econdev challenges

Spring Breakfast Forum Tuesday, March 26, 2013

Mark Barbash Finance Fund

Looking ahead at the future of

Ohio’s Economy

Finance Fund Assists SolarVision with Celina Renewable Energy Center

Major Economic Shifts are Impacting Economic Development

The recovery from this recession is taking longer than prior recessions

We are not replacing jobs lost through the recession

Employers have significantly increased their use of part time workers.

0

20,000,000

40,000,000

60,000,000

80,000,000

Retirement Age WorkersTalent Pipeline

Workers

We are not replacing our retiring workers with our new workers

The Internet is changing the way that everyone does business!

Ohio and the Midwest are leading the nation in the Manufacturing Recovery

Ohio’s Economy is Expected to continue to Expand in 2013…

2009

1994

2013

2015

2001 National GDP Ohio GDP

Technology is changing Manufacturing, Service and Distribution

And the Data Shows….

• Who are the largest employers in the community?

• Who do the largest employers buy from --- and sell to?

• What makes your community special? Why do people want to live in your community?

Economic Development is not about the “big deal”…it’s about knowing your community

And the Data Shows…. Even in Attraction….workforce & infrastructure rank higher than incentives

What Matters Most: Site Selectors Most Important Criteria

1. State and Local Tax Structure

2. Transportation & Utility Infrastructure

3. Land/Building Prices & Supply

4. Ease of Permitting and Regulatory Process

5. Workforce Skills

6. Local economic development strategy

7. Legal Climate

8. Availability of Incentives

9. State Economic Development Strategy

Understand the ROI of your Economic Development Program

• Communities should have a Cost / Benefit analysis for investment of time and resources and incentives

• Is your investment in economic development generating measurable benefits?

• Communities should understand … and take … informed risk

• Use incentives strategically and create local incentives that make sense for your community

Property Taxes based upon Valuation

Sales Taxes based upon Sales Revenue

Income Taxes based upon Wages

Property Taxes based upon Property Values

Fees and Transfer Payments from other sources

The slower economic recovery is having an impact on local budgets

State & Local budgets are lagging the recovery

Regional Collaboration is the New Competition

• Companies are looking for your ability to bring a wide variety of resources to the table

• Regional collaboration: What is your community’s role in the region?

• Expand your partnership to include workforce, land use, transportation, philanthropic, hospitals, permitting

Business and Industry think regional, state and international supply chain

The Solar Supply Chain in Ohio; WIRENET, 2011

Business and Industry think regional, state and international supply chain

The Shale Supply Chain in Ohio; EID, 2013

Workers are more mobile --- they will travel further for a job…into the Region

The best economic development strategy is to support your existing businesses

• Understand your existing business community

and help it grow • Who do your existing businesses buy from, sell

to, and partner with? • Don’t promise what you can’t deliver • Retention and Expansion is still the Best

Attraction Strategy

Education and workforce training are key to a successful economy

• Realign workforce programs to focus on three key priorities: • Job Readiness training as a public priority • Specific skill training in direct partnership

with employers • Technical training is needed because of the

increasing computerization of tasks • Engage employers more directly: Train for

their job openings and for their future needs

Education continues to define economic recovery.

Emphasize a Small Business Strategy that fits your community • Small Businesses buy from --- and sell to --- large

businesses and employers

• 28 million small businesses support 49.2 percent of private sector employment.

• 18,500 large firms employed the other 50 %

• 52 percent of all small businesses are home based.

• 21.5 % of small businesses employ more than one person…only 10.7 percent of that group will employ more than 20 people.

• The need to develop a strategy is NOT changing

• The need to develop strong partnerships is NOT changing

• The need to provide quality services is NOT changing

• The need to tailor your ED tools to the needs of your community is NOT changing

What’s NOT Changing?

Key Questions

• Where are you, where do you want to be, how do you get there

• How well do you know your community?

• Have you established priorities, goals, tasks, with assigned leads?

• Do you have a toolbox that is appropriate to your community and priorities?

• Do you have a way of measuring performance and reacting?

Key Questions and Next Steps

Mark Barbash Chief Operating Officer Finance Fund www.financefund.org markbarbash@financefund.org (614) 774-7599