The Columbus Economic Portfolio (2014) By Alexander Tebben

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The Columbus Economic Portfolio (2014)

By Alexander Tebben

Through out its history the City of Columbus has enjoyed a strong stable economy, but it has never had the type of rapid economic expansion experienced by some of its neighbors. In the Great Lakes Region Cleveland, Pittsburgh, and Cincinnati grew to become economic powerhouses and reached impressive population numbers 1800s. Columbus’ economy has grown steadily and strong over the course of its two hundred and two years of existence. The economy of Columbus has grown steadily in that it never had the booms or busts of its neighbors and has become so strong that it has long been labeled ”recession proof”1. The country has experienced a great many periods of economic turmoil since Columbus’ founding in 1812 but Columbus has weathered them all. Currently, the city boasts a number of large corporate headquarters including American Electric Power, Nationwide Insurance, The L Brands (formerly the Limited). Columbus also is home to numerous world class research institutions such as: the Ohio State University, Chemical Abstracts, Ross Laboratories, Abbott Laboratories, and the Battelle Memorial Institute. The city boasts the headquarters national or major a facility for a number of banks including: Fifth Third, Huntington, and J.P. Morgan Chase2. There are a number of factors that have, throughout its history, contributed to the economic success of Columbus. These factors are primarily the city’s location, and its diversified economic portfolio.

All cities economies are shaped by their locations, as cities tend to be built on certain sites for a reason. Advantageous placement, such as near a lake or river could bring success to a city and shape its future. The Great Lakes Region was many major


cities; some of them were built next to lakes such as Chicago and Cleveland, others along rivers like Pittsburgh and Cincinnati. Over the course of their history Cleveland, Pittsburgh and Cincinnati and Columbus have drawn many advantages from their location. Cleveland, Pittsburgh and Cincinnati’s proximity to lakes and rivers would allow the cities to become bustling boomtowns by the middle of the nineteenth century. Columbus grew modestly during much of the nineteenth century, but never having the booms that its neighbors would. From the beginning Columbus’ neighbors had advantages it did not. Being on the shore of Lake Erie, Cleveland has easy access to trade with other Great Lakes ports3. Pittsburgh being further east was closer to the bustling East Coast and the confluence of the rivers meant that it was an important stop on trade routes west.4. Further west Cincinnati was the gateway to the western frontier as the Ohio River was one of the main routes for penetrating the country’s interior5. Columbus has no lake, and its rivers, the Scioto and Olentangy, were barely navigable. Cleveland, Pittsburgh, and Cincinnati’s economic history was strongly shaped by their waterways, Columbus’ story, on the other hand, is quite different and it was forced to forge its own different path.

Two facts, often quoted by the Columbus’ Department of Development reveal the foundation of Columbus’ economy. These facts are that Columbus is with five hundred miles of half the nation’s population, and no single industry dominates the city’s economy 6,7,8,9,10. While Columbus’ location does not reveal any obvious benefits like Cleveland, Pittsburgh, and Cincinnati, its location did hugely impact the course of its economic development. The two facts above are both about the city are based largely based on the physical location of the city of Columbus. Columbus has been, and is, the nation’s crossroads. Though at its founding Columbus’ location was purely symbolic, it was at the


center of the state, however, this it would soon turn into a major factor in deciding the economic future of the city.

During the city’s first twenty years of existence from 1812 and 1832 Columbus’ economy was mainly focused on fulfilling its role as the state capital. Being the state capital would mean that the city would always have government as a major driver in the cities economy. In addition to being a seat of government, Columbus also had to meet the needs of the visiting legislators11. Legislators needed housing, and food and supplies; this would also be the start of the tradition of a service industry that remains strong today12. The role that government has played in Columbus’ economy has grown as the city ages 13. Not only is the city the capital of the state and the seat of Franklin County, but it is also a city that stretches for over 200 square miles and across three counties. Today Columbus has city, state, county, and federal offices, which make government the single largest employers in the city. According to the City of Columbus government accounts for eighteen percent of the jobs in the city or 158000 of the 904000 jobs in the city14. High government employment has also given the city an industry to lean on in times of economic turmoil15.

In 1834 Columbus’ population reached the four thousand mark and it officially became a city 16. While still small by 1834 Columbus’ location had become vastly more important since 1831 when the National Road reached the city, and a feeder canal to the Ohio and Erie Canal opened. According to Columbus historian Alfred Lee these to advancements ushered in “ [a] new era of trade and travel of material and social progresses…[and] commercially speaking {were] a revolution”17,. For the first time there was now an easy and reliable way to reach the city. Connection to the national road


opened the city to trade with the heavily populated east to the ever-growing western frontier. The canal opened the city to trade ranging from Canada to Mississippi 18, 19. Truly Columbus was now a crossroads. For the beginning, its location on the trade routes had a dramatic impact on Columbus economy, travel the city was now easy, and many people and goods were passing through the city going east, west, north and south. For the first time it was simple for trade between all of Ohio’s main cities, goods from Cleveland could be sent down the canal through Columbus to end up in Cincinnati. At the head of the canal Cleveland’s markets gained a boost as goods flowed to the city to make their way south, Cincinnati’s position as the gateway to the west was enhanced as goods to go west were now easily obtained. In between Cleveland and Cincinnati was Columbus which began to realize its valuable location. One could not get to one town from the other without traveling through Columbus. This meant that goods in Columbus had the unique position of being able to go in either direction. Not only did Columbus get a boost from all of the individuals now moving to the city, but it also opened up the market to Columbus’ goods. Shortly after the Canal reached the city prices for Columbus’ farm goods doubled and demand for wood from the city skyrocketed20.

Not only did demand for Columbus goods increase their prices, but also in response to the large amounts of freight entering and leaving the city, entrepreneurs found new ways to simplify the trade process and turn a profit. Warehouses and distribution centers and shipped products while wholesalers made it so that large amounts of products could be sold at the best prices. From the 1830s onward, distribution and storage would be a major driver in Columbus economy21. This is where being located within 500 miles of half the nation’s population came into play. Though in


the 1830s it was an even higher percentage of the population. Being that closes to half the population means that goods shipped from Columbus can quickly reach much of the nation’s population, this meant that Columbus was a perfect location for storage, distribution and wholesale. By the turn of the 20th Columbus had its own warehouse district located northeast of Downtown. The importance of wholesale can be demonstrated by the number of hardware wholesalers have had locations in Columbus, including Timken, Buckeye Roller Bearings, Berry Brothers Bolt Works, among others22, 23. Shortly after World War I, again, due to the city’s location, the federal government greatly increased their presence in the Columbus economy, as they located a Defense Construction Supply Center (DCSC) here in the city24. Not only did the placement of DCSC in Columbus boast its economy, but also demonstrated the value of the city’s location. As the 20th century moved forward newer distribution centers would be placed in the city including J.C. Penny, Sears (the largest single roof warehouse building in the world) and Eddie Bauer (its only distribution center not located at its headquarters)25. Distribution is still alive today in Columbus, the city even boasts one of the only cargo only airports in the world, Rickenbacker International Airport 26. Distribution and wholesale currently makes up 4% of the Columbus economic profile or 37300 jobs27.

Columbus, to a large degree, owes its heavy industry to the railroads. When the Columbus and Xenia Railroad made its entrance into Columbus in 1851 a new phase in the city’s economic development had begun. 28, 29, 30. Links to other cities by canal and road were a start but now Columbus was linked by rail to a much larger trade system. Railroads could ship a much high volume of goods at a greatly increased rate than canal or road. Cities were now hubs on an interconnected web of rail lines. Once again Columbus


was placed at a crossroads, which opened up many new economic opportunities for the city. The nation had grown larger since the National Road and Erie Canal entered Columbus and the railroads linked the city with a much greater trade system than ever before. Trains also linked Columbus to the bountiful natural resources that Ohio has to offer.

The first trains connected Columbus to the rich coalfields in southeastern Ohio to the Great Lakes and access to the ore being mined in Minnesota31. With trains ores mined in Minnesota could be efficiently brought to Columbus and even Cincinnati, via the Great Lakes and a stop in Cleveland. The 1850s through the 1870s saw new train routes entering the city, routes that would cross through from Pennsylvania in the east on the way to the major cities of Chicago and St. Louis in the west. The Pittsburgh, Cincinnati, Chicago and St. Louis Railroad line (the Panhandle route) of the Pennsylvania Railroad, became on of the largest and busiest routes between, as its name implies, Pittsburgh, Cincinnati, Chicago, and St. Louis, though it traveled through Columbus. Between north and south, east and west Columbus was the hub 32, 33.

Access to coal and ore allowed Columbus’ manufacturing industry to grow immensely. According to historian Alfred Lee “to such lands as these [the coalfields] unlocked by science, made accessible by railways and utilized by invention…Columbus owes chiefly her industrial consequences.” 34. Coal from the south poured into Columbus’ factories as did metal from the north. Though manufacturing might become a driving force in Columbus’ economy, city’s location would help ensure that neither it nor any other industry would dominate Columbus’ economic landscape35. Unlike Pittsburgh,


which was located near coalfields, or Cleveland, which had access to ores around the Great Lakes, and Cincinnati which had access to metals from the blast furnaces east on the Ohio River Columbus is located hundreds of miles from where the metals and coal were being mined making it inconvenient, and impracticable, to ship raw materials to the city 36, 37, 38. Much of the refining was done closer to the sources, meaning that processing the ores and coal would be the driving factor in economies close to the sources, but not in Columbus. This is part of the reason that heavy industry became the main driving force behind Cleveland and Pittsburgh, and Cincinnati, but not Columbus. During the major expansion of railroads from the 1850s through the 1880s Cleveland and Pittsburgh experienced periods of extremely rapid growth. The proximity to metals and speed of railroad shipping allowed Cleveland to go from a city about the size of Columbus at just over seventeen thousand residents to a population of a hundred and sixty thousand39. The lure of Pittsburgh’s heavy industry allowed that city to grow from over eighty six thousand residents to over five hundred and thirty thousand40. Columbus was, however, at the center of many trade routes and its factories obtained much of the refined ores and coal, from cities like Cleveland and Pittsburgh, which were in turn used to create finished products41. Even though Columbus would not have the boom that its regional neighbors did from heavy industry it still could benefit from it. Columbus during this time was able to grow to a city of over fifty thousand residents42.

During the 1880s and 1890s Columbus grew to be an industrial powerhouse, though not quite on par with Cleveland, Pittsburgh, or Cincinnati. Columbus instead focused on making finished products and the Jeffrey Manufacturing Company and the Columbus Buggy Company were able to allow the city to become the largest producer of


mining equipment and horse drawn buggies in the world 43, 44. Until World War I Columbus manufacturing continued relatively unchanged. The Great Depression struck Columbus’ manufacturing industry heavily, and it would not be until World War II when Columbus manufacturing took off again. Even though heavy industry ground to almost a halt during the Depression, Columbus managed to make it through better than Cleveland or Pittsburgh. Columbus’ economy depended much less on heavy manufacturing than its neighbors meaning that its economy could be supported by the other industries45. Decisions made by the Federal Government during World War II helped to revitalize Columbus economy. During the war the Federal Government decided to place the Curtiss Wright airplane plant in the Columbus (once again due to the city’s centralized location), this would spur new manufacturing again in the city after the war46. By the end of World War II, in part due to the work of Columbus Mayor James Rhodes Westinghouse, GM Motors would take up residence in Columbus. By the 1950s Western Electric and North American Aviation (replacing Curtiss Wright) would have homes in Columbus 47, 48, Columbus is not located in an area that would lend itself to primarily focusing on heavy industry. Because of this and the fact that manufacturing entered Columbus’ economic portfolio comparatively late it never dominated the city. Rather manufacturing, would simply add another pillar on which Columbus’ economic health would rest. In contrast to Columbus cities such as Cleveland, Pittsburgh and Cincinnati would experience huge jobs losses during the 1970s and 1980s. In part due to increased competition from overseas as a result of an increasing amount of globalization, Cleveland, Pittsburgh, and Cincinnati all faced crisis in their manufacturing sectors 49, 50, 51. . Today manufacturing makes up seven percent of the jobs in Columbus, with sixty three thousand workers 52.


The confluence of train routes at Columbus also opened other avenues for economic growth for the city. Trade and industry brought new money and people to the city of Columbus. To cope with the influx of wealth into the city Columbus has developed a strong financial industry. It was in the 1866s that Huntington Bank started53. Many major banks call Columbus home, or have a major facility here. Huntington and Fifth Third each have their own skyscraper downtown, and J.P. Morgan Chase has a large processing building. Insurance entered the Columbus market heavily in the 1920s when the Ohio Farm Bureau Federation incorporated the insurance Farm Bureau Mutual Automobile Insurance Company. In the 1950s the Company change its name to Nationwide Insurance. Today Nationwide is a Fortune 100 company that employs over eleven thousand and controls multiply blocks downtown by their corporate headquarters54, 55. Many other insurance companies call Columbus home including the Grange. Finance is a particularly strong pillar in Columbus’ economic portfolio as the city has a high percentage of financial jobs as compared to the rest of the country 56. Today the financial industry makes up seven percent of Columbus jobs with over sixty eight thousand employees57.

Included in Columbus diverse economic profile are the fields of research and technology. Columbus, in part owes its strong research tradition to its history of manufacturing. Columbus is home to the Battelle Memorial Institute, which is the single largest non-profit institution in the world58. Battelle Memorial founder Gordon Battelle at one time worked in his fathers steel mills learning the arts of metallurgy and left his bequest to found a foundation that sought to advance the metallurgy field, though it left room for scientific advances in general. During the 1950s Battelle worked to produce the electrostatic copying processes that are now used in all copiers. The early work with


Xerox produced vast sums of money that were used to transform the small facility into the massive research facility that it is today 59,60. Today Battelle employs over two thousand employees and is magnet for researchers coming to Columbus from all over the world61. Columbus is also home to many other world class research institutions. Ross Laboratories, maker of formulas and nutritional supplements had got its start in 1903. Today Ross Laboratories in now a part of Abbott Nutrition and is a leading researcher into diet and nutrition62. Chemical Abstracts Services (part of the American Chemical Society) started in 1907 and is now is the largest compiler of chemical formulas63. Demonstrating how important research is to Columbus’ economy is the fact that Battelle, Abbott Nutrition, and Chemical Abstracts are the 19th, 21st and 34th largest employers in the city, respectively64.

Closely related to research is the technology field. In 2008 Columbus was rated by Forbes as the number one Up and Coming Tech City in the nation65. The area in and around Columbus contains two thousand science and technology firms and institutions meaning that the city is a large magnet for those seeking positions in the technology field 66.. Indicative of Columbus tech potential is the Online Computer Library Center (OCLC). Founded in 1967 OCLC sought to bring technology to libraries, using computers for cataloging. Today OCLC’s CONTENTdm is used by many major museums, and its WorldCat connects libraries across the globe67. Companies such as OCLC are anchors for Columbus’ technology field and will help it advance in the future.

No discussion of research would be complete with out mentioning the Ohio State University. From its small beginnings in 1873 until now the Ohio State University


continues to provide a large financial impact on the City of Columbus. Though the various governments combined provide a larger number of jobs, the Ohio State University is the largest employer in Columbus as a single entity, with a total just short of thirty thousand full time positions68. Between tuition, spending by students, visitors, and athletic game attendees, it is estimated that the Ohio State University has an impact of 2.4 billion dollars to the Columbus economy69.

Rounding out Columbus economic portfolio is its retail industry. Though Columbus has always had a certain amount of retail, Alfred Lee lists in depth the stores available to the early residents; it was not until the 1950s and 1960s that retail joined the ranks of the major industries70. Columbus itself experienced tremendous growth in area during the 1950s and 60s as Mayor Sensenbrenner and the City Council pursued a policy of aggressive annexation. As the city grew so to did demand for new commercial outlets. Prior to this time retail was mainly focused Downtown with the department store Lazarus as the anchor71. With annexation came a rise in new retail and service jobs in the city, particularly on the city’s peripheries, a trend that continues today72. It was during this time that Columbus’ retail future was made, not only was there was a shift to near suburban shopping , but also many of the present retail moguls got their start during this period. Leslie Wexner, whose Limited Brands would become a driving forces in Columbus’ commercial field by the end of the 20th century opened his first store in 1963 73.
Today eleven percent of Columbus’ jobs are in the retail field with ninety six thousand employees 74.


Leading into the 21st century Columbus boasts an economy based on government, research, education, finance, and retail. The diverse portfolio of economic drivers has helped Columbus maintain a stable economic course through out its history. When one pillar of the economy is weak the others remain to stabilize the city75. At the beginnings of the 21st century Columbus’ economy has be a bright spot in the Midwest. While its neighbors Cleveland, Pittsburgh, and Cincinnati all suffered massive declines during the 20th century Columbus has remained constantly growing. Consistently Columbus now outperforms its region and the United States in many metrics measuring economic health76. With a sound economy built on many different pillars Columbus’ economic story illustrates how to weather economic storms. Columbus’ resilience in the face of economic troubles is evidenced in the fact that as of January 2013 it was the only city in the Midwest to regain the jobs lost during the Great Recession. The situation for Columbus’ neighbors has been improving since the latest economic downturn. Lately Columbus’s neighbors have all been diversifying their economic portfolios. The Great Lakes region has been experiencing a rapid growth in the number knowledge based jobs versus, manufacturing jobs, jobs that do well when the manufacturing sector is suffering78. In recent years, particularly following the Great Recession, Cleveland, Pittsburgh and Pittsburgh have begun leaving their heavy manufacturing past behind and have been focused on a wider range of industries. Great strides have been made in all three cities in the areas of business services, finance, and healthcare79, 80, 81. The future will see a region of cities with numerous strong avenues of economic development, cities that in many ways mirror the City of Columbus.



1.) Reader’s Digest (1959) Inside Test City USA: Report of a Study in Columbus Ohio Pleasant City New York: Reader’s Digest Association

2.) City of Columbus Dept of Development (2013) Corporate Success

3.) Ohio History Central. Cleveland Ohio. Ohio Historical Society
Accessed at,_Ohio

4.) Dietrich II, William. A Very Brief History of Pittsburgh. (Fall 2008) Pittsburgh Quarterly. Accessed at history-of-pittsburgh.html

5.) Ohio History Central. Cincinnati, Ohio. Ohio Historical Society Accessed at,_Ohio

6.) City of Columbus Dept of Development (2013) Corporate Success

7.) Fee, Kyle. Holston, Kathryn (2013) The Columbus Metropolitan Statistical Area. Federal Reserve Bank of Cleveland. Economic Trends

8.) Columbus Chamber of Commerce (1987) Information Guide 1987 Columbus Ohio: Columbus Chamber of Commerce

9.) Ohio State University Bureau of Business Research (1966 or 7) The Columbus Area Economy Structure and Growth 1950-1985. Its Monograph no.126 Columbus Ohio: Ohio State University
10.) Columbus Ohio, Department of Development. Planning Division ( 1977)Columbus as a Warehouse and Distribution Center
11.) Lee, Alfred (1892) The History of the City of Columbus Volume I New York and Chicago: Munsell and Company

12.) Ohio State University Bureau of Business Research (1966 or 7)

13.) Columbus Area Chamber of Commerce (1976) Columbus ’76 An Economic Symposium for Business Leaders Concerning the Future of Columbus Ohio Columbus, Ohio: Columbus Area Chamber of Commence

14.) City of Columbus Dept of Development (2013) Employment by Sector Accessed at

15.) Reader’s Digest (1959)
16.) Ohio History Central. Columbus, Ohio. Ohio Historical Society Accessed at,_Ohio?rec=689 17.) Lee, Alfred (1892) pg. 320
18.) Lee, Alfred (1892) Vol I
19.) Columbus, Ohio(1986) Columbus Economic Resource Profile
20.) Lee, Alfred (1892)
21.) Ohio State University Bureau of Business Research (1966 or 7)

22.) Columbus, Ohio (1986)

23.) Ohio State University Bureau of Business Research (1966 or 7)

24.) Columbus Area Chamber of Commerce (1976)

25.) Columbus, Ohio, City of. (1988) Discover the Columbus Opportunity Columbus, Ohio

26.) Columbus Regional Airport Authority(2013) Rickenbacker International Airport: Airport Overview overview/

27.) City of Columbus Dept of Development (2013) Employment by Sector

28.) Lee, Alfred (1892) The History of the City of Columbus Volume II New York and Chicago: Munsell and Company

29.) Columbus, Ohio (1986) Columbus Economic Resource Profile

30.) Ohio State University Bureau of Business Research (1966 or 7)

31.) Lee, Alfred (1892) Vol. II.
32.) Ibid

33.) Ohio State University Bureau of Business Research (1966 or 7)

34.) Lee, Alfred (1892) Vol. II Pg. 315

35.) Lee, Alfred (1892) Vol II
36.) Ohio History Central. Cleveland Ohio. Ohio Historical Society Accessed at,_Ohio 37.) Dietrich II, William. (Fall 2008)

38.) Ohio History Central. Cincinnati, Ohio. Ohio Historical Society Accessed at,_Ohio

39.) Smith, Harvey. Annual Report of the Secretary of State to the Governor and the General Assembly of the State of Ohio for the Year Ending June 30, 1921. Kelly Springfield Printing Company. Springfield, Oh. 1921

40.) Dietrich II, William. (Fall 2008)

41.) Columbus Area Chamber of Commerce (1976)

42.) Smith, Harvey (1921)
43.) Columbus, Ohio(1986)
44.) Lee, Alfred (1892) Vol. II

45.) Lentz, Ed. Columbus: The Story of A City. Arcadia Publishing. Charleston, Sc. 2003

46.) Columbus Area Chamber of Commerce (1976)
47.) Ohio State University Bureau of Business Research (1966 or 7)

48.) Lentz, Ed. (2003)

49.) David Stradling, Cincinnati: From River City to Highway Metropolis Arcadia Publishing. Charleston, Sc. 2003

50.) Dietrich II, William. (Fall 2008)

51.) Warf, Barney. Holly, Brian. The Rise and Fall and Rise of Cleveland.(May 1997) Annals of the American Society for Political and Social Sciences. Vol . 551

52.) City of Columbus Dept of Development (2013) Employment by Sector 53.) Huntington National Bank (2013) About Huntington

54.) Nationwide Insurance (2013) Nationwide’s Corporate History.

55.) City of Columbus Dept of Development (2013) Major Employers

56.) Fee, Kyle. Holston, Kathryn (2013)

57.) City of Columbus Dept of Development (2013) Employment by Sector

58.) Battelle Memorial Institute (2013) About Us

59.) Battelle Memorial Institute How to Change the World Columbus, Ohio: Battelle Memorial Institute.

60.) Dessour, John (1971) My Years with Xerox: The Billions Nobody Wanted Garden City N.Y. Doubleday and Company

61.) City of Columbus Dept of Development (2013) Major Employers

62.) Abbott Nutrition (2013) About Us

63.) American Chemical Society(2013) CAS History

64.) City of Columbus Dept of Development (2013) Major Employers

65.) Forbes (2008) Top Ten up and Coming Tech Cities cx_wp_0310smallbizoutlooktechcity_slide_2.html

66.) Columbus 2020 (2013) Science and Technology in the Columbus Region

67.) OCLC (2013) History of the Corporation

68.) City of Columbus Dept of Development (2013) Major Employers

69.) University Communications, The Ohio State University (2012) Economic Impact

70.) Reader’s Digest (1959)


72.) Bush, B. (2011, March 11) Census Shows Columbus’ Growth was Uneven. The Columbus Dispatch columbus-growth-was-uneven.html

73.)_ Limited Brands (2013) Our Founder

74.) City of Columbus Dept of Development (2013) Employment by Sector 75.) City of Columbus Dept of Development (2013) Corporate Success

76.)Federal Reserve Bank of Cleveland. Columbus- Leading the State to Recovery (2013) Accessed at


77.)Business First. Columbus, Only Midwest City to Regain Jobs Lost to Great Recession. (1/15/13) American City Business Journals Accessed at only- midwest-city-to-regain.html?ana=e_du_pub&s=article_du&ed=2013-01-15

78.)Elvery, Joel. Brain Hubs and Manufactoring in the Fourth District (2013) Federal Reserve Bank of Cleveland. Accessed at

79.)Schneieder, Keith, An Ohio River City Comes Back to its Shoreline (06/05/12) New York Times

80.) Venkatu, Guhan. Pittsburgh Labor Market (2013) Federal Reserve Bank of Cleveland. Accessed at

81.) Warf, B. Holly, B. (1997)

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