Indiana Outlines Objectives to Raise Per Capita Income by 2020

Just over a year since its creation, the Indiana Economic Development Corporation (IEDC) has released a strategic plan calling for the state to potentially increase its support for several new tech-based economic development initiatives. IEDC's Accelerating Growth: Indiana's Strategic Development Plan outlines nearly two dozen action items along three themes: innovation, talent and investment.

All of the action items, according to the plan, will help IEDC achieve its goal of reaching the national average in per capita income and average annual wages by 2020. Indiana's per capita income has slipped from 106.4 percent of the national average in 1953 to 91.4 percent today. Indiana now ranks 35th out of 50 states in overall economic performance, according to the 2005 Indiana Chamber of Commerce Vision 2010 Report Card. To reverse these trends Accelerating Growth calls for the state's development policies to emphasize the importance of high wage and high growth business.

The innovation-related initiatives include:

• Refocused the Indiana 21st Century Fund - (presently appropriated at $37.5 million per year for the biennium) already underway, the plan is to provide financial support to specific opportunities for the commercialization of technology research rather than R&D. The plan anticipates this will result in more of the fund's resources going directly to private companies.
• Indiana R&D Growth Fund ($25-50 million) - a matching fund to help universities, research organizations and private firms capture more federal research funding. The fund will be used to leverage research initiatives led by public/private university collaborations that require match, support the attraction of eminent scholars, and help finance research facility development and construction.
• Indiana High Growth Fund ($25-50 million) - an inducement fund for "deal closing" for company recruitment, relocation or expansion.
• Indiana SBIR/STTR Assistance - IEDC will consolidate and assume sole responsibility for providing assistance for SBIR applicants and winners within the state. Presently, outreach and proposal assistance is provided by Indiana University and SBIR Phase I matching grants are available from IEDC through the 21st Century Fund.
• Entrepreneur-in-Residence Program - to provide a stipend to support an experienced entrepreneur at a university or technology park to serve as a mentor for start-up firms.
• Commercialization Fund - to provide grants of up to $100,000 to support public/private universities and research organizations in their technology commercialization efforts within the state.
• Enterprise Indiana - an "overhaul of the state SBDC program in order to provide financial, managerial and technical support to entrepreneurs and growth companies. The proposal would provide the SBDC network greater emphasis and expertise for working with research related activities and technology firms.
• Promote the availability of the state's venture capital tax credit to increase the amount of VC available in Indiana. The state's potential annual exposure from the 20 percent credit totals $12 million, a figure the state "has never come close to reaching."

IEDC also proposes creating a $3-5 million regional investment fund to provide matching support for the creation of several regional investment consortia (RIC) comprised of area political, business and civic leaders to work with IEDC, academia, workforce boards and various political jurisdictions. The funds will be used to develop regional plans, conduct regular progress assessments and to competitively support major regional development projects.

How the plan's funding requirements impact existing economic development programs and appropriations remains to be seen. Along with the $75 million already appropriated to Indiana's 21st Century Jobs Fund for the current biennium, the state plans to spend nearly $60 million in several economic development programs and IEDC administrative costs. While specific dollar ranges are presented in the plan for the proposed R&D Growth and High Growth funds, totaling a combined $50-100 million, no figures are provided for the 21st Century Fund. As a result, whether the Accelerating Growth recommendations result in a net increase or decrease in the state's economic development investment is not clear.

Feedback and recommendations for the plan were drawn from more than 600 decision-makers from around the state representing a wide range of stakeholders in Indiana's economic future. Accelerating Growth notes that the successful development and implementation of the plan requires close collaboration among state, regional and local public institutions, as well as the support of the business and academic community. Accelerating Growth: Indiana's Strategic Development Plan is available from IEDC at: http://www.in.gov/iedc/pdfs/Strategic_Plan.pdf

Links to this report and nearly 4,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at: http://www.tbedresourcecenter.org/.