Should Company Attraction Be The Focus Of Economic Development?

tbg_brandamericaDreams are like stars … you may never touch them, but of you follow them they will lead you to your destiny.

I first got involved in economic development when (in 2005) Governor Taft asked P&G to help market Ohio to attract capital investment.  Our CEO gave me the opportunity to start a 501 c(3) organization to fulfill that mission.  I became an Executive on Loan from P&G, and the Executive Director of the newly formed Ohio Business Development Coalition.  I took the assignment for two reasons – 1) I could get the experience of starting a company and 2) I could assess if the branding model I helped develop for P&G could be leveraged to market places.  I managed the OBDC from late 2005 to 2011, in collaboration with three different Governors (Taft, Strickland, Kasich).  For perspective, during that period, Ohio won the Site Selection Magazine’s Governors Cup Award five times.  The last time was in 2011.  In 2011, I managed the transfer of the OBDC into the new JobsOhio organization created by Governor Kasich, and then retired.

Prior to the OBDC, the focus of economic development at the state level was company attraction.  From 2009 – 2011,  Ohio branding concentrated on establishing the state as the ideal location to achieve the American Dream.  After 2011, the focus shifted back to the traditional role of company attraction.

Why did Ohio lead the Nation in company attraction in 2006, 2007, 2008, 2009, and 2011?

I believe the answer is economic development efforts were focused on establishing Ohio as the ideal location to achieve the American Dream.  Traditional measures of company attraction and job growth were viewed as the practical outcomes of success.

It is important to note we didn’t have the benefit of Xavier University’s American Dream Composite Index to guide our thinking.  My exposure to XU Research Team and the ADCI data didn’t come until late in my OBDC experience.

Instead, we relied on equity research to guide our thinking.  But, in retrospect that research led us to position Ohio as the ideal location to achieve the American Dream.

The equity research suggested the best point of competitive difference was the belief of residents that in Ohio they could achieve both professional and personal success without sacrificing one for the other.  This is Ohio’s unique way of enabling the American Dream.  It is a reflection of Ohio’s DNA as a mid-western state.  The research also highlighted that this was possible because Ohio is made up of several mid-sized cities connected by a world-class transportation system that makes it easy to get to and from work.

Our creative Agency brought this positioning to life with through a marketing campaign that included advertising in the Wall Street Journal.  The first articulation of the positioning was “Ohio – Build Your Business, Love Your Life”.  Later we transitioned to a less literal articulation – “Ohio – Balance Without Compromise”.

Our equity statement talked about business success in the broader context of a fulfilling life.  We described Ohio as: “a place where balance without compromise allows you to achieve at a higher level and this realize your individual aspirations – at home, at work and in the community.”  Essentially, we described the path for Ohioans to achieve the American Dream.

But, place branding involves more than marketing, it also involves place making (asset creation, infrastructure investment and public policies/programs).

Place Branding = Place Making + Place Marketing

In addition to marketing, state leaders dramatically reformed Ohio’s tax structure to lower rates for both businesses and residents.  They also initiated meaningful efforts to improve the telecommunication infrastructure in Ohio.  Note, both of these initiatives were viewed by leaders as having a positive impact on Ohio residents.  Tax reform could have been limited to corporate taxes only, but wasn’t.  Having said that, there are certainly opportunities (confirmed by the Tax Foundation) to further simplify and improve the relative competitiveness of Ohio’s tax structure.

It is this combination of Place Marketing and Place Making that will help Ohioans more easily achieve their American Dream.  Place Marketing without Place Making is like beating a drum on an island, while Place Making without Place Marketing is like lighting a candle under a bushel.  A community (or state) needs both to have a truly effective Place Branding effort.

Epilogue

After 2011, the new JobsOhio organization reduced focus on Place Branding and shifted back to concentrating on the traditional capital attraction role of economic development.

An October 15, 2015 article from the Ohio WatchDog Organization entitled “Is JobsOhio Failing Ohio Workers?” claims:

“Four years after the creation of publicly funded economic development agency JobsOhio, Ohio’s job growth has taken a nosedive.

As JobsOhio has awarded hundreds of millions of dollars in targeted loans, grants and tax credits funded with state liquor tax receipts, the state’s private-sector job growth has dropped from above the national average to far below the national average.

Based on seasonally adjusted U.S. Department of Labor data for all 50 states, Ohio’s rate of private-sector job growth from January 2011 through July ranked 28th. Ohio’s labor force shrank by 60,832 during the same period.

Through July, Ohio had gained only 9,500 private-sector jobs this year — a growth rate ranking 41st of the 50 states.”

The article is political in nature, so please take the content positioning with a grain of salt.  I believe this article could have actually been written about any of the state economic development efforts that focus on company attraction as their primary success measure.

I say that because I believe such economic development efforts are measuring the wrong thing.  The focus is on Place Selling (a subset of Place Marketing).  The better success measure is the degree to which residents feel they are achieving their American Dream (measured by improvement in the Xavier University ADCI score).  The only way to move the needle on this measure it is to identify the barriers residents face and implement strategies to reduce those barriers and then communicate those changes.  Net, it requires effective Place Branding.

In my opinion, if Ohio wants to get back on the winning path, JobsOhio will need to readopt a Place Branding approach and shift its focus to better enabling Ohioans to achieve their American Dream.

Peek Forward

I am working with two other colleagues on the publication of a new American Dream State Report.  This Report will look at the period of calendar 2013, 2014 and 2015 to determine which states are outperforming the Nation in enabling residents to achieve their American Dream.

States designated as American Dream States will represent success models for other states to benchmark against.  Understanding the Place Marketing and Place Making drivers behind their above average performance will provide insights for potential local reapplication.

We are also working on providing MSA level data in the Report and will designate some MSAs as American Dream Communities.

I would love to build anticipation for this Report.  You can help by sharing the link to this blog post with your contacts.  Please consider emailing it and/or providing the link in a Facebook or LinkedIn post.

I will let you know as soon as the Report is available.

 

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