Why Ohio Gov. Kasich made the right call in attending Detroit’s auto show

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It’s been a big week for conventions and trade shows — consumer electronics and digital health in Las Vegas, cars in Detroit, healthcare in San Francisco.

Naturally, any governor looking to promote his state’s business environment would want to get in front of the movers and shakers at these conferences and convince them to spend a little cash (or set up a corporate headquarters) in his state.

So, which did Ohio Gov. John Kasich choose as he aims to build Ohio’s economic future? Detroit, of course.

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It would be easy to criticize Kasich’s choice as a look backwards and a wish to bring back those glorious days when Ohio was a manufacturing stalwart and world leader in heavy industry. The top political official in the state should be looking to attract the companies and industries that will create the economy of this century, not last century, right?

Unfortunately, it’s not quite that simple. As much as it pains me as a healthcare reporter to admit it, Kasich made the right choice.

Here’s why: When it comes for bang for the buck, the automobile industry is a better bet for job creation than healthcare. From the perspective of economic development, car companies can create jobs more quickly, easily and at a higher volume than healthcare companies.

Pharma and medical device firms like those at the JP Morgan Healthcare Conference this week in San Francisco can putter around for years with animal and human testing, and regulatory delays without going through any significant growth. And even then, only a select few of the thousands of device and pharma startups that dot the landscape will ever rise into the ranks of major employers.

Most successful pharma and device startups will be scooped up by strategic acquirers before they grow bigger than a couple dozen employees. When viewed through the lens of economic development, it’s a high-risk, low-odds game.

Health IT companies like those at the consumer electronics and digital health show in Vegas are another matter, but health IT a crowded space and IT startups are a dime a dozen.

Contrast that with a few of Kasich’s recent triumphs in the auto industry: Ford’s $128 million investment in a suburban Cleveland plant, Chrysler’s 1,100 new jobs in Toledo and a new Honda plant in Central Ohio.

As much as Ohio would like to think it’s building the economy of tomorrow, the reality is its legacy as a manufacturing powerhouse is likely to drive more job growth in the present and near future. That’s not a pleasant thing to admit, but Kasich’s presence in Detroit this week shows that the state’s top political official at least understands it.

[Photo from naias.com]

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Brandon Glenn

By Brandon Glenn MedCity News

Brandon Glenn is the Ohio bureau chief for MedCity News.
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