Ohio’s economy, like so many in the Midwest and elsewhere, was struggling after the Great Recession. With the evisceration of manufacturing jobs, it needed a major transformation.
In 2011, the state had a novel idea. Using profits from the beverage industry, Ohio formed a new entity—a first-of-its-kind, state-authorized non-profit—to stimulate economic growth through new industries: JobsOhio. Over the next decade, the state saw nearly one million jobs created or protected.
McKinsey was a key early partner, helping develop JobsOhio’s growth plan that identified ten sectors with opportunities for employment, such as aerospace and aviation, healthcare, logistics and distribution, technology, and financial services. Since 2001, Ohio had lost over 230,000 jobs in these sectors and ranked 47th out of all 50 states in growth. By 2017, it was 23rd and had added $30 billion in payroll.
The state’s job creation was its best ever, but JobsOhio wanted to ensure its strategy would be effective going forward. In 2018, the initiative asked McKinsey to issue a report evaluating its performance.
“JobsOhio was in a class by itself in terms of economic development organizations as far as dollars per job, attracting companies, capital investments, and more,” says Ben Safran, a partner at McKinsey who worked on the report. “But we also found it needed to address approaching headwinds in the broader macro economy.”
Brendan Buescher, a McKinsey senior partner based in Cleveland, says the findings encouraged JobsOhio to think locally.
“They were certainly performing well against comparable organizations,” says Brendan, “but we urged them to measure success against the needs of Ohioans.”
The report helped shape JobsOhio’s 2.0 strategy, which expanded its industry-focus to include a new emphasis on workforce, innovation, infrastructure and investment throughout the state. From this, JobsOhio developed Innovation Districts in Cleveland, Columbus, and Cincinnati—, multi-organization partnerships plan to create 60,000 jobs and establishing Ohio as a global leader in healthcare, life sciences, and technology in these three regions.
As the new strategy was getting off the ground, COVID-19 rocked the state’s economy. Partnering with McKinsey again, JobsOhio quickly created a strategy for the pandemic economy, leading to the launch of Ohio to Work. Designed for displaced workers, Ohio to Work offered skills assessments, career coaching, virtual career fairs, and connection with employers who had signed on to interview or hire workers from the program.
Specifically, McKinsey helped JobsOhio develop a unique program for reskilling and upskilling for higher-tech jobs: JobsOhio paid for tuition costs for technical degrees, and enrollees gradually repaid JobsOhio through a marginal percentage of their income—if they got a job that paid a good wage. Those repaid funds are not kept by JobsOhio; instead, the organization invests them in the next cohort. The program has been a success. Its funds have continued to replenish because of the high employment rate of participants.
“With this strategy, not only is Ohio coming back strong from COVID-19, but Ohioans have the opportunity to pursue new careers they might have never thought possible,” says Ben. “A woman who had been a back-office worker and lost her job is now a nurse assistant—a whole new, stable career that feels like a calling. There are many powerful stories like this.”
As we have worked to improve the lives of all Ohioans, we've valued McKinsey's partnership over the last several years. Their data-driven approach combined with creative thinking led to solutions that fit the unique needs of our state—and supported our success in creating hundreds of thousands of jobs.
JP Nauseef, JobsOhio President & CEO
Most recently, the decade of growth and economic investment in Ohio helped attract a new investment from Intel, which announced earlier this year that it would be opening a new chip manufacturing plant in Central Ohio. This huge project is the largest single private-sector company investment in the state. It will create 3,000 new jobs at the plant with an average salary of $135,000.
“As we have worked to improve the lives of all Ohioans, we've valued McKinsey's partnership over the last several years,” says JP Nauseef, president & CEO of JobsOhio. “Their data-driven approach combined with creative thinking led to solutions that fit the unique needs of our state—and supported our success in creating hundreds of thousands of jobs.”
The turnaround of the state’s jobs growth, Ben adds, suggests a potential way forward for other challenging situations. “Their success has been a paradigm shift,” says Ben Safran. “They are a model for growth in a changing economy.”