Leadership Views

As published in the October 1, 2005 Toledo Business Journal

Tom Brady, Plastic Technologies, Inc.

Tom Brady
Plastic Technologies, Inc.,
founder, president, and CEO

Toledo Business Journal recently met with Dr. Tom Brady, founder, president, and CEO of Plastic Technologies, Inc. He shared the following thoughts.

TBJ: What do you see is the most important need in the business community? Would you like to provide any suggested solutions?

TB: The recent agreement to merge the economic development efforts of the city and the county is a step in the right direction. That being said, however, my view is that our economic development efforts in northwest Ohio have been too focused on how we are organized, who is in charge, who has control over available ED dollars, how we can satisfy every constituency, and how one jurisdiction can “win” at the expense of the surrounding jurisdictions. Quite simply, we have not focused on how to satisfy our customer – the business community. Simply merging the city and county ED functions will not help unless both entities commit to collaborate unconditionally, and without regard to their separate interests.

Virtually everyone agrees that companies of the future will locate where business costs are low, where the region is “business-friendly,” where trained and talented employees are readily available, where citizens can enjoy a high standard of living, and where social and professional tolerance drive public policy. In addition, experienced economic development consultants like Brian Bosworth make it very clear that a prosperous region must a) nurture “trading sector” companies in order to “create a pathway into the region for wealth,” b) make education and talent attraction a top regional priority, and c) become an attractive place for young people “to live and work.”

Therefore, if we want northwest Ohio to be competitive in the future, we must a) reduce substantially the personal and corporate tax burdens in northwest Ohio, b) eliminate the bureaucratic roadblocks and delays of starting, running, and growing a business, c) make regional energy and healthcare more affordable, d) make our K-16 educational system a top priority, e) celebrate entrepreneurial “new economy” start up businesses as equal in priority to our traditional manufacturing base, and f) eliminate the “jurisdictional mentality” in our region. In addition, we must collaborate to create a strong voice in Columbus with the goal of a) reducing Ohio’s personal and business tax burden, b) demanding that
state-funding for education become a top state priority, and c) reforming our workplace practices to meet the needs of new economy companies (becoming a “right to work” state, eliminating “living wage” legislation, facilitating more flexible work schedule rules).

In my view, these factors are more important to becoming an attractive place to do business than are a) how we market our region, b) the tax incentives we offer, and c) how we organize our economic development resources.

TBJ: What advice would you provide for advancing the economy in our region?

TB: Others have said that there certainly must be collaboration between the private, public, and academic communities to have any chance of success, and I would agree with that statement. However, my view is that – while valuing collaboration – we must also ask, and allow, the private sector to drive those aspects of our economic development effort which require focused actions, which may not be agreeable to every constituency, and where competition, the free market, and the profit motive are the assets and incentives for success. This is where our newly privatized RGP could be a real value to our region, but it is also a given that a private RGP will not be successful unless the city, the county, the Port, and our public economic development agencies unconditionally support this effort.

One of my greatest frustrations with our economic development agencies, our public agency boards, and our economic development efforts generally is that we consistently attempt to be sure that every constituency is “okay with the plan.” While I understand why the public sector feels compelled to do this, the fact is that if we really want to be competitive in the future, we must find a way to better target our efforts, which necessarily implies words like unequal, high risk, entrepreneurial, innovative, regional, and even unknown.

These concepts are absolutely essential to a viable economic development effort that will make our region attractive to future businesses. Yet, traditional public sector-led economic development efforts tend to focus more on re-vitalizing our old economy, and on making sure that everyone is “okay with the plan.”

However, my comments should not be construed as an indictment of our public sector leadership, nor that I am not supportive of our traditional manufacturing base.

Rather, my focus is on factors that I believe are fundamental to a successful economic development planning, implementation, and funding strategy that will be relevant to the new economy businesses of the future.

The private sector is driven by results. Since the only results important to a private sector company are FUTURE results, private sector leaders hire employees who are appropriately trained and who are able to address future business requirements, and private sector companies target their resources, investments, and strategies to those business opportunities with the highest probability of achieving future results, usually measured by profitability. In general, therefore, a successful private sector leader has a track record of taking a risk by investing in the future, and then achieving measurable and acceptable results.

The public sector, on the other hand, is driven mostly by activity. Since public sector leaders are judged by PAST results and must necessarily be responsive to every constituency, public sector programs, policies, and funding are, by definition, less targeted, are more widely acceptable to all constituencies, and therefore pose little risk, but typically are not compelling for new economy businesses.

The bottom line is that while the private sector should not take sole responsibility for our economic development efforts, I believe that the private sector and its younger leaders, including more entrepreneurs and business people who are involved in building businesses for the future, should be driving our economic development effort. We should seek public sector leaders who are courageous enough and creative enough to support business economic development within the private sector, while focusing our public sector resources on building an appealing and business-friendly infrastructure.

TBJ: Can you share your thoughts on the issue of the upcoming Third Frontier bond initiative on which voters will decide in the November elections?

TB: The debate over Third Frontier funding is ultimately a debate about Ohio’s ability to compete effectively in the global marketplace. States and regions that have invested heavily in technology development have reaped higher rewards than those that have not, because technology investments usually result in emerging companies that are much more inclined to stay in a region and to grow, becoming larger enterprises and adding to the job infrastructure of a region. Cities that we think of today as high tech centers – like Austin, Minneapolis, Seattle, and Boston – have all invested heavily in basic research, educational reform, and seed and early stage company development, which created the fertile ground in these cities that ultimately resulted in the businesses that now define those regions.

In many ways the Third Frontier initiative is an unprecedented milestone for Ohio. After all, it was conceived as a 10-year effort where the politicians that initiated it will be long gone before it pays off. That is unusual in today’s political world but the fact is that only a long-term technology investment strategy has any chance of changing the economic climate in our state, so we needed an initiative like this that is implemented over many years.

Now that we have taken the first steps over the last several years, including devoting current state funding to this effort and including passing a first bond issue several years ago, it would be foolish to not continue this important investment in our future. Cutting off further funding would be a little like setting up a promising stock portfolio and then selling too soon. In other words, we have already made a substantial investment. Not proceeding with this final phase might very well mean a mediocre result for the entire initiative.

Furthermore, it is well-documented that when technology-based companies are grown over time, jobs throughout the community will also be created, including entry level, trade, clerical, manufacturing, marketing, professional, technical, educational, and managerial jobs in related service or support industries which ultimately will be required in the region.

The bottom line is that cities and regions that have been willing to invest in a technology economy have found that jobs are created across the entire community, not just within those technology companies.

It would be a mistake to reject this bond issue just because it was initiated by a republican administration that is now under fire.

TBJ: What is the number one thing that you would personally like to accomplish?

TB: A recent survey showed that Lucas County has lost 11% of its higher paying professional, scientific, and technical services jobs over the past five years. While it would be presumptuous to think that any one person could change that fact, I would like to believe that I can help reverse that trend over the next five years by supporting the efforts of the newly privatized RGP; by promoting the attributes of the IN4 seed capital fund initiative; by supporting the UT-RGP effort to create a Science and Technology Corridor; by supporting the efforts at UT, MUO, and BGSU to collaborate for the purpose of commercializing technologies developed within our local universities; and by continuing to grow our own PTI family of companies in northwest Ohio.

TBJ: Please identify an important organization that needs more support.

TB: Our best hope to regionalize economic development and to focus hard on creating technology-based jobs is the newly privatized RGP. It is crucial that both the public and private sectors come together to make this initiative successful.

TBJ: Can you share a favorite hobby or pastime?

TB: I think everyone knows that I am into building and restoring classic cars. For many years I devoted much of my free time to building things and tinkering in my shop, but with three active children I was never able to spend the kind of time required to take on the really big projects. Now that our children are all grown and out of the nest, I have become passionate about restoring cars. I started by building a replica of the 1966 Ford AC Shelby Cobra, which I completed in 1997. I then did a total restoration of a 1971 VW Beetle convertible, which took two calendar years and required about 2,500 hours of my time. I recently completed the restoration of a 1966 Mustang GT convertible that I found had been sitting in a garage in downtown Toledo for the past 18 years. My most recent trip to the Auburn car auction this year convinced me that my next project must be a 1966 Jaguar XKE restoration.

TBJ: Is there any other issue you would like to address?

TB: I would like to emphasize the importance of education and training in the whole economic development equation. In a sense, I think I could reduce the entire economic development issue to just this one issue. That is, if we spent every one of our economic development dollars on building a world-class
K-16 educational and training system, I truly believe that economic development would happen naturally as a byproduct of that initiative. If we offered superior educational systems and opportunities in our region, talented people and progressive companies would flock to northwest Ohio. We would not have to advertise. Furthermore, if we better educated and trained our young people in this region, they would be better able to compete for the jobs of the future within our region and many of them would become the job creators of the future because they would be more likely to start their own companies in this region. When I was asked by the Mayor several years ago to draft a plan for a technology-based economy, I made a point that I still believe: