States to try outsourcing economic development

The question of how to empower business leaders to play a more meaningful role in state economic development efforts without sacrificing the accountability and transparency with which public funds are used is hardly a new one. A number of states — including Florida, Indiana, Michigan, Texas, Utah and Virginia — have privatized some aspects of their economic development functions in recent years, with mixed results.

The normally low-profile Ohio Development Department suddenly found itself at the center of gubernatorial politics this summer — and its very existence at risk — when Republican candidate John Kasich declared, "The days of trying to connect to business leaders through bureaucrats are over." His campaign unveiled a sweeping proposal to privatize the agency’s core responsibility of attracting and retaining businesses.

Kasich argued that the department had largely failed at its core mission, pointing to an exodus of prominent employers as evidence. "We know all too well the story of NCR in Dayton, in which the Department of Development simply missed the warning signs and failed to act aggressively to keep the city’s last Fortune 500 Company," said Kasich’s running mate, Mary Taylor. NCR moved to the suburbs of Atlanta.

By Melissa Maynard, Stateline Staff Writer

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