leveland’s newest and, yes, “coolest” monument is ensconced in a sleek glass case built to the specifications of the Mona Lisa’s. The airtight, museum-like containment houses an inner chamber kept colder than the depths of space. That’s where the magic happens.Unveiled in March, IBM’s Quantum System One at the Cleveland Clinic is the world’s first quantum computer dedicated solely to biomedical and health research. While traditional computing is built around binary “bits” — zeroes and ones — data stored in quantum bits,
Quantum System One is but the most spellbinding manifestation of a burgeoning alliance between Cleveland Clinic and IBM. Announced in 2021, their 10-year Discovery Accelerator partnership is aimed at leveraging the world-leading assets that each brings to the table in technology and healthcare. The partnership, IBM’s Ruoyi Zhou tells Site Selection, is a natural fit.“At IBM, we are looking at the convergence of bits, qubits and neurons to solve some of the most challenging problems in the world, healthcare being one of them,” says Zhou, IBM’s director of the IBM Research – Cleveland Clinic Partnership. “In looking around for partners, it was clear that Cleveland Clinic is one of the world’s most prestigious hospitals when it comes to life sciences research. Both of our organizations have been around for more than 100 years, and both are committed to investing in the future.”The Discovery Accelerator serves as the tech foundation for Cleveland Clinic’s Global Center for Pathogen & Human Health Research, also established in 2021. The $500 million project includes one of the most aggressive public investments on record in Ohio, with the state having joined forces with JobsOhio, the privately funded economic development corporation, to commit some $200 million to it.
The Center, according to Cleveland Clinic, will “build a pipeline of new tests, vaccines and treatments” that will lead to the creation of new health-related startups in Cleveland and beyond. It is projected to create 1,000 new jobs at Cleveland Clinic by the end of the decade and thousands more elsewhere in Ohio.
On display at Cleveland Clinic’s Learner Research Institute, IBM’s other-worldly computer, says Zhou, serves to further strengthen Cleveland’s position as a globally recognized hub of healthcare innovation.
“It’s a big statement,” she says. “It’s not on the West Coast or the East Coast, but in the heartland of America, where a lot of innovation is occurring. It’s not only a physical system, but it’s also a symbol of our commitment to creating this ecosystem here.”
Man on a Mission
Elected first in 2018 and again in 2022, Ohio’s Lieutenant Governor Jon Husted was tasked early on by Governor Mike DeWine with upping the state’s technology game. The ambitious goal, in Husted’s telling, was to make Ohio “the most innovative, entrepreneurial state in the Midwest.” It turned out to be a bottom-up operation.
“When we started this,” he recalls, “we didn’t really have anything in technology that made us stand out.”
Since then, Ohio has accumulated some serious bragging rights.
“Within the last two years,” says Husted, “we’ve landed Intel’s new semiconductor production facility that is going to build the smallest, fastest chips in the country, and now we have the quantum computer at the Cleveland Clinic.”
Announced in January 2022, Intel’s $20 billion semiconductor investment east of Columbus represents the biggest economic development deal in Ohio history. It’s to create some 3,000 jobs with significant direct and induced employment from support operations, plus some 7,000 construction jobs. Lt. Gov. Husted spoke with Site Selection in late March about the Intel project and other transformations that are occurring within Ohio’s — and America’s — evolving manufacturing sector.
Site Selection: The Intel project was one of the biggest deals announced in 2022. What have you learned in the ensuing 15 months about the complexities of chipmaking fabs and the challenges of getting a project of such magnitude off the ground?
Lt. Gov. Husted: Oh, gosh. I mean, America is where the computer chip was invented. But we’ve lost our edge and our competitive advantage because it costs too much to make them in the States. So, you have to figure out how to help these companies keep their costs down and supply them. Look, the complexity of doing this in a practical sense is where can you find 1,000 acres near a population that can supply a highly trained workforce, that can supply an enormous amount of water and have low-cost access to electricity and not be near a highway or railroad tracks and not have any major storms or seismic events? These are the parameters for these sites, right? And they’re not just sitting around out there. I will tell you that when Intel originally called and said that they wanted to look at Ohio, I was skeptical. Why would they pick Ohio? This is not our area of competency. But then when you further reflect on those parameters, we’re a perfect place to do it. It’s not one thing but all those things that you need to be good at.
Intel is also going to need dozens of highly specialized suppliers. Does the state have a process for helping those suppliers find locations and get set up?
Husted: Absolutely. We worked with Intel to invite all of those suppliers in for a meeting. We had about 200 of them in to visit so they could see what Central Ohio is. We have 160 companies that supply Intel already. And then it’s suppliers to the suppliers making additional investments, anywhere from chemicals to quartz to other things that that are involved in that process. We are definitely preparing to partner with all of those different contractors and supply chain partners. That is one of the very important parts of maximizing what this new facility will be.
United States Commerce Secretary Gina Raimondo said recently that there will be — in her words — “a few places in America where semiconductor manufacturing gets built out at megascale.” Do you expect Ohio to be one of those places, and what does megascale look like?
Husted: I do expect that we will be. Right now, Arizona does most of this. You also have operations in Oregon, Texas and New York. But I think that for America to truly build the capacity that we need for economic and national security you have to spread these facilities out. And I think that was the strategy with choosing Ohio as a place for Intel. We fully expect that we will grow to be one of those mega sites. But a lot of it will depend on how the federal government implements the CHIPS Act. There are some concerning things that we are hearing out of Washington as it relates to mandates. That will drive up the cost of building chips and slow down the process of building these fabs. I hope that they will reconsider those issues because, as the head of TSMC [Taiwan Semiconductor Manufacturing Company] said, it’s 50% more expensive for them to build chips in America than it is in Taiwan. And look, we’re not going to be able to reshore a supply chain being 50% more expensive.
Could you be specific as to the most troubling mandates you see coming from Washington? When you say you hope the administration will reconsider, do you see prospects for that?
Husted: Well, look, I’m not privy to the discussions that are going on between the chipmakers and the Commerce Department, but I have great respect for Secretary Raimondo and her ability to understand these issues. And I also understand that when you’re making policy there are a lot of cooks in the kitchen who would like to see social policy made within economic policy. But that has never worked well. We will create a rising tide that lifts all boats if we can reshore this industry to America. But it is essential that we do it for our national security and economic security interests. We can’t fail in this, and so I hope that that the federal government will work through these issues with the industry to make sure they get them right.
“I’ve been through the tough times. I remember when it was super hard for a place like Ohio to win.”
—Ohio Lt. Gov. Jon Husted
Texas is considering offering its own CHIPS Act. Is this turning into an arms race?
Husted: Well, I would say we’ve done a pretty good job at offering our own version of CHIPS with $2 billion of investment in preparing the site for Intel and long-term incentives that will support them. We fully intend to compete to be a major player in the sector of the economy.
How is Ohio positioned for the EV transition?
Husted: I think we are well positioned. We already have two EV battery production facilities, one operational and one under construction. GM is retooling an engine plant for electric motors in Toledo. Ford is retooling and building a new heavy-duty EV truck facility in Lorain County near Cleveland. And we continue to have discussions with supply chain operators in that sector and other potential customers in that space. But as I tell my team, for every battery and electric motor that’s produced, that’s one less engine and transmission that’s going to be produced. And we produce a lot of engines and transmissions. So, we need to win a lot of these projects to stay where we are with the auto industry presence in our state.
Last week, Honda said it would shift production of the Accord from Marysville, Ohio, to Indiana. They’ve made the model in Marysville for 40 years. Are you disappointed to lose the Accord?
Husted: The explanation that Honda provided is that they’re moving to Indiana to free up space to build their new EV in the location where the Accord has previously been built. The question is how quickly the transition to EV will occur, and what the federal government is saying via mandate is it’s going to happen pretty quickly. Will consumers respond at the same pace that the government wants them to? None of us knows the answer to that question. So, it could be a bad thing or a good thing, depending on which one sells the most.
A lot of elected officials in positions as high as yours come from legal or business backgrounds. You come from economic development. How was that informed and served you as lieutenant governor?
Husted: It has been an invaluable experience. I think sometimes our life’s experiences prepare you for moments, and I feel that way about my role as lieutenant governor in the areas of economic and workforce development. My family had to leave Ohio in the 1980s. The factory my dad worked at closed. That affected my life. Then I come to work in economic development in Dayton in the 1990s, when at the start of the decade GM and GM Delphi combined had 30,000 jobs in Montgomery County. By the end of the decade, they had 2,500. I’ve been through the tough times. I remember when it was super hard for a place like Ohio to win.
I remember having a conversation with some site selectors in the 1990s. “How do we get Ohio on the radar?” And they talked about how terrible our tax code was and what a bad state we were to do business. And I took those experiences with me to the General Assembly where I became Speaker of the House. We did tax reform and eliminated three business taxes and cut the income tax by 21%. Now Ohio is a very good state to do business from a tax and regulatory point of view and we’re winning again. And it’s important that we run up the score while reshoring is happening. It’s important that we win as many deals as possible now because those will be a foundation for the next generation of jobs and opportunity for the people of this state.
Historic Win, Massive Challenge
For Ohio, the effort to marshal a workforce to build and operate the Intel fabs in Licking County has necessitated a statewide commitment. It’s a project whose success or failure carries implications beyond Ohio’s borders as a potential bellwether for the national imperative to reshore semiconductor manufacturing.
“The Columbus plant,” reads part of a lengthy analysis released in January by the Washington, D.C.-based Brookings Institution, “represents a test of the nation and its regions’ ability to facilitate large-scale economic inclusion by ensuring sizable numbers of workers can access training pathways toward semiconductor manufacturing operations.”
Matthew McQuade, now managing principal at McQuade Economic Growth Advisors, was deeply involved in the Intel recruitment while serving as managing director of business development for One Columbus, the economic development organization for the 11-county Columbus region. He says that Ohio’s engineering workforce offering was central to Intel’s calculations.
“You can look beyond Ohio into the Big Ten Conference in general,” McQuade tells Site Selection. “So, it’s not just Ohio State with its excellent engineering program, but Purdue is only three-and-a-half hours away. Carnegie Mellon and the University of Michigan are three hours away. It’s a really, really meaningful talent story.”
For Intel, though, the talent equation merely begins with engineers. Like the chipmaking projects seeking to gain traction in other parts of the country, Intel’s two fabs in the town of New Albany, 20 minutes east of Columbus, will require an army of testers, sorters, samplers, coil winders, tapers, electromechanical assemblers and all manner of other technicians that are not yet trained for the jobs that await.
Intel is funding $50 million in training grants in Ohio as part of what is a $100 million commitment to building a national semiconductor workforce. Under its Semiconductor Education and Research Program for Ohio, it is accepting proposals for Ohio-based academic and training organizations to address curriculum development, faculty training and laboratory equipment upgrades. Having partnered with the Ohio Manufacturing Association, JobsOhio and the Ohio Association of Community Colleges, Columbus State Community College is leading a statewide recruitment and training pipeline strategy.
“Central Ohio education and workforce leaders have recognized the need to take extraordinary measures to ensure their region and its workers reap the benefits of semiconductor production,” reads the Brookings analysis. “Accordingly, they are preparing their region by planning and innovating, building on existing assets, collaborating creatively, and breaking down traditional silos.”
As the Brookings report stresses, Ohio could serve as a measure of the country’s wherewithal to meet an era-defining challenge, one that requires more than just money.
“There’s a lot that this country is trying to shoehorn in, and none of it’s going to be easy,” says McQuade. “Anybody’s guess where this ends up is as good as mine, but my philosophy is that we’ve got to do it. It is a national imperative, and at least we’re moving in the right direction.”
Spreading Out from the Centers
Having been anointed by the state as Innovation Districts, Columbus, Cleveland and Cincinnati are being funded to the tune of some $3 billion worth of public and private investment as part of an effort to build sustainable ecosystems in healthcare, life sciences and technology.
During his State of the State address in February, Gov. DeWine unveiled a proposal — now before the state legislature — to expand the concept beyond the “Three Cs.” The idea to establish Innovation Hubs in smaller cities emerged from discussions among leaders in Dayton, Akron, Youngstown, Toledo and Canton, says Guy Coviello, president and CEO of the Youngstown/Warren Regional Chamber.
or qubits, can exist in multiple states simultaneously, but can only be controlled at temperatures nearing absolute zero. Quantum calculations are exponentially faster than digital’s best. Applied to drug discovery, that could mean dramatically expedited and more cost-efficient development of potentially life-saving therapies.
“Quantum and other advanced computing technologies,” said Cleveland Clinic CEO and President Tom Mihaljevic in conjunction with the inaugural event, “will help researchers tackle historic scientific bottlenecks and potentially find new treatments for patients like cancer, Alzheimer’s and diabetes.”
Intel is building two chip fabs east of Columbus.
Courtesy of Intel
“The next five biggest metropolitan communities,” Coviello tells Site Selection, “came together and said, ‘Well, wait a minute, what about us?’”
Under DeWine’s proposal, smaller cities would compete for $150 million in state funding through a process designed to encourage them to coalesce around an emerging technology sector.
“What we’re saying,” says Husted, “is we’re not going to just hand you a check. You have to collaborate. You have to pull together, and you have to rally around something that you can be world class in. It’s an incentive for them to work together so that they can achieve something bigger than they ever could achieve on their own.
“With Dayton,” says Husted, “they can do work in the aerospace industry and the defense sector. In Toledo, they can do this around glass because you have companies like Owens Corning and Owens Illinois. In Akron, you have sustainable polymers with BF Goodrich and Bridgestone and others. Then you have additive manufacturing over in Youngstown. We need to use these resources to create hubs. We can draw down more research dollars, we can produce more talent and we can create spinoff opportunities for entrepreneurs.”
In February, Youngstown announced a play for some of the hoped-for funding bounty. A 2018 study commissioned by the Ohio Chamber of Commerce Research Foundation cited work underway there as an example of the kind of collaborative innovation the rest of the state might follow. Youngstown’s bid is being led by America Makes, an additive manufacturing hub established there under the Obama Administration’s Manufacturing USA network. Its network extends beyond local manufacturers and research institutes to major defense contractors, including some, says Coviello, that are straining under the weight of supplying the war in Ukraine.
“The Pentagon,” he says, “is saying they have to replenish these systems and in a way that’s more cost-effective, and additive is our way of doing that. So, we anticipate incredible opportunities for the state of Ohio to see its economy soar through America Makes and through this technology. And then you start to apply it to the private sector and other industries and we really transform how we make things.”