Three Thoughts: Economic Development Is Everyone’s Job

 

I’ll never forget the question, 25 years ago, when hundreds of jobs in Steubenville, Ohio were on the line:  “What’s the blue light special?”

Walmart executives, wanting to get to know the community better before they moved forward with a decision to locate a massive, multi-state food distribution center project, chose to wander into a K-mart in Steubenville in Spring 2001.  They randomly picked a worker in their competitor’s store to ask the question about impulse sales.

That day’s executive approach is not unique.  It gets repeated thousands of times when big investment and job-creating decisions are made.  The drill?  Drop into a community and seek encounters with anyone on the street to gain a personal feel for the place.

I was the economic development guy on the spot witnessing all this. I remember fearing that worker could have turned the decision in the other direction for the worse.  He could have been perturbed enough to refuse to answer. It immediately occurred to me: What if he was just having a bad day? 

Thankfully, that Steubenville K-mart worker answered the question respectfully and cheerfully.  Little did he know, but he served as the face of a welcoming community and a responsive workforce that fateful day.   

Today, there are over 800 jobs with Walmart, the largest economic base employer in Jefferson County.

There’s no better Ohio example to make the point:  Everyone has a role in economic development.

First Thought:  Whose Job Is It Anyway?

Frankly, I don’t know anyone who doesn’t wish the best for their kids and grandkids.  For most, that means a job close to home. 

But, after all, whose job is it to make sure there are jobs for current and future generations?  The answer, in my book, is everyone.

In the end, economic development people are really merely on the sidelines watching the real work happening.

Another Thought:  Permit Me to Preach A Little.

If I could use this column to preach a little, it would be to preach to readers this:

Assume that next chance encounter with a stranger could be the turning point for your wish for future generations to be fulfilled.

You never know.  Regardless of the national, state, or local news climate of the day, a truthful, specific, and positive response to that next stranger’s question could make a difference. 

Third Thought: Natural Incentives Are the Best Incentives.

In Steubenville, 25 years ago, the tax abatement helped.  The promise to widen the state route helped.  The overall financial incentives package helped Walmart decide to invest.

Often, when large, job creating projects happen, it’s the dollars and cents incentives that grab attention.  Though they certainly help tilt the scales and close the deal, it’s the natural incentives—workforce, community culture, company fit, etc.--that win every time.  Every time.

Walmart decided to open that food distribution center outside Steubenville and will soon mark 25 years providing jobs in Eastern Ohio.  There are kids and grandkids that gained the opportunity to stay in town and work there all these years.

It was the community that won it.  And everyone in it.

Three Thoughts: Local Impact Matters, Do The Math

 

Imagine the euphoria from the reports that a project creating over 32,000 jobs was coming to Columbus.

Huge.  That kind of job creation level would be seven times AEP’s employment.  It would be equal to two times Nationwide or Chase. 

Do the math.  The equivalent of that mythical huge deal actually happened in Circleville.

Sofidel opened its tissue paper manufacturing facility outside Circleville a few years back.  They’ve expanded since.  Sofidel delivered 500 jobs in Circleville.  Columbus is 65 times bigger than Circleville in population.

Sofidel epitomizes the notion that local impact matters.

First Thought:  State Has Reasons to Celebrate Local Impact.

While Ohio’s economy added 500 jobs with Sofidel, it’s the fact that Circleville hit above its weight that year in job creation that should be celebrated. 

An equivalency test is a lens for looking at impact.  So, yes, the entire state has reason to celebrate 500 jobs in Circleville as much as they would if 32,000 new jobs landed in Columbus.

Communities hitting above their weight in job creation should always be celebrated.  Look at just three recent headlines:  400 jobs in Defiance.  510 jobs in Ironton.  240 jobs in Batavia.  Combined, that equates to as if over 150,000 jobs were being created in Columbus.

The spin off effect from those 1,100 jobs created and supply chain jobs are felt in a much wider area than Defiance, Lawrence, and Clermont counties.

Another Thought:  Feeling the Hurt of Losing 100 Jobs.

An equivalency test argument can work in the other direction.  Look at this in reverse.  When Galion, Ohio fears the loss of 100 jobs, that’s the Columbus equivalent of losing 9,000 jobs. 

It hurts.  It’s noticed.

Do the math in this case, and it tends to cause one to lend some empathy to the economic pain leaders of some of our fellow communities face when a seemingly small company is caught up in an economic downturn that engulfs their workforce and their community.

Third Thought:  More Reasons Why Equivalency Matters.

For decades, the rankings by Site Selection magazine have been the U.S. states’ measure of success in economic development.  Ohio achieved third place this year and has ranked that high or higher for multiple years as a result of producing impactful projects all over the state. 

In Ohio, for decades, the projects that give a boost in the rankings have come not just from our biggest cities, but also from our smaller ones.  In fact, consistently, more than 90% of the ranked projects came from outside of our largest cities in the state. 

That’s the sort of good news that needs to be celebrated. 

When our small communities win, all of Ohio wins.  Yes, local impact matters.

 

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This column is a regular column in The Dispatch.

Three Thoughts: Spending Our Demographic Dividend

Woody Hayes said, “You win with people.”  His sports mantra might as well be a mantra for industrial development too.  Like in football, economic growth requires people to succeed.

Talent is as important as infrastructure.  Though the talk about financial incentives always makes headlines, it’s the availability of people that is the most important incentive to attract capital investment and jobs.

 

In his book predicting the global future for development, The Next Hundred Million: America in 2050, author Joel Kotkin wrote about the demographic dividend.  The premise?  The U.S. competes favorably for gross domestic product growth over countries which are experiencing demographic challenges.

 A shrinking population is a people problem indeed.  The lack of people to work in manufacturing is the biggest threat to growth.  Conversely, when the U.S. sustains a working age population, we enjoy a demographic advantage.  That advantage is Kotkin’s demographic dividend.

 What made me want to sing from the Joel Kotkin songbook is his predictions, fully 15 years ago, that the middle of the country would bring about a national resurgence by experiencing a reshoring of manufacturing.  He predicted places like Ohio could win the people side of the equation while also providing all the energy, logistics, and manufacturing capabilities needed to gain an edge.

Competitors for GDP growth.

Japan and Germany are two countries from where large investors have made their way to the U.S. and Ohio, in particular. It’s been for demographic reasons.  These two countries’ business leaders recognized 50 years ago that if they wanted to sell in the U.S., they had to come to the U.S.  And they did.

Arguably, of all the incentives dangled to get Honda to Ohio, it was people that won out as the biggest reason they came, and the reason they stayed. 

Those German and Japanese decisions being mirrored by other countries are the reason predictions of reshoring of manufacturing have gained momentum in recent years.

China Faces Demographic Cliff.

It didn’t make many headlines, but India surpassed China in 2025 as the most populous country in the world.  China’s yearly population dropped and, by some estimates, the drop was roughly equivalent to the entire population of Iowa.  Birth rates are to blame.  According to The Guardian, “. . . [China] births in 2025 were roughly the same level as in 1738 when China’s population was only about 150 million.”

That’s not a demographic problem.  That’s a demographic cliff. The workforce ramifications are already impacting China and, undoubtedly, influencing their economic decisions now and for decades to come.

U.S. Demographics Trends to Watch.

Spending, if you will, that U.S. demographic dividend requires achieving working age population growth, comparatively higher birth rates, and steady legal immigration in our country.

Lower birth rates and slowed immigration have caused Kotkin’s prediction of the U.S. achieving 400 million population by 2050 to be off.  Though we keep growing as a nation, demographers are adding years on to the Kotkin prediction.

Trends that show population growth, trends that continue to favor reshoring of manufacturing, and trends that see increased foreign investment are all trends to watch in our state. 

If we look to win at the game competing for GDP economic growth in the U.S. and spending our demographic dividend, we’ll win with people.

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This column is a regular column in The Dispatch.