Ohio Department of Development

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• State Economic Development Policies
• Jean Carter Ryan
• Deputy Director
• Ohio Department of Development
• Economic Development Division

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Knowledge is the only instrument of production
that is not subject to diminishing
returns. - JM Clark
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Economic Size and Population

• Ohios Gross State Product was
• 381 billion in 2002
• Ohio ranks 24th in the world in economic output
• Ohio ranks 3rd among the 50 states in mfg. GSP
• Ohios Population of 11,435,798
• Seventh largest state
• Dispersed between 8 large urban centers and
• 15 micropolitan centers

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Competitive Industry Base

• Ohio is ranked
• 1 in growth of exports over past 3 years
• 2nd in the production of cars and trucks
• 1st in the number of automotive suppliers
• 1st in the production of steel products
• 1st in the plastic and rubber industry by
  employment
• 3rd in the number of manufacturing employees
  (850,000)

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Ohio Ranked

• 2003 Governors Cup Winner
• Site Selection
• 2004 Governors Cup 3rd Place
• Site Selection
• 4th in photonics mfg. (1,700)
• 159,000 high tech workers w/payroll of
• 8.9 billion (2003)

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Technology Rankings

• Ohio is ranked
• 1 with the most best hospitals 03-04
• US News World Report
• 500() companies with bioscience focus
  headquartered or have a major presence in Ohio
• 2 in total research funding for materials
  engineering
• 5 in specialty chemical research
• 7 in Small Business Innovation Research grants
• 2 of top 10 nationally recognized polymer
  programs University of Akron, Case Western
  Reserve

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Outstanding Workforce

• The labor force in Ohio exceeds 5,630,000 larger
  than the total populations of 31 states
• Ohio has 177 institutions of higher learning
  every Ohio resident is within 30 minutes of
  advanced education, which graduate 51,000
  students per year

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Strategic Location

• Ohio is within 600 miles of
• 60 of the US population
• 50 of the Canadian population
• 63 of US manufacturing establishments
• 63 of US retail operations
• 70 of North American manufacturing
• 80 of corporate headquarters

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Wealth of Transportation Resources

• Ohio has the 4th largest interstate highway
  system in the U.S.
• Ohio has 6,500 miles of railroad (more than any
  other state)
• Ohio has 184 public airports
• The same amount of freight traffic goes through
  Ohios ports as goes through the Panama Canal

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Ohios ChallengesThe Economy

• Over the last 4 years, Ohio lost over 260,000
  jobs. 210,000 lost in manufacturing alone and
  yet at the same time major private investment has
  exceeded 25 billion in over 3,200 projects.

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Ohios ChallengesThe Economy

• As recently as the 1960s our per capita income
  was well above the national average (more than
  10).
• Now were 5 below the national average.
• Last year every Ohioan is earning 1,500 less
  than the average American (loss of 30.7 billion
  in income).

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Ohios ChallengesCompetitive Position

• Economy.com analyzes Ohios economic performance
  on an annual basis. Year after year, high taxes
  comes out as a weakness in their analysis.
• The Small Business Survival guide ranks Ohio 40th
  in terms of our business climate, an index that
  is largely based on taxes.
• Richard Vetter of OU found in a study that
  low-tax states grew nearly one-third faster than
  high tax states.

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Ohios Response

• Marketing
• Tax Reform
• Third Frontier
• Workforce

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Marketing

• Focus on sectors play to Ohios strengths
• Develop sector expertise
• Provide qualified leads and tools to grow
  business
• Sellohio.org

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Marketing

• Criteria for Ohio brand
• Compelling story to attract new business from
  targeted industries
• Relevant and aspirational for current Ohio
  businesses
• Supports regional ED efforts
• Ideally excites and motivates Ohio residents

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Tax Reform

• Reduce the rate, broaden the base
• Simple, fair, transparent
• Living with tax code of yesterday a system that
  has failed to keep up with realities of today and
  has left us behind other states in achieving
  economic prosperity of tomorrow

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Tax Reform

• Focus on outliers
• Personal property tax
• Personal income tax
• Corporate franchise tax

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Tax Reform

• Cut Ohios personal income tax by 21 percent
  phased-in over 5 years.
• Eliminate the corporate franchise tax over a
  5-year phase-out period.
• Eliminate the tangible personal property tax on
  ME beginning two years from now and implemented
  during a 2-year phase-out period. Inventory FF
  5-year phase-out.

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Tax Reform

• Impose a new tax on businesses known as a
  commercial activities tax. This tax would be
  assessed based on revenues that businesses
  receive from the sale of goods and services in
  Ohio. The first 1 million of a business
  revenue would be exempted. The tax rate would be
  approximately .25 percent. This new tax is
  designed to create a large tax base and impose a
  small tax rate on it. It is estimated that 70
  percent of small businesses will not pay this tax.

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Tax Reform

• Exclude banking and insurance operations from the
  scope of this reform.
• Double the sin taxes on tobacco and alcohol
  immediately.
• Retain a ½ percent of the sales tax scheduled to
  end on June 30, 2005.

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• It is not the employer who pays wages he only
  handles the money. It is the product that pays
  wages.
• -Henry Ford

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Third Frontier

• RD More D less R
• Wright Centers
• Advanced Data Management
• Fuel Cell
• Regenerative Medicine
• Genome Institute - 65 million in federal,
  industrial nonprofit funding
• Save improve lives

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Third Frontier

• Industry driven
• Focus on commercializing products
• 3rd Frontier Action grants
• Diagnostic Hybrids (130 employees/Athens)
• On Inc. 500 fastest growing companies list
• Innovation Ohio Fund
• Cardinal Commerce develops software
  authentication systems for the credit card
  industry. Financial transactions over cell
  phones creating 127 jobs.
• Spin-off companies

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Workforce

• Goals
• Demand-driven workforce system
• 1-Stops integration
• Business Plans
• Initiatives
• Healthcare worker shortage
• Manufacturing Workforce Council

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• The winds and waves are always on the side of
  the ablest navigators.
• - Edward Gibbon

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For more information

• Jean Carter Ryan
• Deputy Director
• Ohio Department of Development
• Economic Development Division
• 77 South High Street
• Columbus, OH 43215
• Jryan_at_odod.state.oh.us
• [phone]
• 1 [phone]
• Fax [phone]
• www.odod.state.oh.us

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Websites of Interest

• www.sellohio.org
• www.jobsforohio.com
• www.thirdfrontier.com
• www.ohioworkforce.org
• www.ohiosites.com
• www.business.ohio.gov
• www.odod.state.oh.us