Three myths metro regions must dispel to spark sustained economic development

A recent article in the “Neoeconomist” dispels three myths that Northeast Ohio, and by extension metro regions everywhere, must overcome if they are to not just survive but thrive in in the 21st century.

Network member Edward (Ned) Hill and John Brandt, CEO and founder of The MPI Group, a Cleveland-based research firm, argue that economic development should tap local strengths, pay more attention to individual firms, and focus on selling products beyond the area’s borders to regional and national markets.

Myth #1: Manufacturing is dead, at least in Northeast Ohio and the U.S.

Manufacturing has transformed into a highly technical, and specialized, field. Regions that want to remain competitive in manufacturing must focus on two key functions that drive innovation and revenue: product design/ development, and headquarters/adminis­trative functions. These functions not only drive corporate income, they also create the highest-paying jobs.

Myth #2: Northeast Ohio needs to hitch its star to new industries to compete in the 21st century.

A better strategy for Northeast Ohio is to focus on and expand what we already know and do well, and to pay less attention to industries and more attention to individual firms and their growth-oriented business plans. There is no silver bullet that can transform a slow-moving, traditional economy into a vibrant, high performer overnight. Instead, regions need silver buckshot. Economic development is always based on a regional portfolio of products.

Myth #3: Health care will lead the region’s economy going forward.

The problem is that for most communities, health care is a local industry, and as such nearly all the revenue enjoyed by local hospitals, clinics, and physicians come from local employers and employees. What regions need are high-growth companies that innovate and sell products beyond the region, with the revenue reinvested in employees and organizations in the hometown.

The Neoeconomist is a forum for the Northeast Ohio region’s business and thought leaders. It appears in each issue of Inside Business.

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