Gov. John Kasich (R., Ohio) swears he never lost his focus on jobs. But last month, he and his allies in the state legislature suffered a significant defeat. In a ballot initiative, Ohioans voted 61 to 39 percent to repeal Senate Bill 5, which had limited public employees’ ability to use collective bargaining. Kasich had hoped to incorporate the legislation into the state budget — and thus shield it from a repeal effort — but a rogue state senator introduced the bill as a stand-alone, and eventually, Kasich had to defend it.

With a 36 percent approval rating, however, Kasich was unable to make the sale. When the bill went down to defeat, Kasich soberly acknowledged the public’s decision. “[Voters] might’ve said it was too much too soon,” he said the night of the election. Gleeful at their success, Democrats are now fielding candidates in all 99 state-house districts for next year’s election; they hope to retake the house, in which the Republicans currently enjoy a 19-seat majority.

But Kasich isn’t down for the count. He’s traveling the state participating in a series of new plant openings and jobs announcements: 200 new jobs at a material-handling company in Cincinnati, 450 new jobs at a Republic Steel plant in Lorain, 1,100 new jobs at a Jeep complex in Toledo. Since Kasich’s inauguration in January, says spokesman Robert Nichols, Ohio has gained more jobs than any other state in the Midwest — over 40,000.

Part of Kasich’s strategy has been to use tax incentives to lure businesses to the Buckeye State. Earlier this month, for instance, the Ohio Tax Credit Authority approved tax-incentive packages for 30 companies that promised to create or retain 14,000 jobs in the state. The state would forgo $60 million in tax revenue next year, in the hope of recouping most of its losses within one or two years. Nichols says 91 percent of the projects that have been approved promise to offer a positive return on investment within two years.

When asked whether he can really depend on these businesses to follow through on their promises to create jobs, Kasich insists, “They make a commitment to how many employees they’re going to hire. We make sure that the numbers we project are lower than what we think will happen. We’re not here to give anybody some Christmas present.”

The Ohio governor has designed his policy with an eye toward the competition. “When I look at Illinois, they need the legislature to do one-offs to keep companies from leaving the state,” he notes. Ohio allegedly offered Sears, which is based in Chicago, $400 million in tax breaks to jump ship. Although Sears seems likely to stay put, that’s only after the Illinois state legislature scrambled to hold a special session and offer the company a sweeter deal.

But Kasich’s strategy extends beyond tax incentives, he tells National Review Online. What Ohio needs is a cultural shift.

“Those are a tool, but you need to have a good university system, you need to have a stable economy, you need to gain a reputation that you have a business-friendly climate. . . . It’s a holistic approach,” Kasich says. And he has already been working toward that end. In the budget passed this year, Kasich and the legislature closed an $8 billion budget deficit without raising taxes, ended the death tax, and implemented merit pay for public-school teachers.

What’s on the agenda for the coming year? “Massive efforts at work-force training,” Kasich says. He adds, “We’re going to be developing an independent energy policy; we’ve got the Utica (shale. . . . We’re going to be working to reduce remediation of students who graduate from twelfth grade; we’re driving significant health-care reform by partnering with private-sector companies and helping them to reduce cost by driving outcome-based medicine rather than quantity payments.”

Kasich is concerned about the federal government’s ability to block shale projects. But he reassures NRO that state environmental-regulation agents are working with the federal EPA to avoid disagreements. “We’re building a relationship with regulators in Washington so that we know what we’re doing, and we work with the environmental community on issues.”

Education is another area of concern. “This is a major problem not just in Ohio but in America,” Kasich says. “What we are attempting to do is to get businesses to start forecasting what kind of a work force they need and then begin driving within technical schools and community colleges outcomes that are consistent with job needs.” With 70,000 unfilled jobs in Ohio alone, Kasich notes, the mismatch is obvious.

And so Kasich is soldiering on despite his critics’ gripes. “If you don’t have a critic,” he says, “you’re not doing anything.”

— Brian Bolduc is an editorial associate for National Review.