No, not JobsOhio, it’s probably too soon for us to legitimately declare that a failure (let’s talk in a few weeks). But we can look to the past for an example that should leave us wary of Kasich’s grandiose plans. We can also dispel any notion that JobsOhio was an original idea from Kasich. In 2005, Republican Governor Bob Taft rolled out a “public-private economic development group” with a rationale and features that read just like a JobsOhio pamphlet.
We mentioned the Kasich administration’s apparent lack of knowledge of the existence of the OBDC when Kasich first unveiled his JobsOhio plan, but not in the amazing detail that you can find in a series of articles in Columbus Business First documenting the beginning of the Ohio Business Development Coalition (OBDC), a state supported business development group formed in May 2005 (pre-Plunderbund). It’s fascinating to read the entire series of articles – here are some highlights about the group and the climate during that time:
Ohio has been in the national limelight a lot in the past year for its politics…
This first line of the series of articles is definitely foreboding.
The Ohio Business Development Coalition, a public-private economic development group that will roll out a campaign in the fall with the theme Ohio Means Business. The campaign will…target top executives at industries the coalition thinks can drive Ohio’s economy back onto the road to prosperity.
The coalition is a public-private venture that aims to get Ohio into CEOs’ minds when the talk turns to corporate expansion and relocation.
How does it differ from other efforts to put a business spin on public operations?
For one, the group is taking its cue from Edward Burghard, its executive director and a corporate player who is at the top of his craft. If successful, the group’s executive director says the state will begin to attract more investment and jobs.
Government likes to talk about becoming businesslike in its operations. Well, Ohio’s economic development effort is getting a big dose of the corporate approach from the head of the Ohio Business Development Coalition.
His lessons on how Ohio should rebuild its business-attraction machine can’t come soon enough for a state beset by a protracted economic slump and dealing with an image sullied by Statehouse scandal.
Taft appointed Burghard in May to lead the group, which was formed last year by the state Department of Development and 37 Ohio corporations. With the help of an $8.1 million state grant, it plans to implement a targeted marketing strategy to expand Ohio’s business base.
Burghard…on loan to the state for three years, said the Ohio Business Development Coalition is starting from a position of marketing the state to business leaders who have no image of Ohio, which is better than trying to overcome a negative opinion.
Now, more than six years later, the Governor-appointed leader of the coalition, Edward Burghard, is the current Executive Director of the OBDC. Remember that when we look at underwhelming success of this venture.
The group’s marketing strategy even sounds vaguely familiar (minus Kasich’s opposite plan to simply eliminate labor unions altogether).
The coalition’s marketing campaign is designed to attract investment by showing that Ohio is a good place to run a business. Part of that effort will entail correcting misperceptions. The coalition found in surveys that some executives think the large presence of labor unions in Ohio is a deterrent and that the state’s manufacturing base is largely linked with the auto industry.
[Burghard] admitted the branding effort will take time and money, but, ultimately, he thinks it will be a success because Ohio is a good product.
“We have a good story to tell,” Burghard said. “We just have to be consistent with our message.”
The Ohio Business Development Coalition has unveiled a new Web site…is meant to bring together the state’s various business marketing efforts into one easily navigable site. The Web site emphasizes the state’s recently revised tax code, its access to markets across the U.S. and world, its education system and work force, and Fortune 500 companies that call Ohio home. It is intended to help economic development officials at all levels of state and local government synthesize their messages to out-of-state and foreign companies.
Now, there was one small part of Burghard’s plan that would seem to contradict Kasich’s current strategy of throwing money around. If it was that bad, Burghard would have been ushered out the day Kasich walked in. Or maybe it is Burghard’s “yes-man” qualities that have kept him employed. (Who wants to drill in Appalachia?) Back on topic and item that Kasich would likely call the fatal flaw of the OBDC:
Burghard has already challenged conventional wisdom, questioning the mentality that puts tax incentives ahead of all else in the quest for companies. Instead, he forecasts corporate attraction gains only if Ohio can persuade top executives that the state is a good business value and not just a convenient hit for a tax break.
If there’s anything we have learned about the Kasich administration it’s that they LOVE to throw money and tax breaks at corporations.
But wait, there’s more. In 2005, under Governor Bob Taft, the state created a state organization that was the unquestionable model for JobsOhio – over five years prior to John Kasich speaking the name. And now, six years later, the new JobsOhio website actually directs visitors to that OBDC website for Resources (see below).
Here in 2011, with the OBDC having operated for over six years, we now have data we can use to evaluate the success of Governor Taft’s public-private coalition that shares so many similarities to the Kasich’s version. Since these are models designed to create jobs, it’s quite easy to track those numbers through the Bureau of Labor Statistics website. We can look at data for Ohio’s employment numbers and quickly compare it to national numbers.
First, based on the creation date of the website, we’ll put the official start date of the coalition as June 28, 2005.
Given the details provided in the article about website development and the push for the group occurring in the Fall, we’ll start tracking employment numbers in December 2005. This gives the OBDC a 6-month window to establish operations. While Strickland did not cut the program, we believe it is more fair if we track the numbers under Taft’s budgetary influence, meaning we need to take a final count in June 2007 (not seasonally adjusted).
Number of Ohio employees:
- December 2005: 5,493,100
- June 2007: 5,493,700
- Net gain: 600 jobs
- Percentage of jobs gained: 0.04%
But maybe the recession had started, right? Wrong. The massive loss of jobs in Ohio and nationwide occurred in 2009. In fact, June 2006 was the highest the employment count in Ohio ever reached and it was a scant 600 more above the 2007 figure. Here are the national numbers for the same time period as the OBDC:
Number of employees nationally:
- December 2005: 135,614,000
- June 2007: 138,779,000
- Net gain: 3,165,000 jobs
- Percentage of jobs gained: 2.33%
So while the nation was experiencing job growth using the same old conventional methods, Ohio’s innovative program had us flat-lining. When Ohio proceeded to lose hundreds of thousands of jobs during the recession at a rate worse than the national numbers, what program did we have in place? Governor Taft’s Ohio Business Development Coalition. And despite job losses that reached 586,300 at the lowest point during operations, the organization has retained Ed Burghard, its prized catch at executive director, a man plucked by our Republican governor from the private sector “because of his proven expertise in brand building and marketing” to run this innovative coalition of private businesses that promised to “drive Ohio’s economy back onto the road to prosperity.”
How can we not believe that this is the root of John Kasich’s JobsOhio program and that it will fail just like its predecessor?
In August 2010, after John Kasich had introduced his JobsOhio model, his spokesman dispelled any myths about its relationship to existing models:
JobsOhio is not modeled after Michigan’s system or any other state’s approach, Kasich spokesman Rob Nichols wrote in an e-mail to Columbus Business First.
“Rather, it is a product of our own analysis of best practices from across the country,” he wrote. “JobsOhio seeks to respond to Ohio’s needs and challenges, which is why we’ve designed it the way we have.”
Rest easy, unemployed Ohioans.