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Results of Telephone Survey of Northeast Ohio Businesses, Non-Profit
Organizations, and Local Government Officials
—James L. Shanahan and Stephen D. Hambley, Center for Urban Studies,
The University of Akron
The Ohio Taskforce on Regional Competitiveness and Cooperation was established in 1993
by the Ohio General Assembly and charged to study current efforts which encourage or
facilitate regional competitiveness and cooperation in the nation and particularly in
northeast Ohio. The Taskforce was also directed to conduct a survey of business leaders
and public officials to identify their perceptions of regional competitiveness and
cooperation in the region. Under the direction of the Taskforce a telephone poll was
conducted by the Center for Urban Studies at The University of Akron in May and June 1994.
The survey consisted of four-hundred and twenty-five (425) completed interviews with
business owners and managers; elected government officials representing cities, villages,
townships and counties; and executives from economic development organizations, labor
unions, and other non-profit organizations located within Ashtabula, Cuyahoga, Geauga,
Lake, Lorain, Mahoning, Medina, Portage, Summit, Stark, Trumbull, and Wayne counties.
Results of the poll show a substantial degree of consensus on key issues affecting the
region's ability to compete and on the benefits of intergovernmental cooperation. The
issues upon which respondents substantively agree are:
- Increased competitiveness for the region's businesses is possible through private/public
and intergovernmental cooperation.
- The competitiveness of the region's businesses is tied to less government intrusion and
the streamlining of regulations.
- There is strong support for local government cooperation to promote economic development
through job creation incentives and aggressive marketing.
- Intergovernmental cooperation is also agreed to be important in providing selected
public services - emergency medical and fire services, police services, education
programs, and water and sanitary sewer services all ranked in the top five.
- Public transportation and affordable housing are ranked at the bottom of the list in
terms of importance for intergovernmental cooperation.
- The repair and rational expansion of northeast Ohio's infrastructure is important for
the region to compete effectively.
- The most important economic development objectives for the state of Ohio to pursue are
the retention of existing automobile-related industry jobs and the strengthening of Ohio's
capabilities in strategic research and planning.
- The top four economic development strategies for the state of Ohio are: improving
funding for infrastructure, providing support for work force training initiatives,
implementing business development initiatives, and promoting international trade.
- The state of Ohio needs to assume the primary role in resolving the financial problems
in local public education and to establish a tax base for supporting K-12 education by
means other than property taxes.
- Employers seek employees for a high-performance work force - ones who understand that
learning, not training, is the goal, yet, the general public and many policymakers do not
understand important differences between education and training.
- A majority of firms are neither creating enough high-skill jobs nor supplying the kind
of continuous training that a skilled work force requires if the region is to achieve
economic competitiveness and offer quality of life. Also, it was agreed that too many of
the region's college graduates move elsewhere in order to find jobs.
- For these reasons and more, the economic development of the region must be better linked
to the education and training provided by our secondary schools, colleges and
universities.
The two issues about which some public officials and business leaders disagree are:
- The effectiveness of Ohio's technical, employment, training, and financial assistance
programs - government officials have a far more favorable view of these programs than do
business heads. Small business owners in particular appear to be more skeptical than other
groups about the ability of Ohio's various business assistance programs to improve their
capacity to compete.
- The importance of state policies impacting Ohio's business tax climate regarding tax
exemptions, abatements and credits. Business heads believe tax exemptions, abatements and
credits to be most important, while public officials believe ease of compliance with
Ohio's tax laws and filing procedures is most important.
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Sources of Employment and Earnings in Northeast Ohio: Recent Growth
Trends
—Ziona Austrian, Economic Development Program The Urban Center,
Cleveland State University
Northeast Ohio is undergoing structural changes in its industries similar to changes
occurring in the state as a whole and comparable to- broad national trends. That means
that there has been a declining number of manufacturing jobs at the same time employment
increased in the service industries.
The northeast Ohio region, defined here as a nine-county area, had 1.44 million jobs in
the first quarter of 1993, up 0.5 percent over four years. This time period includes a
national recession that by formal definition lasted from July 1990 to March 1991. The
recovery in northeast Ohio, as in the rest of the country, was stagnant for at least
another year.
Ohio Bureau of Employment Services data indicate that although the region as a whole
gained 7,436 jobs between the first quarter of 989 and the first quarter of 1993, several
major industries lost employment. The main contributors to employment gains are service
industries, the so-called FIRE sector- finance, insurance, and real estate - and public
administration. These gains were almost all offset by 31,500 jobs lost in manufacturing
industries, followed by additional losses in transportation and public utilities and in
wholesale industries.
A 25,000 decline in employment in durable manufacturing Jobs in northeast Ohio was a
result of losses in four counties including Cuyahoga (-19,970), Stark (-3,083), Summit
(-2,297), and Medina (-279). However, almost four out of five job losses occurred in
Cuyahoga County.
Employment in nondurable manufacturing industries has also declined in northeast Ohio
between the first quarter of 1989 and the first quarter of 1993. The industry lost 7,000
employees, or 5.9 percent.
Services, a very diversified major industry made up of sixteen separate two-digit SIC
Code industries, grew in each of the region's counties, expanding by almost 40,000 jobs in
northeast Ohio.
Employment increases in only three industries show consistent expansion throughout the
whole region. These are health services, educational services, and social services. The
first two industries, health and educational services, are the largest service industries
in the region, including private as well as public institutions. The main conclusions
include:
- Manufacturing remains a very important sector in northeast Ohio, even though the sector
as a whole continues to lose employment.
- Service industries employment continues to expand. Combined with employment gains in
finance, insurance, and real estate industries and in public administration, these
industries offset job losses in manufacturing, wholesale trade, and transportation and
public utilities.
- Cuyahoga County is the dominant county in the region, accounting for half the region's
total employment and 54 percent of the region's payroll.
Implications are:
- It is critical to look at the region as a whole in order to provide businesses with an
environment that will improve their competitiveness in the local as well as global
markets. However, individual county strengths and weaknesses should be recognized and
policymakers should attempt to reduce intra-county competition if it detracts from the
region's ability to compete.
- Special consideration should be given to Cuyahoga County and its problems because of its
size in relation to the region.
- Policymakers should continue to support manufacturing industries in northeast Ohio,
providing for the physical and human infrastructure that is needed for manufacturing
industries to continue to develop. Special targeting of some of the largest industries as
well as the highest growth industries is needed.
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Household Movement Within Northeast Ohio:
Implications for the Region's Economic Vitality
—Thomas Bier, Housing Policy Research Program The Urban Center,
Cleveland State University
People move for many reasons. Some follow jobs; others just like the idea of a newer or
larger home and can afford the expense of a change of scenery. Still others are concerned
about the safety of their neighborhoods and the quality of its schools.
However, moves also occur because government policy at all levels - federal, state and
local - encourages it. Government policy plays a role in the kind of housing that is
available for people on the move and where it is located.
Publicly funded new freeways, for example, bring previously distant communities, with
cheap land, to the attention of home builders. They build new homes, luring people away
from central cities and inner suburbs, which have little attractive vacant land for new
construction.
These kinds of individual actions, multiplied over time, have a substantial impact on
the health of our communities. The effect of movement may be positive: it can increase the
income and real property tax bases of communities.
But the greater concern is for the central cities and inner-ring suburbs. The research
shows that people tend to move up to more expensive housing and out to neighborhoods
further from the central city. As a result, older communities suffer when their more
prosperous residents, best able to maintain housing, are lured to newer housing in
communities distant from the central city.
While this phenomena has traditionally drawn people to communities further out within
an urban county, it now attracts people from county to county. In northeast Ohio, for
example, that means that families are moving from Cuyahoga County to Lake and Geauga
counties.
Every city, village and township in northeast Ohio should be concerned with how
movement is affecting it. So, too, should each county government. If the suburbs follow
central cities in decline, the financial viability of counties will be threatened.
The State of Ohio needs a new policy which increases the options for moving inward and
decreases suburban sprawl.
Achieving that objective will involve actions to increase housing development in
central cities and older, inner suburbs, and decrease development in outer suburbs. Such
actions have come to be known in other states as "managing growth." Ten states
have adopted laws that require locally produced growth management plans.
Changing the course of Ohio's metropolitan areas is also a challenge for
local leadership. Local officials from all of the counties in each metropolitan area must
work cooperatively, not only with each other but with the private sector and citizen
groups. Managing the location of housing development on a regional scale in order to
increase movement inward and decrease movement outward is unprecedented. It runs counter
to the established practice of each community being totally independent in shaping its
development. But it is necessary in order to come to grips with urban decline and suburban
sprawl.
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Cooperative Communities - Competitive Communities:
The Role Of Interlocal Tax Revenue Sharing
—Jack L. Dustin, Center for Urban and Public Affairs, Wright State
University
This monograph argues for a different local tax system. The argument is based on
changes and events altering familiar economic and political relationships in Ohio and
beyond. These changes compel cities and suburbs to recognize their interdependency and act
upon them. We are challenged to value interdependency as a strength rather than a
weakness. In the simplest terms, interdependency means the metropolitan area looms larger
than any single local government.
Three broad, very complex and interrelated urban patterns call for us to think, manage,
budget and plan differently. The patterns are: 1) the decline of central cities and the
growth of suburban and exurban cities and communities; 2) an obsolete tax system which
does not respond to economic or social realities; and 3) urban sprawl which fragments the
region, strains local resources, and leaves them less competitive.
These urban patterns are products of five basic conditions:
1. Changes in technology and markets that make political boundaries less important and
cooperation and coordination more important.
2. Increasing fragmentation in urban regions that isolate classes of people and
constrains the necessary movement of information and people.
3. Mounting disparity between local governments that drains resources and diminishes
competitiveness.
4. Problems that are too large spatially, too expensive, and too complex for any single
local government to effectively address.
5. Citizens who want local governments to work together and redesign the tax system.
Local governance must reflect social and economic reality. Tax revenue sharing
illustrates a response to this reality. Advocates see a well-defined tax sharing plan as a
means to achieve one or more of several outcomes. It:
- enhances the fiscal and political capability of local governments to meet service and
infrastructure demands;
- dampens unproductive competition between local governments, including annexation and tax
abatement, and creates a foundation for cooperation and collaboration;
- checks the forces driving up local tax rates;
- supports and coordinates reasonable and environmentally sound land-use policies; and
- reduces fiscal disparities separating communities in urban regions.
At present, Ohio local governments have two ways to share taxes. Under state law,
municipalities may share tax revenues generated in designated areas, including townships.
Currently, municipalities in Summit County may share with townships the taxes generated in
"development zones."
The second type of tax sharing involves all local governments in a county which choose
to participate. This too required an amendment to the Ohio Revised Code. Montgomery County
utilizes areawide tax sharing. In 1991, 27 of 31 local governments in Montgomery County
voted to participate in a ten-year tax sharing program. The 27 governments represent more
than 95 percent of the county's population. The tax sharing program is called ED/GE, which
is an acronym for "economic development" and "government equity."
Government equity, or GE in this instance, signifies tax revenue sharing and it is
implemented through contribution and distribution formulas. ED, on the other hand, will
invest $50 million in projects conceived by local Jurisdictions, or $5 million per year.
Local governments submit project proposals (construction, research and leverage dollar
projects) to an economic development committee composed of representatives from
municipalities, townships, villages, the county and the private sector.
Given the characteristics of existing tax revenue sharing programs in Ohio and beyond,
an ideal tax revenue sharing strategy can be outlined. The strategy begins with specific
goals that are crucial to any tax sharing initiative. A sound tax sharing program must:
- build on regional economic and social interdependency;
- bond communities together through a common vision of development and a set of economic
priorities;
- bolster democratic values and local choice;
- balance the cost and benefits of economic growth;
- block urban sprawl, unwise land use, and useless annexations and abatements; and
- break down barriers to advanced cooperation and regional competitiveness.
Finally, the monograph deals with steps for developing and implementing a multicounty
regional tax sharing program.
First, the proponents must demonstrate regional economic and social
interdependency, then a need for fiscal reform. Then a multisector, multigovemment
organization must step forward to lead the tax sharing initiative. And because dollars
mean more than principle, an economic development fund must be created either through a
new tax or state or federal funds. This whole process must be guided by a well-designed,
open decision-making process.
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Northeast Ohio's Infrastructure Needs
and Their Impact on the Region's Economic Growth
—Billie K. Geyer, Public Management Program, The Urban Center,
Cleveland State University
Adam Smith, a stalwart of free enterprise, referred to spending on infrastructure as
one of the three rationales for the state (after the provision of defense and justice).
But according to one report, the quality of America's infrastructure is barely adequate
to fulfill current requirements, and insufficient to meet the demands of future economic
growth and development.
While the research on the linkage between infrastructure spending and economic growth
is weak, it is clear that infrastructure provides an essential underpinning for ongoing
economic activity, without which industry could not function and the health and safety of
our citizenry would be threatened.
The research also questions the value of using public works as job-creation programs
since well-planned infrastructure projects have long lead times. Economic conditions may
well have changed by the time projects finally get underway.
The condition of the infrastructure also plays a role in the retention by a community
or region of existing businesses and the attraction to the region of new businesses. It is
noted, however, that studies fail to indicate that incentives such as tax abatement play a
significant role in business location.
This paper assesses opportunities for economic growth through investment in nine
counties in northeast Ohio - Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, Stark,
Summit, and Wayne. Based on capital improvement plans, approximately $4.8 billion needs to
be invested in the nine-county area among the four infrastructure sectors: (1) roads and
systems, (2) mass transit, (3) water systems, and (4) sewer projects. This estimate is
probably understated due to conservative capital planning by agencies and uncertainty
regarding the cost of pending regulations.
While funds are available for much of this work, there is little planning to ensure
that the money is spent most effectively. There should be greater coordination between
regional planning agencies.
In addition, the region could generate additional funding by increasing permissive auto
license fees and by using its clout to increase its share of Ohio Department of
Transportation capital funding.
Lastly, the region should push to make sure that environmental laws and
regulations include adequate funding for implementation.
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The Deepening Financial Crisis in Ohio Public Education:
Issues of Control, Quality, or Income
—Stephen D. Hambley, Center for Urban Studies, The University of
Akron
On July 1, 1994, Perry County Common Pleas judge Linton D. Lewis, Jr. ruled in DeRolph
vs. Ohio that Ohio's system of funding primary and secondary education is
unconstitutional. The decision is being appealed and the Ohio General Assembly may yet
have the last word. As that battle rages, a growing number of Ohio school districts face
severe financial difficulties. Politicians, taxpayers, parents, and school officials have
raised a number of points to explain this alarming trend. One answer to the question may
be found at the polls. An analysis of school levy elections from May 1993 to May 1994
indicates that while voters are willing to pass tax ballot issues that renew or replace
existing millage, they are turning down requests for new taxes.
There are a number of theories about why school financial issues which add to the tax
burden are failing at the polls. The results of this study reinforces an interpretation
that Ohio schools are at the mercy of a major tax revolt and have lost key constituencies
in their local support. The impact of this anti-tax block is especially dramatic to local
schools because school district money issues always face the voters, while tax proposals
of the state legislature and U.S. Congress do not.
The evidence suggests that the failure of school levies throughout the state are the
result of a complex mix of factors. Voters are turning down added taxes across the board,
regardless of whether a district is urban or rural or wealthy or poor. The study finds
that the support of local school issues is not directly related to the local tax base
(property or personal income) nor the amount of relative taxing effort currently being
applied. The relative quality of education, as approximated by the average salary of
classroom teachers and the pupil teacher ratio, likewise, has no statistical relationship
to the failure or approval of school levies in total. An analysis of 254 school levy
issues across the state reveals that the key factor in their outcome was whether or not
the issue asked for new money. An issue adding millage had almost five times the chance of
failing compared to one that was either a renewal or replacement issue.
Public opinion research conducted over the past year gives some tentative support to
the view that demographic and economic changes have produced an electorate that tends to
vote against school levies. Voters who once supported schools have switched sides and
groups that have no personal stake in local education - senior citizens, childless
couples, and single individuals - are growing in size. Local school districts have also
failed to win the support of new young voters, the so-called Generation X (18 to 29 age
group), who have significantly less discretionary income and bleaker job prospects than
the average Baby Boomer. Other opinion research suggests that Ohio voters as a group have
come to regard local property taxes as the least preferable method of funding local
education. It also appears that an overwhelming majority of Ohioans believe that the
current system of public education is in need of reform.
The state board of education has convened a panel of school finance
experts in the wake of the DeRolph ruling and the issue will likely move on to the Ohio
General Assembly. The ultimate success of these efforts will depend on policymakers
recognizing several underlying problems with Ohio's public education system that may
involve more than public finance issues. School board members, state legislators, and
administrators should be aware of what the public will and will not tolerate in the form
of tax increases dedicated to local education. This analysis strongly suggests that a
comprehensive and statewide or regional approach to school funding is warranted if the
ongoing problems of public school education are ever to be reasonably solved.
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Rising Solid Waste Disposal Costs and High Waste-Generating
Industrial Firms
—Stephen D. Hambley, Center for Urban Studies, The University of
Akron
and John DeMuth, Solid Waste Planning, Cuyahoga County Planning Commission
Over the last several years, combining solid waste management options that meet local
needs while balancing the economic and environmental costs has been the goal of solid
waste planning officials. However, due to market conditions brought about by regional and
locational qualities and private sector competition, the economic factors which have
shaped solid waste management practices in America's east coast states have been largely
absent in northeast Ohio. Ohio's industries have perused solid waste minimization to some
degree, but they have eluded the economic burdens that have stricken their competitors,
suppliers and clients in states like New York, New Jersey, Rhode Island, Pennsylvania and
Massachusetts. The "party" will soon be over, however. In the future,
businesses, as well as households and the public sector, will be forced to pay more to
dispose of trash.
The purpose of this monograph is to explore one of the multiple options that may lend
itself to a regional approach: solid waste minimization programs aimed at assisting
manufacturing firms. The conclusions drawn from the research suggest that such programs
can be approached from an economic development perspective, a frequently touted slogan for
intergovernmental cooperation.
There is now an opportunity for the region's local and county governments to pursue
coordinated regional programs aimed at assisting existing and new industries that may be
particularly vulnerable to increasing solid waste disposal costs. The better prepared
these firms are for the sharp increases that will occur in disposal costs the more
competitive they will be in the world market.
Research Findings
In light of Ohio's sustained efforts to improve operating conditions for businesses
already located throughout the state and to encourage new businesses to locate their
facilities in the Buckeye State, the anticipated rise in solid waste management costs
prompted a number of research questions which this study examined. The following is a
summary of these questions and the research findings.
- Does northeast Ohio have a regional advantage or disadvantage with regard to solid waste
disposal costs, and are northeast Ohio landfill tipping fees competitive with those of
other parts of Ohio or the United States?
Yes, Ohio appears to have a significant, albeit temporary, advantage in solid waste
disposal costs related -to landfill operations. In the absence of any federal legislation
to restrict the flow of out-of-state wastes into Ohio's solid waste facilities, the
comparatively low tipping fees will encourage a renewed flood of waste, to the detriment
of the region's recently gained increase in available landfill capacity.
- Do differences in waste disposal costs influence location decisions of firms that are
high generators of waste, and what types of firms are most sensitive to high waste
disposal costs or most likely to benefit from waste minimization programs?
Survey results indicate that waste disposal costs are important enough to some
manufacturing firms to influence their decisions regarding location and expansion.
However, this importance does not appear to be specific to any one SIC group or type of
facility. Firms that generate a large amount of solid waste are more sensitive to waste
disposal costs than firms generating little or no waste. Firms that actively recycle and
have systematically minimized their waste over the last several years were the most likely
to suggest that any future disposal cost hikes could be deal with by improved recycling
and waste reduction measures. Even though most of these firms were unaware of an impending
increase in costs, they were the most confident that they could find technical and
organizational means to minimize their impact.
- The study provides a brief description and information about the following resources
that are available to existing northeast Ohio businesses in minimizing their waste
disposal costs:
- Environmental Services Program, Cleveland Advanced Manufacturing Program (CAMP);
- Office of Pollution Prevention (OPP), Ohio Environmental Protection Agency;
- Solid Waste Management Districts.
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Tax Abatement: War Within A State: Ohio's Enterprise Zone Tax
Abatement Program
—Edward W. Hill, Maxine Goodman Levin College of Urban Affairs,
Cleveland State University
Most analyses of state and local tax abatement programs focus on their impacts on
interstate competition and program effectiveness, which is usually defined as net job
creation in the target area. This article examines the intrastate competitive effects of
tax abatement which are much larger, and more pernicious, than its interstate locational
effects. The legislation that re-authorizes Ohio's enterprise zone program, which is a
loosely targeted tax abatement program, is analyzed, as are claims made by Ohio's
Department of Development in support of the program's re-authorization. The article
concludes with suggested reforms of state and local enterprise zone and tax abatement
programs at the federal, state and local levels.
The hand-out game, whether it involves steel mills or baseball teams or high tech
R&D, stops when politicians fathom or are made to learn that it doesn't pay off in
most cases and it isn't their role in life to bestow these favors anyway. They ought to
attend to competitiveness by maximizing the appeal of their jurisdictions to every kind of
enterprise, not just those with a big snout.¹ —Wall Street Journal, February
4, 1994.
The tax abatement war between the states has spread; the fire-fight is now more intense
within states than between states. During spring of 1994 Ohio's legislature reformed one
of its major tax abatement programs - the enterprise zone program. This legislation
provides a useful perspective on what is wrong both with commercial and industrial
abatement programs and with vaguely defined enterprise zone programs.²
Tax abatement of industrial and commercial businesses continues to be a contentious
political issue in Ohio, as in other states.³ Democrats in the House and Republicans in
the Senate tried to curtail the use of enterprise zone tax incentives in non-poverty areas
in the 1993-1994 legislative session. The move was triggered by the sunset provision in
the original enabling legislation. They were opposed by the Governor and the Department of
Development, who contended that removing tax incentives would choke-off industrial
development in Ohio, making the state more expensive than Tennessee, North and South
Carolina, and somewhat more expensive than Kentucky and Indiana, for businesses.4
Ohio is reported to tie Pennsylvania and is cheaper than Michigan.
The reform legislation reins in some of the more obnoxious abuses of the enterprise
zone program. But it has not touched its core problems and has loopholes large enough to
drive factories through. The Ohio case demonstrates several systematic problems with
commercial and industrial tax abatement programs and enterprise zone programs:
- Ohio's enterprise zone program is not a true enterprise zone program; it is ad hoc
business tax reduction, which is not the same thing as either low taxes or tax reform.
- The program puts the most distressed areas of the state at a competitive disadvantage.
- While the program is promoted by the Department of Development as responding to
interstate competition for jobs, its major impact has been to stimulate intrastate tax
competition for employers, at substantial public cost.
- It is unlikely that Ohio's enterprise zone program results in net new job formation due
to the way in which it is both designed and implemented.
- The program has been marked by a pattern of exaggerated benefits.
The article concludes with suggestions for further reform. The most important reform is
change in the federal tax code. Suggestions are also provided for reforms in state and
local budgeting practices.
——————
¹"Labor blows right whistle," Wall Street Journal, February 4, 1994,
editorial.
²The enterprise zone program was reformed under Amended Substitute Senate Bill 19. The
provisions of this bill took effect July 22, 1994. The legislation was signed into law in
the spring of 1994.
³A 1993 survey of states by State Government News indicated that 30 have active
enterprise zones and 3 states have passed legislation that enables them to create zones
but had not done so at the time the survey was conducted. The District of Columbia also
passed legislation that allows it to create a zone. The zones vary widely as to purpose,
incentives offered, the number in each state, and qualifying, reporting, and evaluation
requirements. Louisiana is one extreme with 1,553 zones, and Arkansas is not much
different even though it only has one zone - the entire state. Michigan has only one zone,
in the western part of the state; but development officials in surrounding states point
out that Michigan allows a 50 percent abatement on new capital invested anywhere in the
state, which to them is equivalent to a statewide enterprise zone program. Christopher
Schwartz, "Zone Defense," State Government News, April 1994. Also see William
Schweke, Carl Rist, and Brian Dabson, Bidding for Business. Are Cities and States Selling
Themselves Short," Washington, D.C., Corporation for Enterprise Development, 1994.
4Donald T. Iannone, Ohio Economic Competitiveness Project,
Summary of Findings and Recommendations, Columbus, OH, Ohio Department of Development,
March 1993.
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Northeast Ohio's Visitor Industry: Development Prospects And
Competitive Advantages
—Donald T. Iannone, Economic Development Program, The Urban Center,
Cleveland State University
This report reviews the state of northeast Ohio's visitor industry, also known as the
travel and tourism industry. Public and private sector leaders within the region have
invested significantly in the development of the industry as a major source of future job
creation and economic development. Additional future investments will be required to help
it achieve future goals.
One of the report's major purposes is to increase the "strategic thinking" of
regional leaders about the visitor industry, evaluate the community's ability to support
increased visitor activity, and the future opportunities and threats which present
themselves in this area. The paper suggests that policymakers organize planning for
visitor industry development around five ideas.
The first idea is that the visitor industry should be viewed from a development
perspective as a "cluster" of inter-related industries which depend upon various
types of visitors to the region.
A second idea suggests defining "visitor" broadly. This paper argues that a
definition which includes northeast Ohio residents who take part in travel and leisure
activities as visitors should be adopted.
The third organizing idea is that public and private sector leaders should carefully
evaluate future development opportunities in the regional visitor industry based upon
their expected "economic impact" on the region. This approach will ensure that
prudent use of scarce public and private sector resources occurs and also that the best
opportunities are developed.
The fourth organizing idea is that the "location" of key visitor attractions,
infrastructure, and other resources is centrally important to the successful growth of the
industry. Linkages among the region's many visitor attractions and resources is essential
to properly stimulate growth of the overall market.
Finally, the visitor industry should be viewed from a "regional market"
perspective, looking at marketing and infrastructure issues that tie northeast Ohio
together.
Thinking that focuses on these five ideas can help as we consider the many
opportunities to increase the size and competitiveness of the visitor industry within the
region.
One way to boost the visitor industry is to more closely involve the major industries
and institutions based in the region. They can be strong catalysts for national and
international events and attractions. For example, there has been little effort to involve
the region's science and technology base in stimulating future conferences and trade
shows. Major industries and headquarters companies in the region should be tapped for
their assistance in recruiting their industry or trade meetings to the area.
Education and government entities in the region should also play a stronger role in
attracting and creating these types of travel and tourism activities.
Events and activities which help build the region's international image and identity
should also be given major emphasis, since these activities can lay the groundwork for
business recruitment and expansion in the area by both manufacturing and service
companies.
The visitor industry represents an excellent initial focus for regional
cooperation by area public and private sector leaders. Many lessons could be learned
through a "pilot" effort in this industry, which will help regional leaders and
communities cooperate in other areas.
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Employee Ownership: A Competitiveness Strategy
in Northeast Ohio's Manufacturing Sector
—John Logue and Karen Thomas, Northeast Ohio Employee Ownership
Center,
Department of Political Science, Kent State University
In the last fifteen years, employee ownership in Ohio has grown from a well-publicized,
last-ditch effort to avert plant shutdowns into a coherent strategy for economic
development that anchors capital in northeast Ohio's manufacturing communities. Drawing on
a total population survey of Ohio's employee-owned companies - both majority and minority
employee-owned - this paper:
(1) charts the rapid growth of employee ownership in Ohio in the last decade and the
internal transformation within firms which has followed;
(2) analyzes the development of the concept of the "high-performance
workplace" in the literature and the unique theoretical advantages of employee-owned
firms in this context;
(3) charts the prevalence of "high performance" characteristics among Ohio
employee-owned firms and compares them to employee-owned firms lacking those
characteristics;
(4) finds a clear relationship between those characteristics and measures of actual
company performance; and
(5) suggests a range of policy initiatives: (a) to improve the competitiveness of
Ohio's employee-owned firms, (b) to expand the scope of this sector within northeast
Ohio's manufacturing economy, (c) to encourage economies of scale among smaller
employee-owned firms to enable them to compete more successfully in the global economy,
and (d) to disseminate the most successful practices of Ohio's employee-ownership sector
among conventional companies to improve the competitiveness of Ohio manufacturing firms
more generally.
In the context of constrained resources, as has existed in Ohio state
government in the last several years, it is important to focus on policy initiatives with
high leverage and low additional costs. The proposals put forward in this paper have been
designed specifically to craft a coherent state policy initiative within the confines of
existing programs and existing funding.
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Revitalizing Northeast Ohio With Greater Education and Training
—James L. Shanahan Center for Urban Studies, The University of Akron
The economic growth in jobs and personal income within the northeast Ohio region has
lagged behind that of most comparable U.S. metropolitan regions and has been insufficient
to absorb the growing pool of workers, most notably jobs for those with better skills and
education. At the same time, the educational attainment of the region's population, while
improving decade by decade, still lags behind that of the nation. Employer training is no
substitute for basic education, from completion of high school right through post-graduate
education.
During the regional transition from the old economic order to a new one - a process
that unfolds over decades - developing the human resource potential of the region is
paramount to successfully replace industries as they mature, go into decline or transfer
major functions to new locations. The region cannot afford to lose more ground to other
metropolitan regions in terms of the educational attainment of its workforce, not given
the dampening effect this exerts on the economic restructuring and growth potential of the
region.
Attacking the problem of inadequate educational attainment of the population in a large
economic region like northeast Ohio is well beyond the ability of a single institution.
Acting in concert, public and private colleges and universities can generate demonstrable
results. Creating better linkages between economic development and education and training
will also require the commitment of government, business and industry, and economic
development organizations. These new partnerships must be based on a convergence of
purpose and thinking about what the region needs for long-term economic viability, about
the importance to the region of a better educated population, and about what can be
achieved through the collaboration and partnership of regional leaders. Collaborative
strategies are needed to enable the region's higher education community to provide
education and training that matches the competitive needs of the region's existing and
replacement industries.
The Ohio Board of Regents is taking the leadership role in Ohio as its new master plan
develops. In that plan, public institutions of higher education in Ohio will take into
account, as they set their respective missions, goals and objectives, the unique needs of
the areas of Ohio they primarily serve. In keeping with OBR's objective, the Cleveland
Commission on Higher Education, an eighteen-member consortium of public and private, two
and four year institutions in the Cleveland, Akron and Lorain areas, has recently unveiled
a plan entitled the Educational Initiatives Toward Regional Vitality Demonstration
Program, an ambitious five-year demonstration initiative designed with one broad goal in
mind: to increase the human resource potential of the region by upgrading the skill level
of the work force through education and training, and to do so in ways that help achieve
the economic development priorities of the region.
Looking forward a few years, the objective of this ambitious initiative is not only to
enhance existing industry, but also, in the longer term, to ensure the region's ability to
replace the industry which now is the major source of economic growth and development. In
both cases, one of the most effective ways to achieve this objective is to expand and
enhance the human resource potential through education and training that plays to the
occupational and functional strengths of market segments and linked industries which are a
good fit for the region.
In the short-term, education and training can be used to strengthen the human resource
pool available in ways that help achieve the region's economic development goals. Second,
and more long term, education and training can be used to discretely increase the region's
occupational and functional capacity which can broaden future development prospects.
The initiative is evidence of the kind of determination needed on the
part of the region's colleges and universities, business and industry, economic
development leaders, policymakers, and others, to take a larger role in addressing the
region's ability to replace its economic base by tapping the economic potential of its
population. As such, this is an initiative which should be supported by the Ohio
Legislature.
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Higher Education and The Future Economic Competitiveness of Northeast
Ohio
—David T. Stephens, Department of Geography, Youngstown State
University
In the northeast Ohio of thirty years ago, possession of a high school diploma was
almost an iron-clad guarantee of lifetime employment at a very good wage in a smokestack
industry. Even without a diploma, many were able to find jobs in manufacturing industries
that kept them well above the poverty level. Today, job opportunities are nearly
nonexistent for those, without a high school diploma. For those with a diploma, that piece
of paper is likely entree to minimum wage jobs in the fast-food industry, not a guarantee
of a secure and well-paid future.
Education is fundamental to an area's economic competitiveness. Two aspects of
education that play a key role in the future economic health and vitality of this region
are examined in this monograph. The first is education's influence on the quality,
competence and skill level of the work force. The second is the region's ability to create
new knowledge and skills.
Demographic information shows that Ohio is falling behind the rest of the nation in the
percentage of the population holding a bachelor's degree, increasingly required for more
and more jobs. The root of the problem shows up dramatically when you look at first-year
high school students, who now take a ninth-grade proficiency exam. Though there was wide
variation from community to community, only 47 percent of northeast Ohio ninth graders
were able to pass the exam. We must raise the expected performance level of high school
graduates. We must also increase the percentage of college graduates in the region. This
can be best achieved by nurturing the development of economic activities that employ
college graduates.
Creating new knowledge and skills involves looking at the distribution of holders of
advanced and professional degrees and at the region's research-oriented universities and
the advanced degrees they grant. Research universities can be significant centers of
innovation, but there is a serious shortage in northeast Ohio of research-oriented
universities. While the region has several graduate-degree granting institutions, only
one, Case Western Reserve University, might be considered a nationally recognized center
for research. Given that thirty-five percent of the state's population live in northeast
Ohio and the economic significance of the region, there has been inadequate allocation of
state resources for the support of graduate study, especially doctoral programs in the
region. The near dearth of centers at state-supported institutions is particularly
distressing. This lack of research is no doubt one of the reasons that the region's heavy
industry has suffered.
It is recommended that regional officials seek to strengthen
post-high-school education in northeast Ohio and, specifically, that they lobby for and
support more research-oriented, advanced-degree programs for the region's state
universities. Those are investments that will help ensure the future of the region in a
global economy.
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March 02, 2007.
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