Ohio and heartland must embrace the “innovation economy,” report says

July 31, 2018

Ohio and heartland must embrace the “innovation economy,” report says

CLEVELAND, Ohio - When it comes to taking advantage of the so-called “innovation-based economy,” where does Ohio rank? 

About in the middle when compared to the whole country, according to a new study released Tuesday, and better that most of the 18 other states that researchers identify as making up the American Heartland. 

Clearly, Ohio can do better, and can take steps to improve its standing, according to the report by the Walton Family Foundation of Bentonville, Ark., entitled, “The American Heartland’s Position in the Innovation Economy.”  

Those are some of the takeaways from the 37-page report and from an interview with one of its authors, Ross DeVol, former chief research officer at the Milken Institute, a California-based economic think tank, and now a fellow with the Walton Foundation. 

The release of the report comes at an auspicious time for Cleveland, which has begun a new round of self-analysis after Cleveland attorney Jon Pinney shook up a City Club of Cleveland audience with a speech that chastised local leadership over the region’s economic stagnation. 

“DeVol describes the innovation economy is one “taking new idea snd processes and putting them into the marketplace. Some might call it the knowledge-based economy.” 

One goal in Ohio and across the heartland, which is defined as 19 states from the Great Lakes to the Gulf of Mexico, needs to be the promotion technical education that results in more associate degrees, certificates of completion or advanced degrees, the report states. Researchers even suggest offering tax credits to lure “tech talent” to the heartland from the coasts. 

Tax credits in and of themselves will not do the trick, DeVol said. But what they will do is get people thinking about location options, such as the heartland, where they can pursue their careers in more affordable and family-friendly settings. 

Those talented workers need some place to work, and of the 19 heartland states, Minnesota is deemed to be in the best position to take advantage of the innovation economy. It ranked number one in the heartland and seventh overall in the Milken Institute’s State Technology and Science Index.  

That index looks at data in five areas, including research and development inputs, risk capital and entrepreneurial infrastructure, human capital Investment, technology and science workforce and technology concentration and dynamism. That last item represents the increase in high-tech firms compared with all new businesses. 

Ohio scored well in that area, with Cleveland Clinic Innovations pitching in, spinning off 80 companies since 2000. 

But Ohio’s State Technology and Science Index score ranked it 27th in the country and sixth in the heartland, behind Minnesota, Illinois, Michigan, Wisconsin and Nebraska. 

Ohio has some things going for it. The report cites the state’s Third Frontier investments and the presence of a relatively high numbers of material scientists and engineers of various kinds, including industrial, aerospace, chemical and mechanical. 

DeVol said Ohio needs to promote more entrepreneurship, something Ohio State University is doing with a pledge to build a $17 million entrepreneurship center. Localities also need to approach higher education differently, with more emphasis on vocational training, perhaps with local chambers of commerce partnering with community colleges. 

Minnesota led the way overall thanks in part to economic drivers such as the Mayo Clinic and the medical-device company, Medtronic, which constitute a substantial talent base, according to the report. 

Also, a policy change in 2013 that allowed researchers at Mayo Clinic to promote their intellectual property has spurred the growth of startups. 

“Minnesota has a long record of accomplishment in promoting research and education polices,” the report states. 

Minnesota also scored high when it came to industry-funded research and development, with companies such as 3M and IBM playing a role, although a the state lagged in the area of academic research.  

In general, progress can be made in the heartland, the report concludes, but steps must be taken to build and capitalize on region’s research capacity. 

“It must invest in programs to facilitate entrepreneurial awareness and build the capacity to execute technology-based economic development,” the report states.

Update hourly