Matt Erskine, deputy assistant secretary for economic development in the U.S. Economic Development Administration and a member of the Obama Administration, spoke at the event.
Photographer: Jonathan Adams
Keynote speaker Charles Wessner, director of technology, innovation and entrepreneurship at U.S. National Academies, emphasized that the United States should strongly consider its investments in education so it doesn’t fall farther behind other nations.
Photographer: Jonathan Adams
Mark Weinberg (right), director of Ohio University's Voinovich School of Leadership and Public Affairs, talks with Erskine (left), and Susan Brehm, regional counsel with the EDA, at the third annual Appalachian Ohio State of the Region Conference.
Photographer: Jonathan Adams
May 23, 2014
By Gretchen Gregory
Business and community leaders across Southeastern Ohio discussed the state of the Appalachian region’s manufacturing sector as it relates to the national economy in Ohio University’s Walter Hall on May 20, and heard a mix of success stories as well as challenges rife with opportunities to overcome.
This year marked the third year for the conference, and afforded local leaders an opportunity to network and hear from government officials about the resources available to help their businesses, as well as learn about national issues affecting the region.
Matt Erskine, deputy assistant secretary for economic development in the U.S. Economic Development Administration and a member of the Obama Administration, highlighted some of the things the administration is doing to help create job growth and manufacturing opportunities across the nation and state. This includes co-investment of $45 million for economic development initiatives in Ohio since 2009, he noted.
“This focus on manufacturing is timely, both for Ohio, the nation, and the Appalachian region,” he told the large crowd of more than 200 people. “Here in Ohio, 1 in 7 people in the Appalachian Region work in the manufacturing industry, and 1 in 10 Ohio jobs are manufacturing-related.”
Erskine gave a brief overview of the decline of manufacturing that has taken place across the county since 2001 when the United States had its first trade deficit in advanced technology, he said. “Research indicates this is due in large part to what we call the ‘missing middle’ in the U.S. ecosystem. In other words, the companies with the ability to scale up products to the marketplace have been losing their edge turning research results into commercially marketed products,” Erskine said.
A recent study by the Massachusetts Institute of Technology concluded the missing middle exists because of a manufacturing trend in the 1990s and 2000s to outsource production to other countries in an effort to control labor costs, he added. Outsourcing hollowed out the nation’s manufacturing capability, weakened the domestic supply chain and created a loss of U.S. jobs.
Since then, higher energy costs to transport goods and services have started a transition phase in which manufacturers are looking at the larger picture when it comes to producing their goods, he said, and some companies are returning to the United States.
“We’re seeing signs of progress, the economy is growing, the deficit in advanced technology decreased in 2012 and 2013, and manufacturers have added more than 620,000 jobs in the last four years,” Erskine said. “It’s no longer just about low wages. It’s about the total cost-benefit for the enterprise, considering all factors.”
Overseas manufacturers appreciate Americans strong, dependable supply chains, as well as the ability to access domestic energy, the rule of law, and an innovative and productive work force, he said.
President Barack Obama is committed to helping companies and universities collaborate in order to move technologies to the marketplace and create an innovative ecosystem where industry and academia can work together to rebuild the industry’s manufacturing base, Erskine said, noting that 20 collaborated research projects are currently underway — including one in Youngstown, Ohio.
“The president has announced that four new manufacturing innovation hubs will be launched this year, starting with advanced composites, and bipartisan legislation has support in both the House and the Senate, and we are working closely with them to send the legislation to the president this year,” he said. “The vision is a network of regional institutes with regional focus and a national impact, each committed to a different manufacturing technology which will help strengthen the supply chain.”
Other regions in the world are making game-changing investments in education and innovation, he noted. “Germany has 60 manufacturing hubs. America can’t afford to be left behind and I encourage Ohio University to be heard on this issue.”
Keynote speaker Charles Wessner, director of technology, innovation and entrepreneurship at U.S. National Academies, delivered a presentation that emphasized the United States should strongly consider its investments in education so it doesn’t fall farther behind other nations.
“The rest of the world understands how important innovation is to growing and attaining a country’s position,” he said. “Collaboration is essential for innovation, and universities are playing a growing role in that process.”
China is investing in building first-class infrastructure and universities, is sending more students to universities and is raising spending levels for education. China, South Korea, Germany and the European Union spend more on education than the United States, he noted.
Wessner suggested the United States needs to invest more in education, and provide additional funding for new companies hoping to market new technologies created by universities through research and development.
Despite his misgivings, Wessner said one-third of all research taking place worldwide is taking place within the United States. “We’re focused on research, and not on brick and mortar projects to maintain buildings, as in Europe,” he said. “We have strengths the rest of the world wants to have but has a hard time getting. We are generally accepting of science, and actually value commercial success.”
Green energy in particular is a huge investment opportunity, and one which is strongly being pushed by the Obama Administration, he noted. “It’s a huge investment opportunity the entire world is trying to take from us. Green energy is where the world is going,” he said, adding that the United States has inexpensive energy sources compared to other countries.
“Government needs to love the University, and the University needs to love the businesses around it,” he emphasized. “We need to support the manufacturing base and reach out hard to Washington. Fight for your piece of the pie and make sure that there’s a pie. We need more research and development. We need to work, we need to invest, we need to cooperate and be serious about the future. Our future, this region’s future, quite literally, is on you. There’s no one else.”
Stories of success
The success stories of three companies in the Appalachian region were presented at the conference, including Belliso Foods in Jackson, The Bilco Company in Zaneville, and Miba Bearings U.S., LLC and and Miba Sinter U.S.A. in McConnelsville.
Mike Evans, partner and vice president of Bellisio Foods, explained how the company invested $40 million in 2005 to expand and renovate their 29-acre campus. The company produces frozen meals from start to finish, including every pizza roll created in the nation, and their products are shipped to grocery stores throughout the United States and around the globe. The facility employs 1,300 people and is active in the Jackson community.
Founded by his grandfather, Bilco Company Executive Vice President Roger Joyce explained the company’s early beginnings 88 years ago. His grandfather was an inventor, he noted, and the company has had 55 patents since 1926. When his grandfather's five sons joined the business in the fields of engineering, financing, marketing and real estate, it helped fuel the company’s growth during the housing boom following World War II. Today, the company creates products to fulfill specialty-need architectural features, including a watertight hatch that was engineered in three months and helped rebuild New York City following Hurricane Sandy. The company has facilities in five countries, and has some of the largest machines in the United States, Joyce said.
Miba Bearings U.S., LLC
Alicia Snider, human capital operations manager with Miba Bearings U.S., LLC of McConnelsville said the Austrian-based company produces bearings with the help of 307 employees, 10 percent of whom are graduates of Ohio University. Located on State Route 60 in Morgan County, some of her challenges include the recruitment of engineering candidates who are willing to live in the area and the two-lane highway, which can be challenging in the winter.
Miba Sinter U.S.A.
Tonya Kohler, human capital operations manager at Miba Sinter U.S.A., located next to the bearings facility, has 26 salaried employees and 87 hourly employees, and creates powdered metal products. Local economic development initiatives in Morgan County helped the company find $11.5 million in financing to expand its facility and will double in size as part of an overall $51 million investment. The highly-automated facility is scheduled to open in July, Kohler noted.
About the region
John Molinaro, president and CEO of the Appalachian Partnership for Economic Growth, talked about the benefits of doing business in the Appalachian region, and highlighted some of the unique opportunities.
The increase in oil in recent years has made it more expensive to ship goods to American ports, he noted, which has led to a change in mindset about the global patterns of trade. Some companies are returning to the United States as a result, he said.
Appalachian workers are well-positioned in terms of availability and have the right skills for the right price, he noted. The region’s transportation infrastructure also is ideal and Canadian markets can be reached in just one truck shift, not to mention the intersection of Interstates 70 and 77 is a short drive away. Low-cost rail lines, and 400 miles of the Ohio River also creates a direct route to the Gulf of Mexico.
Earl Gohl, federal co-chair of the Appalachian Region Commission, said 50 years ago there were 291 counties throughout the entire Appalachian region with a majority of their population 150 percent below the poverty level. Today the number of counties has decreased to 110 counties, but he emphasized there’s still much needed work to be done.
Other people speaking at the morning portion of the event, which included a live Twitter feed, were Ohio University Executive Vice President and Provost Pam Benoit; Susan Brehm, regional counsel of the U.S. Economic Development Administration; Mark Weinberg, director of OHIO’s Voinovich School of Leadership; Christopher Slagle, partner in charge of the law firm Bricker and Eckler LLP in Marietta; Jason Jolley, assistant professor of economic development with EDA University Center and OHIO’s Voinovich School of Leadership; Zack Space, principal with Vorys Advisors LLC; John Glazer, director of TechGROWTH Ohio and OHIO’s Voinovich School of Leadership and Public Affairs; Eric Burkland, president of the Ohio Manufacturers’ Association; and Glenn Richardson, managing director for Aerospace and Advanced Manufacturing with JobsOhio.
Several break-out sessions designed for manufacturers and those interested in economic development were held throughout the remainder of the day. The final session included a tour of Ohio University’s Innovation Center and a 3-D Printer Demonstration led by Jesus Pagan, assistant professor in Ohio University's Department of Engineering Technology and Management in the Russ College of Engineering.
Those who participated in the afternoon sessions included Jolley; Laurene Huffman, MEP outreach specialist for the Appalachian Partnership for Economic Growth; Tammy Eallonardo, manager of The Reserves Network; Kim Stewart, H.R. business partner of Kraton Polymers; Mike Archer, president and CEO of Pioneer Pipe/Pioneer Group; Bret Allphin, development director of Buckeye Hills-Hocking Valley Regional Development District; Cindi Kerschbaumer, project manager at the Ohio Mid-Eastern Governments Association; John Hemmings, executive director of the Ohio Valley Regional Development Commission; Kathy Zook, program manager of special projects on the Eastgate Regional Council of Governments; David Beck, president and CEO of the Center for Innovative Food Technology; Michael Kaminski, senior business growth and innovation advisor of MAGNET; Larrell Walters, director of the Institute for the Development and commercialization of Advanced Sensor Technology at the University of Dayton Research Institute; Kara Valz, executive vice president at the Marketing and Center for Small Manufacturing at TechSolve; Rich Amsden, manager of MEP programs at Polymer Ohio, Inc.; Mike Workman, founder of Contraxx Furniture; Angie Peters, manager of The Business Resource Network; and Marty Loney, chair of the Ohio State Training Association/Plumbers and Pipefitters Local 396.