As published in Toledo Business Journal - March 1, 2010
Dr. Michael Carroll delivers the State of the Region address
Regional development prescription outlined
BGSU Center for Regional Development hosts conference
In mid-February, the Center for Regional Development (CRD) at Bowling Green State University (BGSU) conducted the 8th Annual State of the Region conference. It was held at the Hilton Garden Inn in Perrysburg.
Dr. Michael Carroll, CRD director, delivered an address to attendees on the State of the Region. The address included a discussion of the current economic development direction in the region that has a strong emphasis on targeted industry manufacturers. It also included a prescription for changing this direction and focusing on recruitment of networks of suppliers and customers and targeted industry manufacturers.
At the beginning of his remarks, Carroll briefly discussed the national economy. “The good news is that we have hit the bottom and, nationally, we are on our way up.”
Most of the address was focused on the regional economy. Carroll summarized his views, “If northwest Ohio responds as it has in the past, we will see our regional recovery begin by late summer or fall of 2011. Our region traditionally lags any national recovery by four to six quarters because of our industrial mix. Historically, our economic base included a heavy concentration of second and third tier suppliers whose demand for their product was delayed as OEMs built out of existing inventory.”
A detailed discussion of the unemployment situation in Ohio and the region was provided. In December 2009, Ohio was at 10.9% unemployment. By contrast, full employment would have the state between 3% and 5% unemployment. In order to return Ohio to a 5% unemployment level, the state would need to create 346,645 jobs, according to Carroll. This level of employment has not been seen since prior to the last recession in 2001.
Carroll next turned his attention to northwest Ohio. Unemployment in the Toledo metropolitan statistical area (MSA) – Lucas, Wood, Fulton, and Ottawa Counties – was then examined. “The Toledo MSA would need to create 24,565 jobs to return to full employment. Based on our current workforce distribution and unemployment rates, this will require Ottawa County to create 2,700 new jobs; Lucas County needs to create 15,645 jobs; Fulton County will need 2,150 new jobs; and Wood County rounds it out with 4,070 new jobs. What do you think? Can we create that many jobs to just get us back to where we started?”
Carroll then addressed the policy or strategy direction needed to rebuild the regional economy. He shared the belief that targeting selected industry manufacturers would provide results that would change the economy in the area. “We will not recover if we continue to focus on specific industry manufacturers,” stated Carroll.
He explained that wind turbine manufacturing was an example of this issue. If Ohio could convince all of the wind turbine manufacturers around the globe to move every employee to Ohio, this would result in 100,000 new jobs for the state. Ohio would then reduce its unemployment level by only 1.7% or down to 9.2% in total. In Carroll’s belief, Ohio will win new wind turbine manufacturing jobs in the future, and it will be positive for the state and the region; but will not provide the solution to the current economic difficulty. He emphasized that the number of new wind turbine manufacturing jobs that realistically can be won in the state and in the region in the foreseeable future will not come close to resolving the current economic situation.
Following the conference, Toledo Business Journal interviewed Carroll. He discussed his thoughts concerning economic development in the region and the direction needed to fix the current difficulties being faced. “Our region cannot simply target industry manufacturers. There is a belief by many in our area that if we focus on manufacturing photovoltaic panels and wind turbines, we will change our economic situation. This will not work. The number of jobs that will be created is much too small,” explained Carroll.
“Our economic development policy must be more multifaceted,” he added. He explained that it is necessary to look at both the supply chain and the customer base around the region to address this. It will be necessary to recruit networks of suppliers and customers in key industries as well as targeted industry manufacturers. One important approach, involving increased efforts aimed at cluster groups, will be critical, according to Carroll. The number of jobs lost in the region during the current recession is significant. Recovery will require a much higher level of new job creation, he explained.
In the January 1 issue of Toledo Business Journal, an article was published concerning economic development efforts in Sandusky County. The Sandusky County Economic Development Corporation (SCEDC) is setting up a Supplier Recruitment Program and has made this one of its priority strategic initiatives for the organization and the county. Toledo Business Journal has disclosed to readers in the past that it is involved with the Supplier Recruitment Program.
SCEDC has put a strategic initiative in place to work with Sandusky County Manufacturers’ Roundtable members to implement this program. This involves an effort to identify and target selected suppliers and customers of established area manufacturers for recruitment to the region. Location of a supplier or customer in close proximity to an area facility can improve operations and increase profitability. SCEDC’s initiative will be dependent on an effort to obtain new project leads for recruitment of suppliers and customers to locate new facilities in close proximity to companies with operations already in Sandusky County.