Ryan Augsburger: Manufacturing Multiplier Benefits Buckeye State

Across Ohio, there’s a lot of buzz surrounding Intel’s new $20 billion microchip factory planned for Licking County. There’s just as much talk about the plant’s impact on the rest of the state.

At the Ohio Manufacturers’ Association, we’ve heard reports from across the state — from Cincinnati to Youngstown and from Toledo to Athens — about new opportunities for companies seeking to become Intel suppliers. It’s another chance to relocate jobs while creating rewarding new careers for the next generation.

In its initial phase, the semiconductor project will directly create about 3,000 new jobs, paying an average annual salary of $135,000. It is estimated that as many as 15,000 additional jobs in Ohio are created indirectly by Intel suppliers and the economic activity of Intel employees.

Ohio’s real-world experience with other large-scale manufacturing projects – including in Allen County – has demonstrated the impressive manufacturing multiplier effect, which occurs when an initial injection into the economy translates into widespread and ongoing economic benefits.

• High-tech multiplier effect: The multiplier effect of the Intel Ohio project is expected to be significant, not only due to the demand for semiconductors, but also the job creation history of similar facilities. .

Enrico Moretti, an economist at the University of California, is a leader in analyzing the effects of high-tech manufacturing. His research on the economic impact of the computer, software and microchip industries has been documented in his book “The New Geography of Jobs” (Harper Business, 2012). For every job directly created by these industries, five additional jobs are created indirectly, according to Moretti. He cites Apple, whose 12,000 jobs in Silicon Valley (2012 figures) permanently supported more than 60,000 other jobs in the region.

• Ohio’s experience with manufacturing megaprojects: Ohio’s experience with large manufacturing investments is consistent with the findings of economics researchers.

Real world examples include the Lima Refinery in Allen County. Founded in 1886 by John Rockefeller’s Standard Oil Co. after the discovery of oil in northwest Ohio, the refinery is the oldest continuously operating refinery in Ohio. It has the capacity to refine about 175,000 barrels of oil per day into gasoline, jet fuel and diesel – and it produces about 25% of Ohio’s gasoline.

While its 800 directly created jobs are impressive, the longevity of the facility’s economic benefits to Lima and the entire region is equally significant. For 136 years, the refinery — along with its many other petrochemical businesses located within its fence — has served as a regional economic engine, attracting talent to the region while providing well-paying opportunities for generations of Ohioans.

• Big Picture: The steady stream of manufacturing investment in Ohio ensures that Buckeye State will continue to be a global manufacturing leader with all the essential assets: workforce, infrastructure, and favorable climate. to growth. These continued investments are one of the main reasons manufacturing leads other private industries in Ohio in terms of economic contributions to the state.

Ohio’s annual manufacturing GDP has grown from $84 billion in 1997 to nearly $125 billion today. It’s a big deal – and the future looks even brighter. This growth did not happen by accident. Ohio’s elected leaders have been instrumental in ensuring an enabling environment for manufacturing investment.

For example, Gov. Mike DeWine and Lt. Gov. Jon Husted worked with top Statehouse leaders, including House Speaker Bob Cupp and Senate Speaker Matt Huffman, to improve Ohio’s competitiveness to clinch the Intel project.

In short, it’s an exciting time to be a maker in our state. We look forward to seeing the multiplier effect of the Intel project further elevate and propel Ohio for decades to come, while serving as a magnet for continued manufacturing investment.

Ryan Augsburger is president of the Ohio Manufacturers’ Association, which represents approximately 1,500 manufacturers statewide. His column does not necessarily reflect the opinion of The Lima News editorial board or AIM Media, owner of The Lima News.