Commentary: Using Local Businesses Boosts Mahoning Valley Economy

By Guy Coviello, President & CEO of the Youngstown/Warren Regional Chamber
YOUNGSTOWN, Ohio — Hats off to Warren City Schools and Superintendent Steve Chiaro for using a weighted rating system that leads to hiring local architects, engineers and builders for construction projects.

Formulas created by economic experts peg the multiplier effect of construction projects at 13 to 17 times over 10 years. That means Warren City Schools’ most recent decision to hire a Valley contractor to build a $15 million recreational/wellness center will result in approximately $225 million of trickle-down economic impact pumped into the Valley.

If spent on out-of-town vendors, this multiplier effect – income used to pay mortgages, rent, tuition, groceries, entertainment, utilities, services, fuel, etc. – happens elsewhere, not here.

Every decision-maker in the Valley, public or private, for profit or nonprofit, should adopt this practice. And whether or not this practice is exercised should be a primary consideration when it comes time to vote on tax levies, award philanthropic support and conduct personal business.

We have in the past several years witnessed too many stewards of local organizations and taxpayer dollars hire out-of-town companies for construction projects. While we might benefit slightly from cups of coffee, lunches or an occasional gasoline fill-up purchased by outside vendors, millions of dollars flow to the architects’, engineers’ and builders’ home communities.

This is not limited to construction, either. When local organizations fail to use local in any industry – banking, financial management, accounting, you name it – we all lose.

Meanwhile, many of those making these decisions, from schools and community centers to libraries, foundations and the like, have no qualms about asking the locally owned professional companies to make donations, sponsor events, buy fundraising bricks or commit time serving on voluntary boards and commissions.

I can’t remember the last time I saw an outside company advertising in a local high school sports program or newspaper, buying tickets to local charity fundraisers or sponsoring local teams.

There are rare occasions when a service requires highly specialized expertise that can’t be found in the region. That’s when hiring outside the Valley is justified. But for the vast majority of projects, our region possesses extraordinary talent, well-qualified companies and overall capabilities to compete with anyone in the nation.

These hiring decisions also impact brain drain. Sending the message to our youth that services provided by a company in Cleveland, Pittsburgh or Columbus must be better also sends a message that our youth must take their talents to those communities to be successful.

Of course, that’s bunk. In fact, we’ve noticed that many times outside firms, often large with hefty marketing budgets that help make them look superior, assign their youngest, least-experienced people to projects here. The veteran talent is reserved for projects in the firms’ hometowns.

In 2022, the Youngstown/Warren Regional Chamber will explore ways to celebrate those who follow the example set by Warren City Schools Superintendent Chiaro and his team.

Yes, quality of work is paramount. Yes, cost is a serious consideration. But overall economic impact of local versus outside should always be part of the equation.

Published by The Business Journal, Youngstown, Ohio.