As published in the January 1, 2010 Toledo Business Journal
Jamie N. Beier Grant,
Northwest Ohio Regional
Economic Development Association (NORED)
Capital Asset Grants: Spurring development
Toledo Business Journal recently interviewed Jamie N. Beier Grant, Northwest Ohio Regional Economic Development Association (NORED) president. She shared the following thoughts.
Toledo Business Journal: NORED has proposed an addition to Ohio’s Third Frontier Program in the form of a grant fund to support new product and process development for small and medium-size Ohio manufacturing businesses. What is motivating this proposal?
Jamie Beier Grant: Northwest Ohio economic development practitioners have worked on many occasions in recent years with small and mid-size businesses that have developed new product or process innovations that have yet to be demonstrated in the marketplace. One of the struggles that many businesses face in getting the innovation to the marketplace is a lack of available funds. In addition, there are many instances where funding – outside of the business operating budget – for the development of prototypes and demonstration of the innovation do not exist. It is important to note that these instances have been within the manufacturing environment, and the innovations that have been developed have not qualified for current Third Frontier funding.
TBJ: Can you provide an overview of this funding approach?
JBG: NORED believes there is an opportunity, through the Third Frontier Program, to create a capital asset grant fund to assist in investments in new product and process development within our state’s small and mid-size manufacturing companies. Such investments by the Third Frontier Program would support innovation within our local manufacturing companies to assist in launching these new technologies and processes into the marketplace.
One of the exciting aspects of these new innovations is that they are oftentimes already being used by the company “in-house” and, if given the opportunity to be demonstrated on a broader platform, could be brought to market in an accelerated timeframe.
TBJ: Explain the timing behind this current proposal.
JBG: As the State of Ohio considers reauthorizing the Ohio Third Frontier Program, NORED feels there is a great opportunity to consider introducing a pilot program to fill this demonstrated void in the technology development and commercialization lifecycle, specifically within our small and mid-size manufacturing companies.
It is well known that manufacturing represents the largest industry sector in Ohio’s economy, with a total output nearing 20%. And, from a national vantage point, Ohio’s manufacturing sector represents over 5% of total manufacturing sector production – ranking Ohio third behind only California and Texas, according to the Ohio Department of Development (ODOD) Policy Research & Strategic Planning.
When one examines the significance of the manufacturing sector from a regional perspective, northwest Ohio’s overall GDP makes up 27% of the state’s total GDP with the region’s manufacturing activity representing 21% of Ohio’s overall manufacturing GDP.
TBJ: What are the criteria for obtaining a Capital Asset Grant?
JBG: A number of criteria are being proposed for receipt of these grant funds. First, the Capital Asset Grant Program would be designed to assist small to mid-size manufacturers with less than 200 employees. Additionally, the applicant must have developed a new product or process that clearly demonstrates a new technology-based innovation. The product or process must be new to the marketplace and clearly demonstrate value-added to the marketplace. The Capital Asset Grant Program funds can be used only for capitalized assets (i.e., machinery, equipment, software, or a physical prototype). And finally, the applicant must commit matching funds to the program. These matching funds can vary and are flexible (e.g., private working capital or wages).
TBJ: What are the key benefits that this program will provide?
JBG: Several major benefits will result from this program. Funding of capital asset developments will create near-term job creation through innovation, job retention will be realized as companies find new ways to compete and diversify their products and customer base, and new technologies and applications will be implemented and brought to market quickly.
TBJ: Who are the members of NORED, and what is the organization’s purpose?
JBG: NORED is an association of economic development practitioners and partners spanning 12 counties throughout northwest Ohio. It is a forum for the exchange of information among its members and others aimed at increasing job opportunities and improving the quality of life throughout the region. NORED provides professional development programs for its members, advocates for legislative changes to enhance economic development, and implements programs to market the benefits of locating in northwest Ohio.
TBJ: Are there any other issues that you would like to address?
JBG: The Ohio Third Frontier Program has been nationally recognized for its mission of technology development and for the economic outcomes that have resulted from projects funded by the program. NORED felt there was an opportunity to bring another aspect of technology development into the program to continue to encourage opportunities for business diversification.