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Chasing Smokestacks and Promoting Sprawl: Economic Development in Ohio

19 October 2011 No Comment

When I was a graduate student in planning, a lot of people encouraged me to get a concentration in economic development. And I probably should have.

“Economic development” is the universally acknowledged highest priority in Northeast Ohio and it’s well funded. Cleveland’s Cuyahoga County spends roughly 20 percent of its budget on economic development, or about $100 million dollars. The state of Ohio has made it a top priority as well, pledging $700 million to its Third Frontier technology-based economic development program.

Somehow I couldn’t get excited about the idea of being an economic development professional in the state of Ohio, though. I guess its because so much of what the economic development community does in Ohio I find to be counterproductive, or worse, morally reprehensible.

In Northeast Ohio, almost every suburb employs an economic development director whose sole job it is to poach jobs from other nearby communities, usually those closer to the central city. A recent report from the organization Good Jobs First found that the Cleveland region has provided tax incentives for businesses to move 14,500 jobs further from the central city.

As a result of taxpayers’ investment, those jobs are now less accessible to low-income people that rely on transit. Who knows how much additional tax money had to be made available to add the necessary infrastructure to support such a large migration. Not to mention what its done to the health of our urban areas.

Just last week, I had a minor conniption over the news that the state of Ohio was providing $3.5 million in grants to help American Greetings it headquarters from Brooklyn to Westlake. Last year I was outraged when I heard the Port Authority was guaranteeing $150 million worth of loans to move Eaton Corporation from downtown Cleveland to suburban Chagrin Highlands.The $150 million taxpayer loan to move Eaton Corporation to the suburbs in Cleveland cost every man, woman and child in Northeast Ohio about $7.

$150 million. From one of the poorest cities in the country. So that one company can move to a suburb. All in the name of “economic development.” New jobs produced = 0.

How many start ups could the state of Ohio have seeded with that money?

From what I can tell based on my own (admittedly somewhat limited observations), the state of Ohio isn’t really that into seeding startups at all.

I’m have been a self employed person in Cleveland with some entrepreneurial ventures on the side, this blog included. But I haven’t had a lot of help. Not just that, when I’ve reached out for help, a lot of times I’ve come up empty handed.

That’s not to sound entitled. But I don’t even know exactly where to turn for help anymore.

One option is COSE, which could theoretically help me get a good deal on health insurance or it could offer me some free conference space. But that isn’t really much help to me. I found an acceptable plan pretty easily though on ehealthinsurance.com. And my major clients, I never have to meet face to face.

Then there’s some private venture capital firm based in Shaker Heights called Launch House. But they take a 40 percent interest in your company for their help. Plus, I don’t think this blog is every going to be the kind of cash cow that could attract private venture capital.

Jump Start, the economic development agency that receives the state’s Third Frontier money, isn’t interested in helping people like me. They look mostly at health technology firms with at least $1 million in revenues. (Oh, and they’re probably best known locally for paying their director $400,000 a year.)

For all the money we’re investing in economic development in the state of Ohio and in Northeast Ohio, you’d expect an entrepreneurial culture to be flourishing. But I certainly don’t see it. I don’t see it as someone who’s in-the-know about public programs. I don’t see it as someone who has operated a small business out of her home. I don’t see it as a (admittedly very small) service exporter who brings tens of thousands of dollars to the region annually.

This blog hasn’t even been able to find someone to serve as our fiscal agent so that we can operate as a nonprofit, despite our best efforts.

Jim Cossler, the Youngstown Business Incubator's "Chief Evangelist," outside Turning Technologies, the publicly traded firm they helped seed.

If I was an artist or a urban farmer, I could have my choice of assistance programs. But working in web development? Nada. There seems to be no emphasis on tech-based economic development in Northeast Ohio outside of some medical technology companies with patents.

Living in Cleveland I find myself jealous of Youngstown. Youngstown’s Business Incubator is really doing the heavy lifting of economic development: they nurture start-ups in the pre-revenues stage.

If I was living in Youngstown, I could attend courses, like those offered by my friend Tyler Clark, for free to learn about ecommerce. I think I could also use their office space there from time to time. I was told they once operated a coworking space.

That is the kind of thing that would help me as a small-business owner and self-employed individual in this region. Instead it is really a struggle.

The foundations, which could have been a partner to us, have instead seeded several competitors, who now have far greater resources than us.

We did receive some free training thanks to the Annenberg School of Communication at University of Southern California. But from our home state, nothing.

Anyway, sorry this has evolved into sort of a personal bitching rant. But I think economic development professionals in this region are still “chasing smokestacks.” They are seeking that big employer. A 20th Century industrial employer. Like an auto plant.

And they don’t understand that young, well educated, tech savvy, mobile people like myself are the future of the economy.

I am actually a pretty knowledgable person about new media reporting, a developing field. With the right kind of nurturing, I could help other people in Northeast Ohio understand this industry, and open up new economic opportunities for them. The people in leadership positions in economic development in Northeast Ohio don’t even have this industry on their radar. As a result, Northeast Ohio will be left out of that economic activity, be it an insignificant one, in the scheme of things.

Do I think if I had more help I could make a big impact on the economy? Maybe not. I’m happy to have a small impact. But in my line of work, I’m not tied to any geography, if being in Cleveland isn’t of any advantage to me, there’s no reason for me to be here. Right now it is of an advantage to me because it is cheap. But it is also very isolating.

A reporter from Details Magazine emailed me the other day and asked me to give him some examples of young entrepreneurs that were helping revive the economy in my region. I honesty kind of struggled with it. I sent him to the Youngstown Business Incubator.

The only entrepreneurs I know of personally in Cleveland are those in the food and fashion industries (I did give him a few of their names) but I don’t think the ones I know are having a big impact on the economy.

So go ahead and massacre me in the comments, like you guys do every time I say something negative about Cleveland. I’m just being honest about my experiences here and I think it’s a shame.

The key to getting economic development help in Northeast Ohio, seems to me, is to make friends with a Port Authority board member or run an economic development agency, not try to do something creative and innovative with the sweat of your brow.

-AS