This information was provided by The Ohio Manufacturing Association.
Part ONE in a mini-series examining the importance of Ohio's Intel project.
More than 140 Ohio companies currently in Intel’s supply chain already know what the rest of Ohio is discovering — the recently announced Intel project is good for growth.
Intel’s planned $20 billion microchip plant is the kind of transformative mega-project that in the past has helped elevate Ohio as a leading state for innovation and manufacturing.
Why It Matters to Ohio:
• Supply Chain Opportunities: Intel already has 140 Ohio-based suppliers. That figure will grow quickly with this project. Initial estimates are that Intel will bring 30-40 additional supplier companies with it to Ohio.
• More High-Tech Workers: In addition to 7,000 construction jobs, Intel’s Ohio facility will employ 3,000 highly skilled workers, while fueling tens of thousands of additional support jobs. (More details on this in a future edition of Retooling Ohio.) While some Ohio manufacturers have voiced legitimate concerns about the added pressure on an already tight labor market, the Intel project will likely amplify interest in manufacturing careers, Ohio's unique training initiatives (such as TechCred), and the state's post-secondary institutions, thereby growing the talent pool over time. As more Ohioans are recruited and trained for these positions, the manufacturing workforce infrastructure will also build capacity to engage and upskill "hidden workers."
• Improved Access to Semiconductors: Every Ohio manufacturer has been directly or indirectly affected by the global chip shortage. With 75% of all microchip production now occurring in Asia, the international supply chain disruption has highlighted U.S. manufacturers' vulnerabilities. Reshoring microchip production — to Ohio, no less — will begin to permanently address this weak link.
• Expanded High-Tech R&D: Ohio’s network of research universities and community colleges has a historic opportunity to increase alignment with employers' training and research needs. Intel has pledged $100 million for new partnerships with Ohio’s higher education system. As a result, the innovation taking place at educational institutions across our state will spur university-supported research and expand Ohio's economy.
What Experts Are Saying: Michael Jones, an economics professor at the University of Cincinnati, recently told The Columbus Dispatch that because semiconductors are so critical to the modern economy, "Ohio is going to reap benefits we can't even measure."
Ohio-based economic consultant Howard Fleeter said this about the Intel project: "You're building something integral to the future. Their plant is the most sophisticated plant of its kind. The likelihood is very high that this will be successful."
And Steve Case, co-founder of AOL, has said projects like the Intel facility help Midwestern states stop "brain drain" and allow them to retain more college graduates.
The Big Picture: Intel’s Ohio project will have a permanent, transformative effect on our entire state, directly and indirectly — from new supply chain opportunities, workforce expansion, improved access to microchips, and enhanced research and development at educational institutions statewide.
Part TWO in a mini-series examining the importance of Ohio's Intel project.
In its initial phase, Intel’s new $20 billion microchip plant in central Ohio will directly create 3,000 new jobs, paying an average annual salary of $135,000. As many as 15,000 additional Ohio jobs are estimated to be indirectly created by supplier companies and businesses supported by the economic activity of Intel employees.
The multiplier effect of large manufacturing investments has been proved through both academic research and Ohio’s real-world experience with previous projects.
High-Tech's Multiplier Effect: University of California economist Enrico Moretti is considered a leader in analyzing the effects of high-tech manufacturing. His research regarding the economic impact of the computing, software, and microchip industries was documented in his book “The New Geography of Jobs” (Harper Business, 2012).
For every job these industries directly create, five additional jobs are indirectly established, according to Moretti. As an example, he cites Apple, whose 12,000 jobs at its Silicon Valley headquarters (2012 figures) supported more than 60,000 other jobs in the region on an ongoing basis.
Ohio's Experience With Advanced Manufacturing Mega-Projects: Ohio’s experience with large (and advanced) manufacturing investments aligns with the findings of economic researchers. Examples include the following:
• GE Aviation — Hamilton County: GE Aviation's production of airplane engines began in 1949 on the site of a former Wright Aeronautics plant. Over the decades, the plant has grown to approximately 10,000 employees who support 30,000 military and commercial aircraft engines worldwide. This Ohio facility continues to receive major investments from GE Aviation and recently completed $500 million in upgrades. The company’s 2017 analysis of its overall statewide economic impact put its then-total direct employment in Ohio at 14,000 jobs and indirect employment at 37,000 jobs.
• Lima Refinery — Allen County: Founded in 1886 by John Rockefeller’s Standard Oil Co. after oil was discovered in northwest Ohio, the refinery is the oldest continuously operating refinery in Ohio. It has the capacity to refine around 175,000 barrels of oil a day into gasoline, jet fuel, and diesel – and it produces approximately 25% of Ohio’s gasoline. While its 800 directly created jobs puts this facility on a different scale, its significance flows from the longevity of its economic benefits to Lima and the region. For 136 years, the refinery – with its numerous other petrochemical businesses located within the fence line – has served as a regional economic engine, drawing talent to the area while providing well-paying opportunities for generations of Ohioans.
• Honda of America — Union County: In 1979, Honda became the first Japanese automaker to locate vehicle manufacturing in the U.S. with 64 employees in Marysville assembling motorcycles. What started as a $35 million investment has grown to a $14 billion network of five plants employing approximately 15,000 associates. Taking into account Honda’s 158 Ohio suppliers, as well as its other economic impacts, independent economic analysis as far back as 2004 has calculated Honda’s indirect job creation at approximately 40,000 statewide.
The Big Picture: The steady flow of manufacturing investments into Ohio ensures the Buckeye State will continue to be a global manufacturing leader with all the essential assets: workforce, infrastructure, and a pro-growth climate.
These ongoing investments are a key reason why manufacturing leads other Ohio private industry in economic contributions to the state. Ohio’s annual manufacturing GDP has climbed from $84 billion in 1997 to more than $118 billion today.
The multiplier effect of the Intel project will further elevate and propel Ohio for decades to come, serving as a magnet for continued manufacturing investment.
The Ohio Manufacturers' Association | 33 North High Street | Columbus, OH 43215
