Northeast Ohio has to reinvent itself. It must fire up an economic engine to generate jobs that provide not just meaningful income, but opportunities for its workforce to adapt existing skills to new applications.
As the region historically has been an industrial and manufacturing powerhouse, it must now develop an identity as a center for innovation and entrepreneurship in new – and some existing – growth sectors.
And, for those being left behind in the current economy, Northeast Ohio must do a better job of educating its people and providing the knowledge needed for the jobs of the future.
Northeast Ohio businesses that have retooled their strategies can attest: Change isn’t easy, but it is unavoidable.
Last fall, Baldwin-Wallace College, as part of its Carl Kamm Lecture Series, hosted a panel that focused on ways Northeast Ohio companies have adapted to global competition and international sourcing.
In February, B-W continued its examination of globalization with a program addressing its implications for the Northeast Ohio regional economy. Featured panelists were:
- Alfred M. Rankin Jr., Chairman, President & CEO, NACCO Industries Inc.
- Gina France, President, France Strategic Partners LLC
- David O’Halloran, Associate Principal, McKinsey & Company
- Ronald Richard, President, The Cleveland Foundation
Rankin, the panel moderator, said NACCO was formerly North American Coal Corp., an old-line, highly unionized mining company whose operations were mainly in the East, underground. Mining operations today are primarily in the West and South, and workers are salaried. NACCO also includes Hamilton Beach and Procter Silex consumer products, and a forklift and truck business – its largest segment.
“At Hamilton Beach and Procter Silex, we thought manufacturing was our core competency. It absolutely is not. Our core competences are innovation, product design and the speed with which we get the products to our customers,” Rankin said.
O’Halloran said that over the past five to ten years, 2.7 to 3 million manufacturing jobs have been displaced due to “outsourcing and offshoring.” Ohio lost 135,000 manufacturing jobs from 1994 to 2001. Today, white-collar workers are being affected; it is anticipated that 3 million service-sector jobs will move overseas by 2015.
However, new jobs will be created as well. Noting that biomedical sciences, polymers and information technology have been identified as industry clusters that can spawn new jobs, O’Halloran said workers and employers must learn to adapt existing skills for the transition to a new kind of economy. However, he said, other clusters that don’t get the “buzz” may be equally important, such as food manufacturing.
Richard suggested wind power as an industry with tremendous potential for this region.
“I hope within five years to see 1,000 windmills in Lake Erie, supplying a huge portion of our electricity,” he said. Modern mills that generate renewable wind power are 250 feet tall – and might one day be made out of Northeast Ohio steel and components made here.
France said astute human resources departments become increasingly important as workforce skills are assessed and workers reassigned to new jobs.
“With training and patience, people will be successful (in different jobs)”, she said.
Richard, who was formerly president of North American operations for Panasonic, said that today, both Japan and Northeast Ohio are in economic doldrums because they are not adept at three core competencies:
- speed
- marketing
- coorperation among the private sector, the philanthropic sector and local governments
For the first time ever, 28 foundations met recently in Akron at an Economic Funders Forum to put their collective brain power to work on regional economic development.
Northeast Ohio faces twin threats from globalization and from advancing technology, Richard said. For example, in five years, automobile fuel cells will render obsolete the drive trains and many other components that are now one key to the region’s economy.
“When fuel cells come on board, it’s estimated we will lose 140,000 jobs in this local economy – unless we become a leader in fuel cell production, which would allow us a net gain instead of a net loss (of jobs),” he said.
Mentioning the Silicon Valley and Research Triangle Park, Richard suggested the region “rename” itself in order to develop an identity. Whether we become the “Ohio Technology Quadrangle” or some different geometric shape, he said, “I think we need to figure out what we want to be, put a name on it and then live up to the name.”
Richard suggested that the region needs to market itself to overseas companies seeking locations for U.S. sales offices.
Rankin noted that the recent merger of the Greater Cleveland Growth Association, Cleveland Tomorrow and the Greater Cleveland Roundtable to form Greater Cleveland Tomorrow, and the creation of the new Team NEO regional economic development umbrella organization, are addressing the issue of marketing the region, as well as that of job creation and wealth creation. He also suggested that reforms of county government, which have been discussed, should include creation of a new position: chief development officer.
Richard said that very large companies have the scale and scope to undertake major change, but small and mid-size firms may need help from a civic-corporate-educational partnership.
France, a former partner with Ernst & Young, said that historically, U.S. companies believed they had to “do it all” – innovate, develop and design products, manufacture, distribute, sell and build customer relationships. Nowadays, she said, a company might outsource production while it focuses on product design, market development and oversight of sourcing and shipping.
We need to help companies learn to “lean manufacture” and take advantage of global opportunities, she said, adding, “Outsourcing doesn’t mean offshoring, necessarily, but ‘best-shoring’.”
Northeast Ohio should nurture industries such as health care, which will remain local because the facilities must be where the customers are, she added. The region also needs a tax policy supportive of business, development of international business skills and etiquette, and improved education.
Richard agreed, saying, “Higher education in Ohio, in my opinion, is vastly underfunded.” Northeast Ohio has been poor at marketing to the downstate-dominated state legislature the value of research institutions to the entire state’s economy. In addition, the region should aggressively speed the commercialization of technology from research institutions, he said.
Those whose jobs are lost or changing need opportunities for lifelong learning and retraining, and children in urban schools need rigorous math and reading literacy programs, Richard said. The region should celebrate and make use of its diversity to create a magnet school for languages, he added.
You can hear both the October 2003 and February 2004 panel discussions on Globalization by going to http://www.bw.edu/webcast/archives.
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