T H E M E T R O P O L I T A N B U S I N E S S P L A N N I N G I N I T I A T I V E BROOKINGS

A P R O S P E C T U S F O R G R O W I N G

M A N U F A C T U R I N G I N N O R T H E A S T O H I O

I N V E S T I N G I N T R A N S F O R M AT I O N

A M E S S A G E F R O M N O R T H E A S T O H I O

NortheastOhioisaregionveryfamiliarwitheconomictransformation.Overthelasttwo

centuries,waterwaysandagrariansystemsgavewaytoindustrialmight,whichinturn

sufferedseriousdeclineastheeconomywentglobal.Todayanewtransformation,rooted

inourmanufacturingprowessandpoweredbyourheritageofinnovation,isunderwaythat

willresultinbusinessgrowth,well-preparedtalent,inclusiveopportunities,andefficient,

effectivegovernment.

Theregion’stransformationcanbesummedupinthreewords:

Connect…Collaborate…Compete

Theregion’srichandrobustassetsarebeingconnectedsothattogetherwearestrongerthanourindi-

vidualparts.Forexample,theregion’sworld-classresearchinhealthcare,energy,andmaterialsarebeing

connectedtoinnovationandcommercializationassetstodevelopandmakenewproductsinglobaldemand.

Attheheartoftheseconnectionsstandsmanufacturing—weknowhowtomakethingsinNortheastOhio.

Ourmanufacturersarecapitalizingonthenextgenerationofproductionprocessesandnewmarketdevel-

opmentstocreatejobsandgrowincomes.

Robustnetworksofengaged,empoweredstakeholdersarecollaboratingtodriveinnovation,fuelentre-

preneurship,andreinventgovernment.Ourregionknowsthatbycollaboratingtodeliberatelybuildonour

assetsthroughintegratedstrategies,wecanachievemore.

Together,ourconnected,collaborativeregioncancompeteforjobs,marketshare,andinvestments.The

region’sprogressinattractinggrowingglobalcompaniesandspawningthenextgenerationofentrepre-

neurialgiantssetsthestagefortransitioningourstrongbaseofsmall-tomid-sizedmanufacturersinto

highgrowthmarkets.Thisprospectusoutlinesourstrategytomakethattransitionarealityandtoacceler-

atetheeconomictransformationofNortheastOhio.

Bradley Whitehead

President

FundforOurEconomicFuture

METROPOLITAN

BUSINESS

PLANNING

INITIATIVE

NORTHEAST OHIO

1

I N V E S T I N G I N T R A N S F O R M AT I O N

A P R O S P E C T U S F O R G R O W I N G M A N U F A C T U R I N G

I N N O R T H E A S T O H I O

1775 Massachusetts Avenue, NW

Washington D.C. 20036-2188

telephone 202.797.6000

fax 202.797.6004

website www.brookings.edu

BROOKINGS INSTITUTION METROPOLITAN POLICY PROGRAM © 2011

BROOKINGS

METROPOLITAN

POLICY

PROGRAM

2

Northeast Ohio is moving toward a

“next” economy based on the strengths

retained in its skilled manufacturing

workforce, top-quality research

institutions, relatively high patenting

rates, and strong export performance.

the

pro

po

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on

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3

In particular, PRISM will:

➤ Increasethecontributionsthatmaturesmall-to-

mediumsizedmanufacturers(SMMs)maketo

regionaleconomicgrowth.SMMsrepresentan

estimated15percentofthemanufacturersinthe

regionbutgeneratemorethan45percentofthe

manufacturingsector’s$29billioningrossregional

product

➤ Helpfirmstoconnectwithsignificantunmet

demandfornewmanufacturedproductsfrom

high-growthmarketslikecleanenergy,biosciences/

health,flexibleelectronics,andnextgeneration

automotives

➤ Benefitfromtheleadershipoftheregion’sexperi-

encedmanufacturingservicesproviderMAGNET

andthearea’snetworkofcommittedimplementa-

tionandplanningpartners,includingNorTech,

BioEnterprise,JumpStart,WIRE-NetandtheFund

forOurEconomicFuture

➤ PositivelyimpacttheeconomyofNortheastOhio

bygeneratinganestimated3,200incrementaljobs

andover$470millioninincrementalgrossregional

productwithineightyearsofPRISM’slaunch

➤ Serveasanationalmodelforbestpracticesin

turningaroundolderindustrialandauto-impacted

communities

Both private and public sector leaders have impor-

tant roles to play in the execution of the initiative:

➤ Businessleaderscantakeamorecoordinatedand

comprehensiveapproachtoenhancingtheregion’s

economiccompetitiveness

➤ Philanthropiescancontinueandexpandsupport

ofregionaldevelopmentstrategies

➤ Stateofficialscancontinueandexpandagency

coordinationtostrengthenpromisinggrowth

clusters

➤ Federalpolicymakerscanbetteralignagenciesand

introduceflexibilitiestoexistingprogramstobetter

supportlong-range,multi-dimensionalregional

strategies

PRISM carefully addresses key risk considerations,

offering promising returns to all stakeholders. Most

notably,PRISMwill:

➤ Benefitfromandcontributetoongoingregional

effortstocultivatestrongclustersincleanenergy,

advancedmaterials,andbiosciences,amongothers

➤ Drawtogetheranexperiencedteamofmanyhigh-

performing,motivatedregionalpartnerstoexecute

particularservicesandprovidecriticalresources

➤ Deliverbenefitstoboththeindividualparticipating

firmaswellastheregionasawhole

T H E P R O P O S I T I O N

Aregionineconomictransition,NortheastOhioismoving

beyonditslegacyofover-dependenceonheavymanufactur-

ingtowarda“next”economybasedonthestrengthsretainedinits

skilledmanufacturingworkforce,top-qualityresearchinstitutions,

relativelyhighpatentingrates,andstrongexportingperformance.

ThePartnershipforRegionalInnovationServicestoManufacturers

initiative(PRISM)willdevelop,demonstrate,andexecuteservicesto

helpsmall-to-medium-sizedmanufacturerswithhighgrowthpotential

makethistransition.

the

big

pic

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BROOKINGS

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4

T H E B I G P I C T U R E

NortheastOhioisreadytobuildonitsindustrialpastto

succeedinthenexteconomy.

A DAUNTING LEGACY. Northeast Ohio is a

region in economic transition.Onceanindustrial

leaderwitharichheritageofinnovation,Northeast

Ohiohasseenitscompetitiveadvantagesinthe

productionofsteel,rubber,automobileparts,and

otherproductserodeinthefaceofglobalcompeti-

tionanditsmanufacturingbasecontractoverthe

pastdecades.Between2002and2006,theregion’s

productivitygrowth(measuredasper-workergross

regionalproduct)increasedbyonlyhalfthenational

rateat4.5percent,andtwooftheregion’smajormet-

rosexperiencedjoblossesthatrankedthemamong

the10worstofthelargest100U.S.metros.Whatis

more,businessclosingshavegenerallyoutpaced

businessstartsinNortheastOhio,andthenumber

ofsmallfirms—thoseemployingbetween10and99

workersandgeneratingadisproportionateshareof

newjobsnationally—droppedoffacrosstheregion

between1999and2008.

STRENGTHS TO BUILD UPON. And yet, despite

past and current economic woes, Northeast Ohio

retains a tremendous set of assets to build upon

for future success. Theregion’seraofindustrial

prosperityendoweditwithaskilledmanufactur-

ingworkforcecapableofmovingintonewsectors;

astrongnetworkofcommunitycollegesthatcan

developtheworkforceskillsneededforthistransition;

abaseforindustryandacademicresearchthatspent

anestimated$2.2billionin2006;andenoughexperi-

enceinforeignproductmarketsthattheregion’sthree

majormetrosrankamongthetop30ofthelargest

100U.S.metrosfortheirexportintensities.Northeast

Ohiohasalso,inrecentyears,boastedrelativelyhigh

patentingrates,andafteraperiodofanemicventure

capitalinvestmentsthroughthe1990s,attracted

$220millionannuallybetween2005and2009.

Further,NortheastOhiocurrentlyboastsstrong

clustersinadvancedenergy,medicaldevices,and

advancedmaterials,amongothers.

LOOKING FORWARD. National trends point to a

post-recession economy that will be lower carbon

and increasingly innovation- and export-oriented.

Andforthatreason,NortheastOhioisstrategically

planningtoexploitexistingstrengthsalongthese

linestocreateasustainable,high-growth,knowl-

edge-intensiveeconomy.Variousstrategies—already

ongoingorintheformativestages—includeincreasing

supportofhigh-growthindustryclusters,including

biosciences/healthcare,cleanenergy,andadvanced

materials;buildupoftheinnovationandentrepreneur-

ialecosystem;nurturingtalentedworkerstomeet

currentandfuturedemand;andincreasinggovern-

mentcoordinationandcivicengagementtoaddress

priorityregionalissues,likeequity,businessattraction

andretention,andgovernmentefficiency.

TARGETED FOCUS. In the “next” economy,

boosting the innovation capacity of Northeast

Ohio’s manufacturing sector presents a powerful

strategic opportunity for transforming the regional

economy. Themanufacturingsectordirectlyemploys

14percentofallworkersinNortheastOhio,indirectly

drivesover45percentoftotalregionalemployment,

andcontributes18percenttothestate’sgrossdomes-

ticproduct.Advancingthemanufacturingsectorto

bettertapintothepotentialoftargetednewhigh-

growthmarketswouldbenefitallofNortheastOhio.In

particular,older“traditional”manufacturingcompa-

niesinpolymers,chemicals,andmetalscantranslate

wellintosuch“neweconomy”pursuitsasglobal

health,flexibleelectronics,transportation,andclean

energy,amongothers.TheproposedPRISMInitiative

willacceleratethesetransitions.

the

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T H E V E N T U R E

The Partnership for Regional Innovation Services to

Manufacturers initiative (PRISM) developanddemonstrate

servicesthatwillbroadlysupporttheeffortsofexistingNortheastOhio

manufacturersintransitioningtonewhigh-growthopportunities.

AN UNTAPPED SOURCE OF ECONOMIC

GROWTH. Hundredsofmaturesmall-to-medium-

sizedmanufacturers(SMMs)inNortheastOhio

havebeendeliveringqualityproductsindemanding

marketsforyears.Whilemanyopportunitiesexist

fortheseSMMstomoveontotheirnextstageof

growth,includinginhealthcare,advancedenergy,

advancedmaterials,instrumentationandelectronics,

andnextgenerationautomotive,manySMMsarenot

transitioningaseffectivelyastheycouldbe.Pressure

toperforminthenearterm,riskaversion,alackof

know-how,andfinancialconstraintsareamongthe

obstacles,andatpresentexternalorganizationsand

systemsthatarecapableofprovidingsupporttocom-

paniesintheirtransitionsarenotoptimallydesigned

oralignedtohelpSMMsovercometheseobstacles.

PRISMisaregionaleffortinitiatedtochangethis

dynamic.FocusedonhelpingSMMsidentify,access,

andapplythemanyresourcesinpublic,private,and

non-profitnetworksthatcansupporttheirgrowth

plans,PRISMwillgeneratesubstantialregional,

statewide,andnationalimpactasitengagesexisting

manufacturingcompaniesinscalinguptheirinnova-

tioncapability.

LEVERAGING NETWORKS TO CATALYZE

GROWTH. Firmsthatcaneffectivelyleverageexter-

nalresourcesintheexecutionoftheirgrowthplans

areknownfortheirinnovativenessandresilience

underchangingmarketconditions.Thebasicpremise

ofPRISMisthatiftheabilityofSMMstoaccessand

applyexternalresourcescanbeimproved,thensuc-

cessfulexecutionoftheirgrowthplanswillincrease.

PRISMwillthenservetogrowandstrengthenregional

clustersofexistingfirmsandattractnewfirmsto

NortheastOhiotoo.Thebenefitstotheeconomywill

reachbeyondthetaxrevenuesandjobsgrowthfrom

theseindividualfirms,spillingoverintootherareasas

newopportunitiesbecomeapparentnotonlytothe

manufacturersthemselvesbutalsotootherswithin

regionalnetworks,includingatstart-upfirms,larger

manufacturers,governmentagencies,universities,

andserviceproviders.

INNOVATIVE APPROACH GROUNDED IN BEST

PRACTICES. ThreekeyfeatureswillallowPRISMto

deliveronthepromiseofincreasedeconomicimpact:

➤ Networkorganizationshavetheassetsthatcan

helpSMMstransitiontothemarketopportunities

thatwilldefinethefutureoftheregion

➤ TheManufacturingAdvocacyandGrowthNetwork

(MAGNET)willtakeontherolesofscout,intermedi-

ary,andadvisortohelpSMMsproactivelyidentify,

access,andapplythesenetworkresourcesin

commercializingnewproductsandprocessesand

approachingnewmarkets.Asanon-profitorgani-

zationwitha25yearhistoryofengaginginthese

networksandofsupportinginnovationatSMMs,

MAGNETiswell-positionedtotakeontheseroles

➤ Theserviceswillfocusonaddressingtheunique

needsofSMMsandwilltakeintoaccountthe

factorsintrinsictoSMMsthatmaketheeffective

applicationoftheseresourcesachallenge

Theservicesofferedwillleveragebestpracticesin

innovationandinaccessingexternalresourcesfor

growth.Theserviceswillemphasizetheuseofdisci-

plinedprocessesinideation,productdevelopment,

strategicplanningandprogrammanagementwith

capabilitytoaddressneedsatallstagesofthecom-

mercializationprocess,fromconcepttolaunch.

BROOKINGS

METROPOLITAN

POLICY

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6

A SHARED STAKE IN THE FUTURE OF

NORTHEAST OHIO. Thepartnershipsthatwillbe

developedtoaidintheexecutionofPRISMwillbe

groundedinbothasharedinterestinthefutureof

NortheastOhioandabeliefthatincreasedcollabora-

tionacrosstheregioncanimprovetheprospectsfor

aneconomicturnaround.PRISMalsowillbuildpartner-

shipswithorganizationsbeyondtheregionbasedon

therolethattheNortheastOhiomanufacturingsector

playsinachievingstatewideandnationalobjectives.

BUILDING ON EXISTING MOMENTUM. The

basicprinciplesofPRISMoriginatedsixyearsagoin

aplanningeffortknownastheGlobalManufacturing

Roadmap,thepurposeofwhichwastodevelopa

regionalplantofacilitategrowthinthelocalmanu-

facturingsector.Momentumhasbeenbuildingsince

asavarietyoforganizationsfromeachoftheabove

networkshavecontributedtothedevelopmentof

PRISM.Twoeffortsarecurrentlyinprocesstopilot

elementsoftheservice,oneapartnershipbetween

MAGNETandNorTechtodeveloplocaltechnology

clustersintheelectricvehiclesandbiomass/waste-to-

energymarkets,andtheotherapartnershipbetween

MAGNETandWire-NettoconnectSMMswithoppor-

tunitiesingrowthmarketsthatareoutsideoftheir

coremarkets.

MAKING IT ALL WORK.PRISMwillbemanaged

byMAGNET,aregionalnonprofiteconomicdevelop-

mentorganizationthatservesasakeyelementofthe

stateofOhio’sManufacturingExtensionPartnership

program.Withmorethana25-yearhistoryofactive

engagementwithinrelevantnetworksatthelocal,

state,andnationallevels,andofsupportingthe

growthplansofSMMsthroughitsconsultingservices,

MAGNETisuniquelypositionedtoleadthisinitiative.

Withinthefirstthreeyearsoftheinitiative,amini-

mumof56firmswillentertheprogramtocomprise

thePRISMportfolio(estimated10inyearone,15in

yeartwo,26inyearthree).Prospectivefirmswillbe

invitedtoself-selectintotheprogramonthebasisof

thefollowingcriteria:

➤ Significantoperationswithinthe16-countyregion

ofNortheastOhio.

➤ Annualrevenuesbetween$5millionand

$500million,asignificantshareofwhich

originateintheregiontoensurethatportfolio

firmsareembeddedintheregion

➤ Executive-levelsupportforanannualgrowthrate

targetof10percentorgreater

➤ Ideasorprojectsintheirpipelinethatofferstrong

prospectsforthetargetedgrowth

➤ Identifiedgapsinorganizationalresourcesand

capabilitiesthatcanbeaddressedthroughPRISM

EachSMMwillbetakenthroughafour-stageprocess

tovalidatethatthereisastrongfitbetweenitsneeds

andopportunitiesandthevaluepropositionofPRISM.

Attheendofthisstagedprocess,itisexpected

PRISM will bring multiple organizations, resources and capabilities to bear

WorkforceTraining

Mature Small- to

Medium- Sized Manufacturers

(SMM)

IncentivesTechnicalExpertise

CapitalManagementExpertise

TalentAnalyticalCapacity

ExportSupport

Databases

IntellectualProperty

Technology

PRISM Service Model

SELF SELECT

INTERVIEWGROW

VETENGAGE

PROPOSEDECIDE

Manufactureroptsinbasedonsize,growth

plansandin-regionoperations

MAGNETgainsunderstanding

ofmanufac-turer’s

currentbusi-nessand

futureplans

MAGNETresearches

thenetworksforresources

thatcouldbeused

inshort-,medium-,and

long-termMAGNETreportsoutonpotential

engagementswithorganizationsin

thenetwork

MAGNETandmanufacturerreachagreementoncompatibilityofnetworkcapabilitieswith

companyobjectives

MAGNETfacilitatesplan

toaddressneedsanddevelop

opportunitiesthroughnetwork

Manufacturerexecutesongrowthplan

Service Providers

Universities/Community

Colleges

EconomicDevelopmentOrganizations

Other Manufacturers

GovernmentAgencies and

Labs

METROPOLITAN

BUSINESS

PLANNING

INITIATIVE

NORTHEAST OHIO

7

GROWTH MARKETS FOR MANUFACTURED PRODUCTS

Historical Projected Annual Market Market Growth Relevant Competencies/CapabilitiesSector Size Year Size Year Rate Found in Northeast Ohio Manufacturing Sector

HomeMedicalEquipment $6.3B 2009 $7.9B 2012 6% instrumentation,controls,electronics

U.S.ImplantableMedicalDevices $33B 2009 $49B 2014 8% advancedmaterials,corrosion

U.S.DisposableMedicalSupplies $65B 2008 $79B 2013 4% qualitymanagement,leanmanufacturing

U.S.DemandWindTurbines $7.3B 2007 $10B 2012 7% coatings,advancedmaterials,motors,gears

WorldFuelCellDemand $560M 2008 $1.9B 2013 28% coatings,advancedmaterials,materialshandlingandstorage,vehiclesystems

WorldElectricVehicles $24B 2010 $473B 2020 28% electricmotors,batterystoragesystems,powerelectronics,sensors

WorldOrganicElectronics $7.5B 2010 $24.5B 2013 48% plastics,advancedmaterials,sensors,roll-to-rollprocessing

WorldLightingFixtures $96B 2009 $127.5B 2014 6% optics/glass,electronics,plastics

U.S.SmartGrid $29.4B 2008 $71.5B 2014 16% powerelectronics,electricalcompenents,energystorage,sensors/controls

Source: Freedonia

thattheSMMwillagreetolong-termengagements

thatwillhelpthemtoidentify,access,andapplythe

resourcesofthenetworkthatcansupportcommer-

cializationofproduct-,process-,ormarket-oriented

innovations.MAGNET’sroleinconnectingportfolio

firmstoresourceswillbefinancedinpartthrougha

retainerpaidbythefirmthatwillaveragetwoyears

induration.

IncreasedaccesstocapitalfortheSMMswillbeakey

pointofemphasis.Toachievethedesiredeconomic

impact,$8.4million(throughgrantsand/orloans)

willbeneededbytheSMMstofundaportionoftheir

associatedresearchanddevelopmentandcommer-

cializationactivities,includingtechnicaldevelopment

ofproductsorprocesses,prototyping,andtechni-

calmarketresearch.Emphasiswillbeplacedon

accessingcapitalthroughexistingsources,including

throughvariouspublicsectorprogramssuchasthe

ThirdFrontierProgramandtheCuyahogaCounty

InnovationLoanFund,andTheInnovationFundat

LorainCountyCommunityCollegeandthroughpri-

vateorganizations.Newpoolsofcapitalwillalsobe

developedbybuildingon,extending,and/ormodifying

public-privatemodelsalreadyinplacethroughout

theregion.

Specialattentionwillalsobegiventohelpingcom-

paniesgainaccesstothetalenttheyneedtopursue

theirinnovationstrategies.Partnershipswillbe

formedwitheducationalinstitutionstoaddress

theworkforceneedsoftheportfoliofirmsthrough

internships,studentprojects,andfacultyexternships,

positioningtheseinstitutionstobenefitfromexpo-

suretorealworldchallengesofSMMsandtoaddress

longertermworkforceneeds.Inaddition,organiza-

tionssuchascommunitycollegesandWorkforce

InvestmentBoardswillbemobilizedtohelpaddress

trainingneedsforskilledemployees.

BUILT FOR LASTING IMPACT. Todeliveron

PRISM,MAGNETwilldevelopnew,complementary

in-housecompetenciesandaddstaffthat

willaddressseveralgapsinthenetwork:

➤ Market Research.Anewcapacityformarket

researchwillbedevelopedanddeployedtoboth

identifythenetworksofapplicableresources

andalsotoidentifycandidatemanufacturersand

providetechnicalmarketresearchservicestopar-

ticipatingfirms.Theseeffortswillbemanagedbya

strategicmarketingspecialist,anewstaffposition

atMAGNET.

BROOKINGS

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8

➤ Partnership Development. MAGNETmustproac-

tivelydevelopmoreandmorerobustpartnerships.

Thedevelopmentofthepartnershipsunderlying

theregionalresourcenetworkwillbeledbya

PartnershipDevelopmentManager,anewposition

atMAGNET

➤ Assessment of Growth Prospects.MAGNETwill

furtherdevelopitscapabilitiestoassessSMMs’

commitmenttoandcapabilityforgrowthbyusing

existingpersonnelandsupportfrompartnersand

externalconsultingfirms

➤ Capital Fund Management and Administration.

Thedevelopmentandadministrationofanewcapi-

talfundtosupportthefinancingrequirementsof

portfoliofirmswillrequirenewresourcesandcom-

petencies.MAGNETwillbuildontheinfrastructure

inplacethatisusedtoadministertheCuyahoga

CountyProductInnovationLoanFund,anditis

anticipatedthatthisactivitywillbeexecuted

throughacombinationofin-houseresourcesand

externalcontracts

Thedesignandimplementationofasustainable

businessmodelfordeliveryofPRISMserviceswillbe

pursuedovertheinitiative’sthree-yearfirstphase.

ThegoalistoensurethatthePRISMservicemodel

willbeavailableonanongoingbasistosupport

growthinthelocalmanufacturingsectorwithout

requiringongoingfinancialsupportfromthefederal

government(excludingthefundingreceivedfrom

NISTthroughthestateofOhiofortheMEPprogram).

Requestedinvestmentof$2.425millionwillbeused

tobuildouttheserviceinfrastructureatMAGNETand

toassistwiththecostofMAGNET’sPRISM-related

servicesoverthefirstthreeyearsoftheinitiative.To

achievethetargetof$8.4millionincapitalrequired

asdescribedabove,localandfederalfundingwill

besought.However,revenuetomaintainthecapital

poolsafteryearfiveisexpectedfromlocalsources,

includingrepaymentofloansbytheSMMsand/or

royaltiesfromprojects.

PRO FORMA INCOME STATEMENT FOR SERVICE INFRASTRUCTURE

REVENUE to MAGNET ($000’s) Year 1 Year 2 Year 3 Year 4 Year 5

Retainer-basedfees 50 300 675 750 750

Project-basedconsultingfees 50 150 300 550 625

Otherlocalfunding* 250 300 350 455 405

NIST-MEPgrant 50 100 0 0 0

TOTAL REVENUES 400 850 1325 1755 1780

COSTS to MAGNET ($000’s) Year 1 Year 2 Year 3 Year 4 Year 5

Personnel 700 700 700 700 700

Contractservices 250 250 200 150 100

Workforcedevelopmentcontracts(e.g.internships,training) 50 100 125 125 125

Databases/informationtechnology 150 150 50 50 50

Outreach/marketing 50 50 50 30 30

Capitalfundadminstration 150 150 150 150 150

Totalincrementaloperatingcosts 1350 1400 1275 1205 1155

Deliveryofproject-basedservices 250 300 425 550 625

TOTAL COSTS 1,600 1,700 1,700 1,755 1,780

FederalGrantsforOperatingBudget 1,200 850 375 - -

*Could include public sector grants, private donations, surplus from fees

the

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T H E R E T U R N S

PRISMwillbeaninvestmentinNortheastOhio’sregionalecon-

omyandcanbeexpectedtodeliveraseriesofpositiveimpacts.

GROSS REGIONAL PRODUCT. Participationby

the56SMMswillsupportanincreaseinrevenue

fromthesefirmstotaling$10millionbyyearthree

oftheinitiative,growingto$160millionbyyearfive

and$470millionbyyeareight.Itisexpectedthat

supportingsectorswillalsocontributetoincreased

grossregionalproduct,asothersectorsintheregion

suchaslogisticsanddistributionandservicestendto

growinresponsetogrowthinmanufacturingwiththe

multipliereffect.

REGIONAL JOBS. Byyeareight,portfoliocom-

panieswillhavedirectlycontributednearly3,200

incrementaljobstoNortheastOhio’sregionalecon-

omy,andhundredsofadditionaljobsfromsupporting

sectorscanbeexpected.

NETWORKS POSITIONED FOR GROWTH.

Educationalinstitutions,serviceproviders,economic

developmentorganizations,andgovernmententities

standtobenefiteconomicallyfromtheirownsupport

andgrowthintheregion’sbroadermanufacturing

sectoraswell.

T H E T E A M

PRISMboastsanimpressiveleadershipteamcommittedtopropelling

theproposalfromconcepttorealityandoverseeingitssuccess.

LEAD PROJECT IMPLEMENTATION. Theexecu-

tionofPRISMisconsistentwithMAGNET’smissionto

supportNortheastOhio’smanufacturingsectorasa

regionalcenterforthenationalMEPprogram.Just

between2005and2009,MAGNET’sserviceshave

helpedregionalmanufacturerscreateorretainover

5,600jobsandincreaseorretainsalestotalingover

$500million.

IMPLEMENTATION PARTNERS. Ahighlyinformed

andengagednetworkofregionaleconomicdevel-

opmentpartnerswillhelpMAGNETexecutePRISM

successfully.Thesepartnersincludehighereducation

institutionssuchasCaseWesternReserveUniversity,

theUniversityofAkron,ClevelandStateUniversity,

andtheregion’sfivecommunitycollegesystems.

Regionaleconomicdevelopmentresourcesinclude

BioEnterprise,focusedonthebiosciencesandhealth

sector;NorTech,currentlyworkingintheadvanced

energyandflexibleelectronicsindustries;JumpStart,

whichprovidesbroad-basedentrepreneurialtrain-

ingandfinancialassistance;theOhioAerospace

Institute-TechSolvealliance,focusedonadvancingthe

aerospaceandaviationsectors;andthefiveother

stateofOhioEdisonTechnologyCenters,eachof

whichbringsindustry-specificexpertise,totheefforts

toincreasemanufacturingcompetitivenessstatewide.

PLANNING LEAD. TheFundForOurEconomic

Future(FFEF)—auniquecollaborationofmorethan

50regionalphilanthropies—ledtheshapingofthe

broaderNortheastOhiobusinessplan,ofwhich

PRISMwillbethefirststrategyimplemented.Forthis

work,FFEFhasdrawninputfromthosementioned

above,aswellasthepublic,andleadersfromthe

GreaterClevelandPartnership,StarkDevelopment

Board,GreaterAkronChamber,theYoungstown-

WarrenRegionalChamber,andWIRE-Net(formerly

knownastheWestsideIndustrialRetentionand

ExpansionNetwork),amongothers.

the

ask

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1 0

T H E A S K

Regional,state,andfederalleadersallhaveastakeinthe

successfulexecutionofPRISMandhaveimportantrolesto

playtohelpensureitssuccess.

BUSINESS AND REGIONAL LEADERS.For

NortheastOhioleaders,PRISMoffersgreatpotential

toboosttheprosperityofthewholeregion.In

particular:

➤ Theprivatesectorcansupportamorecoordi-

natedandcomprehensiveapproachtotheregion’s

competitivenessopportunitiesbyparticipatingin

ventures,investinginthem,andengagingstrategi-

callytostrengthenandbuildlocalclusters

➤ Thephilanthropicsectorcansustainoreven

expand,ifpossible,itssupportofregionaldevelop-

mentstrategies,suchasPRISM

STATE GOVERNMENT. SupportingPRISMwould

allowthestateofOhiotobuildonitsclosepartner-

shipwithNortheastOhioinpursuitofgrowth.Tohelp

advancePRISM,inparticular,thestatecan:

➤ Continueitsleadershipinadvancingthegoalsof

theMEPanditssupportfortheprogram

➤ Continueandexpandthecoordinationbetween

theOhioDepartmentofDevelopmentandthe

UniversitySystemofOhiotomaximizebusiness

growthandtalentdevelopmentinpromising

growthclusters

➤ ContinuetoenhancetheThirdFrontier’sinnovation

investmentsbyacceleratingcommercializationof

technology

Tomoregenerallysupportcomprehensiveregional

strategies,thestatecanundertakelegislative,execu-

tive,andprogrammaticeffortstoencouragemore

regionalplanningandcoordination,regionalrevenue

sharing,andlocalgovernmentcollaborations.

FEDERAL GOVERNMENT. BysupportingPRISM,

federalleaderscanpilotanapproachfortransitioning

industrialregionstotheneweconomy,offeringthe

prospectforamoreeffectivetransitionthatwillresult

inacceleratedgrowth,reducedjoblossesandwelfare

costs,andincreasedtaxcollection.Tobestengagein

PRISM,federalpolicymakerscan:

➤ Increasecross-agencyalignmentbetweenthe

EconomicDevelopmentAdministration,theSmall

BusinessAdministration,theDepartmentof

Commerce,theNationalInstituteofStandards

andTechnology,MEP,andotherstobettersupport

multi-dimensionalregionaldevelopmentstrategies.

Thisincludes:

•Federal-levelagencycoordinationtodeliverhigh-

levelmulti-agencydirection

•Region-levelfieldofficecoordinationtoprovidea

“one-stop”forregionalimplementers

•Coordinatedconsiderationoffunding,bothin

theamountandtiming,soastofacilitateoptimal

executionofPRISM

➤ Introduceexpandedflexibilitiesinexistingfederal

agencyprogramstobetterrespondtotheactual

needsofPRISMandothercross-sectorregional

plans.Forexample,agenciescan:

•Easematchingfundrequirementsandterms

•Focusprogramperformancemetricsonlonger-

termobjectives(likeregionalimpact)inaddition

tousualshort-termoutputs(likenumbersserved)

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METROPOLITAN

BUSINESS

PLANNING

INITIATIVE

NORTHEAST OHIO

1 1

D O W N S I D E S A N D U P S I D E S

In pursuing PRISM, stakeholders will have to successfully negotiate

a number of factors.

INDUSTRY CHALLENGES.NortheastOhio’sman-

ufacturingsectorisgeographicallydispersedacross

thewholeregionandisverydiverse,representing

nofewerthan20broadindustrycategories,ranging

fromfabricatedmetalproductiontowoodproduct

manufacturing.Thishighdegreeofindustryvariation

mayposeachallengeinidentifyingthosefirms

withthegreatestpotentialforregionaleconomic

impact.PRISMwilltacklethispossibledifficultyhead-

onbyfocusingfromthestartoncreatingafirm

assessmenttool.

PARTICIPANT RECRUITMENT. Thehighdegree

ofmarketentrenchmentamongNortheastOhio’s

manufacturersmaymakeitdifficulttorecruithighly

engagedfirmsforPRISM’sservices.Yet,recent

notablecasesofregionalmanufacturerssuccessfully

transitioningtonewmarketsmayprovideenough

motivationforotherfirmstotrynewapproaches.

OPERATIONAL CHALLENGES. WhileMAGNET

bringstoPRISMmanyyearsofexperienceinworking

withmanufacturers,itwillneedtofurtherdevelopits

capabilitiesinmarketresearchandinsightdevelop-

ment,partnershipmanagement,firmcharacterization,

andbestpracticesapplicationtosuccessfullyexecute

PRISM.Toaddressthesecapacityissues,MAGNEThas

alreadypreparedaPRISMimplementationplanandhas

commitmentsfromvariousregionaleconomicdevelop-

mentpartnerstobringtheirownexpertisetobear.

PRISM offers federal, state,

philanthropic, and private-sector

leaders a signal opportunity

to boost the prosperity

of a key region.

the

rig

ht

idea

BROOKINGS

METROPOLITAN

POLICY

PROGRAM

1 2

T H E R I G H T I D E A I N T H E R I G H T P L A C E AT T H E R I G H T T I M E

Forallitschallenges,PRISMmeritsfullstakeholderengagement

forseveralcompellingreasons:

THE RIGHT IDEA. Therecentsuccessofsuch

NortheastOhiomanufacturersasGrafTechand

CardinalFastener,tuningtheirexpertise(inthese

cases,ingraphiteproductsandindustrialfastenings,

respectively)tonewcleanenergyusesillustratesthe

growthopportunitiesopento“old-line”firmsthat

pursuein-demandmarkets.Inlightofthesecases,

PRISMoffersaclearvalueproposition:Theprovision

ofinnovation-enhancingresourcescanhelpselected

manufacturingfirmsmaketheirowntransitionstothe

“next”economy.

THE RIGHT PLACE. NortheastOhioisperfectly

suitedtopilotinganapproachlikePRISM.Ithasa

strongconcentrationofoldermanufacturingfirms

withuntappedinnovationpotential.Moreover,the

regionboastsanimpressivearrayofexistinginno-

vationassets,includingnumerousacademicand

researchinstitutions,suchasCaseWesternReserve,

ClevelandState,KentStateandYoungstownState

Universities,andtheUniversityofAkron;aworld-

classnetworkofhealthcareinstitutions,includingthe

ClevelandClinic,UniversityHospitalsandtheSumma

HealthCareSystem;andmultipleregionaleconomic

developmententitiesactivelyadvancingcleanenergy,

biosciences,next-generationtransportation,and

othergrowthopportunities.Additionally,Northeast

Ohiohasprovenadeptatcultivatingeffectivepublic-

privatepartnerships,liketheThirdFrontierinitiative

andtheEdisonprogram,andothermulti-stakeholder

efforts,likeFFEF.

THE RIGHT TIME. NortheastOhiocurrentlyenjoys

tremendousmomentumwhenitcomestoregional

economicrevitalization.Bygettingofftheground

now,PRISMcaninformandengagewiththevarious

regionaleffortsstrivingtostrengthenmanyofthe

high-growthindustryclustersthatitwillalsotarget

foritsparticipatingmanufacturers.Theseinclude

BioEnterprise’seffortstogrowtheregion’sbioscience

andhealthcaresectorsandNorTech’sworkfocusedon

clustersinadvancedenergyandflexibleelectronics.

PH

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A B O U T M E T R O P O L I TA N B U S I N E S S P L A N N I N GThisprospectusisapartofalargermetropolitanbusinessplanninginitiativeledbytheMetropolitan

PolicyProgramatBrookingsincollaborationwithBrookingsNon-ResidentSeniorFellowRobert

Weissbourd.ThreeregionalbusinessplansandassociateddocumentswithmetropartnersinNortheast

Ohio,MinneapolisSaintPaul,andthePugetSoundregionhavebeendeveloped.Eachplansituatesthe

currentmarketpositionofthepilotmetro;detailsemergingregionalstrategiesforgeneratingmetro

prosperity;andadvancesadetaileddevelopmentinitiativeinonepressingareathatpromisestodeliver

successfulmetrogrowthinanextAmericaneconomythatismoreexport-oriented,lower-carbon,more

innovation-fueled,andmoreopportunityrich.Thesebusinessplansalsosolicittailoredresponsesfor

theirachievementfromfederal,state,andlocalleaders.

A B O U T T H E B R O O K I N G S - R O C K E F E L L E R P R O J E C T O N S TAT E A N D M E T R O P O L I TA N I N N OVAT I O NThisispartofaseriesofpapersbeingproducedbytheBrookings-RockefellerProjectonStateand

MetropolitanInnovation.

StatesandmetropolitanareaswillbethehubsofpolicyinnovationintheUnitedStates,andtheplaces

thatlaythegroundworkforthenexteconomy.Theprojectwillpresentfiscallyresponsibleideasstate

leaderscanusetocreateaneconomythatisdrivenbyexports,poweredbylowcarbon,fueledbyinnova-

tion,richwithopportunity,andledbymetropolitanareas.

A C K N O W L E D G M E N T STheMetropolitanBusinessPlanninginitiativeinNortheastOhiowouldnothavebeenpossiblewithoutthe

projectmanagementprovidedbytheFundforOurEconomicFuture,ledbyChrisThompsonandBradley

Whitehead.TheinitiativealsobenefittedfromthemanyNortheastOhioleaderswhohaveprovidedvalu-

ableinputtothiswork,includingDr.LuisM.Proenza,EdMorrison,andDianePalminteraoftheUniversity

ofAkron;BaijuShah,BioEnterprise;JoeRoman,GreaterClevelandPartnership;GregZucca,Cuyahoga

County;DanBerry,EdNolan,BobSchmidt,MaryAnnPacelli,andJohnSchober,MAGNET;Rebecca

Bagley,NorTech;andStevePaquette,StarkEconomicDevelopmentBoard.

ProjectconsultingwasprovidedbyGretchenKoskaroofRWVentures,andMarkMuro,SarahRahman,

andKenanFikriatBrookingsandgenerousfinancialsupportwasprovidedbytheJohnD.and

CatherineT.MacArthurFoundation,theGeorgeGundFoundation,theHeinzEndowments,the

RockefellerFoundation,theF.B.HeronFoundation,andTargetCorporation.

Brookings,inparticular,alsothankstheMetropolitanLeadershipCouncil—abipartisannetworkofindi-

vidual,corporate,andphilanthropicinvestorsthatprovideitfinancialsupportbut,moreimportantly,are

trueintellectualandstrategicpartners.Whilemanyoftheseleadersactglobally,theyretainacommit-

menttothevitalityoftheirlocalandregionalcommunities,arareblendthatmakestheirengagement

evenmorevaluable.

The Brookings Institution is a private non-profit organization. Its mission is to conduct high-quality, independent research and, based on that research, to provide innovative, practical recommendations for policymakers and the public. The conclusions and recommenda-tions of any Brookings publication are solely those of its author(s), and do not reflect the views of the Institution, its management, or its other scholars.

Support for this publication was generously provided by the Rockefeller Foundation.

Brookings recognizes that the value it provides to any supporter is in its absolute commitment to quality, independence and impact. Activities supported by its donors reflect this commitment and the analysis and recommendations are not determined by any donation.

F O R M O R E I N F O R M AT I O N

Thisinvestmentprospectusisadistilledversionofafull-length,

fullydocumentedregionalbusinessplanthatcanbefoundhere:

www.futurefundneo.org/About/Advance

DanielBerry

President

MAGNET

dan.berry@magnetwork.org

BradleyWhitehead

President

FundforOurEconomicFuture

bwhitehead@futurefundneo.org