Team NEO, NorTech merger is just start of what group hopes will be economic growth
By Jay Miller, Crain’s Cleveland Business
And the merger announced last week — of Team Northeast Ohio, the business attraction nonprofit, with NorTech, which was created to accelerate the pace of innovation at the region’s young technology companies — is just the beginning of an evolution in the way the region assists growing businesses, attracts new businesses and builds a better educated, diverse and more talented workforce.
The driving force behind these changes is a heretofore under-the-radar ad hoc group called the Regional Competitiveness Council. It’s comprised of leaders in business, education and philanthropy and led by co-chairs Ward “Tim” Timken, the chairman and CEO of TimkenSteel Corp., and David Abbott, executive director of the Gund Foundation. It has evolved alongside another organization many of the council members are affiliated with — the Fund for Our Economic Future, which has invested more than $100 million in a growing group of economic development organizations over the last decade.
The group members have developed a plan — the Regional Economic Competitiveness Strategy, or RECS — to guide them through this restructuring.
Although conversations with council members about the achievements of Team NEO, NorTech and other similar organizations are couched in gentle, non-judgmental terms, such as “though the region has made great strides,” members of the council and the Future Fund believe they must shake things up so the Northeast Ohio economy will keep pace with the nation in key measures, especially in the pace of creation of new jobs.
“All of these people were doing a good job,” Timken said in an hourlong briefing with Crain’s staff and a group of council members. “But we weren’t getting the job done.”
Edward Hill, dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University, has been watching this process as an adviser.
“The region put together an innovative set of specialized economic development intermediaries back in 2000 with no coordinating mechanism,” Hill said. “They started bumping into each other, and the head count grew. We needed an economic development system that was accountable but also sustainable on the amount of money we have to invest in it.”
Studies the council commissioned showed that, since 1990, the region’s economy has been steadily losing ground. Had the region’s economy kept pace with the rest of the country, they found, the region would have 400,000 more people employed, the annual per capital income of people in Northeast Ohio would be $1,840 higher and the region’s annual economic output would be $67 billion higher.
The council wants to see a greater emphasis on keeping existing businesses in the region and helping established, successful businesses grow.
Team NEO took on a key role in that system in 2011 when it affiliated with JobsOhio, a nonprofit that is using the profits from the state’s liquor business to attract new businesses and help existing businesses expand.
That link to JobsOhio, which is the conduit to state financial incentives to businesses, also brought with it a set of goals that Team NEO must now meet to stay in good standing, another reason for the reorganization.
“We’ve gotten good at helping startups and young high-tech businesses,” said Brad Whitehead, president of the Future Fund in a telephone interview from Italy.
“We need to be more effective in the business retention and expansion effort.”