are under scrutiny to prove the merits of each and every action they take.

Much of this erosion of trust is well-earned. This year marks the 40th anniversary of President Nixon’s resignation, an important moment in our country’s history. Since that time our public discourse has become even more divisive and the evolution of the Internet and a 24-hour news cycle have created an environment that does not allow for reflection or thoughtful analysis of events and their meanings. On a positive note, the ability that citizens and consumers have to create a movement or expose wrongdoing has increased, even in countries where this was unimaginable a generation ago.

How does a general environment of mistrust impact efforts to develop communities and take action? In an era where business, government, and academic institutions must act together to get anything accomplished and to move our society and our communities forward, credibility is a more important than ever. A lack of trust in our institutions and civic leaders is a real liability when trying to take advantage of opportunities to meet some of our most intractable social and economic challenges. A lack of trust in business fundamentally changes the employer/employee and business/community relationships necessary to scale and grow.

I would also argue that there have never been better tools to create engagement and build trust. The very things that make it easy to tear down credibility are also the things that can be used to engage citizens, gather feedback and assess public sentiment. Two thoughtful pieces on this are worth a read for any business or community leader:

-Kenny McDonald

Columbus 2020 Update

  • This week, Kenny McDonald will travel to Washington, D.C. to take part in the 2014 White House Forum on Economic Development, hosted by IEDC, SelectUSA, the White House Business Council and the National Economic Council.
  • Our team will also host companies considering the Columbus Region.
  • Columbus will be visited by the Democratic National Committee this week as they consider location options for the 2016 Democratic National Convention. On Wednesday, August 6, we’ll join Columbus 2016 for a welcome rally at Nationwide Arena Battelle Plaza. Everyone is invited – please join in!

A Defining Moment

As you know from the title of this blog, we believe that economic development matters. Therefore, defining economic development is important, too. A proper definition of success leads to clearly defined goals and objectives, and hopefully focuses the limited resources of our national, state and local organizations on what matters most.

I encourage you to read this Forbes article that examines the U.S. Economic Development Administration’s recently updated definition of economic development. The article, and the definition now posted on the EDA’s homepage, alludes to the changing nature of economic development – from a hunter-gatherer mentality to that of a gardener who nurtures an environment where businesses thrive.

As an economic development practitioner, I believe it is critical to create an environment for the private sector to start new businesses, grow existing businesses, and invest in technology and workforce. I also believe that competition is healthy and critical for economic success. Capital will flow to the most competitive locations based on access to markets, the presence of talented people and the ability to maximize return for investors.

I applaud the EDA for furthering a “new” definition of economic development and creating dialogue about our field. We’d like to know what you think. Please share your thoughts below.

-Kenny McDonald

Columbus 2020 Update

  • Recent findings from The National Center for the Middle Market, a partnership between GE Capital and The Ohio State University’s Fisher College of Business, show that Central Ohio middle market companies are lagging national trends. Please take a few moments to complete this survey, data from which will be used to undertake important policy discussions.
  • The Ohio Third Frontier Open Innovation Incentive Program connects businesses with a third party organization to quickly explore resources for overcoming technical obstacles, product advancement challenges, service or process improvements hurdles. Click here to learn how to take advantage of this program. Originally scheduled to end August 2014, the program may be extended through January 2015.

Insights About E-Commerce

Columbus 2020 recently released a unique report about e-commerce fulfillment. Available here, it’s the first in what will be an ongoing series of profiles on industries that are important to the Columbus Region.

Covering topics local and global, the e-commerce profile contains information from a range of government and industry data sources, as well as insights directly from Columbus Region companies working in fulfillment.

Some highlights from the profile:

  • The e-commerce arms of clothing retailers in the U.S. are keeping pace in sales growth with pure e-commerce companies.
  • Local fulfillment operations surveyed tend to source from vendors within the Columbus Region for packaging, human resources and administrative services, and marketing and branding. But, they source from outside the Region and Ohio for manufacturing, back office and call centers, and various IT services – especially analytics.
  • Among publicly traded companies with a local fulfillment presence that share their e-commerce sales (or direct-to-consumer) data, Abercrombie & Fitch had the highest percentage jump in e-commerce sales in the most recent financial quarter over the same quarter last year. 1-800-Flowers (Cheryl & Co.) and Restoration Hardware lead the pack in the e-commerce share of overall sales.

If you have feedback about the e-commerce fulfillment profile or you’d like to suggest an industry for a future report, we want to hear from you. Our next industry profile will cover automotive supply chain. If you are a Columbus Region business that’s in the automotive industry and you’d like to participate, please let us know.

-Kenny McDonald

Columbus 2020 Update

  • Congratulations to Sally Hughes, president and CEO of Caster Connection, for receiving NAWBO’s Columbus Visionary Award.
  • The Columbus Region June Economic Update is available here. The report shows the Region’s unemployment rate is at 4.0 percent, lower than both the Ohio and U.S. rates.

Keeping the Trains Running on Time

Opportunities often lie just beneath the surface. When looking at industries and communities, it is important to look past the headlines and marketing brochures to determine what else is happening.

A lot has been written about the U.S. energy resurgence and the transformative value of it to our economy. What is less written about is the resurgence of the U.S. rail industry, and what it means to U.S. manufacturing and our communities. Last week the Region hosted officials from the U.S. Federal Railroad Administration. One of the stops was just a few miles from downtown Columbus and the restaurants and shops of German Village and the Short North.

The biggest foundry in the United States resides along Parsons Avenue – yet another example of the Columbus Region’s strength as a manufacturing hub. Columbus Castings is a company with a storied history in our region and a powerful example of how the uptick in the rail industry is fueling growth in the railcar industry.

More railcars are needed and those that exist must be constantly maintained and upgraded to modern standards. It is estimated that Ohio has over 100 companies and thousands of jobs that exist because of the railroad industry. Great jobs exist at companies like Union Tank Car, Norfolk Southern, and CSX and dozens of others within our state.

-Kenny McDonald

Columbus 2020

  • This week, the Columbus 2020 team is hosting journalists who will learn more about the Columbus Region’s retail industry. We are also hosting the Brookings Institution, who we’ve been working with on Columbus Global Connect.
  • Columbus 2020 is working with Columbus CEO to publish a supplement this fall that highlights business founders in the Columbus Region. Advertising opportunities are available – click here for more information.