On Fixing Cleveland – Part 2: How to Bring Businesses and Jobs In?

I recommend that you first see Part I of this series in my previous post …

Retain, grow and attract businesses:
798px-Cleveland_from_Superior_ViaductTo grow again, Cleveland and the other cities in its region need to provide opportunity. This opportunity needs to come in the form of business and jobs. The cites in North-East Ohio need to work together to provide the right conditions to grow, retain and attract businesses.

Give opportunity to make money by being easy to do business with:
To do this, we need to make it easy for businesses to make money, by making it easy for them to locate and operate here. Remember when Progressive was a growing young company and Peter Lewis wanted to build his corporate HQ in downtown Cleveland? City officials dithered away the opportunity – and all those offices and jobs are now scattered around in the already-affluent suburbs, and Cleveland allowed itself to slide that much further down the drain.

Build on existing strengths:
We have a unique set of strengths and weaknesses that should determine what businesses choose to be here: low property values and a mix of low-skill/low-wage labor and high-wage-highly-skilled labor. We have a vibrant corps of highly educated white collar professionals in the accounting, finance, legal, R&D, engineering, bio/medical, hi-tech and precision manufacturing  sectors. We have a strong base of highly trained blue collar workers.

The greater Cleveland area should build upon its location at the nexus of rail, road, air and water routes. Did anyone pay attention in American History class? Much of Cleveland/Akron’s rise 100-150 years ago was fueled this way; example: by the Ohio and Erie Canal, the railroads, and shipping iron ore from Minnesota to Pittsburgh for steel making.

Basic Research and Design should be fostered , and innovations rolled out to business. Case Western Reserve, University of Akron are both leaders in developing technology and new businesses around technology.   Business Week makes the case for increasing Federal Research funding to many public and private institutions to do additional basic research that may not pay immediate dividend These schools and their cities should be fighting tooth and nail for a big piece of the pie.

COSE and Team NEO help get startups going and bring in existing businesses from elsewhere.  I see the Plain Dealer reports they are trying to get a Japanese waste-to-energy company to locate its North American headquarters, manufacturing and distribution here. We need to be reading about some new attempt every day, and a success story every month or so.  If the region could grow a couple home-made mid-cap companies and bring a few large-caps’ North American or divisional HQs and some new plants to its urban cores… we would be rolling again.

Turn weaknesses into strengths:
We have a lot of low-skill / low wage people, who need to upgrade their skills and education so they can aspire to something more than ringing a register in their career. As anyone who has ever played Sim City knows, education is the key to attracting the kinds of businesses that create real opportunities for people. We need to put a decade-long plan into effect that will educate and train as many of those low-wage/low-skill people as are willing. There are a lot of people that slipped through the cracks in the public school systems, that need a second chance to get a good education. The city should subsidize RTA/bus fares for low-income residents to get to work and school. If money allows, the city should also partner with businesses to give a small voucher for education of low-income workers who maintain a high grade point average and high job attendance.

All older cities have many additional problems. Many abandoned sites remain unused despite demand for land in nearby suburbs because of fear of environmental problems and litigation. Now is the time to go to the government and request a waiver of environmental liability (for past on-site sins ) from the EPA for any company that moves its operations into a currently unoccupied urban building.

Older buildings also have many other issues:
· higher insurance costs for older buildings with more ornate architecture,
· building code violations (example: obsolete wiring),
· facility layout issues (example: load-bearing columns or walls in the way of planned production lines and material movement paths, obsolete shipping/receiving docks and equipment),
· communication issues (only copper phone line is installed),
To address these issues, the city, county and state should allow all businesses that renovate an existing unoccupied structure to deduct the cost of renovation from their tax, every year going forward, until the entire cost of renovation is recouped by the business. In addition, businesses should be offered a tax exempt first quarter following every year that they remain onsite in their renovated location. It’s not like the government would lose any money – this would apply to new businesses that move into unoccupied buildings. And whether the business pays taxes or not, the workers do. Charities should be enlisted to the maximum extent permitted by law to help match company renovation, retraining and re-education dollars.

Where are all of the bleeding-heart liberals that want to spend money on cities? Where are all of the hardcore pro-business conservatives that want to grow our economy? These are things that many people could agree should be done.

Finally, we have to eliminate corruption. For several years, there have been ongoing investigations and allegations of corruption and scandal in Cuyahoga county. It’s not acceptable to business or citizens. Corruption should be allowed zero tolerance. I hope the recently passed Cuyahoga County Issue 6 (2009) is an effective  beginning to this.

Maintain what we already have:
Cleveland and its surrounding towns and suburbs host the headquarters of many large and leading companies, including 28 Fortune 1000 companies. Also many other large companies have significant local operations and offices (a report by the Cleveland Citywide Development Corporation provides a wealth of detail on this).  It should be the full-time job of every public official in the region to keep their costs low, and make it easy for them to do business here. We need to keep what we have and help them grow here.

Grow, attract, dominate and diversify:
Cities grow when their businesses grow.  Cleveland was bigger than Los Angeles well into the 1920s, and bigger than Atlanta until the 1990s… What happened? Manufacturing and heavy industry declined in the northern states, taking Cleveland and its surrounding region steadily down with it. Media, electronics, manufacturing and trade boomed, bringing Los Angeles up. Atlanta attracted many companies to relocate there. Notice how diverse both their economies are. Much of the manufacturing that remains in the USA has moved south and west to get away from unions. Guess where Rubbermaid went to? It got bought by a company in Atlanta.

It will be difficult to undo the decline of heavy industry and consumer manufacturing in this country (see my upcoming blog on the economy), contrary to what Jeffrey Immelt said about wanting to see manufacturing be 20% of US jobs. Its never too a bad idea to try to maintain what you have already got. And its never too late to grow into whatever is becoming the Next Big Thing. I see the region has gotten into services, healthcare and precision/aerospace manufacturing in a big way – just like most every other city in the midwest. Its good to be on the bandwagon too. We also need to lead in some things, the way L.A. led in media, entertainment and oil after Standard Oil was broken up.  It has been decades since Cleveland dominated oil and Akron dominated rubber, and the region still hasn’t found other industries to dominate.

We are also starting to get into biotech and green business. Green is a young enough field that we could be among the leaders. When I say green, I don’t mean renovating an existing business to be green for its own sake. I mean we should be working on building and selling green products and services to businesses and consumers that allow them to do more with less- i.e. we should lead in those green products that add quantifiable dollar value to the customer. Such products include fuel cells for generating electricity off of waste heat (and many others such as Rolls Royce) we could be doing fuel efficiency products (such as Timken’s fuel-efficient bearings) or alternative power sources. How about wind power? Wind is nearly cost -competitive with coal and nuclear.  We have many companies that supply components to turbine manufacturers.  But the turbine manufacturers aren’t here. It might make sense to one or more of them to locate a plant near all these suppliers.  Wind power is golden opportunity to get something going.  Lets do it.

Click to see On Fixing Cleveland – Part 3: How to Attract People to the Region’s Urban Cores?

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3 Comments on “On Fixing Cleveland – Part 2: How to Bring Businesses and Jobs In?”

  1. […] the original post here:  On Fixing Cleveland – Part 2: How to Bring Businesses and Jobs In? Money, bankruptcy, ebusiness, […]

  2. […] This post was mentioned on Twitter by Glenn Stanza. Glenn Stanza said: On Fixing Cleveland – Part 2: How to Bring Businesses and Jobs In … http://bit.ly/3um8wS […]

  3. Thank you for the wealth of information you have provided!

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