As published in Toledo Business Journal - January 1, 2010

Mfg diversification a
regional issue

Lake Erie West has held a competitive advantage over many other regions for the manufacturing system that has been put in place over the years. A combination of established manufacturing firms, supplier facilities, engineering firms, industrial service companies, educational institutions, skilled workforce, and more comprise this industrial system that is the largest segment of the economy in the region. The region’s competitive advantage in this area is the reason many businesses have, in the past, placed new investment and new jobs.

The economic downturn and structural changes in the auto industry have placed the largest segment of the region’s economy at risk.

A survey of manufacturing attendees at a recent session at the University of Toledo (UT) – the Northwest Ohio Manufacturing Forum – provides insight into this issue and its strategic importance to the future economic health of the region.

Toledo Business Journal has disclosed to readers that it was involved in the development of the Northwest Ohio Manufacturing Forum. The session brought professionals at manufacturing companies around northwest Ohio and southeast Michigan and area economic development officials together. The program was focused on the issue of business and market diversification for manufacturers.

A survey of attendees was conducted following the forum. Of those surveyed, 39% responded and provided their thoughts and opinions. Many of the attendees are the presidents, CEOs, general managers, and other senior management at manufacturing companies throughout the region.

One respondent shared his thoughts, “We as a region need to diversify our efforts. Northwest Ohio is changing rapidly and you’ll diversify, adapt and succeed, or stay the course and ultimately fail. Change is a good thing.”

New venture firms an option for diversification

One segment of the Manufacturing Forum provided presentations from three new venture firms. Each of these companies is close to commercializing new high technology products, and each is in need of manufacturing and other resources. There are other new venture firms with high technology offerings moving toward commercialization in the area.

Some of these new venture firms are looking for area suppliers of parts and components. Some are looking for a contract manufacturer to produce a new product. Some are seeking partners with distribution capabilities that address important marketing needs. And some are in need of equity funding to enable them to move to market.

Established area manufacturers offer an opportunity for these new venture firms to obtain critical resources. At the same time, joint arrangements with a new venture firm can offer an established manufacturer an option for business and market diversification.

Attendees heard presentation from three new venture firms that included RADCO Industries, Inc. / Insitu Foods, Inc.; Bluetronix, Inc.; and SUREnergy, LLC. The presenters were asked to share with attendees their key needs for manufacturing and other resources.

Respondents to the survey indicated that the information presented by these new venture firms represented opportunities for area manufacturers to accomplish market diversification for their businesses.

Improving the region’s economy

Another attendee stated, “If local manufacturers succeed in shifting to new markets, we will fix our economy.”

With manufacturing being the largest segment of the regional economy, success by these established area companies in figuring out new products and new markets will have a critical impact on the economic health of the region.

Resources and support needed

Attendees at this session made it clear that business diversification is a critical issue for their future and a difficult problem to address.

“More support and assistance is needed by manufacturers trying to diversify products and markets,” stated one respondent to the survey.

The issue of why there is not more support and assistance for established area manufacturers interested in accomplishing business and market diversification was raised.

The health of the region’s economy is at stake.

Obtaining new resources and providing additional assistance to area manufacturers interested in business diversification is a strategic regional issue that merits the attention of leaders in the business community, public sector officials, and academic institutions throughout northwest Ohio and southeast Michigan.

This strategic issue will have an important impact on the region’s ability to address the difficult economic issues being faced.