While Toledo area business leaders brace for more possible bad news from the automotive industry, Jakeway believes the area will remain competitive because of its investment into economic diversification.

---

---

     That appears to be the lesson others throughout Ohio are learning. In Cleveland, for example, the rapid development of a high-tech telecommunications cluster is taking place.
     Two Internet2 backbone networks (Abilene and vBNS) run through Greater Cleveland, and three area universities -- Akron, Case Western Reserve and Kent State -- are participating in development research projects within the Internet2 project.
     More than 60 Internet service providers (ISPs) are located in the Greater Cleveland area, with at least 13 such firms offering customers connectivity at T-3 (45 Mbps) or greater.
      Recent telecom hotel announcements in Cleveland include the 500,000-sq.-ft. Tower City Infocom Center, the 500,000-sq.-ft. Cleveland Technology Center and the 380,000-sq.-ft. Public Square Tech Center.
     "A study by Ecom-Ohio showed that Cleveland is the best wired market in the state," says Jim Kroeger, senior director of business Development for the Greater Cleveland Growth Association. "With nine telecom hotels and three net-centric incubators, we have a lot of telecom capacity in Greater Cleveland. Also, our research shows that telecom jobs accounted for half of all new jobs created in Cleveland in 2000."
     Keeping Ohio headed in that direction, of course, is the challenge for the state's economic development leaders. Without further diversification into the high-tech sector, the automotive-dependent state could suffer.

Cleveland is the best wired market in the state.

     The state government's own numbers show that from July through November of 2000, revenue from non-auto sales tax was $112 million below projections, or 5 percent less than was expected.
     That means the state must do more to invest in its "rising stars" -- those industries that are growing but have not yet reached maturity.
     "In Cleveland, we look at this as portfolio management," says Kroeger. "We have a very active Northeast Ohio Software Association, which has more than 370 members. We must identify those clusters of industry that are developing and then support them."
     That could mean more liberal use of the Ohio Job Creation Tax Credit Authority, which last year approved credits for more than 200 new and expanding companies in Ohio. Since the program's inception in February 1993, 784 companies have taken advantage of the tax credit to invest more than $11.1 billion in the state's economy, create 91,464 jobs and retain 126,847 jobs.
     The Job Creation Tax Credit is a refundable tax credit against the business corporate franchise or income tax. The credit equals a percentage of the new state income tax withheld on new full-time employees.
     Among the companies that have benefited from the program is TekFor Inc., located in Wooster in Wayne County, which invested $27.6 million into a 102,000-sq.-ft. automotive parts manufacturing facility that created 141 jobs.
     As state sales tax revenues slow and the demand increases for certain social services, there may be some pressure upon Ohio politicians to limit or restrict the awarding of financial incentives for corporate real estate projects. But the state's economic development leaders also know that, in tough times, the best the last thing the state wants to do is discourage the creation of new jobs.
     "We know that we will have some short-term shutdowns in the auto industry that will affect us in the early part of 2001," says the ODOD's Kelley. "But we also know that we have some major companies, like Chrysler and Delphi, that have pledged to make large investments in Ohio, so we believe that the auto industry will continue to be a very important segment for the Ohio economy."