Reduced Funding Scales Back Indiana Life Sciences, Technology Development Initiatives

July 15, 2009

While maintaining a $1 billion reserve over the next biennium, the 2009-11 budget signed into law by Gov. Mitch Daniels reduces by half funding for the state's 21st Century Research and Technology Fund and appropriates only a fraction of the requested $70 million for the Indiana Innovation Alliance, an initiative to grow the state's life science industries.

Indiana's 21st Century Research and Technology Fund administered by the Indiana Economic Development Corporation (IEDC) will receive $35 million over the next two years - half the amount appropriated last biennium. Supporting numerous entrepreneurial ventures over the last 10 years, IEDC uses the fund to offer loans and grants to companies bringing new technologies to market, to match SBIR grants, and to create University Centers of Excellence. Additionally, no funding was included for IEDC's High Growth Business Incentive Fund, which received $3 million last biennium.

The Technology Development Grant Program, which supports the creation and expansion of technology parks, will receive $3.8 million over the biennium, $400,000 less than last biennium.

Lawmakers allocated $20 million over the next two years to establish the Indiana Innovation Alliance, a partnership between Indiana University (IU) and Purdue University. Hoping to bring more external funding into the state by providing matching funds for large-scale research grants and initiatives, the presidents of the two universities asked lawmakers for $70 million over the biennium to be divided among two priority areas. This included $25 million each year to enhance state-of-the-art core research capabilities for university and corporate research, specifically in bioeconmic areas, and $10 million each year to expand education and healthcare innovations by growing statewide medical and bioscience programs.

In the end, lawmakers approved just $10 million each year, allocating $5 million for core research for the two universities, $3 million for expansion of the IU School of Medicine, and $2 million for Purdue's health care technology assistance program, reports the Lafayette (IN) Journal and Courier.

Legislators also concurred with the governor's proposal to eliminate the $20 million Life Sciences Fund approved as a one-time appropriation last biennium to support recruitment and retention of world-class scientists specializing in life sciences at the Indiana School of Medicine.

Federal stimulus funds were allocated during the session to support several economic development projects in the higher education system. Specifically, the enacted budget includes $20 million in bond authority for a drug discovery center at Purdue University West Lafayette and $10 million for the Midwest Institute for Nanoelectronics Discovery, a partnership between industry, Purdue University, and the University of Notre Dame. Launched in March 2008, the collaboration is one of four across the nation designed to create new research opportunities that will lead to development of atomic-scale technologies and drive future computing breakthroughs, according to the Semiconductor Research Corporation (SRC). Additional funding comes from Notre Dame, IBM Corporation, SRC's Nanoelectronics Research Initiative, and the city of South Bend.

Another $5 million in federal stimulus funds was allocated to support the Woodrow Wilson Teaching Fellowship program to add new math and science teachers in underserved areas of the state and for startup costs to establish new Tech High Schools.

The 2009-11 enacted budget is available at:

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