From the Columbus Dispatch:
Is Ohio’s Appalachia region a business hot spot? Yes, and as a native of Appalachia -Mingo Junction, close to Steubenville – I know this surprises people. Most just don’t associate economic progress with an area best known for coal mining, steel mills, power plants and timber harvest.
Inc. magazine ran a feature story in May on entrepreneurs stimulating a rebirth of Youngstown. The city was compared to Silicon Valley but without the overhead expense.
Then Reuters featured an in-depth look at Ohio’s Enterprise Appalachia, an effort to raise awareness of the area’s desirability as a business location for entrepreneurs because of ready access to capital, knowledge and labor, supply chain and markets.
And in May, Ohioans voted overwhelmingly to renew the Ohio Third Frontier initiative to ensure that promising entrepreneurial start-ups achieve commercial success. Diagnostic Hybrids Inc. is a perfect example of a company that benefited from Third Frontier support. The privately held Appalachian Ohio life-science company was so successful that it was recently acquired by Quidel Corp. for $130 million.
These stories and many like them are evidence of a new paradigm: Business and Appalachia mix well in Ohio.
Probably Appalachia’s most impressive resources are the spirit, work ethic, research expertise and technical know-how of its people. Ohio’s 32 Appalachian counties are home to 25 institutions of higher education, including seven four-year universities and colleges. The result is a readily accessible labor pool of both young professionals and manufacturing workers with the mind power and manpower to accelerate start-ups.
In addition, Ohio has the lowest state tax burden in the Midwest. Entrepreneurs particularly appreciate that there are no taxes for the first $1 million in gross receipts. And those companies with sales between $150,000 and $1 million pay only a flat fee of $150. Other notable features of the tax structure include no tax on inventory or corporate income, no tax on investments in machinery and equipment and no tax on products sold to customers outside of Ohio.
Access to capital can often be a major hurdle. However, entrepreneurs in Ohio’s Appalachia can tap angel investing through the East Central Ohio Tech Angel Fund, experienced investors who help new and established companies. The fund has helped to raise $11 million for start-up companies in that region.
In terms of supply chain and access to markets, geography makes a difference. The state as a whole is within 600 miles of 60 percent of the U.S. population and 50 percent of the Canadian population, 62 percent of U.S. manufacturing plants, 59 percent of wholesale establishments and 63 percent of retail establishments.
Two interstate highways and nine four-lane highways serve Appalachian Ohio. Commercial air service is available from six airports surrounding the region. CSX, Norfolk Southern and the Ohio Central Railroad provide rail service throughout the region. The Ohio River and Lake Erie in northern Ohio handle more freight tonnage than the Panama Canal.
In Ohio’s Enterprise Appalachia, entrepreneurs have the resources and the space to make their dreams come true. But in the process of achieving commercial success, they don’t have to sacrifice their personal life. Family and community are especially valued.
The people of Appalachia make all the difference. The pioneering thinker and the individualist are welcome. What better location for entrepreneurs to start and grow their businesses, and become the driving force behind economic expansion in the 21st century?
I work closely with the Foundation for Appalachian Ohio, whose ICAN! and I’m a Child of Appalachia programs are designed to build a bright future for children. When AEP Ohio recognized three Hocking County middle-school students with writing awards, I was pleased to hear the children’s thoughts on entrepreneurship and their own futures taking root in Appalachia. It is inspirational to know children can seek out professional and personal success close to home.
This is just the beginning of an exciting new chapter for Appalachian Ohio. Many people know the region played a significant role in Ohio’s history, but now we are looking to the future – a future created through the dedicated work, ingenuity, innovative nature and hard-wired problem-solving attitude of the people in Ohio’s Enterprise Appalachia, backed by the resources and infrastructure to beckon business.
Joe Hamrock is president and chief operating officer for AEP Ohio and co-chairman of the Foundation for Appalachian Ohio’s ICAN! Business Council.