Ohio’s Governor and economic development agencies may not be visiting California companies to woo them back to Ohio as Texas Governor Rick Perry has been doing, but I would say the answer is “yes” to this question. California would do well to emulate the successful economic development policies of central Ohio surrounding its capital city of Columbus.
Recessions usually didn’t affect this region very much, but the Great Recession was different. In 2009, business leaders formed Columbus 2020 to address the effects of the recession on the 11-county region surrounding the state capital. It is now a private, nonprofit entity incorporated as both a 501(c) (6) and a 501(c) (3) (Columbus 2020 Foundation) and has become a collaboration between business leaders, government, and educational institutions. Its mission is to generate opportunity and build capacity for economic growth throughout Central Ohio.
To achieve this mission, the founders set the following goals to achieve by the year 2020:
- Add 150,000 net new jobs
- Increase personal per capita income by 30 percent
- Add $8 billion of capital investment
- Be recognized as a national leader in economic development
The plan to achieve these goals is:
- Retain and expand the companies and industries that call the Columbus Region home today
- Attract major employers to establish operations in the Columbus Region
- Create more commercial enterprises by leveraging research assets and entrepreneurs
- Improve civic infrastructure that enhances the economic development environment
In my interview with Kenny McDonald, CEO of Columbus 2020, he said, “The key factor of our success was starting with the vision of the business leaders that formed Columbus 2020 and having corporate leaders that are willing to engage in the process. You need both vision and engagement. There has been a real partnership between business, government, and educational institutions.”
He added, “We take a holistic view of trade and investment, as many of the companies in the region have a global footprint, and take time to understand what is driving business. The business climate has improved, especially for companies that sell in the U. S., and we’ve noticed that many companies are reshoring back to the US as part of their strategy to regionalize. The U. S. has never been more competitive, and our markets remain attractive, while there remains instability elsewhere in the world. Companies that had a plant in China or India to export to the U. S. are bringing production back to the U. S., to sell to the U. S., while some companies are bringing back work to export to other countries.”
He said, “Honda of America, which has a significant presence in the Columbus Region, recently announced that they were planning to export more to countries outside of the U. S. Honda’s supply chain and other companies that are part of the global automotive supply chain are evidence of the trend to regionalize. It’s been recommended that foreign companies, especially mid-size companies, regionalize by having a plant in the U. S. to reduce risks that disrupt the supply chain.”
The region has a population of only 2 million, but has 15 Fortune 1000 companies, such as Cardinal Health, The Scotts Miracle-Gro Company, Big Lots, L Brands (including Victoria’s Secret and Bath & Body Works, Express, and Nationwide.)
There is a special industrial park, the Personal Care and Beauty Campus, built up near Victoria’s Secret and Bath & Body Works, where all of types of companies in their supply chain are located, representing about 2,000 jobs.
Middle market companies are also an important part of the Columbus Region economy. There are 1,313 businesses that have between $10 million and $1 billion in annual revenue. Even though they represent only 2.3 percent of business establishments in the Region, they employ 15.4 percent of the private sector workforce and have an outsized presence in manufacturing, headquarters and back office functions, and other key industries.
The Columbus Region is home to 63 colleges and university campuses with a total enrollment of nearly 150,000 students and more than 22,000 annual graduates. It is also home to the largest concentration of PhDs in the Midwest, and has more PhDs than the national average. The Ohio State University – the state’s flagship university and one of the country’s leading research institutions – has more than 56,000 students at its main campus in Columbus.
Businesses in the Columbus Region benefit from:
- No personal property tax
- No inventory tax
- No state corporate income tax
Ohio offers the following tax incentives:
- Job Creation Tax Credit
- Ohio Enterprise Zone Program
- Community Reinvestment Areas
- Research and Development Investment Tax Credit
Ohio also offers several unique loan and grant programs as additional incentives for companies to relocate in the region.
The chart below shows the largest manufacturers in the Columbus region:
| COMPANY | INDUSTRY | EMPLOYEES |
| Honda of America Mfg. Inc. | Automotive | 9,433 |
| Whirlpool Corporation | Appliances | 2,344 |
| TS TECH Co, Ltd. | Automotive | 2,078 |
| Abbott Nutrition | Food & Beverage | 2,055 |
| Emerson Electric Co. | Utilities | 1,720 |
| Worthington Industries Inc. | Steel | 1,390 |
| Ariel Corporation | Energy | 1,265 |
| Boehringer | Medical | 1,250 |
| The Anchor Hocking Co. | Glass | 1,202 |
| The Scotts Miracle-Gro Co. | Lawn Care Products | 1,165 |
| Rolls-Royce Energy Systems | Machinery | 1,146 |
| Commercial Vehicle Group | Automotive | 1,125 |
| Owens Corning Corporation | Automotive | 1,011 |
| Lancaster Colony Corporation | Food & Beverage | 856 |
| Mettler-Toledo International | Precision Instruments | 800 |
| Jefferson Industries | Automotive | 750 |
| Cardington Yutaka Technologies, Inc. | Automotive | 725 |
| Columbus Castings | Steel | 700 |
As a result of these policies, Columbus is now ranked as the 8th most affordable location in the U. S. for corporate headquarters. The cost of doing business is half the cost of New York City, Los Angeles, and Silicon Valley. For all of these reasons, Columbus has become the state’s largest and fastest growing city.
Columbus 2020 is well on the way to not only achieving, but exceeding these goals by 2020 as shown below:
| JOB CREATION | CAPITAL INVESTMENT | PERSONAL PER CAPITA INCOME |
| As of August 2013, more than 53,000 jobs have been created in the Columbus Region since Columbus 2020’s founding in 2010. | As of December2013, $3.71 billion of capital investment has been added to the Columbus Region since 2010. | As of 2012, personal per capita income in the Columbus Region has increased 10.8 percent since 2010, from $38,547 to $42,728. |
California’s Governor Brown and the State legislature should review what the Columbus 2020 organization has accomplished in revitalizing the economy of central Ohio. California’s manufacturers would love to benefit from having no corporate income tax and no inventory tax, as well as having a Job Creation Tax Credit and a Research and Development Investment Tax Credit.
The new hiring tax credit and partial exemption of certain property from California’s sales and use tax are meager benefits being offered to manufacturers as part of Assembly Bill 93 and Senate Bill 90 that went into effect January 1st. Our California legislature needs to “stop fiddling while Rome is burning,” so that we will be able to stem the tide of companies moving out of California and add more than the pitiful 7,900 manufacturing jobs we have added since 2010 after losing over 625,000 manufacturing jobs since 2001.