Michigan, Ohio make strides in economy: But study finds problems in switch from factories
BYLINE: Julie M. Mckinnon, The Blade, Toledo, Ohio
Feb. 28--Michigan is the top-ranked nationwide when it comes to state government allowing residents to access services over the Internet and using other digital technologies. Ohio is No. 5.
But the neighbors in the industrial Midwest have some of the same problems in transforming economic development from a model based on "smokestack chasing" to one in which creating innovation and high-wage jobs are prized, according to a report released yesterday.
Massachusetts, New Jersey, Maryland, Washington, and California, respectively, lead the nation in adapting their states to a global economy that largely is entrepreneurial and driven by information technology, said the report by the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation.
Overall, Michigan jumped from No. 22 five years ago to No. 19 this year. It was No. 34 in 1999. "There is something going on there," said Rob Atkinson, the primary author and president of the information technology foundation.
Ohio, he added, is not doing too bad, but could improve. The Buckeye State ranked No. 29 this year, down from No. 27 five years ago and up from No. 33 in 1999.
Some parts of Ohio have done well with transferring technology from the university to commercial realm, such as in Cleveland with medicine, but other areas are lacking, said Richard DeKaser, chief economist at National City Bank.
Ohio has tried to focus on fostering technology, such as through the state-run Third Frontier program, he said. "There are efforts afoot. There's an awareness of a need to improve performance in that particular area."
The biggest strength for Michigan and Ohio was their state governments' use of digital technologies, according to the report.
That category was one of 26 factors used to rate states.
"Each state has some strengths that they can build on," said Mr. Atkinson.
Ohio, though, ranked No. 48 on job churning, or a shortage of innovative and efficient companies replacing jobs lost when operations downsize or are closed. Michigan's worst showing was a No. 40 ranking for entrepreneurial activity.
Overall, the worst state nationwide was West Virginia, followed by Mississippi, South Dakota, Arkansas, and Alabama, respectively.
The report was released on the same day Toyota Motor Corp. announced it picked Mississippi to build a $1.3 billion assembly plant. Getting manufacturing remains important, but states shouldn't devote all their economic development resources to it, Mr. Atkinson said.
"You can still do smokestack-chasing," he said. "States have to rethink how they do incentives."
Contact Julie M. McKinnon at:
or 419-724-6087.
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