Purdue News

Economic development initiative a must for Indiana By Don Gentry This summer, Industry Week magazine ranked eight Indiana cities in the top 100 world-class U.S. manufacturing cities, with Kokomo at the No. 1 spot. And it's no surprise. Manufacturing has been the driving force of Indiana's economy for decades, with Indiana ranked first in the nation in the percentage of workers employed in manufacturing jobs. So all is well with Indiana's economy? Not exactly. It's true that wages from manufacturing in Indiana have remained 10 percent to 12 percent above the U.S. average for more than a decade. The unemployment rate in Indiana also remains very low. But 54 percent of Indiana jobs pay a median wage of $10 per hour ($20,000 per year) or less, and that figure is not expected to change in the next five years. So how do we promote the kind of economic growth in Indiana that will create more high-paying jobs? It will require growth in worker productivity, increased worker skill levels, increased skill requirements of jobs, and the expansion of advanced manufacturing and other high-skill jobs. To accomplish these goals, Indiana must have an aggressive statewide economic development initiative. We've already started down that road with the state's creation this year of the 21st Century Research and Technology Fund to provide a foundation for new economic growth by supporting innovation and research. To build on this foundation, however, the state must support an environment conducive to the growth of small businesses that offer high-skill/high-wage jobs, and it also must help existing manufacturing become technologically advanced. In effect, Indiana needs not only to foster new research, but also to speed up the research commercialization process. The development of small-business incubators like those in Purdue's Research Park are key. They create an important partnership between the state, the university and high-tech venture companies. They provide support services for small businesses, helping with business planning and recruitment of management, identification of mentors, continued research, business and legal services, and the location of seed capital. Without this kind of support, many new ventures have a hard time getting off the ground. Purdue's incubators have launched more than 80 companies employing more than 2,500 high-skill/high-wage workers. Because of Purdue's success in this area, one of the Research Park's new business incubators – the Purdue Technology Center – could serve as a model for regional partnerships between higher education and applied research. Existing and expansion companies also need a boost in this world of swift technological advancement. New technology and improved management practices are needed. The Technical Assistance Program at Purdue, which has offered this type of support since 1986, could be expanded on a regional basis by drawing on the expertise of university faculty in other areas of the state to work in tandem with the program. The jobs these initiatives will create are another key component for any significant economic change. Purdue is one of the largest suppliers in the nation of engineering graduates, the largest public-institution supplier of bachelor of science degrees in technology, and the No. 1 supplier of information technology graduates in the nation. When you add in the graduates of the other great institutions of higher learning in Indiana, it becomes obvious that our state has a human capital resource that is being greatly underutilized in this state but that is highly valued by other states. High-tech, high-paying jobs need to be waiting for our students when they graduate, so that we can effectively squelch Indiana's troubling "brain drain." No business plan can be successful without the availability of capital and a state government that encourages growth. Indiana must become more aggressive in making seed and venture capital available to new and expanding companies and by addressing the business and regulatory issues that foster, not hinder, growth. A statewide economic development initiative – one supported by state and local government, business and industry organizations, labor and business leaders – will provide the economic engine to power Indiana's economy into the next millennium, allowing the state to remain competitive in a global economy. Don Gentry is assistant to the Purdue president for economic development and dean of the university's School of Technology. To the Purdue News and Photos Page