How to restore Ohio's leadership in technology and innovation

Logan Kolas Nov 14, 2021

This piece was first published by Crain's Cleveland Business.

From the Wright brothers and John Glenn to the "Rubber Capital of the World," Ohio has a proud history of innovation and leadership in developing new technology. More recently, however, Ohio has followed more than it has led, losing its competitive edge to states that have attracted innovators and technology firms with bold, tech-friendly policies. But the race is not over, and state policymakers can take several significant strides to regain lost ground.

Prioritizing internet connectivity, for example, building "regulatory sandboxes," helping the drone industry take flight, and welcoming emigrating entrepreneurs and innovators, would all help Ohio retake the lead in technology innovation.

Nearly 1 million Ohio residents still lack reliable broadband internet service. That needs to change. Internet access opens doors to the modern age, connecting employers with workers, buyers with sellers, doctors with patients, teachers with students, and people with better opportunities. Ohio trails states like Virginia in connecting citizens to life-changing internet access. But if state policymakers will reject government takeovers of broadband networks, wisely spend free-flowing federal aid, and revive a competitive free market in broadband deployment, Ohio can reposition itself as an internet leader.

In regulation, like technology, if you aren't moving forward, you're moving backward.

And Ohio's bureaucratic red tape continues to keep innovation, technology and the state from moving forward. Building "regulatory sandboxes" can help. A regulatory sandbox offers businesses a place to experiment with and test new technologies and services under regulatory supervision without the full regulatory weight on their shoulders. Once again, however, other states have taken the lead.

North Carolina — an economically vibrant state — recently built a regulatory sandbox for financial and insurance products and services. Arizona, Utah and Florida, among others, have built similar sandboxes offering regulatory relief to diverse industries, including financial technology, insurance, legal services, agriculture, health care and energy. To catch up, Ohio should start building a financial technology sandbox like the one proposed by state Sen. Steve Wilson , immediately expand it to include autonomous and electric vehicles and emerging drone technology, and move quickly to extend the sandbox's regulatory relief to all businesses and industries.

The birthplace of aviation, Ohio embarrassingly ranks 30th nationally — closer to last than to first — in drone readiness. Military drones, of course, have already revolutionized 21st century combat, and commercial drones may soon do the same for travel, agriculture, and package and medical delivery. But despite drone companies already partnering with Ohio's own Kroger to transform grocery shopping, Ohio finds itself trailing most of the pack in drone innovation.

One reason for the state's poor showing: imposing new rules instead of tailoring old ones to fit the nuances of drone flight. Ohio already has "Peeping Tom" rules in place to protect residential privacy, for instance. And existing airspace lease regulations can and should be modified so that drones can travel safely fly over local roads and other properties. Drafting new and redundant regulations will discourage innovators and delay drone development from taking off in Ohio.

Finally, immigrants appear twice as likely as the native-born to work in the technology sector, start new businesses and hold patents. To retake the lead in innovation and technology, Ohio lawmakers should attract the world's best and brightest by working with federal officials to secure state-based visas for high-skilled immigrants. Taking such a savvy step would help reverse Ohio's worrisome population decline and signal to the international technology sector that Ohio is serious about growth and innovation.

Once a cutting-edge innovator and technology trendsetter, Ohio regrettably lags behind peers that have embraced technological change and innovation by reforming their rules and rewriting regulations to keep up with the times. Now, Ohio must do the same if it wants to reclaim its distinguished, trailblazing glory.

Logan Kolas is an economic policy analyst with The Buckeye Institute’s Economic Research Center and the author of Policy Solutions for More Innovation: A Policy Primer for Emerging Technology in Ohio.