Balancing Growth and Health

Would you rather have a job or breathe clean air? Unfortunately, that is a choice that millions of people around the world make each day – the choice between good health or a livelihood that will give them enough to feed themselves or their families. In too many countries and cities around the world, the quest (or desperation) for economic growth comes with a price that not only harms the environment, but the very people that growth is supposed to help.

Tomorrow, April 22, is Earth Day, a day that serves to remind us that growth for growth’s sake is not the goal. Rather, the goal is to generate growth and opportunity that improves the lives of citizens in our communities. In an age of tremendous technological innovation and global programs aimed at improving the environment, we are reminded that much of the world’s economic development comes with a heavy price.

Last month China declared war on pollution because in many of its cities, air pollution is reaching levels that are causing vehement protest from citizens. While the United States is not free of risk or environmental pollution, we are very fortunate to live in a country where there is awareness, debate, and a balance between economic development and environmental interests.

A great example of this in the Columbus Region is through one of our oldest and most important employers. Greif is a very successful manufacturer of industrial packaging products and solutions, but has made sustainability a core value. Through this focus, they have also developed PackH2O, which helps to transport safe drinking water in developing countries. They’re proving that growing your business and sustaining the environment are not opposing ideas.

-Kenny McDonald

Columbus 2020 Update

  • Last week, our team attended MORPC’s State of the Region luncheon. Congratulations to Eric Phillips of Union County, ED411 and Marjory Pizzuti for receiving well-deserved honors at the event, and kudos to MORPC for kicking off insight2050, an important step in helping our region to understand our economic potential and plan for the future.
  • Our team has returned from a productive business development mission in China where we participated in the Pearl River Delta SelectUSA Roadshow and met with dozens of companies and consultants. Our team also held productive meetings throughout New England last week.
  • Along with a number of regional businesses, educational institutions and civic leaders, we look forward to taking part in the Central Ohio Compact.
  • Next week, our team will travel to Pinehurst for the IAMC Spring 2014 Professional Forum.

Somewhere Else

I grew up in a small, rural town in Montana in the “pre-Internet” age, and because of this I developed a great sense of curiosity about other places in the world. I wanted to see the rest of the world partially because I assumed that “somewhere else” must have more culture, more opportunity and smarter people. As we grow older we begin to understand that that isn’t necessarily true. In my profession of economic development I remain curious about other places and cultures, but try very hard to separate curiosity from envy.

At an event in Seattle last week held by JPMorgan Chase and the Brookings Institution, Bruce Katz of Brookings offered that the work of a community is to study what others do, but stop short of trying to be the next version of some other place. The advice: Get busy becoming the next best version of your community by using your own cultural, human and economic assets. This was his message to the leadership of Seattle and the other communities in the room, and it certainly resonated. In essence, stop trying to be the next Silicon Valley or the next…whatever – and instead, take lessons from others and apply them to your community.

This doesn’t mean that you stop benchmarking or stop searching for things to apply to your strategy. Benefiting from the hard work of others and avoiding their mistakes can accelerate your efforts. However, too much hand wringing can paralyze your strategy and lead you to focus only on challenges, while focus also belongs on the opportunities that abound for communities of all types and locations around this country.

Our entire team welcomes your thoughts and comments about untapped opportunities and best practices that could be applied within our region.

-Kenny McDonald

Columbus 2020 Update

  • Last week, Columbus 2020 joined the Columbus Partnership in hosting students from the Buckeye Leadership Fellows (BLF). In partnership with OSU alumni and community leaders, BLF builds unique and transformative experiences for undergraduate students so they can achieve a competitive advantage in their post-graduate pursuits and remain deeply connected to the university.
  • This week, the Columbus 2020 team continues its mission in China. They have met with several companies independently and are joining the SelectUSA team this week. Our team will also be in Massachusetts and Connecticut this week to visit companies and location advisors.

Aiming at the Right Target

There are dozens upon dozens of programs to assist small businesses in any state or community. There are programs that help entrepreneurs turn ideas into a storefront, those that help with financing and those that help guide the business as it grows. There is an important place for the good work that each of these programs do in every community.

However, in looking at the rankings of which communities rank best for small business growth, perhaps the two most important factors are population growth and a healthy inflow of first generation immigrants. South Florida ranks first in a recent study by the Kauffman Foundation for high-tech entrepreneurship, as did cities like Houston and Washington, D.C. All top ranked cities on the list are growing their populations and attracting immigrants at a faster pace than other metro areas.

As a result, they do better in this important ranking, and it is not likely because they have better small business programs than other cities. A provocative new book called The Triple Package by two Yale professors goes deeper to explain why it may be that some cultural groups do better in America than others, and what characteristics they seem to possess.

The Columbus Region is full of smart and open communities, more than 140,000 college students and a number of fantastic programs that help companies start and grow. According to the Kauffman Foundation, 14 percent of high-tech entrepreneurs in Columbus are immigrants, compared to 19 percent of those in the U.S. The Columbus metro also saw 47 percent growth in immigrant high-tech entrepreneurs from 2000 to 2011, compared to 12 percent in the U.S.

Perhaps the aim of our small business growth programs should not only be to assist entrepreneurs trying to get a business started, but to attract and retain people to our community who are inclined to do it in the first place.

-Kenny McDonald

Columbus 2020 Update

  • This week, the Columbus 2020 team will travel to Phoenix for the MRO Americas conference, and we’ll be hosting companies in the Columbus Region. We’ll also travel to China to begin a two-week business development mission where we will meet with companies and consultants across the country.
  • Next week, our team will travel to New England to meet with companies and consultants in Massachusetts, Rhode Island and Connecticut.

Reinvention or Simple Action?

I was fortunate to attend Forbes Reinventing America Summit last week in Chicago. The theme of the conference was daunting and the participants were impressive – CEOs, financiers, entrepreneurs, inventors and political figures from cities and states.

The conversation centered around the idea that to remain or become competitive, we need to “reinvent” education, workforce development, government, companies and entire industries. Although hard realities of these challenges were addressed, there was a lot of optimism in the room.

I believe there is good reason for this optimism. It seems both business and civic leaders are more willing and more capable of challenging assumptions than ever before. Everything seems to be up for debate. Is a technical school classroom or a college campus the best place to learn? What business models foster the greatest innovation? What is the government’s role in fostering job creation, workforce training, and even innovation? Not only are leaders willing to ask these questions and address these “sacred cows,” but they now have more data and more tools for this analysis.

Technology was a big part of the dialogue. Faster computing cycles, the evolving Internet and cloud computing help get things done more efficiently and they create new ways to deliver services. Technology helps crunch numbers and analyze data, and in doing so, is smashing long held beliefs about society and the economy. This is a leading to a period of progress and innovation, which is upending industries and institutions.

The greatest question presented by those at the Forbes Reinventing America Summit was not whether we have the insight or the ability to “reinvent” America, but rather, do we have the willingness to take action? Oddly enough, it seems that the greatest challenge may be to move forward on issues where the evidence is clear and there is a great amount of agreement. If we start on those items – and there seems to be many of them – we will be well on our way to becoming more competitive in every aspect of our communities and our countries.

-Kenny McDonald

Columbus 2020 Update

First, Understanding

Understanding local economies and where opportunities and challenges lie takes more than studying economic reports and national trends. Today’s economy plays out differently from community to community, and to understand it we need to go out and experience it by visiting businesses and talking with consumers.

Besides, what is more interesting? Listening to an hour long presentation about monetary policy, or spending an hour touring a facility where something is made or produced? Most of us would say we’d be more interested in visiting a manufacturing plant or touring offices of a growing technology company, where you’d feel the buzz of growing businesses. Perhaps by doing this more we could develop a better understanding of our economies as well. (Related, there’s a great story here from NPR about the invention of “the economy”)

It is a particularly interesting time to pause and pay attention, because everything from the way that we pay for a cup of coffee to the way energy is produced is drastically changing. As economic development professionals, it is our responsibility to convene elected officials, civic leaders, academic officials and businesses. And it’s now more important than ever to convene them on the plant floor or in the place where workers are being trained, so we can grasp what real opportunities and challenges look and feel like.

Business leaders, it is important that you ask community leaders, academic leaders and even other business leaders that are active in the community to visit your facilities. This article from the Plastics Industry Association was written to encourage manufacturing leaders to bring people to their facilities, but is applicable to a variety of industries.

Elected leaders, what is the last business you proactively visited? Business leaders, when did you last invite policy makers to your facility for a private tour?

As someone who loves facility tours and is fascinated by how things are designed, manufactured and ultimately moved, I encourage you to reach out soon to make this happen. Your economic development partners will appreciate it and be happy to assist.

-Kenny McDonald

Columbus 2020

  • Last week, the Columbus 2020 team had successful meetings with consultants and companies on the west coast.
  • This week, our team is meeting with and surveying e-commerce fulfillment operations and automotive manufacturers in the Columbus Region. Please contact Patty Huddle at ph@columbusregion.com or 614-225-6065 to participate and help us increase our understanding of these regional economic drivers.
  • This week, our team will travel to Washington, D.C. for the IEDC 2014 Federal Economic Development Forum, to Dallas for a Consultant Connect conference and to Chicago for the Forbes 2014 Reinventing America Summit.
  • Congratulations to Columbus Regional Airport Authority on the inaugural flight of Cathay Pacific, Rickenbacker’s new resource for exporters to China.
  • The Columbus Region Logistics Council Job Fair will be held on May 13. Reserve your recruiting space by clicking here.

Embrace Skepticism

“On the road from the City of Skepticism, I had to pass through the Valley of Ambiguity.” -Adam Smith

Good critics are necessary to build a great strategy. In the world of economics and economic development, there is reason for healthy skepticism and heated debate about what works on national, state and local levels. What really moves the needle? Can the needle be moved at all or does the economy “just happen?” Where should resources be allocated?

Those charged with executing a plan are often inclined to act, regardless of criticism. Forging ahead is often exactly the right thing to do so that your community or company can break the paralysis of constant analysis and instead test and retest real world results.

But occasionally, it is healthy to take a deep breath and seek out critical views regarding your plan or the execution of your plan. Being open to and curious about legitimate criticism is difficult and it can be hard to not take it personally. It can also be difficult to get critics to meet directly with you for a frank discussion.

This week, seek out a critical view of your plan. Ask someone who is skeptical about your strategy to sit down and unpack their thoughts. If you are asked for your view on someone else’s plan, deliver thoughtful and useful criticism. I believe it will be worth it, and it will lead to a stronger strategy and a more trusting relationship with your stakeholders.

-Kenny McDonald

Columbus 2020 Update

  • This week, the Columbus 2020 team will meet with companies and consultants in Los Angeles and Phoenix.
  • Back at home, our team will attend the Mid-Ohio Development Exchange (MODE) program at RAMTEC on Thursday. The superintendent of Tri-Rivers Career Center will speak about the partnership that created RAMTEC and lead a tour of the state-of-the-art industrial robotics and advanced manufacturing skill training facility.
  • Next week, our team will head to Washington, D.C. for IEDC’s 2014 Federal Economic Development Forum and to Chicago for Forbes 2014 Reinventing America Summit.

Cost vs. Value

There is a lot of debate about pay in our country right now, from minimum wage rates to seemingly stalled salaries in various sectors of the economy. It is an issue that creates tension between employees and employers, and it confounds many economists and political leaders. It is also a critical issue in the location selection business, where companies seek to serve new markets while maintaining levels of quality and service at the lowest possible cost.

The baby boomer retirement surge, changing worker attitudes about work/life balance and new business models have made it harder to characterize the true value of wages and benefits. What is clear is that location does matter, to both the employee and the employer.

Pay and its resulting quality of life is also largely a function of location. A recent article in The Atlantic analyzed which metro areas were trending upward and those whose trajectory was stagnating or losing ground. One of their maps caught my eye:

Percentage increase for high-wage jobs, 2009-2013

Employers should know how their location impacts their ability to recruit and retain the best talent. For example, this graph shows that while standard average wage comparisons emphasize cost, the percentiles focus on value. In this example, an $80,000 annual salary gets you a software developer in the top 74th percentile in Columbus but only in the 24th percentile in Silicon Valley. Across many industries, higher quality talent is available at a greater value to employers in the Columbus Region.

Percentile in salary range for software developer earning $80,000 per year in…

Source: PayScale

I suspect wages and benefits will remain a hot topic at the dinner table and in the boardroom for decades to come. It can be complex for employers to makes apples to apples comparisons when evaluating locations, and even more difficult for employees to make the right decisions about where to place their future.

I would hope more and more talented people and innovative companies continue to choose the Columbus Region to live, work and play. Companies here find themselves in a unique position, able to employ top talent at a competitive cost. Meanwhile, talented people find interesting opportunities, favorable compensation and a dynamic community that remains on a positive path forward.

-Kenny McDonald

Columbus 2020 Update

  • Thank you to Columbus 2020 investors and our panel of experts from IBM, Nationwide and The Ohio State University who joined us for a discussion about big data last week at COSI. You can read more about the event here.
  • Next week, our team heads to California to meet with companies and consultants.

Simply Community

“While the spirit of neighborliness was important on the frontier because neighbors were so few, it is even more important now because our neighbors are so many.”  
-Lady Bird Johnson

According to Wikipedia, community is defined as a “social unit with shared core values,” or in biology as a “a group of interacting living organisms sharing a populated environment.” Either way, community is really at the core of what economic development is all about. Beneath the technical terms, the metrics and measures, and all of the policies and programs, economic development is simply neighbors coming together to better the place they call home.

This week, let’s work to make our neighborhoods, cities and state a better place to seek opportunities and achieve dreams.

-Kenny McDonald

Columbus 2020 Update

  • Last week, the Columbus 2020 team joined the MODE Board of Directors for a great retreat and discussion about our region’s path forward.
  • This week, our team will travel to Orlando for the Jones Lang LaSalle Academy. Back at home, our team will present during the marketing session at the 2014 Ohio Basic Economic Development Course.
  • On Thursday, we’ll host Columbus 2020 investors at the next Investor Update, where a panel of experts from IBM, Nationwide, The Ohio State University and the Columbus Collaboratory will discuss the effect of big data on the Columbus Region economy. If you haven’t yet RSVP’d, please do so today. Details are here.

A Sense of Urgency

Economic development is often referred to as a race with no finish line. Cities and states toil to grow their economies, generate opportunities for their citizens and build capacity for the future.

It is certainly analogous to a marathon, but sometimes you have to sprint. Sometimes you have to act with a sense of urgency. There is ongoing debate about whether the U.S. economy is poised for growth or beginning a slow-down. Perhaps we shouldn’t wait for the outcome as if it’s some sort of phenomenon, but instead take action for growth today.

What is the top economic development priority of your community? What one thing would generate opportunity for your company? What partnership are you waiting to develop at your academic institution? What three steps would you have to take in order to leap forward toward your goal?

Economic development will remain a marathon, but each of us can make a difference now instead of waiting for others to diagnose our future.

-Kenny McDonald

Columbus 2020 Update

  • Last week, our team celebrated the expansions of two companies in the Columbus Region. Automotive supplier Sumitomo Electric Wiring Systems broke ground to consolidate and expand in Marysville, while cookie-maker Cheryl’s broke ground on an expansion to nearly double production in Westerville. Great news for two great companies!
  • Registration is open for the March 6 Ohio Food Industry Expo. Food manufacturers and auxiliary service providers will convene to discover new techniques, learn of industry trends, and identify valuable resources that will strengthen the already sizable industry of food processors in Ohio.
  • Kudos to EWI on their $70 million federal contract to help research and develop innovations in lightweight metals. EWI will team up with The Ohio State University and the University of Michigan on the project, which could help retain manufacturing jobs and create up to 10,000 jobs in the Midwest.
  • Congratulations to The Ohio State University on receiving its largest-ever up-front payment to license technology for healthcare data analytics software.
  • Two of our region’s entrepreneur resources also have reason to celebrate. TechColumbus announced its $7 million Catalyst Fund that will invest in technologies coming from The Ohio State University and Nationwide Children’s Hospital. The Dublin Entrepreneurial Center, currently housing more than 100 startups, marked five years of connecting businesses with services, space and more.

An Olympic Economic Development Debate

The greatest competition associated with the Olympic Games may actually take place before a single race is run or game is played. Leaders around the world intensely compete to host the Olympics in an effort to showcase the progress and strength of their countries. While this has been true for a very long time, it’s never been quite as expensive as it is today. It is estimated that Russia has spent nearly $50 billion, and the summer Olympics in Beijing and London also cost tens of billions of dollars.

Though expensive, the Olympics do bring economic development and notoriety to host cities and countries. Hosting major events and developing signature assets are positive activities for the economy and can create much needed awareness of host cities and nations. Many assets are long lasting and beneficial to an entire city and country, including major infrastructure. Sometimes the costs of the goal outweigh benefits and do little to improve quality of life in host markets. Because costs of these developments don’t always equal their value, few places can pursue an event as grand as the Olympics.

So what is the lesson from the debate that Sochi has caused? That whether to pursue such events should always be predicated on an overall strategy for the area. If the event and the related costs to host it can serve that strategy and the community in the long-term, then pursuit is an easy choice.

-Kenny McDonald

Columbus 2020 Update

  • Our team is back from Toronto, where we executed a productive business development mission. We also attended the Corporate Venturing & Innovation Partnering Conference to promote the Columbus Region to corporate investment and innovation partners.
  • Last week, Columbus 2020 released the Q4 2013 Economic Update . Highlights of the report include a decrease in unemployment, an increase in logistics jobs, a strengthened housing market and an increase in project activity.