Ohio’s Stock is Rising in the Business Community
Ohio continues to climb in several annual state business rankings
Matt Waldo, director of research, JobsOhio•Wed Nov 06 2019
In the past four months, Ohio has received exciting news from a host of leading business publications, reaching into the Top 10 in the country in several annual state business rankings. Most notable, of course, is Ohio’s jump in the CNBC rankings from 23 in 2011 to 10 today, a jump from 41 in 2011 to nine in Chief Executive’s annual CEO survey as well as a first-ever Top 10 in Area Development Magazine’s ranking. Ohio also reached No. 3 of Site Selection Magazine’s Best State Business Climate rankings, making it the top-ranked state in the Midwest.
At JobsOhio, the research and analysis team is focused on helping explain and validate trends. So I wanted to explore why, exactly, Ohio has improved so much in recent publicly-available, and consistently published, business climate rankings. Let’s start in the table below, with a high-level overview of the recent rankings where Ohio has most excelled:
Depending on the publication, there are different, and varied factors that contribute to the rankings, with each utilizing unique methodologies to reach their conclusions. Chief Executive relies on a CEO survey, and noted the growth in finance, manufacturing and logistics industries in the state, a handful of big expansion deals, and well-structured state and local business incentives. Area Development interviews site selection consultants on eight categories to come up with its composite state rankings, placing Ohio at No. 9.
CNBC looked at 10 factors, and while not all factors overlap from 2011 through 2019, we can clearly see those consistent factors where CNBC identifies that Ohio improved most. I’ll try to explain why I think CNBC highlighted Ohio’s progress on each factor, based on the research methods published by CNBC:
- Cost of Doing Business: CNBC examines tax climate and overhead business costs within each state. Ohio has no corporate franchise tax, or corporate income tax. In 2017, Ohio eliminated the local “throwback” tax, which previously taxed products sold out-of-state by companies in Ohio. Ohio also has no personal property tax – all of which position Ohio favorably against almost any state that has a corporate income tax. The Ohio Bureau of Worker’s Compensation has returned over $1 billion in premiums to companies in each of the last two years. Tax on individuals has also gone down in Ohio by over 1% at the state level, to graduated rates that are competitive with most US states.
- Workforce: CNBC rates each state’s concentration of STEM (science, technology, engineering and math) workers and workforce productivity. Between 2011 and 2016, Ohio added the 12th most number of STEM graduates to the workforce. Between 2010 and 2017, Ohio’s employed workforce productivity increased by 4.4% – more than 3% higher than the U.S. average.
- Education: CNBC also looks at the number of higher education institutions that businesses can draw from, and measures K-12 education programs. Ohio’s talent pipeline is strong, with more than 200 colleges, including 45 schools with cybersecurity programs. Each year, more than 20,500 engineers and scientists graduate with degrees from Ohio schools, fostering an “evergreen” pipeline of skilled, in-demand talent.
When discussing these wins and improvements in the office with J.P. Nauseef, JobsOhio’s new president and chief investment officer, he told me he’s of course thrilled about Ohio’s strengths and will continue talking to companies about those positions, but realizes there are areas where we can improve. Even in some of those categories in which we already put on a strong showing.
For example, after touring the state and meeting with all six of JobsOhio’s regional economic development partners and more than 900 people across the state, among other priorities, J.P. will set JobsOhio to continually improve Ohio’s talent and workforce development initiatives. JobsOhio will also focus on site selection and development so companies can move in quickly, and look for ways to expand the R&D funding coming into the state. We’ll also explore options for academic institutions, private industry, incubators, and aerospace and military researchers to expand their collaborative, commercial potential.
The U.S. Bureau of Economic Analysis recently reported that Ohio had a 3.5% real GDP growth rate in Q1 2019, the fastest economic growth in the five-state Great Lakes Region, and 15th in the nation – an early indicator of the continuation of the positive trends we discussed earlier.
Later this fall, J.P. and JobsOhio will announce our strategy to continue developing economic opportunities for companies who come here, and the Ohio workers who fill these jobs. We believe in Ohio’s ability to continue to improve its economic prospects, in collaboration with vigilant partners across the state contributing to the mission.