1. Thomas A. WaltermireCEO, Team Northeast OhioBaldwin-Wallace Graduate Commencement SpeechMay 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 todays 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 mixtwo 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 pastproductively 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 Ohios 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 ofcommunication; and 3. The skill to interact with many new cultures that will bekey 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 doesnt 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 dont 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 dreamersthe 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. Londons 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 repeatyou 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.