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Economy and Business


Northeast Ohio needs more knowledge-based jobs for economic stability
The Cleveland Federal Reserve chief says the region is regaining lost manufacturing jobs, but needs to be more like Pittsburgh
by WKSU's KEVIN NIEDERMIER


Reporter
Kevin Niedermier
 
Cleveland Federal Reserve Bank President Sandra Pianalto says Northeast needs more focus on attracting knowledge-based jobs to build a stronger economic future.
Courtesy of KEVIN NIEDERMIER
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In The Region:

Like most of the U.S., Northeast Ohio is slowly pulling itself out of the recent economic downturn. There are gains in manufacturing jobs, and per-capita income is inching up at a rate slightly higher than the national average.

But the head of Cleveland’s Federal Reserve Bank says those bright spots will not sustain the region in the long run.

LISTEN: What should drive Ohio's economy

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Federal Reserve Bank of Cleveland President Sandra Pianalto says Northeast Ohio is recovering some the manufacturing jobs it lost after the deep recession began in 2007. She says manufacturing was hit hard across the country, but Northeast Ohio is at a long-term disadvantage.

“Manufacturing jobs were a larger share of our economy here in Northeast Ohio than in other parts of the country. And ... our economy did not have strong enough job growth in other sectors to offset the loss of manufacturing jobs.
"So, even though manufacturing is experiencing a cyclical rebound, it would be risky to rely heavily on the manufacturing sector to provide significant employment growth in the long term.”

Pianalto says regions of the country with more “knowledge-based” or high-tech employment, like the San Francisco area, have seen a sharper recovery despite also losing significant manufacturing jobs. She says in 1990, the nation had equal numbers of high-tech and manufacturing jobs. Today, that ratio is 2.5-to-1 high-tech. And Pianalto says Cleveland lags behind the nation and cities like Columbus and Pittsburgh, where there are significantly more knowledge-based jobs than manufacturing positions.

What did Pittsburgh get right?
“So, over time, regions with skilled-labor pools are going to draw employers who need skilled workers, and, in turn, more skilled workers are going to be drawn to those areas.
"Over a period of decades, Pittsburgh successfully navigated this transition from losing manufacturing jobs to becoming a brain hub. And by working to develop a critical mass of highly skilled workers and innovative companies, we can become a brain hub right here in Northeast Ohio, I’m confident of that.”

Pianalto says Pittsburgh successfully evolved from a steel town by quickly focusing on innovation and education. She says one example is that Pittsburgh’s Carnegie Mellon University dedicated itself to becoming a world-class research institution. And Carnegie Mellon and the city’s other major college, the University of Pittsburgh started collaborating on research and development instead of competing.

Poverty and jobs and some surprising corrolaries
Johnathan Holifield is with Nor-Tech, an economic development organization focused on generating knowledge-based jobs in Northeast Ohio. He says the region is creating high-tech jobs. For every manufacturing job, there are now nearly two jobs in a high-tech field.

To accelerate regional growth of both knowledge-based and manufacturing jobs, Holifield says more regional cooperation is needed. And, he advocates help from the private sector to provide better educational opportunities for minorities and low-income residents.

“We need more contributors. We have great contributors, but they are insufficient to revitalize our communities. So, inclusion of women, African Americans, Latinos and others, we need a movement around tech and 21st century competitiveness, not just a collection of programs.
"No region in the country is doing this very well. We have regions that are doing innovation very well, but none that have brought along their entire communities. In fact, some recent research from the Fund for Our Economic Future finds that regions with the most significant job growth have also had a growth in poverty. So we have an increasing disconnect of large swathes of people from where regions are going and opportunities for prosperity.”

Holifield says large pockets of impoverished people, nullify many of the economic gains a region makes.

Holifield and Pianalto were part of panel discussion sponsored by Center for Community Solutions.                       

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