Adapting legacy industries and creating clusters of innovation

10.12.11 |  Today we reblog an article published in the May 2011 issue of the “Neoeconomist“ by Network member Ned Hill and John R. Brandt, CEO and founder of The MPI Group, a Cleveland-based research firm. The Neoeconomist Magazine is a forum for the Northeast Ohio region’s business and thought leaders.

The authors pose the key question for regions: how do you innovate using the talent and tools developed in a legacy industry?

By Ned Hill & John R. Brandt

You can’t swing a dead cat at a conference these days without hitting somebody yammering on about the importance of innovation — as if product development was something new. Here in Northeast Ohio, world-class innovation has been a core economic driver for more than 100 years — but we need to adapt to 21st century realities to maintain our competitive advantage.

NEO’s Secret Economic Weapon

Our manufacturing legacy laid a foundation for excellence in product development — one we’ve retained even as production and customer service jobs moved elsewhere, because headquarters and product development jobs stayed nearby. Look no further then the plumbing industry.  Moen designs their products and manages their global business out of North Olmstead.  The other end of the faucet is the domain of Cleveland’s Oatey Manufacturing, which also produces locally, and the tools to put them together are designed and managed by another Northeast Ohio company, Ridgid Tool. Why? Because headquarters and product development roles in a given industry or function are “stickier” than other jobs, remaining closely tied to a talent pool of similar researchers, marketers and executives. This is good news, since these roles create more value for corporations and the local economy, and tend to pay higher wages as well:

  • An example of industry expertise is our region’s leadership in materials development and application, exemplified by such companies as RPM’s Building Solutions group anchored by Tremco, Advanced Elastomers, Omnova, PolyOne, and Goodyear, it’s no exaggeration to call Northeast Ohio the Polymer Valley.
  • An example of functional expertise is the area’s wealth of industrial design talent, illustrated by the success of such companies as MTD, Little Tykes, Step 2, and Vitamix.  It’s no accident that Victor Schreckengost made his name here as one of the 20th century’s preeminent industrial designers where he created the flip over truck cab for White Motors, pottery for Cowen, and toys for Murray Ohio Manufacturing; it’s our good fortune that his legacy lives on, embodied in industrial design program at the Cleveland Institute of Art.

Northeast Ohio has also benefited in recent years from the commercialization of technologies through Third Frontier funding.  Award-winning Quality Electrodynamics combined math and electrical engineering to invent a preamplfer for MRI Machines that sets the world standard.  TMI’s Anywhere Energy system now has workable fuel cells in test applications.

This is all good news — but there are storm clouds on the horizon. Why? Because talent thrives when it collides with other talent, creating sparks of innovation that ignite in unexpected ways. But the hollowing out of the region’s core cities — Cleveland, Akron, Youngstown — has isolated much of our product development talent in cube farms located at highway exits throughout the region. It’s hard to be creative when nobody around you has the same passion, or speaks the same design language.

At the same time, Northeast Ohio’s legacy industries are mature — which means that, for the most part, companies here manage for steady but not spectacular growth. Unfortunately, low growth rates make it harder to recruit new capital, new ideas and new talent from elsewhere.  We run the risk of getting stale.

Creating NEO’s Industrial Design Culture for the Next 100 Years

How can we maintain and extend our innovation advantage? By focusing on two core strategies:

  • We need to make sure that our economic development investments are focused on helping companies to invent, refine and successfully launch innovative products. Too often economic development gets it backward, measuring success by how quickly lots of (often low-skilled and low-paid) jobs are created. But as our own history teaches us, high-paying, long-lasting, sticky jobs only come from innovative products and companies. Programs like the Cuyahoga County Product Fund serve as models for what really helps long-term growth.
  • We need to invest in creating an industrial design culture — in part to help the rest of the world recognize our expertise (bringing yet more innovative products here), but also to recruit, train, and inspire the next generation of innovators in our own backyard. Initiatives like the Industrial Design District reinforce Northeast Ohio’s footprint on the map of global innovation hotspots.

What are we waiting for?

Comments are closed.