Tom Waltermire, Team NEO CEO, gave the commencement speech to Baldwin-Wallace's MBA and advance degrees in Education on May 9. He talks about the Cleveland Plus region's transitioning economy.

1. Thomas A. Waltermire
CEO, Team Northeast Ohio
Baldwin-Wallace Graduate Commencement Speech
May 9, 2009
President Durst, thank you for inviting me to speak to your
outstanding graduate students and thank you for the very
kind recognition. It is an honor to be recognized by such a
prestigious institution.
Congratulations to today’s graduates. Returning to school for
additional personal growth speaks highly of your
professionalism and you own drive to contribute to your
families and to our society.
My goal today is to give you some insights about the
community you are now rejoining, now armed with an
advanced degree. So Twitter away.
As the CEO of a company that operated in over 25 countries,
it used to be my job to see that we located those operations
in the best places for them to success. Today, I am on the
other side of the table. At Team NEO our job is to attract
business from across the U.S. and around the globe to invest
right here in Northeast Ohio.

2. To do that successfully, we at Team NEO need to understand
what makes our regional economy tick. We also need to
know what companies today are looking for and what is
required to make the NEO economy thrive in the future.
The theme of my remarks today is this…..I can think of no
more important combination of skills for the future of
Northeast Ohio than those represented by the graduates here
today. In some respects you are an unusual group, those
receiving MBAs and those receiving advanced degrees in
Education. To some, those may seem like worlds that do not
mix……two parts of our society that clash more often than
they collaborate.
Yet, the truth is that our future depends, in fact, on the
combined skills that you represent.
Why is that? The economy of Northeast Ohio is in the midst
of a dynamic and in many respects painful transition. The
media and politicians often like to paint it as a decline, but
that could not be farther from the truth as we will discuss a
bit later. In a nutshell, we have been transitioning for a few
decades, before many of you were born, from the economy of
the first half of the 20th century to the economy of the 21st

3. century. Our region exploded in growth based on that earlier
economy and the knowhow that went with it. What is needed
now, to accelerate the transition we are in, are two things:
First, a whole new set of skills. Skills that create higher value
than the past…productively using our minds, not just our
bodies. And to go along with it, and perhaps more
importantly, the capacity to constantly absorb and put to use
new skills at an accelerating rate. For you education
professionals, Northeast Ohio’s global success depends in
direct measure on your ability to instill in your students three
things:
1. The skill to keep pace with the explosion of knowledge;
2. The skill to embrace constantly changing modes of
communication; and
3. The skill to interact with many new cultures that will be
key players in the global economy of the future.
Armed with your advanced education degree, you are now
responsible for seeing that the people of Northeast Ohio have
the skills to achieve more than anyone who came before us.
The second requirement for our regional rebirth is clever,
efficient blending of innovative ideas, talent and capital. That
is exactly what productive business people do every day.

4. Recognizing an idea with potential economic value has been
one key to success for millennia. In my view, however, the
essence of the MBA is someone who is astute at putting that
idea into profitable practice by employing the right human
talent and the optimal amount of capital in the shortest
amount of time, in other words, with the most efficient use of
those scare resources. This is why good business people are
so important to our society. They bring together scare
resources and employ them productively to create goods and
services at higher quality and less cost than if we had to
make everything for ourselves.
I wonder if you MBAs have thought of the critical role you
play in our social progress.
My wife and I recently returned from a trip to a newly
developing area of Central America. In a simpler economic
setting, it was a reminder that the essence of any business is
one or more people who produce more of a good or service
than they need for their own use, who then trade that surplus
for the surplus goods and services produced by others. You
may use money as the means of exchange, but that doesn’t
change the principle, it just makes it easier. This
specialization of work in the developed world is so
fundamental that we totally take it for granted. Our entire

5. society is dependent on this process. When you efficiently
put to work our scarce resources, you are making our society
stronger. The surplus you produce is what allows you to pay
taxes and to invest in social, educational and cultural
programs that make up what we call our “Quality of Life.”
The most productive countries have the best standard of
living for their people.
Armed with your MBA, you now are responsible for
generating the economic resources on which our Quality of
Life depends.
Together you education and business graduates are the
answer to our resurgence. You are the people who will
inspire others to acquire new skills at a faster rate than ever
before and the people who will channel those skills and the
innovations they generate into productive use. You are the
ones who will take our economy to new heights.
I commented earlier that it is our job at Team NEO to help
others understand the reality of our economy. I also spoke of
a transition in our economy. As we look to the needs of the
future, it is important to understand the past and the
foundation on which we are building.

6. Because the transition has been going on for so long, we
have come to think of ourselves in Northeast Ohio as
disadvantaged or flawed in some way. This victim mentality
saps our confidence and confidence is the first step in taking
the risks to innovate and succeed. As Baldwin-Wallace
favorite son and now Ohio State football coach Jim Tressel
preaches……..it takes courage to excel. If you are not
confident, you cannot have courage and without courage, you
cannot win.
We are so short sighted and self-centered that we have
forgotten the extraordinary past of this region. If our
regional forbearers could succeed so magnificently, starting
virtually from scratch, how can we---with a tremendous
foundation on which to build--- think that somehow we are
not up to the task?
Why do I believe in the future of this region? It begins with
how we got to where we are today.
From roughly the 1870s to the 1950s, our region was the
Silicon Valley of its time. The major inventors and inventions
that blossomed in the 20th Century had their roots in this
period and many of them started right here. Business
leaders such as Henry Sherwin of Sherwin-Williams, Dr.

7. Benjamin Franklin Goodrich of BFGoodrich and Henry Timken
of The Timken Company moved here. Notice that, they
MOVED here to found their businesses, which not only
became global giants themselves, but they spawned clusters
of similar companies founded by people who left one
company to start their own. Did you think that Silicon Valley
invited that practice? No, it copied the idea from the
booming Pittsburgh, Cleveland/Akron/Canton and Detroit
corridor from a century earlier.
Today we think of all these world famous companies, and
many more I don’t have the time to mention, as if they were
always global enterprises . But……….they all started small.
They started with a few people and ideas that were
intelligently and aggressively put to practice using the skills
of the people who flooded to this region and those who were
trained by the education base that sprung up to serve the
needs of that booming economy.
But along the way, this very success was sowing the seeds of
a future problem. The more successful these early innovators
became, the more they focused their energies on doing more
of the same, serving the entire U.S. market and then serving
global markets. Exploiting the potential of their inventions

8. took so much energy, they gradually took their eye off the
need to invent and reinvent.
A personal example of that problem was Henry Ford himself.
His invention of the Model T was such an overwhelming
success that he focused all his energies for many years on
making it better and cheaper and in larger quantities right up
to the point that it became so behind the times that he
almost went bankrupt. He used all his energy exploiting his
idea instead of saving some time for invention.
Simultaneously exploiting growth and reinventing oneself
takes incredible discipline and foresight.
The additional problem that this early success brewed for our
region is that we were the original site of this early 20th
century technology. As the companies expanded into new
geographies, the new sites naturally got the latest
technology. Over time, that made the original sites
progressively less competitive. This is natural, the same way
our Northeast Ohio industry made New England industry
obsolete.
The momentum of 100 years of invention and growth
continued until the 1970s. At that point, growth statistics for

9. our region (and all the Great Lakes by the way) began to
stall. Since that time, our economy has continued to grow
but more slowly and population has leveled out. We started
to feel the effects of having a business base dependent on
products that were invented decades before and of having
facilities that were no longer the most modern. Most
troubling… in our drive for size and scale, the rate of new
product invention and new business creation slowed. We
became expert at making increasing amounts of the same
product, while other regions, repeating our earlier formula for
success, were inventing new technologies. Our whole culture
and self-identity was based on the emerging global giants.
Status was no longer based, as it was many years before, on
what you had invented and what company you had started.
Instead it was based on what big company you were working
for. We became expert at maintaining and optimizing, where
originally we were inventors and dreamers………the traits that
made us the engine of the US economy.
When we hit the 1970s, the term in economics for what
followed is probably what they call creative destruction. That
old economic base naturally began to fade away and be
replaced. It is painful for the people involved who thought
that the old world would continue. Baby Boomers like me
came into the labor force in NEO just as the transition was

10. beginning and we have worked for our entire careers seeing
this transition play itself out.
And…..playing out it IS. We are well into it and there is life
on the other side. This is why YOUR roles are so important.
For example, consider the city of Akron. Once truly the
Rubber Capital of the World. When I went to work at
BFGoodrich---the original rubber company in Akron--- in the
early 1970s, BFG was phasing out the last passenger tire it
made in Akron. By the end of the 1980s Goodyear was the
only U.S. owned major tire company, most of the rubber jobs
were gone and what remained was corporate headquarters
and research centers.
Yet, today Akron is the most successful large city in
Northeast Ohio. In recent years its job base and population
trends have been the best among major cities in Ohio. How
can this be?
Remember what remained from the Rubber Capital days.
Headquarters and research. Knowledge work. The Akron
economy has diversified. It is the University, the Hospitals,
FirstEnergy and newer innovators such as Go-Jo, Infocision
and Sterling. Akron has the problem of no longer having a

11. single identity. But it is largely through the transition to a
more balanced, new economy that values new skills and new
ideas. They have perhaps the best high tech incubator in the
region. The City itself actually owns a part of a technology
incubator in Israel. Akron is ahead because of good
leadership, and also because it is smaller than Cleveland (so
it can change faster) and because it began the transition
earlier.
The rest of Northeast Ohio is on this same path. Did you
hear the NPR story on the highly successful incubator for IT
companies in Youngstown? IT in Youngstown?? It is just he
beginning.
The skills with which you are armed make you the critical
links in accelerating our path to that new economy.
Lest you have concerns about the opportunities here, they
abound for those who seek them.
The wealth created in the original phase of our growth as a
region has left a tremendous legacy of assets on which we
are building our new growth curve. For those who think we
do not value education enough, our region is one of the hubs
of higher education nationally. We have as many colleges

12. and universities as Boston. We have 175,000 higher ed
students seeking degrees right now and we graduate some
26,000 students with post-secondary degrees each year. The
30 colleges and universities we have in Northeast Ohio were
all founded in the first growth phase of our economy. Is
there a better legacy than that on which to build? Our
regional forefathers did not have that when they started.
Higher education is increasingly turning to translating
research to new business. Entrepreneurship programs here
at BW, U of Akron and others are expanding our rate of new
business formation. In the biotechnology sector alone, in the
last 5-6 years we have gone from an also ran in attracting
venture capital for new biotech companies to being among
the leaders, even surpassing the famed Research Triangle in
North Carolina.
The cultural assets of this region are second to none,
especially for a region of our size. London’s Economist
magazine named us the “most livable City in the U.S.”
recently. The assets that make us so livable were put here
either by God (the lake and the Cuyahoga Valley) or by the
wealth created by our original period of growth.

13. Our higher education base, research engines such as the
Cleveland Clinic, the cultural and recreational assets are not
things that move away. They cannot be outsourced. They
are ours to enjoy and, especially, on which to build the new
economy and our next growth curve.
When Team NEO sets out to sell our region to business
decision makers worldwide, we focus on 5 key selling points:
First is our central location in the heart of the North American
economy. Within one days drive are 80% of U.S.
corporations, two-thirds of the economic output, 60% of the
population.
Second is our talent base of 2 million skilled, loyal workers
and that great higher education base.
Third, the size and diversity of our economy. Over $170
billion, bigger than many industrialized countries. Our
economy is IN FACT 30% larger today in uninflated, real
dollars than it was in the early 1990s. Our productivity has
grown so much that we have continued to grow our output
while population has stayed flat.

14. Fourth, the global prominence we have in important fields
such as advanced manufacturing, medical devices, polymers,
finance and legal services. We are leaders in these areas and
more.
Fifth, due to reform of the tax structure in Ohio, we now have
the lowest business taxes in the Midwest and among the
lowest in the country. Ohio is competing for business.
Location, talent and education base, large economy, global
prominence in key areas, low business taxes, livable major
city, cultural assets, more fresh water than anyone, LeBron
James……..you name it.
The graduates of Baldwin-Wallace in 1909 had very few of
these advantages, yet they were part of building an economy
that was the envy of the world.
You enter a new phase in your lives surrounded by these
advantages, by this head start created by those before us.
You are entering this new phase of your lives just as our
region is emerging from a multi-decade transition.
We are not victims, we have simply been going through a
change that was the natural result of our early success. We

15. have been given a gift. How can we not have the confidence
that we can do at least as well as those before us?
Let me repeat………you are the people who will inspire others
to acquire new skills at a rate never seen before and you are
the people who will put those skills efficiently to good use to
continue to raise our Quality of Life. You are natural
partners.
I am very excited about the opportunities before you. You
should be too.
Thank you for the honor of helping to launch your new lives.
And thank you in advance for taking our region to new
heights, which I know you surely will.