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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2010 > February > 26 > Entry
Guest column: Manufacturing could boost Ohio once again
This commentary is written by Bruce Katz, vice president and director of the metropolitan policy program at the Brookings Institution in Washington, D.C., and Lavea Brachman, co-director of the Greater Ohio Policy Center in Columbus.
It can be hard to find good news in Ohio. Foreclosure filings are at record levels — again. Income tax receipts plummeted 35.6 percent from April 2008 to April 2009, and the downward trend continues in 2010.
Unemployment remains high: Dayton’s metro jobless rate reached 11.8 percent in December 2009.
But the current devastation is only half the story.
Ohio is in a paradoxical moment: The present is painful, but the future could be promising. And, in another paradox, its manufacturing heritage is part of the reason why.
The pre-recession economy was driven by consumption, energy profligacy and financial bubbles.
The next American economy must be very different: export-oriented, low carbon and innovation-fueled.
According to the World Bank, exports make up only 11 percent of U.S. GDP, compared to 40 percent in Europe, 40 percent in China, and 36 percent in Canada. Only 4 percent of U.S. companies export.
Ohio can lead the U.S. back into the export game, because the state still manufactures what the rest of the world wants, including medical instruments, electrical machinery and aircraft parts.
Brazil and China, two rapidly growing economies, are Ohio’s third- and fourth-largest trading partners. Dayton and six other large Ohio metros exported about $3.6 billion worth of goods and services to Brazil, India and China in 2007 alone.
Dayton is in the country’s top 20 large metros in terms of export intensity (the percentage of metropolitan region output that is exported overseas). The region is in the top third of large metros, and first in Ohio, in terms of service export intensity (education, consulting, health care). Dayton’s service export growth outpaces the national average.
Low carbon is the second hallmark of the next U.S. economy, and it could spark a production revolution in Ohio and other manufacturing states.
The transition to a low-carbon economy is fundamentally about markets and products. We will need new energy supplies — like biomass — and new machines — like turbines and solar panels.
Also, we will need new kinds of batteries, new kinds of cars and energy-efficient appliances, and smart meters. All of these products could be designed, developed and built in Ohio.
The state ranks seventh in the nation for total green technology patents for 1998-2007, with strengths in batteries, hybrid systems and fuel cells.
According to a recent report by the Pew Center on the States, Ohio’s number of clean energy jobs grew by more than 7 percent between 1998 and 2007, even as the overall number of jobs in the state fell 2 percent.
Creating the products and services demanded across the globe, and those that fit with a low-carbon world, will take quantum leaps in innovation.
Ohio attracted $46 million in venture capital investments in clean technology in 2008, more than triple the 2007 amount.
The state is in the top 10 nationally in science and engineering doctorates awarded; in academic research and development spending; and in small business innovation research awards, according to recent National Science Foundation data.
It is true that Ohio’s job losses, and Dayton’s in particular, in manufacturing have been staggering, especially with the recent closing of the Delphi and GM plants.
But manufacturing doesn’t have to be a millstone — it can be a steppingstone toward the next economy. Important innovations emerge from the factory floor. Innovating more means producing more, and that production can take place in Ohio.
This mindset should drive Ohioans’ policy decisions over the next year. It is not easy to raise spending on innovation, or to vote for an additional $700 million for the Third Frontier program, while pressing school districts and local governments to find more savings. But those hard choices will position Ohio for a stronger future.
The “Restoring Prosperity” report that the Brookings Institution and the Greater Ohio Policy Center just released recommends 39 policies — from rebuilding physical assets to collaborating at the regional level, that can help Ohio be strong in an export-oriented, low-carbon and innovation-fueled world.
The Downtown Dayton Partnership, CityWide Development Corporation, the Dayton Development Coalition and others have already started implementing some of these ideas, working to reuse vacant properties and build on neighborhoods and assets like the University of Dayton — all to become a stronger, greener city and region.
Yet, just as important as the policies is the underlying message: even as this economy falters, Ohio could benefit from the next one that’s emerging. Your strengths are just as real and relevant as the current crisis.
Bruce Katz is vice president and director of the metropolitan policy program at the Brookings Institution in Washington, D.C. Lavea Brachman is co-director of the Greater Ohio Policy Center in Columbus. They co-authored “Restoring Prosperity: Transforming Ohio’s Communities for the Next Economy,” which was released Feb. 22.
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Comments
By ggg
February 26, 2010 8:27 PM | Link to this
Ohio has some outstanding programs for mfg. businesses. County Corp. low interest loans, workers compensation payments for ergonomic equipment 66/33 split for workers safety. Did you know in manufacturing over 80% of the employees work in the plant, 20% front office educated. The key is not to tax old manufacturing out of business to support free education for 20% of the jobs. How about supporting manufacturing like we do education. Maybe less education and more manufacturing job support
By Ice Bandit
February 26, 2010 10:59 PM | Link to this
Ohio had manufacturing. Lots of it. We ran them off with a combination of high taxes, stifling regulation and Wagner Act unionism. And no amount of prognostication by DC based pointy heads will bring them back…..
By GUSS
February 26, 2010 11:22 PM | Link to this
The financial shape Ohio is in a the present,and no real plan to get better,most people that read this report will be retired in the sun,or will be resting in peace,before Ohio becomes a manafacturing power again!!
By John
February 28, 2010 8:48 AM | Link to this
Ohio will continue to lose manufacturing jobs as long as it is a forced member union state. It’s no mystery why we lost all those jobs to Georgia.
By joe_mamma
March 1, 2010 9:09 AM | Link to this
Why on earth would it be a good idea to have policies targeted for specific areas of business? You would be setting up the region for failure. Government needs to get out of the business of picking winners because it cannot react fast enough to adjust to changing business conditions and trends. The better goal would be to be business friendly in general and not to try to pick winners. Aim to have comparatively low taxes and streamlined regulations.
By Steve Rueckhaus
March 2, 2010 3:49 PM | Link to this
While industry around the world is under pressure to reduce carbon emissions, there is also a race to develop the green technology that will be implemented. One local company, AFS Technology, designs systems for safely using tire waste as fuel. The equipment is fabricated domestically and shipped to cement plants and other large-scale facilities around the world, that typically burn coal. Even if many of the conventional manufacturing jobs have gone away, there are several fledgling shops like this in the area, able to innovate and do business globally - wherever the actual manufacturing may be.