A Business-Friendly Approach Promotes Innovation and Growth in Ohio
Ohio is the birthplace of some of the world’s greatest inventions – the airplane, the lightbulb, the traffic light and even Superman. Today, as the country rebounds from an unprecedented crisis, Ohio will benefit from that innovative spirit in addition to the decisive interventions that helped to mitigate the impact on our state’s businesses and the economy.
Ohio offers a business environment that attracts global investment and fosters growth. Ohio’s simplified tax structure, central location, and affordable cost of doing business are catalysts for past and future economic diversification and prosperity.
- With a Gross State Product (GSP) of $675 billion in 2020, Ohio is the 7th largest economy in the U.S., and ranks 3rd in manufacturing gross domestic product
- Ohio’s economy is ranked 21st worldwide
- In 2020, 171,073 new businesses were created in Ohio, compared to just 80,273 in 2010
- JobsOhio sector real GDP growth is 30.4 percent from 2010-2019, more than Region (19.2 percent) and the country (28 percent)
- The state’s Common Sense Initiative has created a jobs-friendly regulatory environment
- Accelerated environmental permitting process takes 180 days or less
- Ohio has enjoyed stable ratings from Moody’s, S&P, and Fitch of Aa1/AA+/AA+ for more than 20 years.
- Ohio ranks No. 10 in CNBC's 2021 America’s Top States for Business; No. 2 in cost of doing business, and No. 7 in access to capital.
- No state corporate income or profits tax
- No tax on products sold outside of Ohio
- No state tax on machinery and equipment investments
- No state tax on R&D investments
- Only one state business tax – the Commercial Activity Tax (0.26 percent)
The Tax Foundation recognizes Ohio as:
- No. 1 in new data center corporate tax costs.
- No. 1 in distribution center corporate tax costs.
- No. 3 in new capital-intensive manufacturer corporate tax costs.
- No. 5 in new labor-intensive manufacturer corporate tax costs.
- Ohio’s Tax Policy Delivers Results
Protecting Ohio Businesses During the Global Health Crisis
In 2020, despite the global pandemic, JobsOhio worked tirelessly in collaboration with partners and the DeWine-Husted Administration to rebuild its pipeline of potential investment, translating into over 19,000 new jobs coupled with over $7.8 billion in capital investment.
Since March of 2020, Ohio companies have benefited from over $300 million invested in numerous programs designed to provide relief during the public health crisis, including: the JobsOhio Workforce Retention Loan, the JobsOhio Innovation Fund and partnerships with Peoples Bank and First Federal/Home Savings Bank. This infusion of funding was made possible by strong state leadership and bipartisan cooperation between the executive and legislative branches, a hallmark of governance in Ohio.
Governor Mike DeWine’s RestartOhio plan has been lauded as a sensible and responsible plan of action to safely restart Ohio’s economy during the pandemic.
Under Governor DeWine’s leadership, the state of Ohio initiated the repayment of nearly $1.5 billion borrowed from the federal government to pay unemployment benefits to eligible Ohioans during the pandemic. This repayment will prevent future tax increases for Ohio employers that would have been needed to pay off the loan.
“I'm not willing to let our employers bear the unemployment debt burden caused by the pandemic. By repaying this loan in full, we ensure that Ohio businesses won't see increases in their federal unemployment payroll taxes,” said Governor DeWine. “Without this added tax burden, our employers can invest more money into their businesses and hire more staff. I’m grateful that we were able to work with the legislature to use this federal recovery money to avoid further hardship for Ohio’s businesses.”
Ohio’s Bond Rating
Ohio inched closer to a triple-A rating as Fitch Ratings lifted the outlook on its AA-plus rating to positive. The rating agency cited “Ohio’s sustained trend of balanced finances and growth in reserves that strengthens the state’s financial resilience as it confronts cyclical economic and revenue trends.”
The rating action is Fitch’s first change in 11 years and represents the highest rating level for Ohio’s IDR since 1979.
Ohio’s economy consists of thriving industries that reflect the Midwest’s industrial leadership and continued innovation. JobsOhio executes strategies around Ohio’s top industries: advanced manufacturing, aerospace and aviation, automotive, energy and chemicals, financial services, food and agribusiness, healthcare, information technology, and logistics and distribution.
Foreign Direct Investment
For international companies seeking access to the U.S. market, Ohio is an advantageous location. Ohio’s welcoming culture, low cost of doing business, reliable and affordable energy, and skilled workforce make the state an appealing choice for international investors.
The Rise of Ohio — A Midwest Leader in Economic Growth
Recent indicators leave no doubt that Ohio is the best positioned state in the Midwest region to rebound from the economic downturn. Growth in Ohio’s private sector gross state product, jobs and wages have all outpaced regional states in recent years. Over the past decade, Ohio added more private sector jobs than any other state in the region, boasting a nearly 14 percent growth rate from 2010-2019. Additionally, Ohio's global engagement has supported a significant increase in jobs – up 18.91 percent over the last five years due to foreign direct investment. With global investment from 51 countries and 4,297 international establishments continuing to strengthen Ohio’s economy, the state has a culture of being able to work with international companies and make sure that they succeed and enjoy growth in the U.S. market.
The strong foundation of Ohio – including the state’s record budget reserves in 2019, a strong credit rating and a favorable tax climate for businesses – appeals to business decision makers. Investments in talent development initiatives and industries will further diversify Ohio’s economy - addressing concerns that companies face today and better positioning Ohio as their choice for the future.
Ohio’s growth trajectory continues to garner national accolades and positive economic expectations:
- Ohio ranked No. 1 in Site Selection’s Governor’s Cup 2020 state economic and business attraction rankings for bringing more new corporate facility projects per capita than any other state in the nation. Ohio also ranked No. 2 among the nation for total projects overall.
- Chief Executive Magazine ranks Ohio No. 7 in its Best States for Business rankings, up from 41 in 2011. Area Development ranks Ohio in 9th among its ranking for Top States for Doing Business.
- Ohio received a Silver Shovel award from Area Development, which recognizes the state’s impressive roster of large job-creating and investment projects in 2020.
- Ohio is #10 among CNBC’s ranking of America’s States for Businesses and #7 among U.S. News and World Report’s Best States for Opportunity ranking.
- Ohio is #5 in the Fortune 500 count (27) and Fortune 1000 count (53) companies
- Site Selection ranks Ohio fourth on its Prosperity Cup state rankings for 2021, which recognizes the state and regional offices that were the most successful in attracting capital investment projects in 2020.
Ohio’s growth and resilience is a testament to the efforts of public and private entities across the state. Recent trends and mitigating interventions demonstrate that Ohio continues to be a great state for business.
California-Based Companies Head to Ohio
Companies from California are heading to Ohio to improve their competitive advantage and business operations. From 2016-2020, JobsOhio has brought in investment from more than 27 California-based companies to Ohio, including Amgen, Facebook, Crocs, Upstart, and Google.
“We’re thrilled to hire talented and passionate people who can fuel our growth and expansion as we continue to scale rapidly,” said Grant Schneider, head of Upstart Columbus, “and central Ohio has demonstrated that it has many such people!”
In Ohio, every dollar goes further without sacrificing quality. Because Ohio has a lower cost of living, there’s also a lower cost of doing business than in California. Ohio’s software engineers, for example, cost 40% less than California’s. Ohio’s cost of office rent is also 25% less than in cities like San Francisco and average wage costs are 50% less.
The COVID-19 pandemic influenced a lot of businesses to re-evaluate how they operate and where they’re investing capital. Now, these businesses are turning away from more expensive coasts and looking toward the Midwest.
From 2000 to 2020, California experienced a net loss of 2.6 million people to other U.S. states. There were also more relocations in the first half of 2021 than in all of 2018 or 2020. Reported relocations slowed down during the pandemic, but they are accelerating as the economy looks toward recovery.
And the destination for these relocations? The Midwest and Ohio. According to a data analysis by Consumer Affairs, the largest group moving to Ohio is Californians, with Florida and Texas in second and third, respectively.
People and businesses are migrating to Ohio because they’re seeing the value in Ohio’s economy, lower costs, high-quality of life, and opportunity.
JobsOhio Focus Industries Continue to Outperform
JobsOhio sectors continue a growth trajectory in gross state product for the private sector that significantly outpaced the U.S. and regional states over the past seven years. The JobsOhio sector focus has helped fuel the private sector growth in Ohio. The state is becoming more resilient, and to continue to foster this growth, JobsOhio will undertake a targeted approach to support of the needs of growth businesses.
In Q1 2021, over $1.15 billion in venture capital was raised in Ohio. This is a record and already eclipses the total amount raised in any previous full-year, including full-year 2020 when $1.1 billion in venture capital (VC) was raised.
Ohio’s total for Q1 2021 is more than Michigan and Indiana combined, and second in the Midwest only to Illinois which is driven by the Chicago VC ecosystem.
- Ranked #17 in VC investment two years in a row (2020 and 2021).
- Ranks #3 among regional comparison group in VC.
- Saw a 23.75% increase from 2019 to 2021, ranking #15 among states in VC growth rate.
- Has a VC growth rate of 3.68% in 2021 that is far greater than California's (-16.04) and far greater than Washington's (-31.68) – two of the biggest high-tech hubs in the world.
To learn more about Ohio and how JobsOhio can help you, visit one of the resources below.