The Indianapolis Star John Ketzenberger column

BYLINE: John Ketzenberger, The Indianapolis Star

Jan. 4--SENTELLIGENCE SET EXAMPLE; AN R&D FUND IS SMART, TOO: Remember Sentelligence?

You may recall from an October column that company officials were trying to decide whether to stay in Indiana or cash in Michigan's better incentive package and move north.

The local maker of electronic sensors decided to reinvest here -- but only after the state sweetened the pot with more money from the 21st Century Research and Technology Fund and a couple of angel investors.

This time, Indiana got the 100-plus jobs with even greater potential thanks to the resourceful efforts of people like Bruce Kidd, the state's director of small business and entrepreneurship. There are times, though, when that's not enough and the state loses.

To pull this deal together, Kidd had to marshal money from three sources, and all of them required his best sales pitch. But it doesn't have to be that hard.

The Greater Indianapolis Chamber of Commerce and its statewide counterpart want the General Assembly to appropriate up to $100 million for two new programs -- a research-and- development fund meant to leverage federal grants and another pot of money state officials can use with more discretion to persuade companies to locate or expand here.

Kidd is convinced that if the state could make a $5 million grant from the research fund, it could double or triple that with federal bucks. Right now Indiana ranks 26th in getting Small Business Innovation Research grants. Ohio receives 10 times more money.

"It gets the attention of federal agencies when they know Indiana's got some skin in the game," Kidd said. That's why he used $6 million from the 21st Century Fund to match 60 $100,000 federal grants this year, even though that is not the fund's purpose.

The other pot of money proposed by the chamber is more discretionary -- and therefore more politically charged. In the Lone Star State, for example, Gov. Rick Perry has had to defend charges that he used the $300 million Texas Enterprise Fund for political purposes.

Even so, it's important for Indiana officials to have options, said Roland Dorson, president of the local chamber. "We want to give our local and state economic development officials as many tools as possible to be competitive," he said.

So how likely is it legislators will see the wisdom of investing more money into the state's economy? "It's hard to find anybody (at the Statehouse) who doesn't believe in economic development," Dorson said.

Remember, though, he is paid to be optimistic. Even Dorson notes, "there are a lot of outstretched hands this year, and the pie is only so big."

It will be a tough sell to legislators sorting through competing spending priorities, especially since they rarely get credit in the jobs race.

But there is no doubt that the new funds would have made Kidd's job easier -- and left more money in the 21st Century Fund to develop the products of other companies.

Indiana badly needs the federal money the proposed research fund would leverage. Having a fund to close deals quickly with companies like Sentelligence would help, too.

The question is, then, will legislators be as willing to invest in Indiana as Sentelligence was?

Catch John Ketzenberger on WTHR's 6:30 a.m. news every Tuesday and Thursday. He can be reached at (317) 444-6081 or at john.ketzenberger@indystar.com.

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