It’s déjà vu all over again. Only the project numbers are different where Ohio and Texas — the 2020 Governor’s Cup winning states for per capita and total projects respectively — are concerned. They’re down a bit from the previous year, but impressive nonetheless for a year all states endured a pandemic-induced economic crunch. Both states were the winner in their category last year as well. Ohio finishes the per capita facilities race with 419, down from 448 in 2019. Texas, the total projects winner for the ninth consecutive year, has 781 projects for 2020; it had 859 qualifying projects the previous year.
Per capita runners-up include Georgia with 360 projects, Kentucky (152), Nebraska (59), and Indiana (189). Total projects runners-up for 2020 are Ohio, Georgia, Illinois (329), and North Carolina (194). Qualifying projects are those meeting one or more of Site Selection’s criteria for inclusion in the Conway Projects Database: a minimum investment of $1 million, creation of 20 or more new jobs, or 20,000 sq. ft. or more of new space.
Both Ohio and Texas have diverse economies, as do the other high-ranking states, so that was a factor in their capital investment success. All states benefited from a strong national economy heading into 2020 — until COVID-19 slammed the brakes on their momentum. Economic development agendas turned to business recovery and assistance, and suddenly governors were seen leading daily pandemic updates and determining to what extent they would remain open for business. Governors Mike DeWine of Ohio and Greg Abbott of Texas shared their takes on managing those challenges while continuing in their roles as chief economic developer for their state in interviews with Site Selection in recent weeks.
It’s true that the COVID-19 pandemic has tested us all on many levels,” says Ohio Governor Mike DeWine. “Ohioans are resilient and create solutions when confronted with challenges. For example, last spring, I challenged my teams to be creative and flexible in how they support businesses as we faced the ongoing pandemic. In early 2020, we saw the critical need and unprecedented opportunity to produce Personal Protective Equipment (PPE) amidst the global health crisis. JobsOhio, Ohio’s private nonprofit economic development corporation, worked with state agencies and businesses to identify and acquire these life-saving tools when it mattered most. We saw many Ohio producers expand production of PPE, while others created PPE for the first time. As a result, the state has a skilled workforce and the necessary logistical advantages to re-shore production and meet demands for American-made PPE now and in the future.”
Ohio did not slow down investments in existing or new economic development projects during the COVID-19 pandemic, says the governor. “This was a crucial and deliberate decision our team made because we knew it was necessary to keep our economy moving forward, as well as strengthen it for the future. We invested in our workforce and our economy through several new initiatives and partnerships, including the Ohio To Work Program and three Innovation Districts.” Ohio To Work is a pilot program that was established to help Ohioans displaced by the COVID-19 pandemic return to work or discover new job opportunities.
New Innovation Districts were announced in Cincinnati, Cleveland, and Columbus over the last year that the governor says will position Ohio to compete nationally within the technology and healthcare industries.
“Each Innovation District has a unique healthcare focus, including pediatric cancer, pathogen research, and cell and gene therapy,” he explains. “The partners for each Innovation District have strong assets in these respective fields, and these Districts will even further capitalize on their strengths. By making significant investments at each location, we are positioning Ohio to lead as we move forward. We want people to think of Ohio as the place to go to start a flourishing business or receive cutting-edge medical care. As these Innovation Districts grow, they are expected to create more than 60,000 new jobs and deliver billions in economic impact.”
Workforce Programs Will Expand
What’s the mood of Ohio businesses heading into a new year with the pandemic still a factor?
“Ohioans are optimistic; businesses are open, and the economy is on track for a successful year,” says Gov. DeWine. “We saw new economic development projects established across the state, keeping us at the top for projects per capita. Though 2020 brought challenges, businesses in Ohio continued to invest and expand. We are investing in our people, our communities and our businesses.”
The governor says the state will continue to expand workforce development programs in 2021: “Ohio To Work and TechCred, which helps Ohioans upskill and employers build a stronger workforce with the skills needed in a technology-infused economy, are two that stand out because they are programs that will have an immediate impact on our workforce. Additionally, as part of the biennial Executive Budget, we created the Investing in Ohio Initiative to spur Ohio’s continued recovery by investing more than $1 billion in communities, people and businesses to accelerate economic growth and ensure economic vitality. The Initiative supports our people and our economy as we continue to prepare for the future and showcases Ohio as the premier place to live and work.”
All the metrics are moving in the right direction,” Governor Greg Abbott related to Site Selection in an early February interview, when asked about Texas’ recovery from the pandemic. By metrics he means hospitalizations and positive cases. It was in early March 2020, when we presented the governor with last year’s Governor’s Cup for total qualified projects on the lawn of the capitol in Austin, that the severity of the pandemic was just becoming understood.
What transpired subsequently?
“We undertook a number of measures that were focused on trying to maximize businesses being allowed to remain open and operate safely and to minimize any type of shutdown,” says the governor, “and find the right blend of that and maximum public safety. We focused on keeping businesses open as much as possible and providing them the guidance and the tools, meaning we were able to surge testing supplies through chambers of commerce to help businesses be able to test employees, for example.” The Lone Star State’s vast geography made the challenge that much more daunting. “That did make it challenging. We have some of the largest cities in America and some of the smallest rural communities in America that are hard to get to. The spread of COVID-19 was not the same in different areas, and the needs were very different. A one-size-fits-all approach would not work.”
Are businesses optimistic about the year ahead?
“Businesses use situations like this as an opportunity to chart their next paths forward,” says Gov. Abbott. “That’s something we saw from the phone calls we got during the course of the pandemic this past year — businesses wanting to either come to Texas or grow in Texas and using this time as an opportunity to do those expansions. What they see in Texas is extremely promising, and I believe our economy will be booming the latter part of this year and next year.”
Civil liability protection and broadband expansion, among others, are deemed emergency items for inclusion in the next state budget by the governor, the latter particularly for its benefits with respect to the pandemic and access to telemedicine resources outside the major cities.
“Emergency items allow the legislature to get to work on them quicker,” says Gov. Abbott. “The one I was most emphatic about timing-wise is civil liability protection. This is an issue that businesses were hoping and expecting Congress to be able to pass, and it has not. I can’t wait until the end of our session to get it into law, as quickly as possible so we can provide protection to our businesses, individuals and health care providers to protect them from frivolous lawsuits.”
During a January 26 listening session with construction workers, small business leaders and advocates in San Antonio, Governor Abbott and participants discussed strategies on how to grow the Texas economy and help business owners and workers impacted by COVID-19. The Governor noted that he is working with the Legislature to provide civil liability protections for individuals and businesses, and review regulations suspended during the pandemic to cut unnecessary red tape. The listening session also highlighted the importance of broadband access for medicine, education, and business.
The Governor said this session, Texas lawmakers must remove barriers that slow down and prevent broadband deployment to unserved Texans. Additionally, listening session participants discussed finding ways to reduce permit process delays for Texas businesses. They also discussed the COVID-19 rapid testing program for front line workers of small businesses, the Texas Enterprise Fund, and how the state of Texas can continue to develop a high quality workforce.
Don’t Mess with Texas
With a new Administration in place in Washington, D.C., the specter of federal overreach into Texas’ signature energy industry emerges as a new challenge relative to recent years.
“It is a threat,” Gov. Abbott tells Site Selection. “Texas is number one in the nation in the renewable energy of wind, and this year or next year, Texas will be number one in solar. Energy in Texas is all of the above — wind, solar and the oil and gas Texas produces prolifically. When it comes to natural gas, exporting of LNG from Texas has really accelerated over the past year. That continues to increase as the world more towards natural gas. Even with a movement to wind and solar and the addition of Tesla as a new Texas company, which is focused on electric vehicles, there will be mass advancements in battery manufacturing. But oil and gas will be needed for a long time. Texas is doing a replication of that we did during the Obama Administration when I was the attorney general. If we see federal regulations that we believe violate the law, then legal action will be taken. I filed more than 10 legal actions against the Obama Administration for heavy-handed regulations that were issued by the EPA. We’re prepared to do that again.”