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Making Change:  Attracting Foreign Firms to Cleveland

Monday, October 14, 2002 at 1:06 PM

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As autumn approaches, change is beginning to take place everywhere - and it's not just the changing of the leaves. Efforts are underway to make significant changes in our local economy. Last January, this region's business community sought change by going overseas, when a group from Northeast Ohio went on a mission to Israel. The goal was to attract bio-science companies to this region. While the mission did not result in a slew of bio-tech firms immediately knocking down the door to set up shop, it did create a flurry of interest-both here and abroad. This morning, ideastream begins "Making Change: Reinventing Our Economy," its goal? To find out what it takes to bring the color, mostly green, back to the local economy, ideastream's Shula Neuman reports.

Shula Neuman: Israel is often thought of as a stage of unrest in the Middle East. But away from the headlines, life in Tel Aviv carries on as it does in Cleveland. In Israel, where the population is only 6-million strong, there’s a glut of knowledge and technology - assets that could be a boon to Northeast Ohio and your pocketbook. Here are just a few examples of Israel’s advances: AOL’s instant messenger-developed in Israel; Pentium Chip-from Intel Israel; cell phones? Motorola Israel.

So, considering all of this innovation, Howard Guddell, president of the Ohio-Israel Chamber of Commerce, had an idea: expose Israel’s vast bioscience industry to the resources available in Northeast Ohio and convince those businesses to use our region to reach into the North American market. The reaction?

Howard Guddell: Initially, very poor. In fact, people were very skeptical, in fact I’ll even go one step farther, there was almost amusement. There was amusement because in the first instance people didn’t realize that Israel is one of the most advanced countries for biotechnology.

SN: In fact, Guddell says, Israel is the third biggest draw for Venture Capital in the world. Why not bring some of that money and technology over here, he thought, and let it rub off on you in Northeast Ohio. Guddell eventually rounded up a group of Northeast Ohio university presidents, civic leaders and representatives of area hospitals and research institutions. He took them over to Israel to see how advanced that country’s bio-science industry is. And it worked. The visit made the Israelis aware of Northeast Ohio’s potential as a business base, and it allowed the crew from Ohio to see first hand everything that Israel had to offer. The similar business interests between the two regions was so obvious and the notion of connecting them was such a good idea that now other organizations - such as the World Trade Center in Cleveland - are looking to other countries with burgeoning hi-tech industries. Think Shanghai’s automotive industry or India’s polymer sector in Mumbai.

David Yen: There’s a lot of crossover between their native industries and strengths and those clusters we have here in Northeast Ohio.

SN: David Yen is executive director of the World Trade Center.

DY: So, the intention is to create the kind of flow between Israel and the U.S. or Israel and Northeast Ohio related to the biosciences. Next might be new materials or security devices. The next might be something else. We’re going to keep filling the pipeline.

SN: The more that pipeline is filled, Yen says, the better for our economy. As the region draws in foreign companies, it also draws in highly educated, high salaried people with disposable income to burn on things like houses, cars, clothes, restaurants. And who knows? Some of those high tech workers could spin off their own companies, which would draw in even more people with more money to spend. Get the picture? Importing those businesses to Northeast Ohio may just be the kick in the tushie-as they say in Israel-that this region needs.

So far, the few foreign firms that have opted to co-locate in Northeast Ohio were given extra incentives from local government in the form of loan programs or tax abatements. But public incentives aren’t the be-all-end-all hook to attracting corporations, says Bill Sanford, chairman of Bioenterprise Corporation.

Bill Sanford: Our ability to attract individuals companies to this region will be much more closely associated with establishment of research and clinical collaborations than the available (sic) of tax incentives and things like that.

SN: Sanford was one of the participants in last year’s trip to Israel and is now involved with efforts to make connections with other countries. He says, the real attraction of this region is the area’s universities and medical institutions and those are the things we should capitalize on. Brad Whitehead, Senior Fellow at the Cleveland Foundation and another one of last year’s sojourners adds that attracting more companies will come down to personal relationships.

Brad Whitehead: I gotta say, the main thing we need right now is good old-fashioned hustle. And people understanding what are the connections they have, what might we do and going at it that way. I mean, looking at that first OICC example of that first trade mission to Israel; that wasn’t a huge budget event, but it had an extraordinary ripple effect. Both in Israel as well as here in Northeast Ohio as we started seeing the possibilities.

SN: So, with the business community behind the idea of looking outside the U.S., and people on many levels starting to form connections, Whitehead says it’s time to put the region’s patience to the test. Establishing the contacts and working out the details of how a company can co-locate here takes more than a few quick visits. The next step for the Israeli connections, says the OICC’s Guddell is a reverse mission this January with several Israeli firms coming here to see for themselves what we have to offer. In Cleveland, Shula Neuman, 90.3 WCPN News.

Tags

Making Change, Regional Economy/Business - Analysis and Trends, Regional Economy/Business - News

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