Purdue News

April 21, 2000 Purdue submits statewide plan to halt brain drain, create jobs WEST LAFAYETTE, Ind. – Purdue University is proposing a statewide partnership to create high-tech business incubators across Indiana. The Purdue Research Park's high-tech incubator system would serve as a model for these centers, providing leadership and service and helping to speed up the commercialization of research and the development of new small businesses. "Both Purdue University and state officials recognize the need for an important shift in Indiana's economy," said Don Gentry, dean of Purdue's School of Technology and special assistant to the president for economic development. "A large percentage of young engineers, scientists, managers and others with highly valued technical skills are leaving Indiana for high-paying positions in other states. To slow down this 'brain drain,' we must provide jobs that place a significant emphasis on technological skills and foster the development of cutting-edge industries with the most growth potential." Purdue's plan to promote the creation of high-skill, high-wage jobs is based on recommendations recently handed down by the Indiana General Assembly's Legislative Interim Study Committee on Economic Development Issues. The state report calls for the state to create and provide start-up costs for five regional technology centers each biennium. To determine where to locate the centers, Purdue would conduct feasibility studies around the state, including northwest Indiana, South Bend, Fort Wayne, Muncie, Indianapolis, Richmond, Columbus, Bloomington, Terre Haute, Evansville and New Albany/Jeffersonville. "The focus for each center would depend on the region of the state and the potential that exists in that region," Gentry said. "This change in our employment base can't come too soon," he added. "Indiana's per capita income is declining relative to the rest of the country. Fifty-four percent of the state's jobs are in occupations with a median wage of $10 per hour or $20,000 or less per year, a figure not projected to change within the next five years." In the Purdue Research Park in West Lafayette, the current business incubator system houses more than 90 companies and has produced more than 2,500 high-skilled, high-wage jobs. Most of these companies are using Purdue-generated technology and/or expertise. "Purdue has established the key components and methodology to identify, prepare, develop and incubate technology-based companies," Gentry said. "The Purdue incubator concept not only generates successful commercial business opportunities from within the university's research activity and from its intellectual property asset base, but also serves new business development activity within the Lafayette region." Purdue Research Park's version of a business incubator provides start-up businesses, mainly in the high-tech arena, with a shared office concept, flexible leases, attractive rental rates, and some shared office services. Businesses within the park also have access to large conference rooms, two-way videoconferencing facilities, T-1 Internet access, and presentation preparation equipment. Incubator tenants benefit from more than just a roof over their heads and secretarial assistance. These early-stage companies have access to the Purdue Gateways Program, which assists tenants when it comes time to write a business plan, market their product, connect with mentors, and tap the expertise of accountants, bankers, attorneys and other professionals. "Our incubation system is a synergistic combination of key business components," said Stan Mithoefer, director of the Purdue Research Park. "Any attempt to clone one or two of these components without attending to the total program would not be likely to succeed." Purdue's plan calls for each regional technology center to create an advisory committee to establish criteria for use of its services and to evaluate each company's potential for growth and success. Each center would be expected to work in partnership with Purdue during the developmental years of the program. The second component to Purdue's proposal is to speed up the commercialization of research findings. This effort would search out product development possibilities and markets for technology that emanates from research. To achieve this goal, the business incubators would be set up whenever possible in partnership with a local university campus. The universities would be eligible for the state funds and would own the resulting facilities. Such facilities would be built debt-free and managed by the local university campus administration. Purdue's plan calls for the state to appropriate funding in an amount not to exceed 50 percent of the total capital investment, up to $3 million per center. Matching funds are expected from local sources. Local tax abatement for each facility also would be expected. The proposal also asks for the state to appropriate no more than $250,000 per regional center per year for start-up operational costs for the first four years of operation. After that time, each center would be expected to operate on income generated from the facility and local funding support. The Lafayette region, through Purdue, would receive a $3 million grant to provide facilities for the leadership and service component for the regional technology centers, and for the completion of the second half of Purdue's latest incubator, the Purdue Technology Center. Purdue Technology Center staff would: • Provide orientation programs for people interested in the regional programs and support facilities. • Work with regional advisory committees or organizations in preparing a formal feasibility review and development plan for each location. • Assist with funding proposals, appropriate applications, staffing and governance issues. • Provide training and technical assistance for local staff and task force participants. • Offer mentoring as the region begins to recruit and service business prospects. • Provide consulting assistance to local staff on construction planning and on monitoring construction of the facility. Sources: Don Gentry, (765) 494-2552; dkgentry@tech.purdue.edu Stan Mithoefer, (765) 494-1727; smithoef@purdue.edu Writer: Jeanine Smith, (765) 496-3133; jsmith@purdue.edu Purdue News Service: (765) 494-2096; purduenews@purdue.edu To the Purdue News and Photos Page