The Marcellus and Utica shale formations have become some of the most significant sources of natural gas and natural gas liquids in the world. The resulting potential benefits to the Ohio Valley region are profound.

IHS Markit has released a groundbreaking study that for the first time quantifies the production trends and economic benefits likely to emerge from the Marcellus and Utica shale formations. The study, “Estimated Logistics Benefits of the Shale Crescent USA Region Versus the U.S. Gulf Coast for Natural Gas and LPG,” indicates that the two formations will supply nearly half of the nation’s natural gas and nearly a fifth of its natural gas liquids by 2040.

These volumes, coupled with the low-cost of feedstock and close proximity to end user markets are expected to lead to a second petrochemical hub in the tri-state area of Ohio, Pennsylvania and West Virginia.

The IHS Markit study said that the tri-state region “will play a key role in satisfying America’s increasing reliance on natural gas, as well as keeping energy costs moderate. Favorable production economics place the Marcellus and Utica shale plays amongst the most cost competitive in the nation.”

Consider what we already know about the Shale Crescent region:

  • The region’s natural gas industry has been the biggest driver of energy growth in the United States for the last four years.
  • The last IHS study showed the clear advantages associated with ethane: it yields a 23% cost advantage for producing ethylene/polyethylene in the region verses the US Gulf Coast.
  • The current IHS study found additional cost advantages for the production of various natural gas components such as methane, propane and butane in the Midwest versus the Gulf Coast are expected to range from 10 percent to 26 percent. The savings already are impacting petrochemical company expansion plans.
  • Ohio is among the nation’s leaders in natural gas power plant construction, with 10 plants either completed or in the permitting or planning process.
  • The region has emerged as a national leader in energy, with the shale industry contributing more than $70 billion in new private sector investments from 2011-17, according to a Cleveland State University study.
  • Cleveland State also documented that the savings for ethane transportation, together with the savings on shipping polyethylene from the Gulf Coast back to the Midwest, has been projected to be around $100 million per year for prospective local large-scale crackers.

IHS Markit has now completed two studies that have found significant cost savings for petrochemical investment in Shale Crescent USA. It’s driven by some of the lowest-cost feedstock in the developed world, massive reserves unlocked by revolutionary technologies and unrivaled access to end markets.

The expected savings, as well as the region’s access to water for transportation and processing and its close proximity to the East Coast, Midwest and Mid-Atlantic states make the region a prime candidate for what many industry experts expect to be a second U.S. petrochemical hub.

In light of this, it’s worth stepping back to understand the full spectrum of possibilities at hand for this region of the country.

There is considerable benefit for the local economies in the Ohio Valley. The large-scale projects inherent in petrochemical production often provide hundreds of high-paying construction jobs and skilled positions to operate facilities going forward. During the construction of Lordstown Energy Center power plant in Northeast Ohio, for example, 1,026 jobs were created, which generated an estimated $148.3 million in payroll.

Considerable impact is felt by those outside the petrochemical complex as well. Restaurants, real estate and other related industries experience similar benefits to employment and wages. These wages increase the tax base and help support schools, infrastructure and other necessary investment in the region.

The resources being extracted have considerable value locally as well. Products down the value chain from natural gas components like methane stand to uniquely benefit the region. These include agricultural products, such as fertilizer in the form of ammonia and urea, and methanol, the base of many industrial chemicals.

The tri-state region is transforming its energy economy and with it, is developing a second petrochemical hub that will benefit the nation.

Some of the best-known early companies, such as IBM, Genentech, Apple and Intel, were backed by venture capital (VC). What has changed since then? In a word: everything.

As an industry, VC firms have gone from providing a few million dollars in funding per year in the 1960s, to funding over 8,900 deals worth more than $130 billion in 2018, according to Pitchbook/National Venture Capital Association data. VC firms still invest the largest share of their funds in technology and biotech firms. However, the funding shift within technology is dramatic – from mostly hardware in the 1960s and 1970s to mostly software in 2018. Software was by far the largest sector beneficiary of all VC funding in 2018, accounting for about 36 percent of the total. The second largest recipient sector, pharmaceuticals and biotech, accounted for about 18 percent.

"Venture capitalists do write the check, but that isn't all we do. I attended staff meetings. I was on the phone to them a lot. Was an excellent board member. Offered advice. Planning. Setting up an audit committee. Customer relations. Interviewed a lot of people. Built all the pieces of an enterprise." — Arthur Rock and Tom Perkins on the early days of venture capital, from the movie Something Ventured, 2011.

Another significant shift has occurred in the geography of firms receiving VC funding. In the early days of VC, West Coast firms received the vast majority of deals. Since the early 2000s, the West Coast has slowly seen its deal share decline, while Midwest states have experienced significant increases in share of deals.

Ohio led the trend toward more Midwest VC investment in 2018, breaking the $1 billion mark.  In 2018, Ohio firms secured a 150 percent increase over 2017 funding, and more than a 100 percent increase over the prior three-year and five-year averages. This breakthrough placed Ohio as the No. 1 growth story in the Midwest from 2017 to 2018, in both percentage and absolute terms, and the eighth best nationally.

Falon Donohue, CEO of VentureOhio, explains, “As technology proliferates and we enter a new area of entrepreneurship, Ohio is positioned to lead. Strong public-private partnerships and an engaged corporate community are fueling the work of our visionary startup founders and investors. The raw ingredients are here to lead the next wave of innovation and job creation.”

Donohue said the buyout of the Ohio-based firm CoverMyMeds by McKesson, valued at over $1 billion, was the turning point in getting West Coast VC firms to take notice of what is happening in Ohio.

Media outlets are starting to take notice of the Ohio startup and scale-up ecosystem. Here is a sampling of recent accolades:

  • In July 2018, one of the largest global commercial real estate firms, CBRE, listed Columbus, Ohio, as having the lowest technology sector rent-to-wage ratio in the U.S. Cincinnati and Cleveland were ranked No. 6 and No. 7, respectively. CBRE also listed each of these three Ohio cities in the top 10 for smaller city tech talent availability, with Columbus No. 1.
  • In October 2018, Forbes published an article titled "The Top 10 Rising Cities for Startups." Columbus finished No. 1, for its "college presence, low costs (business and living), increase in VC deals and the high number of funds launched since 2013."
  • In January 2019, Inc. magazine included Columbus, Cincinnati and Cleveland in the top 50 cities in the U.S. for starting a company.

According to Columbus Business First and CB Insights, each of the top five deals in 2018 were larger than those of 2017 and 2016. The 2018 VC funding leader in Ohio was Root Insurance, raising a total of $151 million in two rounds. Root is an automotive insurer, powered by an app and artificial intelligence that rewards safe driving. Other large deals include:

  • Sollis Therapeutics: Raised $50 million for an extended release analgesic that is not derived from opioids or steroids.
  • Olive: Raised $32.8 million for artificial intelligence to automate repetitive healthcare back-office tasks.
  • Enable Injections: Raised $30.7 million for wearable devices that allow patients to self-administer high-volume and high-viscosity drugs.
  • Beam Dental: Raised $22.5 million for a toothbrush and software that measures how often users brush, using the data to determine prices for dental insurance.

If you know of a promising scale-up company that would like to locate or expand in Ohio, get in touch with JobsOhio.

In order to continue offering best-in-class service to companies, JobsOhio dedicated a portion of 2018 looking inward at its performance since 2013, highlighting where its model is working while looking for opportunities to chart further progress over the next five years. As part of this analysis, JobsOhio hired McKinsey & Company to conduct an independent performance assessment (IPA) of its performance and operating model, which was published in June 2018. The IPA posed strategic questions that JobsOhio should address, specifically:

  • What larger investments can offset some of the headwinds facing Ohio’s economy?
  • What strategic initiatives (within target industries and cross-cutting
  • areas) are needed to meet critical
  • customer needs?
  • How can JobsOhio use its flexible and well-resourced platform to creatively attract more innovative companies to Ohio aligned with strategic priorities?

Using these questions as a prompt, McKinsey worked hand-in-hand with the JobsOhio strategy team, JobsOhio Network, and partners to identify new five-year aspirations for the Ohio economy and how JobsOhio – as the lead economic development organization for the state – can enable them across the nine targeted industries.

  • Accelerate Ohio’s growth. Over the next five years, Ohio aims to become a leader in job, income and investment growth, achieving the highest growth rate among Midwest states and becoming one of the top 10 states in the U.S. in terms of growth. JobsOhio, which focuses its efforts on nine targeted industries that collectively comprise 25 percent of total private sector jobs in Ohio, will support this ambition. It will serve as the driving force behind new economic momentum by developing the road map for top 10 job creation and wage growth and collaborating with state, regional and local partners to achieve such performance.
  • Enable shared prosperity. With a goal to have all six of Ohio’s regions experience positive job and wage growth, JobsOhio will partner with its regional and local stakeholders and economic development organizations (EDOs) to support regional prosperity and growth.
  • Improve Ohio’s resilience. Ohio will have a share of resilient industries, those that are able to maintain their gross domestic product (GDP) growth through all business cycles and are above the U.S. average. JobsOhio will focus attraction efforts and resource allocation to more resilient (and less cyclical) sectors, increasing the state’s share of industries that maintain GDP growth through all business cycles.
  • Enhance state brand and competitiveness. Ohio will improve its competitiveness in talent, innovation, infrastructure and brand awareness to address its target sector company needs. To enhance the state’s brand and competitiveness, JobsOhio is exploring an initiative to improve the perception of Ohio by adding high-skilled STEM talent, creating jobs through innovation districts and attracting high-growth, scaleup companies. Efforts will include considering projections related to urban vibrancy, training a middle-skilled workforce and increasing the inventory of authenticated sites.
  • Make Ohio a leading state for business. Ohio will improve its attractiveness to businesses and become the most attractive state to do business within the region and one of the top 10 in the U.S. JobsOhio seeks to be recognized as a top EDO globally through best-practice company attraction activities and leadership in programs that enhance state economic competitiveness.

By supporting these five aspirations, JobsOhio further demonstrates the ways it differentiates itself from the competition. By employing sound strategies and taking smart, calculated risks, JobsOhio and its economic development partners across the state will continue to drive job creation and capital investment in Ohio. One of JobsOhio’s values is to “Make a Difference,” and when it makes a difference, customers thrive and Ohio strengthens.

Each year, JobsOhio takes the time to reflect on its current performance in order to build future capability. 2018 was JobsOhio’s best year yet, surpassing previous years in both job creation and new capital investment.

Here are some of the 2018 highlights:

  • Amazon committed to create 1,500 new jobs in Central Ohio, the biggest new job commitment JobsOhio secured during the year. CoverMyMeds also committed to create 1,032 new jobs in Central Ohio and First Solar committed to create 1,000 jobs in Northwest Ohio, helping drive JobsOhio’s record year.
  • HomeGoods, Inc. committed to create 1,000 new jobs in Northeast Ohio. This project exemplified the importance of the partnership between JobsOhio and its regional and local partners in order to see this company’s commitment materialize in Ohio.
  • The Research and Development (R&D) Center Grant program received additional funding through the approval of the JobsOhio board of directors, which led to several projects that will facilitate innovation in Ohio, including:
    • Nanogate Jay Systems LLC: R&D for applications in the areas of chrome and stainless-steel alternatives, decorative surface finishes and innovative lighting.
    • Pillar Technology: R&D for testing, development and deployment of safe, reliable autonomous vehicle technologies.
    • Toyodenso/Weastec: R&D for the design and development of vehicle electrical components.
    • Dana Incorporated: R&D for engineered solutions for improving the efficiency, performance, and sustainability of powered vehicles and machinery.
    • JPMorgan Chase: Financial technology (fintech) lab created by JPMorgan Chase’s R&D arm at The Point at Otterbein University.
    • Inteva Products: R&D for vehicle interiors systems (e.g., instrument panels, door trim, floor consoles, interior surfaces, stitching).
    • Honda: Expansion of current R&D center to advance driver-assistive and human interface systems to support Honda’s vision for a collision-free society.
    • COTSWORKS: New R&D facility focused on innovation in aerospace optical components.
    • GE Aviation: R&D related to hybrid electric propulsion technology for aviation.
  • Upstart, a platform that leverages artificial intelligence (AI), is planning a new location in Central Ohio in 2019. Upstart’s market entry to Ohio from California will represent another positive validation of the business climate offered to innovative, scaling companies: talent, strategic relationships and cost-competitive operations.
  • JobsOhio launched a talent acquisition service (TAS) in 2016. In 2018, JobsOhio began marketing and attraction as well as training and screening support for several clients. JobsOhio continues to build out the team and capabilities to further this ongoing effort to help companies find talent.
  • SiteOhio continues to build authenticated sites to mitigate risk for businesses. By the end of 2018, JobsOhio authenticated 16 sites that are immediately ready for construction.
  • For its high-level of transparency, JobsOhio received GuideStar’s Platinum Seal of Transparency, and the Ohio Association of Nonprofit Organizations’ Seal of Excellence.

JobsOhio is proud of these accomplishments, but there’s more work to do. While JobsOhio celebrates new project investments, there are lessons learned from lost projects, too.

Lost opportunities allow the JobsOhio team, in conjunction with its robust network or regional and local partners, to learn and grow to improve for the future of the citizens and communities of Ohio.

  • Amazon HQ2: Many of JobsOhio’s regional partners submitted proposals in the fall of 2017 which was a feat in itself. This project was unlike anything the economic development community experienced before. In 2018, the Columbus region made the list of 20 finalists, and JobsOhio worked alongside its partners at Columbus 2020 as well as locals in the community to support company visits to Ohio. Although Ohio did not win the project, JobsOhio and its partners are better prepared to attract large-scale corporate headquarters to Ohio. The partnership with Amazon continues in a number of ways across Ohio, including several distribution centers, Amazon Web Services and a recent announcement in 2018 with Amazon Air for an investment in Wilmington Air Park.
  • Apple: JobsOhio’s relationship with Apple led to Ohio’s competing for the company’s proposed second campus. Apple did not choose Ohio. However, during the process, JobsOhio strengthened its relationships with Apple. Ohio already benefits from Apple’s support of The Ohio State University’s Digital Flagship University, a digital learning initiative and iOS design laboratory that also provides training in Apple’s app language.
  • General Motors (GM), Lordstown: Part of JobsOhio’s mission is to retain and support companies that have already invested in Ohio. Having a strong relationship with the GM leadership, JobsOhio remains in close communication with the company, local and regional partners, and the administration and legislative partners to manage the impact of GM’s difficult decision to have no product allocation at the Lordstown plant. Recognizing evolving automotive industry and market trends, JobsOhio continues to learn how the team can better support future opportunities for this facility.

Malcolm Forbes once said, “Failure is success if we learn from it.” With pencils and minds sharpened, Ohio’s economic development network builds on these experiences to prepare for future opportunities.

Under the guidance of the board of directors and third-party strategic insights, JobsOhio was designed to have a proactive business development model and a return on investment approach to investment decisions. The initial focus included manufacturing, automotive and food processing – industries that represent Ohio’s historic strengths. While protecting the base of Ohio’s economy, the leadership team also recognized that there were growth industries in which Ohio could, and must, compete, including technology and healthcare. Altogether, nine industries were identified as the foundation on which JobsOhio would pursue economic growth.

Ohio’s increased industry diversity, as referenced in the chart below, is driven by strategy around the inclusion of growing industries including professional and business services, finance, insurance and healthcare. From 2007 to 2017, Ohio’s economy witnessed a shift from manufacturing sector to services providing industries like professional and business services, finance, insurance and real estate, education and healthcare. JobsOhio has played a role in helping promote diversification of the economy by proactively attracting businesses to the state. In 2007, Moody’s ranked Ohio tenth among U.S. states in terms of industrial diversity. By 2017, Ohio had improved to eighth. As innovative companies like BrightEdge, Facebook, Quotient, Upstart, Veeva Systems and others invest in Ohio, JobsOhio is optimistic that the economy will continue to diversify.

Ohio's Diversifying Economy Index Chart

Historically, these businesses may have located on one of the coasts where large numbers of technology and healthcare organizations have established headquarters and operations.

Today, company executives are taking note of the changes happening in Ohio. With a balanced budget, a pro-business tax climate, low operations costs, a skilled workforce and JobsOhio’s flexibility to build customized solutions to meet companies’ needs, Ohio is on the radar for companies and growth industries and is part of the national conversation about economic diversity and jobs of the future.

New connections are happening all across manufacturing facilities. Sensors may be monitoring a fleet of vehicles by sending crucial data back to the warehouse. Or perhaps plant managers run an entire operation armed with an iPad. As this type of connectivity and communication spreads across various industries, from automotive to healthcare, the Industrial Internet of Things (IIoT) is positioned to profoundly impact advanced manufacturing. Automation is one of the largest opportunities for growth for manufacturers of all sizes, and Ohio offers an environment ripe for companies ready to take their manufacturing floors to the next level.

Companies such as Crown Equipment Corp., Festo and Gosiger Automation are all leveraging IIoT to change the way things are made and delivered, as well as to train a future workforce, and they are doing it in Ohio.

Founded in New Bremen, Ohio, in 1945, Crown Equipment Corp. designs, manufactures, distributes and services forklift trucks. Considered one of the top five largest lift-truck manufacturers in the world, Crown Equipment has designed an automation and fleet management solution called InfoLink. It uses IIoT to connect lift trucks, operators and facilities to collect accurate, real-time information regarding productivity, fleet utilization, compliance and resource management. By having insight into how certain functions are operating day-to-day, their customers are able to reduce operating costs, ensure compliance, and protect the assets they have invested in using metrics provided by InfoLink.

Festo is another example of how talent, collaboration and commitment to innovation can help a global leader thrive in Ohio. The Germany-based corporation specializes in advanced automation technology for more than 40 industries. With a focus on two-way communication, Festo’s enabled devices, such as IO-Link, transmit machine data to factory management systems, where the data is downloaded and then sent back to the controller. In many cases, adjustments can be made while a machine is running. This type of monitoring and real-time diagnostics results in increased machine time and productivity. To keep up with customer demand, Festo announced in 2018 it is investing $90 million to nearly triple its existing state-of-the-art Regional Service and Manufacturing Center, bringing unprecedented growth in automation technology to Mason, Ohio.

Gosiger Automation, a robotics and technology company, located in Dayton, provides automation solutions for companies across an array of industries. The company has specialized in helping manufacturers seamlessly integrate robots into a manufacturing system for the past 30 years. Gosiger explores the needs of each company, whether it is a compact robot cell, designed to handle small parts up to five pounds, or larger models that can accommodate parts weighing up to 250 pounds. Often a custom solution is created for its customers. An increase in manufacturing productivity, performance and product quality are just a few benefits of robotics solutions.

JobsOhio and its partners also create opportunities for Ohio manufacturers to connect to resources that help them implement operational IIoT strategies. For example, the Northeast Ohio cluster for smart devices and systems provides companies the opportunity to network and learn about IIoT from early adopters, including how to assess the benefits and develop an appropriate implementation plan, while learning about key suppliers of IIoT services. A key partner in standing up this initiative has been David Moon, solutions consultant for Hitachi Vantara. A leader in advanced manufacturing, Hitachi Vantara is both a provider and a customer of IIoT. Its Lumada software provides necessary data and analytics to improve maintenance and repair processes, reduce downtime, and increase efficiencies on the
factory floor.

Ohio’s R&D resources, partnership opportunities and access to academic programs, make it easier for companies to develop and benefit from new innovations while Ohio continues its stronghold as a manufacturing powerhouse. Companies can develop new and exciting products and processes here, and our team at JobsOhio is here to help. Contact our advanced manufacturing team, and we will connect you with the right resources.

For 75 years, the Gulf Coast has been the obvious place for petrochemical companies to invest in North America. But that distinction has changed.

The massive energy finds in the Marcellus and Utica shale formations, which together lie underneath areas of Ohio, West Virginia and Pennsylvania that we call Shale Crescent USA, have disrupted the industry’s time-honored economics.

Now, for many companies with established and expandable footprints on the Gulf Coast, it likely doesn’t make sense to invest in a region that is a growing petrochemical hub. But for those considering new site investments, the economics are clear. An IHS Markit study evaluated hypothetical returns for major petrochemical and plastics investments made in the Gulf and Shale Crescent USA. The bottom line: the same plant constructed and operated in Shale Crescent USA instead of the Gulf Coast could offer a pre-tax cash flow advantage of $3.6 billion over a 20-year time span and a net present value four times higher.

So, as executives plan for what many have dubbed a second wave of US petrochemical investment, it’s time to get smart about what’s happening in Shale Crescent USA.

Shale Energy

The impact of the Marcellus and Utica shale formations has been transformative. If Shale Crescent USA were its own country it would rank third in natural gas production, behind just Russia and the United States as a whole. Infact by 2030, the region will account for an estimated 40 percent of U.S. natural gas production. It’s why Shale Crescent USA is home to the lowest natural gas prices in the developed world.

The IHS Markit study mentioned previously focused heavily on the advantages of our low-cost ethane. We are currently conducting a follow-up study and expect to find similar advantages using propane, butane or even methane, demonstrating further benefit of investing in Shale Crescent USA.

Location, Location, Location

Shale Crescent USA is as much about access as it is about energy. Among its unique assets are:

  • fresh water for processing and transport.
  • more than two-thirds of U.S. polyethylene consumption in just a day’s drive.
  • a local workforce with one of the lowest turnover rates in the nation.
  • an education system that graduates more than 11,000 engineering students each year.
  • stable weather patterns without seasonal risk of production-halting floods or hurricanes.

Increasing Momentum

At the end of 2018, the U.S. Department of Energy delivered a 91-page report to Congress on the potential for an energy storage and distribution hub in the Appalachian region. Secretary of Energy Rick Perry was clear about the opportunity at hand. “For us to be at this moment in time where we have the potential to diversify our petrochemical footprint, I think it would be very inopportune for us to miss this opportunity,” he said.

The energy balance has taken a significant turn and is creating opportunities in Shale Crescent USA that haven’t been thought about for a long time. It’s time to seize the opportunity to harness this incredible resource and diversify and secure our petrochemical industry now and for the future of this great country.

Cloud computing, big data, artificial intelligence (AI), robotic process automation (RPA), the Internet of Things (IoT) and mobile device ubiquity are not just buzz words and acronyms – they are earth-shaking changes in technical capability that enable companies to operate and delight their customers in ways they could not before. While startup technology companies often win headlines, what this digital shift really means is that nearly every company today is a “tech company.”

Whether offering digital products and services, improving internal and customer efficiencies, or shifting to entirely new digital markets, to remain competitive and grow, every company must innovate and transform how they do business. 

In Ohio, our workforce, businesses, academic institutions, and medical and health systems are on the cutting edge of this digital shift. To get there, many are embracing the startup ethos of agility and innovation, creating partnerships, innovation hubs and labs that bring together multiple stakeholders with the ability to think beyond company lines, introducing and spawning new breakthrough ideas across industries.

And whether in industry or academia, those breakthroughs are happening at new and interesting spaces all around the state:

AEP’s Kyte Works

A wholly owned subsidiary of AEP, this innovation lab allows AEP to operate like a startup, creating new energy solutions and quickly validating them for market. Operating out of the Columbus Idea Foundry, Kyte Works allows different disciplines within AEP to come together to forge new, real-world business solutions. 

Bounce Innovation Hub

Located in downtown Akron in the former BFGoodrich plant and opened in early 2018, Bounce serves as an incubator, accelerator and mentoring program, with more than 50 organizations in the building. Bounce accounts for more than 200 people working and creating in 300,000 square feet of office, lab and light manufacturing space.

Fuse by Cardinal Health

The Fortune 15 health solution provider’s innovation lab focuses on rapid design and prototyping to deliver technology-based, “human-centered” solutions that also meet business needs. Located just over a mile from company headquarters in Dublin, Ohio, the Fuse team works to create solutions that could have the biggest impact in a changing healthcare landscape.

Cleveland Clinic Innovations and Ventures

As the commercialization lab for Cleveland Clinic, Innovations helps turn the medical center’s breakthroughs, from medical devices and healthcare IT to therapeutics and diagnostics, into real-world solutions. Meanwhile, Ventures invests in emerging healthcare companies to deliver financial returns to the clinic’s foundation. That’s resulted in some 1,200 awarded patents, more than 500 licensing agreements as well as more than 80 spin-offs.

Plug and Play Cleveland

Plug and Play is the world’s largest innovation platform, investing in and accelerating startups. Moreover, they connect these startups with Plug and Play’s corporate partners to solve some of their greatest challenges, while investing in these new technologies. Cleveland is one of just three locations in North America and is focused on healthcare technology innovation.

The Point, JPMorgan Chase and Otterbein University

In September 2018, Chase announced plans, with support from JobsOhio, for a fintech R&D hub at Otterbein’s The Point in Westerville, Ohio. The new hub has three distinct innovations that combining teams made up of Chase employees and Otterbein students, with projects including robotics, software development, financial technology, IoT cybersecurity and data analytics.

The 1819 Innovation Hub – University of Cincinnati

The University of Cincinnati’s foray into corporate innovation has already drawn partners and investors like Procter & Gamble, Kroger, Cincinnati Bell and CincyTech. The lab and makerspace, which opened in October, provide a place for industry and business to work directly with students and faculty on their business and technical problems.

Wendy’s 90° Labs

In 2015, Wendy’s opened this dedicated lab that can house nearly 90 employees to explore forward-looking technologies to meet changing business needs. In particular, the fast-food chain is exploring consumer-facing opportunities such as mobile ordering, pay and other digital experiences like in-store kiosks – which are appearing in stores now – for taking orders and payment.

State Innovation Investment

Ohio is also home to an Entrepreneurial Service Provider (ESP) Program, establishing a network of labs and innovation spaces across the state to help startups grow, attract investment capital and create jobs in Ohio.

Powered by Ohio Third Frontier, which has invested some $1.5 billion in the program, ESP, like Rev1 Ventures in Columbus, CincyTech in Cincinnati, NextTech Ohio in Toledo and JumpStart Inc. in Cleveland, gives startups and technology-based entrepreneurs a single resource for technical and business support, as well as access to funding and capital. ESP has sparked dozens of successful startups across the state.

These are but a few examples of the culture of digital innovation occurring in Ohio. And ecosystems like these will continue to push Ohio to the forefront of IT and digital development, leading to new businesses and solutions for both customers and business.

In early October, I attended a demonstration of Honda’s new “smart intersection” technology in Marysville, Ohio. I’ve been involved in the auto industry for many years, and while I’m aware of the advancements taking place with autonomous and connected vehicles, Honda’s technology and how it will improve safety at intersections continues to impress me.

Honda partnered with Marysville to install the technology at one of the city’s busiest intersections. Four cameras are mounted above four traffic signals on each corner of the intersection, capturing live video of pedestrian and vehicular traffic. Honda’s proprietary object recognition software then processes that information and analyzes it for threats, such as approaching emergency vehicles, cars running a red light or people stepping into the street. If necessary, the system alerts drivers who have onboard units in their cars using an audio and visual warning projected on a small screen on the windshield.

This pilot program between Honda and Marysville is just one example of smart technology projects in Ohio. Let me explain why they’re happening here. For quite a while, we’ve been touting the fact that Ohio has an unparalleled combination of assets and resources that make it an ideal location for researching, testing and deploying connected and autonomous vehicle technologies. But I think something that makes Ohio particularly attractive for companies involved in this sector is the ease at which they can partner with local communities, state government, academic institutions, research centers and even other companies.

In looking at the Honda and Marysville partnership, Honda came up with the smart intersection technology, but it needed a community where it could research the technology. Marysville, home to Honda’s manufacturing plant, R&D center and thousands of employees, offered a real-world environment and was a logical choice.

The 33 Smart Mobility Corridor is another good example showing the value of partnerships. The cities of Dublin and Marysville and Union County collaborated with the Ohio Department of Transportation (ODOT) to install fiber-optic cable and dedicated short-range communications along a 35-mile stretch of U.S. 33. The Ohio State University and the Transportation Research Center (TRC) got involved in the effort and helped turn that part of U.S. 33 into a route for public and private entities wanting to test connected vehicle technologies.

TRC, the largest independent automotive proving ground in North America, has long partnered with OEMs, government entities and manufacturers from around the world on research and development activities. When it’s finished, the TRC’s Smart Mobility Advanced Research and Test Center – which itself is a project supported by multiple partners (ODOT, JobsOhio, the state of Ohio and the Ohio State University) – will serve as a one-stop facility where auto manufacturers and suppliers can safely test autonomous vehicles and related technologies before they’re used on city streets and highways.

In May, Gov. Kasich signed an executive order authorizing autonomous vehicle testing in Ohio, reinforcing the state’s commitment to automotive and technology companies that are working on these next-generation technologies. The executive order also created a voluntary “Autonomous Vehicle Pilot Program” with the specific purpose of linking companies with local governments willing to partner and provide testing locations.

So, if our weather, geographic assets, research organizations, testing facilities, IT talent and existing “smart” projects aren’t enough, now we have the added benefit of public-private partnerships. These partnerships give companies one more reason to consider Ohio when they’re looking for that perfect location to research, test, and deploy connected and autonomous vehicle technologies.

If you’re interested in learning more about Ohio’s smart mobility assets, give me a call at 614.300.1159 or send me an email.

Photo by Fred Squillante, courtesy of The Columbus Dispatch as featured in Megan Henry’s story on Dispatch.com found here

Food is a social unifier and an important part of our daily life. Some of our fondest memories are tied to the foods we eat. Today, consumers want food that is healthy, convenient and flavorful. This unique mix of freshness and taste is challenging the food industry to innovate.

Food processing companies are focusing on making their ingredients safer, tastier and more satisfying. While some companies struggle to navigate this shift, Ohio’s food processing and food flavoring companies as well as other food entities are rising to meet this new expectation for high-quality foods and beverages.

Food and Agribusiness in Ohio

At its core, Ohio is a strong food and agribusiness state. Food and agribusiness is the largest industry in Ohio, with hundreds of companies that cultivate, process, package, distribute and market food and drinks. Ohio provides the perfect environment for companies because it has plenty of natural resources such as abundant land and fresh water; commodities such as soybeans and dairy; processing, packaging and distribution facilities; a multifaceted infrastructure; and a common-sense regulatory climate that fosters efficiency. From farm to table, Ohio guarantees food freshness and quality.

When the world hears “Ohio is a food test market,” people aren’t surprised. In fact, this is a well-known claim supported by years of testing carried out by companies in state and out of state. Ohio’s population is diverse and plentiful, and food companies crave the input of this market.

Kroger, Bob Evans, Abbott Nutrition, Smucker’s and Wendy’s are all headquartered in Ohio. Daisy, General Mills, Heinz, Campbell’s and Nestlé have significant operations in the state. These companies will often test in their neighboring communities to save on cost. Why go anywhere else when the perfect food testing market is in your backyard?

In the mid-1800s, Cincinnati was big in pork, which is why it received the nickname “Porkopolis.” As the years went on, this reputation was fed by companies like Kroger and Procter & Gamble. The Cincinnati region continues to grow, as the critical mass of food companies in the area allows global companies to source from just one area and enables regional companies to share knowledge and skills. When you have a proven concentration of industry resources, like Cincinnati has for food (or Silicon Valley has for tech), the demand attracts more companies that want to take advantage of this specialized environment.

Home to the Second Largest Hub for Flavoring in the U.S.

Ohio’s food industry also benefits from Ohio’s reputation for food flavoring. Many food flavoring companies are located in Southwest Ohio. In fact, the Cincinnati region is known as the second largest food flavoring hub in the U.S. Some of the world’s largest leaders in the industry, such as Givaudan, MANE, Frutarom and WILD Flavors, all have major operations in the Cincinnati region. As a result, Cincinnati has built an environment with programs, resources and improved processes that support food flavoring companies and open the door to pursue new trends.

Innovating and Growing Quickly

Sometimes, even the best flavors need to improve to accommodate consumer preferences. For food companies pursuing improvements, Ohio has many resources to help them innovate and create new products. These resources include:

Your Future in Food and Flavoring

Every day, consumers are scrutinizing the ingredients in the food they’re buying. They’re picking up products and putting them back on the shelves because the food is unhealthy. In Ohio, your products can stay fresh and you can stay innovative. There’s a reason food companies are adamant about investing in Ohio. Its consumers represent a microcosm of America, and its resources can help you achieve a profit here and anywhere. Thanks to the right ingredients, Ohio provides an extra kick to the world’s food and flavoring industry.

Interested in learning more? We’d love to talk to you! Contact me or Joe Needham for more on Ohio’s food and flavoring opportunities.

Andrea Enders
Andrea Enders
Manager, Business Development and Project Management, REDI Cincinnati