Ohio grows into a globally recognized R&D hub

By Gordon Feller

With top-notch universities, federal research institutes, leading companies from nine major industry sectors, and 14 top-ranked hospital systems, Ohio is a “quiet giant” of innovation in industrial sectors and life science. Ohio has the fifth-highest number of Fortune 500 and Fortune 1000 companies — and is home to more than 120 NYSE/Nasdaq companies with a combined market capitalization exceeding $1 trillion.

Ohio government executives attribute the state’s growth to government actions that help businesses succeed and the research and development (R&D) investments that lay the foundation for innovation in the Midwest.

In 2019, government leaders challenged JobsOhio, the state’s private economic development corporation, to uncover new opportunities to enhance innovation within the state. JobsOhio saw a need for comprehensive initiatives that advance growth-enabling innovation and bring in companies and highly skilled talent. In collaboration with the state government and healthcare and university partners, JobsOhio launched a three-pronged innovation strategy for Ohio.

ONE: Innovation districts
Through partnerships with leading research institutions, universities, private corporations, and local, regional, and state economic development leaders, Ohio is developing nationally competitive innovation districts in the dense urban settings of Cleveland, Columbus, and Cincinnati. Each location has a priority focus based on the city’s existing institutions and expertise.

The world’s top people and companies come to these sustainable ecosystems of ideas, infrastructure, and talent to roll up their sleeves, create, and grow. With more than $3 billion in innovation district investments, they anticipate more than 47,500 new STEM graduates, 60,000 new jobs, and up to $9 billion in annual economic impact for the state over the next 10 years.

The Cleveland Innovation District is home to a global center for pathogen research and human health aligned with the $100 billion biotech industry. This innovation district is anchored by the Cleveland Clinic — the No. 2 ranked hospital worldwide — along with Case Western Reserve University, Cleveland State University, MetroHealth Medical Center, and University Hospitals.

To the south, Cincinnati’s healthcare thought leaders are furthering Ohio’s global presence in pediatric oncology research and treatment. The city’s innovation district is anchored by the University of Cincinnati and Cincinnati Children’s Hospital Medical Center — the No. 3 pediatrics hospital in the country. Investments there are expected to spin out discoveries and companies to serve the $150 billion global pediatric healthcare market.

The Columbus Innovation District’s mission is to promote interdisciplinary research and high-tech therapies to address adult oncology. Anchored by The Ohio State University and Nationwide Children’s Hospital — the No. 8 pediatrics hospital nationally — Columbus will attract leaders and spark innovations in the $1.2 billion photon therapy market and the $3.4 billion global gene therapy market.

TWO: R&D grants
JobsOhio’s brain trust of industry leaders developed the Research & Development Center Grant Program to help business partners establish corporate R&D hubs equipped with tools and resources to build, disrupt, and drive growth globally. The resulting capital investments, trailblazing technologies, and innovative products align with the state’s strategy to attract and augment targeted industries while changing the world for the better by directly and positively impacting people’s quality of life.

There has been substantial interest in the R&D Center Grant Program, with inquiries from some of the most prominent domestic and international companies. So far, JobsOhio has committed approximately 20 R&D Center Grants, totaling $57.5 million, with companies investing $460 million and creating nearly 1,000 new jobs.

THREE: Growth capital
The third pillar of JobsOhio’s innovation strategy is a Growth Capital Fund that makes individual investments into Ohio-based, early-stage, venture-backed companies. By taking minority stakes under the same terms as venture capital firms, JobsOhio helps early- and growth-stage companies become the next titans of their industries while remaining in Ohio — a state with the fourth lowest cost of doing business. And by all accounts, it’s working.

The Growth Capital Fund program has been a success. In 2020, Ohio was No. 17 out of 17 peer states for venture capital investments. The following year, it was No. 10 out of 17, with a record $2.4 billion of venture capital attracted. And in Q1 of 2022, when investments across the country slowed, Ohio attracted more than $900 million.

Thus far, JobsOhio has invested $87 million in 59 companies, leveraging other investment dollars at a rate of $6 of private capital for every $1 of JobsOhio capital invested. And after exiting just three companies so far, JobsOhio’s return on investment (ROI) has increased 2.8 times with an annualized ROI of 169%.

 

Ohio’s diverse industry outpaces its peers

Ohio’s industrial footprint is growing through the R&D efforts bolstered by JobsOhio’s innovation strategy. The state ranks in the top 20% for industrial diversity, improving yearly since 2013 at the fastest pace among Midwest peers and quicker than many of the largest coastal states.

Semiconductor manufacturing
Semiconductors are a critical part of modern life, and our increasing reliance on them is astounding. Yet semiconductor production has decreased, which strains the global supply chain. Impressed by the state’s welcoming business climate and stellar workforce, Intel chose to plant its flag in Ohio, building its next-generation chip fabs and supporting ecosystem. Intel’s initial $20 billion investment and suggestion that it could grow to $100 billion will establish what Intel calls the “Silicon Heartland.” If successful, it will help prevent the recurrence of chip-related disruptions that have negatively impacted the security of millions of jobs.

Intel’s manufacturing campus on nearly 1,000 acres in central Ohio will become the company’s most advanced semiconductor manufacturing operation. The construction will create about 7,000 jobs and 3,000 permanent, skilled, high-wage positions.

The project will have a massive direct impact on the state’s supply chain infrastructure and will be a catalyst for R&D across the region.

“We are excited to call Ohio home to Intel’s first new manufacturing site in 40 years,” said Pat Gelsinger, Intel’s CEO. “We expect Intel Ohio will become one of the largest semiconductor manufacturing sites in the world over the next decade.”

Advanced materials
Novagard Solutions is one example of a corporation using a JobsOhio R&D Center Grant to attract, retain, and train talent needed to continue its track record of cutting-edge innovations. As a direct result of the grant, this woman-owned company expanded its silicone coatings and adhesives manufacturing operations with 50 new jobs in northeast Ohio and grew its revenue by $42 million.

Electric vehicles
In June 2022, Ford Motor Co. announced a $1.5 billion investment to convert its assembly plant in Avon Lake, Ohio, and expand production of an all-new line of commercial electric vehicles (EVs). In addition to the 1,800 new union jobs this will create, Ford also announced an additional 90 jobs and a $100 million investment between its Lima Engine Plant and Sharonville Transmission plants.

JobsOhio and its statewide partners worked over the past several years to build on the state’s momentum as one of the world’s major automotive sector hubs and as home to crucial, enabling technologies. For example, SEMCORP, the world’s largest lithium-ion battery separator film producer, is bringing its first U.S. facility to Ohio, propelling Ohio to the forefront of the EV industry. And Ultium Cells, a joint venture between LG Energy Solutions and General Motors (GM) to mass produce lithium-ion batteries for GM, is expected to begin production later this year. The Ultium Cells facility is one of the largest cell manufacturing plants in the world.

JobsOhio R&D Center Grants have supported intellectual property that accelerates the development of autonomous and EVs since before 2018. They awarded $2 million to Pillar Technology to establish a collaborative space to accelerate the advancement of revolutionary intellectual property related to the development, testing, and validation of connected, autonomous EVs.

Sustainability
With the seventh largest U.S. solar labor force and rapidly growing penetration of solar energy, Ohio is attracting companies that aim to generate or use clean energy. Ohio currently has more than 8,400 mW of utility-scale solar projects either operating, approved for construction, or pending before the Ohio Power Siting Board for approval. The growing solar presence in the state can serve as a key investment attraction asset as major industries seek to decarbonize their supply chain through local renewable energy purchases. Promoting Ohio’s renewable energy presence in parallel with JobsOhio’s successful battery supply chain development efforts will lead to network effects for future investment attraction.

Furthermore, Ohio government executives recognize a growing need to focus on mobility, sustainability, digitalization, and emerging urban technologies. The SMART Columbus program addresses growing inequity, climate change, and technology disruption, aiming to achieve carbon neutrality by 2050 and to fully immerse all residents in the digital experience. Smart Columbus Program investments are expected to generate an increase of 4,220 jobs, 719 resulting directly from program-related staffing expenditures and 3,501 from the program’s indirect effect on targeted industry sectors. Some accomplishments of the program include a transition to mobile payment for parking across Columbus, more than 900 additional electric vehicle charging stations, and a 500% increase in EV adoption, which placed Columbus at No. 3 among non-zero-emission-vehicle states for EV adoption.

Broadband
State leaders are working to increase broadband coverage throughout the state, giving Ohioans faster and more reliable access to the internet. These broadband initiatives are expected to create 20,000 jobs in Ohio and a $1 billion increase in Ohio’s GDP.

Big data
Ohio’s data centers are just another way Ohio is diversifying its economy. The 26 enterprise data centers and 97 co-location data center sites power some of the most well-known companies in the world: Facebook, Honda, JP Morgan Chase, CitiGroup, and Amazon Web Services.

In April 2022, Facebook’s parent company, Meta, announced it would expand its data center in New Albany, Ohio, by 1 million sq-ft. The expansion will boost Meta’s investment in New Albany to $1.5 billion and house the data for billions of users using Facebook, Instagram, Messenger, and WhatsApp.

“So, whether you’re sharing photos, video, or reels on Facebook or Instagram, the New Albany data center has a huge impact on bringing the world closer together,’’ said Katie Comer, Meta’s manager of the community development team in North America.

Healthcare
A rise in chronic disease, the nation’s aging population, and the global pandemic have accelerated the need for medications and triggered an urgency for innovative solutions.

Companies like Amgen, recently named one of the World’s 25 Best Workplaces by Fortune, are leading the way and tackling some of healthcare’s most complex digital automation technologies. With brands like Enbrel and Otezla and a worldwide presence, Amgen responded to a growing demand for human therapeutics by establishing a 270,000-square foot facility near Columbus and building on the city’s collaborative and innovative global healthcare supply chain network.

Military
JobsOhio added the military and federal installations as the No. 10 target sector in 2018. It has positioned Wright-Patterson Air Force Base as a prime beneficiary of federal base closings, relocations, and expansions.

In September 2021, the U.S. Air Force chose the 179th Airlift Wing at Mansfield-Lahm Airport to host the Air National Guard’s Information Cyber Warfare Wing. This new mission will bring more than $50 million in capital investments to Richland County and position Ohio on the front lines of the military’s fight against cyber threats.

Aware, located in Columbus and one of the leading enterprise-grade collaboration governance platforms specializing in human behavioral data, recently finished a $60 million Series C funding round less than one year after JobsOhio Growth Capital Fund, Ohio Innovation Fund, and other capital venture partners contributed to itsSeries B equity investment. As one of the many tech startups accelerated by the JobsOhio Growth Capital Fund, Aware expanded its capabilities in addressing data risks and insider threat concerns related to critical online messaging and collaboration tools.

In addition, Ohio continues to play a crucial role in developing Advanced Air Mobility technologies with robust supply chains, test markets, partners, and legislation that both public and private sector entities can rely on. Ohio lawmakers have opened the skies for Unmanned Aircraft Systems Traffic Management (UTM) and Urban Air Mobility (UAM). In August 2022, JobsOhio and 15 other AccelerateOhio partners broke ground on the National Advanced Air Mobility Center of Excellence in Springfield, Ohio, which will serve as the physical space for the collaboration, pushing the speed and depth of the partnership to research, design, and test deployment.

About the R&D Center Grant Program
The R&D Center Grant Program helps support targeted industries, including Advanced Manufacturing, Aerospace & Aviation, Automotive, Healthcare, Financial Services, Food Processing, Information Technology, Logistics & Distribution, and Shale Energy & Petrochemicals.

Project factors that determine grant eligibility include:

• Alignment with JobsOhio sector strategies
• Job creation
• New payroll
• Fixed-asset investment commitments
• Project location
• Applicant’s track record in successful R&D commercialization

Eligible uses of funds include:

• Industry-driven, value-added applied research
• Software development
• Developing technologies that a corporation can commercialize

To learn more about the grant program and other JobsOhio initiatives, visit the website: www.jobsohio.com.

 

 

 

 

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