A Quiet Crisis: Regional Economic Development Transcript
Mr. Shatten: You are saying two things. There are place bets, the Shoreway and the water’s edge, but you are also saying the harder one, place big bets, and have the confidence to place a big bet.
Mr. Roman: It does go back, though, to the other governments. If we are going to approach the State and the Federal governments for the big dollars as we have in the past, we’ve got to be willing to make the big bet first. We can’t expect the State or the Feds to put in the first bogey. We have to be willing to do that and that’s what I think is so missing right now.
Mr. Hill: I take a slightly different twist on it. It’s like any investment. If you load up all your bets on one stock and the stock does badly, you go with it. And I think there is broad agreement throughout this community that you need a three-part strategy, a portfolio strategy, and we’re doing parts of it.
In the short run, it has to be labor force and improving the quality of life and I also say a lot of focus on a lot of the process of engineering that has taken place. Five to fifteen years out, we are going to get most of our returns by working with our existing economic base and bringing forth new products on it. And that linkage doesn’t exist with the legislature, it doesn’t exist with our universities. Campus has been a wonderful investment that’s been helping around but on the short-term stuff.
How can we get partnerships going with our science technology infrastructure and our current set of firms and industries to continue fundamental process innovation and new products.
And then the long term, 15 years out, we need a fundamental strengthening of our science technology base because the market is smarter than any of us. We don’t know which bets are going to come in. I do agree that when it comes to biotechnology, actually biomedical products, we are in a much stronger strategic position.
Mr. Eckart: There is some manufacturing expertise there as well.
Mr. Hill: Absolutely. And the other thing is what should we be looking for is a win from the biology life sciences bet. What I have said, the win on firms is distant. The win on employment in that industry and treating the research in that industry is the right win. That’s going to be the indicator. So you need that portfolio.
Ms. Pianalto: I agree very much with what Ned has just said. There is a risk in trying to look out and find out which industry is going to be the growth industry of the future. We are much better off focussing on making sure we have all the infrastructure that would allow any industry to grow in this area or want to do business in this area. That infrastructure includes, as we have all said this morning, a good educational system.
It also includes—it used to be transportation. It still can be transportation, but it is a very different type of transportation. Businesses want to be located—because now businesses are global, want to be located in areas that have good air transportation.
And a third part of our in infrastructure has to be good communication systems. More of our business is being conducted over communications networks and we have to make sure we have that infrastructure in place. So I wouldn’t want us to try and place a bet on an industry, and I don’t think anyone here is saying that. We need to work on providing an environment that any industry and any business would want to be a part of.
Mr. Eckart: Sandy’s point is very well taken. The purposeful design of the region, the team Northeast Ohio Concept which embraces regional concepts in a variety of ways, and the one thing we have to keep thinking about—Richard, I heard you say this before. You don’t have to reinvent the wheel. Toronto and Chicago stepped up to the plate in meaningful ways that dealt with intellectual infrastructure, that dealt with capital infrastructure, dealt with amenity infrastructure and then dealt with some attitudinal changes that need to take place, too.
We are, in some ways, our own worst enemy when we think about ourselves and other thing, what we don’t do, the Harvard visitors that were just in Cleveland a few weeks ago. The first recommendation they has was marketing ourselves better, telling folks what we are about, what we have within an hour of Public Square in a context that creates an amenity that is Northern Ohio.
A Convention Center is absolutely critical to that, because as Peter Hart showed us in a survey a few weeks—a few months ago, if you get folks here for a couple days, they love being in Cleveland, and that is something that is so introductory to this community.
Like in airports—you don’t have front porches in communities anymore. Airports are your front porches, convention centers have become our front porches. And we have to get about doing those things. And in this context, I will slightly disagree with folks. While I think the State is a very willing partner to follow the convention center thing, they might build us an access ramp and give us some sort of consideration for a half a billion dollar convention center. Columbus won’t build it for us. We have to raise the money ourselves. We can’t count on them to do it. And while we should integrate them into that process, we have to embrace this. Richard, you are absolutely right. Do things of scope and of scale that will fundamentally change the character of the community.
Mr. Shatten: Back to the beginning of the delegation which is your point, too, Steve, which is I think this place has to make these bets. And every bet is easy to debate and easy to disagree with, but there is a pool of bets sitting there. It’s this magnificent Shoreway idea, it’s this transformation of our whole biomedical strategy which we should have labeled biopark. It is a convention center. It’s taking our water.
I like this notion that if you are touching the lake it matters and it takes us all the way down to the Cuyahoga Valley National Park now. It’s gotten a better name. And to take our educational system which has been manufactured and remind ourselves to make stuff, to use Lorain Community College, to get Cleveland State University and use its college engineering and do something constructive with it. There is a list of stuff to do. Push it over the edge.
Mr. Roman: We have all used the word ‘bets’ and at the end of the day, it is going to require leadership to make the bets. The bets are not going to be made unless people, some of us, some public officials and others not in this room today who are going to have to gain the confidence that we are going to have to make those three or four bets.
The Convention Center is a perfect example. There will never be on the short term the passion for building a Convention Center as there was for keeping the Cleveland Indians. The convention center from an economic development standpoint and the visitor industry as a whole is our big missing piece. We have to have confidence, leadership has to have confidence that we can move forward.
Mr. Shatten: You can’t debate it. There is a pool of stuff you have to do, and instead of fighting over the pool of stuff, you got to move the pool and hope that half of that pool gets over the edge. And some of it may not, but the whole list, a long list and it’s an expensive list has to be there. And sometimes it’s going to be a little sloppy.
Mr. Hill: A lot of what you are talking about is vital to the City of Cleveland.
Mr. Shatten: For Northeast Ohio.
Mr. Hill: And from the City of Cleveland, we have to make certain that Northeast Ohio understands what the return is for the whole region. And one of the problems we have had in Northeast Ohio is Cleveland has looked out for regional partnership when it’s needed something, and it’s gone down to Columbus and said here is the hole to fill.
And there hasn’t been a long-term commitment to building that regional partnership. Don Pasqualic, the Mayor of Akron, one of the best mayors in the State, should be an intimate part on what happens in this region and it shouldn’t just be when something is needed specifically to build it.
Mr. Eckart: And it can happen. But leadership is beyond some projects, too. It’s management, it’s collegiality, it’s creating a sense of broader ownership in community projects. It can’t just be downtown. Somebody is trying to run for Mayor, they are just going to make downtown better? I guess 80% of the people voted for Gateway in Cleveland and it didn’t carry. It is to link things into the neighborhood, to make sure Tremont gets a bounce out of this, to make sure Slavic Village has a piece of the action, that the neighborhoods around University Circle share in the biopark developments, to make sure that White City, you know, White City State which is now a State park shares in it.
Because unless there is vestedness by voters in some of these where you can’t get the leadership of the politicians because they think there is too much risk in stepping out. But you can’t wait to get to 75 percent on something. If the County Commissioner says it’s got to be three to nothing, everything’s got to be three to nothing. My dad was on Euclid City Council. There were nine members. I said, “Dad, what does it take to be a city councilman?” He said, “The ability to count to five.”
Joe, you are right. You get two people. You get the business community, look what you did when with you linked up John Ryan and AFL/CIO on Issue 14. Create alternatives to the traditional public private partnership that not only pushes, but pulls the political leader as well. Create the agenda. This is not Kevin Costner’s, build it and they will come. But if you create more pressure on them, having been one of them myself, the last thing you want is pressure. But we don’t create enough pressure and we don’t have the defined agenda on the political leadership as well and so you get the mediocrity of making everything your second priority.
Mr. Frolik: A lot of it about regionalism, but is the willingness to go forward on regional projects there? Ned mentioned to a lot of people outside of Cleveland, they see Cleveland as something they wanted to move away from, why they spurred throughout the area. Within the City, and I’m sure it is in other places, there is this reluctance to give up what you’ve got. There was a councilman earlier this year, forget for a moment the mayor suggested regionalizing the airport. He managed to bring together his 20 colleagues and Mayor White in a rare moment of unity to denounce him. We are not going to give up our assets. How do you break through that so that regionalism or these type of discussions don’t become the third rail of Northeast Ohio politics?
Mr. Shatten: This region, in the last 20 years, has been a remarkably successful exercise in regionalism. I always get agitated when people talk about regionalism. We went to a regional transportation system, we went to a regional water system, we went to a regional tax base so that wherever I work, somebody moves some money into somebody else’s pocket. The park systems have become regional, the dog pound has become regional, our hospital has become regional, our Lake Farm Parks have been regional. This City is one of the standards of regionalism in the United States of America. I believe it strongly. Now, that said, let’s reopen the game on the rest of it. All these government issues are important on high leverage. Why don’t we have a water edge governance that can actually—I think one of you said, can tax and raise resources. Maybe you said that, Dennis. That owns land.
Mr. Eckart: That owns land.
Mr. Shatten: Why don’t we open up all of these? Why don’t we open up the question of the port authority? Why don’t we open up the hard questions of the airports? Each one of those has to be worked hard and carefully in the context of collegiality, that nasty thing of working together, but there are a whole list of things that you could open up there. But the antecedent to me is to not whine about it. We are excellent at regionalism. Our venture capital initiatives, they are all regional. COSE is what, how many counties now?
Mr. Eckart: We have 16 counties and 17,000 members.
Mr. Shatten: 17,000 small businesses from 16 counties and we are complaining about regionalism. What could be more regional than our small business geography in Northeast Ohio? So I think we have done a very powerful job there and there are four good enough to keep doing it. So I always get agitated when I talk about it.
Mr. Minter: I agree with you, Richard. And I think we really need to face into it and that is when you start dealing in Northeast Ohio around these sets of issues and politics and cultures and ethnic affairs, we still are a place which is highly noted as being fairly or not, but the statistics, I guess, don’t lie. Highly segregated.
And when you start to deal with the issue with trying to talk with the major City which is the important driver in the region, the downtown region is still quite significant for business, for culture, for sort of defining the spirit of the region.
We still have to deal with the questions of poor families and issues of race, and, you know, we just—look, we just went through a very critical election. The bond issue that passed successfully which was based upon—we really only wanted people to turn out in a certain area of the City to vote for this. We want a low turnout. It was all designed significantly and probably appropriately so given the political realities around. We want people in this ward to turn out because they are African-American and they are going to vote a certain way and we want to discourage people to turn out elsewhere.
And if we look at how the population moves and we look at who is in the City, where was there a growth in population and where was there decline in population. It has a great deal to do with perceptions and feelings about race.
Mr. Eckart: Steve has just scratched a long-standing and frequently wishing it was hidden itch in Cleveland. Both racial politics and racial economics. The top 15 black entrepreneurs in Cleveland, these are successful men and women, get less than 20% of their business from other Northern Ohio orders. These are manufacturers, these are service providers, these are architects, engineers and other professionals.
And we do not—there is no home field advantage for doing business being an African-American here. In Detroit, those numbers are almost flipped over on their head completely.
In this context, the government or entity such as all of us around the table can’t try and guarantee success. That’s probably where we get in trouble. Not my voting record notwithstanding in Congress. What we have to try to do is a try to do a better job in guaranteeing opportunity.
In that context, we do need to create greater linkages between African-American entrepreneurs, between capital to African-American entrepreneurs. We need to go beyond boardroom to boardroom initiatives and create a talent bank between majority companies and minority entrepreneurs who are trying to work themselves out.
You’ve got dozens of great graduate students at Cleveland State and at Weatherhead who would love to use test bets opportunities for empowering economic development. The only thing I would have holes in it in my view is the first quality Swiss cheese. Not in the economy end. In the context of Cleveland, we have holes on a racial basis, just as significant on an educational basis, of African-American and Hispanic entrepreneurs who are not sharing, and whatever, Sandy, the growth that has occurred, they have not sharing do not share and in an egregiously disproportionate way.
Mr. Shatten: Steve, I think that point is an essential point and it’s a frustrating one because this community—I think this community has been running honest, hard experiments for 20 years. So after the L.A. Riots what did this Mayor do? A day later a 160 mayors showed up at the Ritz Carlton Hotel to launch a major minority economic development initiative.
Year after year the community has formed minority outreach initiatives. We have figured out in housing because of the Foundation’s commitment to housing in these neighborhoods, but we have mammoth experiments to deal with this issue and I think you are right—see, I think it’s an intended issue that we haven’t figured out yet as opposed to we haven’t done it. This place has experiments all over town but haven’t clicked. We haven’t gotten to the scale, e haven’t gotten the boardroom to boardroom idea up to a scale where we can point to and say it’s successful. We haven’t gotten the mentoring programs to the point. The dilemma is we haven’t gotten—a 15-year-old we haven’t gotten. So there is a big gap here in terms of how hard are we working to get over the edge.
Mr. Roman: When do we become afraid to measure it and track our progress which I think on the verge of accepting. And The Plain Dealer started this a year or two ago with some work they did. But, I think if we are going to acknowledge the problem and then start measuring and tracking our performance, one would tell you, and anything else around quality improvement, that that’s the first step you got to take and I think we are ready to do that.
Mr. Hill: Issue 14 is a large part of it as well. One of the largest issues we have is the fourth grader to be competitive when they become older and to gain access has to have a set of fuel. So you have to push for access, but you also have to find away of investing in kids. And when you have a school system that is, what, 90% or higher?
Mr. Minter: It’s not that high. It’s more in the 70s.
Mr. Hill: But it’s a substantially poor system that you have to make certain that the quality comes up, and the school system has done amazing things. But then you have to say, well, how can we expose suburban kids to African-American experience and how do you get different races of kids to mix together when they don’t live and play in the same places? That’s very hard. So, not only do you have the issue of opportunity of entrepreneurship, but you also have to realize the fourth grader in Cleveland, East Cleveland, the Heights, maybe in Lakewood, that’s part of our work force, that’s part of our opportunity.
Mr. Frolik: Steve, you spent a lot of your—almost your entire career working on issues related to education, job training, job preparation, that sort of thing, and a lot of work at the Cleveland Foundation, and before that you were a cabinet member of the administration --
Mr. Minter: Sub-cabinet member.
Mr. Shatten: He was working at the high talent level, not the high political.
Mr. Frolik: We talk a lot about work force, we talked about these fourth graders. We have talked about it for a long time. How do we do a better job of linking the business sector, the employers with how we’re training and what we need to do for those future employees, those fourth graders. Are there other models out there, other cities, other communities who really do it well and that we can take some lessons from?
Mr. Minter: Well, I don’t think there are one or two communities you can look to and say they do it well. I think we can find best practices in a lot of different communities of pieces that are done well. And in that regard, I wouldn’t be so, you know, disappointed about where Cleveland is.
And point of fact, the work that has been done over the last couple of years, and particularly lead by Dan Barry at the Growth Association on the whole work force development has been some of the, I think, some of the best work and has drawn upon the resources of the best we can find anyplace around the country.
It’s now going in and doing the stitching, it’s like taking the basic sciences and working on it and making the collaborative approach and articulation agreements between what happens in elementary, what happens in the middle schools and what happens in high school and that transition to, first, the community college level.
Because we have now learned, and a lot of us have come to appreciate even more that our challenge isn’t just getting college graduates. We don’t need 80% college graduates. We need people who have technical skills, and fortunately here, if we look at Northeast Ohio, the three community college systems in this part of the State are among the best there are. Cuyahoga County Community College, Lorain and Lakeland College are doing tremendous jobs. Roy Church over in Lorain is well noted for his work.
So, I think we have the elements. The question is really staying after the components and putting it together. And so that’s why I think the building block of what’s happening with the Cleveland Public Schools, and, let me stress, what’s happening with the inner ring suburban schools, keep in mind that East Cleveland and Warrensville and Shaker and Cleveland Heights and Euclid and South Euclid and Lakewood and Parma, these systems are turning out a lot of young people. Some of those systems have significant records in terms of going on to higher education and some had pretty mediocre records and some are poor.
So it isn’t just Cleveland, although we obviously need to focus on those 77,000 students, but really placing a great deal of emphasis on this and really continuing to push with work with our higher education institutions. We have to sometimes constantly remind ourselves there really is a lot more than the community college and Case Western Reserve and Cleveland State.
Mr. Eckart: You have more kids coming to Northern Ohio to go to college every fall than much in the Boston area. What we don’t have, in my view, is a significant linkage between higher education and the business community in definable ways. Case is probably a little bit ahead of the crowd there. But Carol Cartwright down in Kent State and certainly Louise Perenzo over at Akron have now started to build on some more significant business relationships that are significant. Creating true broadband interactive classrooms between each of the four State universities alone would do a lot to make every professor available to any student on any campus.
But also creating, for instance, a linkage between what Jeri Sue Thornton’s doing over at Tri-C or Roy or the new president out at Lakeland between tomorrow and growth where we would actually have a joint vice presidency who are not just taking cookie cutter curriculums, but sitting down with you, the business person, and saying okay, what do you need? What do I have to teach these young people coming here to be a value to you? And it’s creating is a more significant linkage. It’s what Zell Miller did down in Georgia that really played very well because it worked. They developed curriculum around economic needs. They just didn’t teach a curriculum that had been developed in some other context.
Mr. Frolik: I’m going to go Joe to here. He’s on the State Board of Education. Particularly on the science end, what are you hearing from businesses about science and technology? What should these kids know?
Mr. Roman: As a lot of the folks around this table know, I’m a proponent for—I think our community colleges are excellent. But if we want to go back to your opening comment, how do we reach scale in this town, if we wait to cure problems until kids leave high school, we are done. We are done.
And as we speak, this State is rewriting all its standards. We got the cart before the horse. We started to test kids with proficiency tests before we knew what the kids should really know before they graduate.
So we are trying to go back as a State such as others have done such as Texas and North Carolina, and create the very understandable system that says at the end of third grade, kids should know this, to keep progressing and at the end of each grade and to test those progressions. We know what kids are going to expected of in the State of Ohio.
Right now we are rewriting the science curriculum for the State of Ohio. And Dennis made a joke about it, but it’s one of my concerns is that we are hearing more as a State as those standards get written as we speak about whether creationism should be added to our science curriculum, then what are the kids going to need to know when they make those career decisions in ninth grade, in tenth grade, in eleventh grade and then go on into either the work force, to college, community or otherwise, they are going to be affected right now by what we do.
And we are not hearing from—there has always been sort of a Chinese Wall, largely constructed, I believe, by the education community, which was the business community can’t come in this door because what the business community is really trying to do is create robots. They are just trying to tell us what our kids need to know so that when they graduate from here they can do that little kind of job that’s been defined-- that’s not the case anymore.
If we don’t bring them in and allow them to come in, and if the business community doesn’t jump in with both feet, we will forever sort of be sort of relying on our excellent community colleges to cure the problems that we didn’t get to when we should have and I’m very frustrated by that.
