Central Indiana

Congratulations to David Johnson, President & CEO of the BioCrossroads life sciences initiative, who was appointed by the Central Indiana Corporate Partnership Board of Directors as CICP's new President & CEO this afternoon:

BioCrossroads President David Johnson is named President & CEO of Central Indiana Corporate Partnership

Johnson will succeed Mark Miles at helm of regional CEO alliance; will continue to lead CICP’s BioCrossroads life sciences initiative

(INDIANAPOLIS, Ind., December 18, 2012) The Central Indiana Corporate Partnership (CICP) announced today that BioCrossroads CEO David Johnson will succeed Mark Miles as its President & CEO.  CICP is a coalition of the CEOs of major private employers and university presidents focused on the long-term economic vitality of the region and state.  Johnson was an original organizer of BioCrossroads, the life sciences initiative founded by CICP in 2002, and has served as its President & CEO since 2005; in this role, he also serves as a member of the CICP Executive Committee.

The CICP Board of Directors selected Johnson by acclamation at its meeting this afternoon to succeed Mark Miles, who recently ended his five-year tenure with the influential economic development group to take on the post of CEO of Hulman & Company.

“We didn’t have to look far afield to find there is no better prepared or qualified candidate to take the reins at CICP than David Johnson,” said Denny Oklak, Chairman of Duke Realty and co-chair of CICP.  “David helped create and has led CICP’s first industry initiative [BioCrossroads], knows the organization intimately through his participation on our Executive Committee, and is well-respected by the business community, policymakers and opinion leaders alike for his tenure at BioCrossroads as well as an illustrious legal career and many civic endeavors.”

At BioCrossroads, Johnson has been responsible for raising more than $140 million in dedicated venture capital for Indiana life sciences start-up companies and roughly $100 million in philanthropic funding focused on strategic initiatives in science and technology education, health informatics, and most recently OrthoWorx, a regional partnership to grow the orthopedics sector in and around Warsaw, Indiana.  He will continue in his role as President & CEO of BioCrossroads along with his new duties at CICP.

“David has made BioCrossroads a national model for how private industry, academia, research institutions and the public sector can work together to capitalize on an industry cluster and promote real economic growth,” noted Jo Ann Gora, President of Ball State University and co-chair of CICP.  “BioCrossroads paved the way for the many successes of CICP’s other initiatives – Conexus Indiana, TechPoint, and the Energy Systems Network – and David has been there every step of the way. 

“He has been a valuable partner to Mark [Miles] and the rest of the CICP team, and he is uniquely qualified to follow him as President & CEO.”

In taking the helm at CICP, Johnson will oversee a growing portfolio of initiatives focused on workforce development, entrepreneurship, innovation and business climate with a continued emphasis on key economic sectors – the life sciences, advanced manufacturing and logistics, information technology and energy.  CICP is also a leading advocate for regional mass transit and an increasingly active voice on issues like K-12 education reform.

“The collective influence and insight of CICP’s members make it a real catalyst for economic progress,” said Johnson.  “I’m honored to be chosen to lead the group and welcome the challenge of building on the momentum generated by Mark Miles, who brought so much energy and an innovative spirit to the role.”

According to Johnson, the need for a CEO-led group like CICP has only grown since the organization was founded in 1998.

“In 2001, CICP put forward a blueprint for economic development that still guides policymakers today, and over the last decade built the infrastructure for initiatives like BioCrossroads, Conexus, TechPoint and the Energy Systems Network to energize our major industries,” Johnson continued.  “Today we still face major challenges – educating Hoosiers for tomorrow’s careers, creating more high-skill jobs in Indiana, building an entrepreneurial business climate – and we need an organization with the credibility and clout to tackle our most daunting issues.”

Prior to his time as President of BioCrossroads, Johnson was a partner with the Indianapolis-based law firm Baker & Daniels (now Faegre Baker Daniels) with a practice that included public finance, major public-private investment projects and economic development transactions.  He serves on the Purdue Research Foundation board, the IU Research & Technology Corporation External Advisory Committee, and the Notre Dame Graduate Studies and Research Council.  He is also a member of the Indianapolis Charter School Board.

He is a graduate of Harvard University (where he was a Rhodes Scholar) and Harvard Law; he served on the staff of the U.S. Senate Foreign Relations Committee before embarking on his legal career.

Johnson will assume his new responsibilities with CICP effective immediately.

Last week, CICP’s advanced manufacturing and logistics initiative, Conexus Indiana, released its 2012 Manufacturing & Logistics Report Card, an annual analysis of where we stand with our largest economic cluster, inter-connected industries that have led Indiana out of the last recession as our largest source of new jobs and job commitments.  Along with the life sciences, information technology, and clean energy technologies, manufacturing and logistics are the primary wealth-creating, high-skill employment-generating sectors.  Their vitality is critical to our overall economic health. 

The Report Card, developed by economists at the Ball State University Center for Business & Economic Research, ‘grades’ Indiana on a number of categories related to the present and future of these industries. Indiana is one of only two states to earn an ‘A’ for the overall vitality of both our manufacturing and logistics industries – we continue to rank #1 in manufacturing employment per capita, ninth in logistics jobs.

Indiana also earns an ‘A’ for competitiveness in the global economy, ranking among the leaders in manufacturing exports and income for Hoosiers generated by foreign-owned manufacturers.

The study gives significant credit for Indiana’s growing manufacturing and logistics sector to the state’s pro-growth business climate, and sound fiscal policies that have limited state government’s exposure to unfunded debts (like public pensions and bonds) – this allows companies to invest in Indiana with confidence that large tax hikes or drastic budget cuts lurk around the corner.

Unfortunately, not all news is good news. The Ball State economic team predicts that manufacturing and logistics growth is stay positive but slow down for the rest of 2012, as the national economy continues to falter (and could slip into recession). A poorly-educated population also jeopardizes the future health of these industries as employers demand a highly-skilled workforce to drive productivity and innovation.

The press release summarizing the Report Card is below, and the full study can be downloaded here.  You’ll also find interesting commentary by Conexus CEO Steve Dwyer on what the Report Card tells us here and here.

2012 Manufacturing & Logistics Report Card:

Indiana’s business climate helps the state thrive in the global economy – but workforce challenges continue to threaten future growth

(INDIANAPOLIS, Ind., June 19, 2012) Conexus Indiana and the Ball State Center for Business and Economic Research today released the 2012 Indiana Manufacturing and Logistics Report Card, the 5th annual assessment of the strengths, challenges and opportunities impacting two industries that collectively employ nearly one of every four Hoosiers.

According to the report, manufacturing and logistics continue to drive Indiana’s recovery and employment – the state again ranks as the most manufacturing-intensive economy in the nation, and first among states in manufacturing employment per capita. Indiana ranks 9^th in logistics employment and 10^th in freight shipments by tonnage. The strength of these and other data earned Indiana ‘A’ grades in the strength of both its manufacturing and logistics sectors (Ohio is the only other state to earn an A in both categories).

Indiana also thrives in the global economy, receiving an A in Global Position; the state ranks 10^th in manufacturing exports per capita and first in income derived from foreign manufacturing investment.

According to Ball State economist Michael Hicks, Indiana’s solid tax and fiscal policies have kept the state’s historically-strong manufacturing and logistics industries competitive. The state earned another A grade for its tax climate, and a B for a new category – Expected Liability Gap – that assesses the state’s exposure to future liabilities such as unfunded pension costs and bond obligations.

“Growing businesses are looking for a business climate that’s pro-growth and predictable,” noted Hicks. “Indiana’s tax code is favorable for investment today, and the policies that have kept us on solid fiscal footing lowers the risk of abrupt tax hikes or drastic budget cuts in the future based on unmanageable public debt.”

Indiana earned an improved B+ grade in the Report Card’s Productivity and Innovation category, based on improvements in manufacturing productivity and patent production, a testament to the incumbent Hoosier worker.

“The current manufacturing and logistics workforce is driving growth,” said Conexus Indiana President and CEO Steve Dwyer. “But these workers are getting older – the average age for manufacturing and logistics employees is over 50 – and the pipeline for the next generation is weak. That’s where our challenge lies.

As Dwyer notes, not all of the news is positive in the Manufacturing and Logistics Report Card. Indiana continues to be dogged by weak educational attainment, a critical challenge for industries that are increasingly high-tech and demand a highly-skilled workforce.

“The majority of U.S. manufacturing workers now have some college education,” Dwyer added. “With Indiana in the bottom half of states for adults with a two- or four-year degree, we’re at a competitive disadvantage for manufacturing and logistics companies looking to hire educated workers with advanced skills.”

The state’s C- grade in Human Capital is attributable to disappointing rankings in the adult population with a high school diploma (31^st among states), adults with a four-year college degree (42^nd), and associate’s degrees awarded per capita (32^nd). While older workers have acquired skills through years of experience, the demands of industry have evolved beyond the educational abilities of future employees, according to Dwyer.

“We have to introduce young Hoosiers to manufacturing and logistics careers early on, and give them opportunities to acquire the skills they need to succeed in 21^st century factories and high-tech supply chain operations,” he said.

As the state’s manufacturing and logistics initiative, Conexus Indiana is working with its corporate and academic partners to develop industry-endorsed educational programs, and marketing the careers to young people through its ‘Dream It. Do It.’ marketing campaign (at www.DreamItDoItIndiana.com). The organization is currently focused on a pilot launch of its new manufacturing and logistics high school curriculum, which will be available to school districts statewide next year.

“We value this annual Report Card as a way to mark our progress and get an objective read on the vitality of these industries, which make up almost a third of our economy,” finished Dwyer. “But we’ve made the strategic decision to focus most of our attention on Human Capital – the story of manufacturing and logistics over the last few decades is the transformation of the workforce, and Indiana still has some catching up to do.”

Other findings in this year’s Report Card include a C- in Benefit Costs driven by healthcare expenditures, and a C+ in Diversification (an improvement from last year’s C grade, demonstrating a breadth of growth across 22 industry sub-sectors identified by Ball State).

Last week, the Indiana Department of Education released the results from the first round of I-READ tests, a new assessment to ensure that Hoosier third-graders are reading at grade level before moving on.

The I-READ is about reading proficiency, but what else do the inaugural results tell us about the state of education in Indiana?

84% of third-graders statewide passed the test, a strong outcome that nonetheless shows that the DOE’s focus on early reading education is vitally important to the future of our young people and our state:

 Nearly two of every ten students who took the test were unable to demonstrate basic reading abilities; without the I-READ, it’s likely that many of these kids would have been passed along to fourth grade, continuing to fall further and further behind their peers.  Without strong reading skills, all other learning becomes a struggle and the chances of making it through high school drop precipitously.

The I-READ measures how well our students are doing, but also how well our schools are teaching.  The test comes with a host of other reforms from the state being implemented at the district level – a new reading curriculum, dedicated 90-minute blocks of reading instruction, annual reading assessments and the opportunity to get extra help in summer school.

Being retained in third grade, for those students who fail the I-READ twice, is a last resort.  As the other changes take root, I expect we’ll see I-READ scores continue to improve, a trend that will send ripples along subsequent grades as kids arrive better prepared to learn and succeed.

The I-READ results also provide insight into the performance of specific districts and schools – and once again, the Indianapolis Public Schools lags the state.  Only 67% of IPS third-graders passed the test, a 17% difference.  (This is similar to the district’s deficit relative to the state average in high school graduation rate, further confirming the link between early reading and ultimate achievement.)  While a third of Indiana schools met or exceeded a 90% pass rate, 56% of all IPS schools ranked in the lowest 10% of schools statewide.

 In fairness, IPS does serve a population of students with difficult circumstances.  But comparing IPS with high-poverty schools around Indiana – schools ranking among the top 25% of the state in free and reduced lunch-eligible students – IPS still comes up short, as these schools collectively managed a 70% pass rate.

Interestingly enough, nine high-poverty schools did achieve a 90% pass rate, showing that an environment focused on achievement can overcome any hurdles.  Four of these schools are in Indianapolis: Ernie Pyle School 90, the Merle Sidener Gifted Academy, Christel House, and the Padua Academy.  All of these are either magnets, charters or private schools – institutions operating largely or completely outside of IPS’ centralized control.

This leads to a final observation: IPS faces a lot of challenges.  But the top-down district structure is not equipped to address them – indeed, it is likely part of the problem.  Nationally and locally, we know what works in urban education: School-level leadership with flexibility from district rules and contracts, a culture focused on learning and empowering teachers.

A truly transformative approach is to decentralize the district into a portfolio of quasi-independent schools (a model similar to that which has been employed with success by the Recovery School District in New Orleans).  This would allow innovation and incentivize great teaching, and also push money that is consumed by central administration into the classroom (which could double spending per student by some estimates).

Less than half of IPS students pass Math and English I-STEP requirements.  Graduation rates lag the state average by more than twenty percent.  Six of the seven schools identified by the state as failures for six consecutive years under Public Law 221 are IPS schools.  The I-READ results are another data point in a compelling indictment of the current approach.

As innovation and accountability take hold across the state, and as students continue to struggle with reading and other subjects in IPS, there should be broad consensus that dramatic change is needed.

An excellent editorial ran in the Indianapolis Star late last week by former IPS School Board President Kelley Bentley, who makes an inarguable point with unique credibility – IPS is a broken system. 

Bentley’s piece is published in the midst of an ongoing pattern of actions and statements by the district that shows its commitment – not to the students in its care, but to defending what it views as its rightful monopoly on education within its boundaries.

IPS has engaged in a running feud with area charter schools over funding and enrollment practices.  It fought the recent state takeover over several schools by demanding special treatment on how scores were calculated and threatening litigation.  Now the district resorts to stonewalling the turnaround operators tasked by the State Board of Education with turning around these schools.  IPS officials have long been vocal opponents of voucher programs designed to give students and parents more choices.

While IPS spends significant time and energy seeking to stop the migration of students out of district schools – and therefore preserve its budget and justify its bureaucracy – its academic performance continues to falter.  Less than half of IPS students pass Math and English I-STEP requirements. Graduation rates lag the state average by more than twenty percent.  And six of the seven schools statewide identified as chronic failures under Indiana law are IPS schools.

Bentley points a finger at a major cause of this mess – the very structure of the traditional urban school district, a ‘command and control’ system where success is too often measured by enrollment and budget figures, not the achievement of students.  When you exist within a large bureaucracy, the preservation of that bureaucracy inevitably becomes the primary goal.

Read the editorial here:

Indiana's early reading education reforms, passed by the legislature in 2010, are coming to fruition to the benefit of the state's children.  A version of this commentary appeared in today's Indianapolis Star (click on the logo below to read it there).

During the 2010 legislative session, the Indiana Department of Education asked for and received from the General Assembly a simple but powerful mandate:  Make sure every Hoosier student learns how to read before the end of third grade.

This year, after careful study and analysis, the DOE is putting its strategy for early reading success into practice statewide. Their efforts include a new research-based reading framework to help local schools build intensive and successful instruction.  And in late March, for the first time Indiana third-graders will take the IREAD-3 test, a new evaluation to make sure they are reading at grade level.

 If students don’t pass IREAD-3, they will receive special reading education during summer school and re-take the test in July.  If they don’t pass this re-test, they will be retained in third grade.

 The media has covered the upcoming IREAD-3 testing, but the stories I’ve read seem to focus primarily on students’ apprehension and tired arguments from administrators against accountability.  As one who helped advocate for the new policy in 2010, I think it’s time for a refresher on the rationale for this reform on the eve of its implementation.

First and most obviously, reading is the foundational skill that makes all other education possible.  Students who can’t read struggle in other subjects, and fall further and further behind their peers.    Their odds of graduating high school, much less going on to college, plummet.  And in reading education, the third grade is a critical year – when students transition from ‘learning to read’ to ‘reading to learn.’  If students aren’t reading well by the end of third grade, their opportunity to catch up is all but lost.

But in the old system, too many students who couldn’t read were simply passed on to the fourth grade and beyond. 

This approach casually consigned students to a lifetime of struggle.  Available statistics tell a dismal tale: Only 2% of students who struggle with reading go on to earn a college degree.  Over 50% of people with the lowest literacy skills live in poverty.  Nearly 70% of prison inmates nationally have less than a 4^th grade level of reading.  We owe our children something better.

What the DOE has adopted is a renewed focus on teaching kids to read - a new focus on research-based reading curriculum, dedicated 90-minute instructional blocks, and annual K-3 reading assessments that provide ongoing opportunities to get students additional help and support before they reach the end of third grade.  And as a final safety net, an end to social promotion from third grade without some verification of reading proficiency.

In crafting this policy, we’ve followed the example of Florida, which ended social promotion in the late '90s and jumped ahead of Indiana on national reading achievement tests while spending consistently less per pupil.  Florida cut its failure rates by more than a third in less than a decade.  In the mid-90s, Hoosier students outperformed Floridian 4^th graders by 15 points on national reading tests (NAEP).  By 2011, the Sunshine State students were four points ahead.

But now we have a framework in place to achieve similar progress.  The DOE’s strategy makes sense:  Make reading education the top priority of the early grades.  Implement a new test focused on reading (the I-READ-3) and if students don’t pass, get them special help and make sure they can pass before promoting them.

The overarching goal of this strategy is to minimize the number of students who must be retained in the third grade by teaching them more effectively, measuring their progress and helping them every step of the way.  The IREAD tests are designed to keep any more students from falling through the cracks while holding schools accountable – the most visible manifestations of a renewed focus on reading that gives Hoosier students a better chance to succeed in the classroom and in life.

Mark Miles

Miles is President & CEO of the Central Indiana Corporate Partnership, a regional coalition of corporate and university leaders focused on economic growth and issues like human capital.

While this legislative session has been disappointing for advocates of mass transit (though the fight continues), the General Assembly can still take an important action to help Indiana's transportation sector: Approving Senate Bill 321, a tax incentive to encourage our state's logistics companies to invest in private infrastructure to help move freight to, from, and across Indiana more efficiently.  David Holt, Vice-President of our Conexus initiative, describes the proposal in this column published on Inside Indiana Business:

Logistics tax credit a super-size boost to Indiana’s economy

David Holt

Last week, more than 150,000 visitors descended on Central Indiana for Super Bowl XLVI, one of the biggest sporting events in the world.  Thousands upon thousands of people packed the streets of Indianapolis, transforming the state capitol into the capitol of football fandom.

Indy drew rave reviews for how it handled the influx with hospitality and aplomb.  But this shouldn’t be surprising – after all, organizing and managing the flood of fans is really an exercise in logistics.  And Hoosiers know logistics.

Think of it this way: Take every single Super Bowl visitor in Indianapolis last week, and replace each of them with over 12 million pounds of freight, piled higher than the city’s skyline.  That gives you a sense of the volume of manufactured goods, agricultural products, steel and other materials that are shipped to, from and through Indiana every year – nearly a billion tons.

It adds up to big business.  Indiana’s logistics sector is a $10 billion industry that employs 300,000 Hoosiers.  By moving products efficiently across the country and around the world, logistics also makes our manufacturing sector work.  ‘Crossroads of America’ is more than a marketing slogan for Indiana – it’s an economic fact.

State lawmakers recognized the importance and growth potential of our logistics industry last week, when the Indiana Senate passed SB321, the Transportation and Logistics Income Tax Credit (introduced by Senator Tom Wyss of Fort Wayne) by an overwhelming 49 to 1 vote.

SB 321 provides a 25% income tax credit for qualified expenditures made before January 1, 2019, by a taxpayer to make improvements to real property that is related to constructing a new or modernizing an existing transportation and logistics distribution facility and/or the transportation of goods on Indiana highways, rail, water and air.  The legislation limits the credit to $10 million per fiscal year. 

Indiana is fortunate that our central location puts two-thirds of the nation’s population and businesses within a day’s truck drive of our borders.  But we also need world-class transportation infrastructure to maximize our geographic advantages.  Through Governor Daniels’ Major Moves plan, Indiana has been able to continue to make aggressive investments in our public infrastructure even during the recent lean budget years.  But it’s also important that we incentivize companies to invest in their privately-held infrastructure, encouraging expansion and growing our overall capacity to move freight. 

This is the goal of the Transportation and Logistics Tax Credit, which now moves to the Indiana House of Representatives for consideration.  The Conexus Indiana Logistics Council, representing the state’s major employers in transportation, distribution and supply chain operations, would like to express our gratitude to the Senate for acting to reinforce our logistics sector – and we respectfully call on the House of Representatives to do the same.

Nationally, the economy continues to lag behind expectations.  Here in Indiana, we’ve been more fortunate than many in terms of output and job creation, because our economy is concentrated in what we might call ‘the basics’ – making and moving products.  Even so, too many Hoosiers are still out of work, and too many of our employers are hesitant to grow.  Encouraging our logistics industry to keep investing and contributing to a world-class transportation infrastructure is a wise investment in our economic recovery.

David Holt is Vice-President of Operations and Business Development for Conexus Indiana, the state’s manufacturing and logistics initiative; Holt manages the Conexus Indiana Logistics Council, an industry-led forum representing the interests of this sector.

Congratulations are in order for the team at BioCrossroads, which celebrates its 10-year anniversary this week as CICP’s initiative focused on the state’s life sciences sector. It’s been a decade of great success for the organization, ably led by David Johnson and the rest of his team – BioCrossroads was CICP’s first foray into launching subsidiary initiatives to catalyze growth in promising economic clusters, and it has established a model that has won national (even international) attention for how a cluster initiative should operate in pursuing new business opportunities and addressing broad challenges like human capital and risk capital needs.

To quote from BioCrossroads’ 2011 annual report:

“2011 was another milestone year for BioCrossroads and Indiana’s life sciences industry. More companies were formed and funded; more pharmaceutical and medical device products made their way from Indiana into the global marketplace; more and better data tracked the development of our sector; and more recognition came to our community as a regional hub of America’s life sciences industry – an industry with a $44 billion total impact on Indiana’s economy.

“For the first time, we identified, organized and analyzed a wide range of nationally significant indicators through a landmark study, authored by Walter H. Plosila, Ph.D., a globally recognized expert on developing life sciences clusters and initiatives, and based on data gathered by the Indiana Business Research Center at the Indiana University Kelley School of Business.

“The results illustrate a decade of substantial growth and measurable progress for Indiana’s life sciences sector, including the state’s rank as the third highest exporter of life sciences products in the U.S. ($9.1 billion), behind only California and Texas; a 21% increase in life sciences employment since 2002, adding more than 8,800 new jobs to the industry; and a total sector employing more than 50,000 workers across 825 companies…

“One of 2011’s most gratifying moments came in August, when the Wall Street Journal, in an article appropriately titled ‘Where the Action Is,’ singled out Indianapolis as one of seven “new industry hubs” for start-ups across the country – and the only one to make the list in the life sciences. Our sector is at last beginning to get the national attention it deserves.”

Statement from the Central Indiana Transit Task Force:

Last November, the Central Indiana Transit Task Force proposed a significant regional mass transit plan that will connect workers to jobs, revitalize urban neighborhoods and help the region compete for talent and economic investment.

The Task Force called on the Indiana General Assembly to give voters a chance to evaluate the proposal and decide for themselves through a referendum if they wanted to invest in this kind of transit system. A broad coalition of more than 100 groups, representing civic organizations, neighborhood associations, the business community, organized labor, local elected officials, disability advocates and others joined the call to give local voters this voice.

We knew that the time constraints of a short legislative session would be challenging, but we were encouraged that this groundswell of support would lead to success this year. Unfortunately, the transit initiative became entangled in collateral issues at the Statehouse, most notably right to work. With labor issues added to the mix, our bill failed to clear the House Ways & Means committee by one vote, even though the transit portion of the legislation – on its own merits -- would have easily passed the committee with strong bipartisan support.

Given this outcome and the pressing calendar of the short session, it has become clear that the transit initiative won’t pass this year. To quote Vince Lombardi, "We didn't lose the game; we just ran out of time." Speaker of the House Brian Bosma and Senate President Pro Tem David Long have encouraged us to continue making the case for the transit plan and to bring the issue back for consideration in the 2013 budget session.

In that spirit, we’ll meet with individual legislators over the course of the coming year to answer their questions and secure bipartisan support for the plan. We'll engage the strong grassroots network that already exists to build even broader community support. And we'll continue gathering feedback to refine the transit plan as necessary to meet the community's needs.

The success of the Super Bowl demonstrated once again that we can do incredible things when the community comes together to pursue a shared goal. It showed that we know how to take a familiar concept, study the success and failures of others, and put our own unique imprint on the event. 

Finally, the Super Bowl experience reminded us that the disappointment of an initial setback – such as losing our initial attempt to host the game – shouldn’t deter us from pressing on. We'll take all of those lessons to heart as we plan for the next legislative session.

Task Force Co-chairs
Al Hubbard, E&A Industries
John Neighbours, Faegre Baker Daniels
Robert Palmer, FedEx

Task Force Founding Members
Mark Miles, Central Indiana Corporate Partnership
Scott Miller, Greater Indianapolis Chamber of Commerce
Steve Sullivan, Metropolitan Indianapolis Board of Realtors

While issues like Right to Work have dominated the headlines and the fight for mass transit hits close to home in Central Indiana, another important debate in the General Assembly has the potential to contribute to Indiana's economic competitiveness - local government reform.  As we've written about extensively here, CICP believes that streamlining local government - particularly the outdated layer of township offices - can lead to a leaner, more effective, 'customer-friendly' public sector to serve individual taxpayers and businesses.

Here is an excellent editorial from the Anderson Herald-Tribune describing the state of reform in this session of the legislature and calling for much-needed progress on the issue.

Over the last few years, the voters have been called on to decide a number of important issues – whether to do away with township assessors, to put property tax caps in the state constitution, and to allow school districts to exceed those same caps on a case by case basis.

Mass transit legislation being considered by Indiana’s House Ways and Means Committee empowers voters in Marion and Hamilton Counties to similarly make their own decision on an expanded, multi-modal transit system (based on the proposal advanced by CICP’s Central Indiana Transit Task Force). The bill doesn’t ask lawmakers to support a tax increase or even declare their support for transit. It simply allows local officials (many of whom support the plan) to put the question before the voters this fall in a referendum.

Most surveys suggest widespread support for such a ballot question, for a number of reasons:

The current IndyGo system, underfunded and limited to Marion County, doesn’t meet the needs of our citizens or our economy. Nearly 20% of households in the region have either no car to get to work or have multiple workers in the household but only one vehicle. For these Hoosiers, access to job opportunities is limited to IndyGo routes, and a simple cross-town commute can take hours with multiple transfers.

Our mass transit plan recognizes that employment centers have shifted across the region. By doubling bus service in Marion County and extending it to Hamilton County, it helps employees and employers by connecting the two. But the economic benefits of transit go beyond helping Hoosiers get to work.

The construction and operation of a multi-modal system with light rail and bus rapid transit (BRT) routes will create a significant number of jobs. Mass transit has also been shown to attract private investment and build a broader tax base, as commercial and residential development grows along the transit lines. In Cleveland, more than $4 billion in private development is planned or in progress along the Euclid Avenue light rail corridor. In Dallas, another $4.2 billion in business and new housing sprang up around the Dallas Area Rapid Transit system between 1999 and 2007.

We see the same kind of potential to revitalize the neighborhoods along the proposed northeast corridor rail line, and along the BRT lines that may transition to light rail as demand and finances allow. 

Finally, mass transit is the kind of ‘quality of life’ infrastructure that helps the Indianapolis region compete for talent and business opportunities. The availability of a young educated workforce is a critical driver of economic development. The convenience of effective public transportation and the attraction of ‘walkable’ neighborhoods served by transit helps lure these workers. 

The arguments for regional transit are numerous and compelling. But the current debate at the Statehouse isn’t really about the merits of mass transit itself – it’s about trusting the elected officials and voters of Marion and Hamilton Counties to look at both sides of the issue and make their own choice.

This position is summed up nicely by this letter to the editor by CICP co-chair Denny Oklak in the Indianapolis Star, as well as the Star’s own editorial plea to legislators.

Around 2008, the U.S. manufacturing sector crossed an important rubicon – the percentage of its workforce with a college degree or some post-high school education exceeded the percentage with only a high school diploma or less.  When these high-skill workers became the majority, manufacturing had undeniably evolved – hence, the rise of the term ‘advanced manufacturing.’  Unfortunately, our education/workforce system has not evolved along with industry demands - hence Conexus' critical work in this arena.

Millions of Americans are looking for work, and thousands of U.S. manufacturers are looking for workers.

The numbers are startling. While unemployment and underemployment remain stuck near 20 percent, more than 600,000 good manufacturing jobs have gone unfilled, according to the National Association of Manufacturers. While personal income has stagnated, these jobs pay wages much higher than the national average.

Where's the disconnect?

There's a simple answer to a complex problem: The majority of manufacturing jobs now require education beyond high school, and our workforce doesn't make the grade.

As manufacturers have raced to be more productive and innovative over the last several decades, they've demanded more out of their workers -- the skills to operate advanced computerized equipment and robotic systems, teamwork and troubleshooting capabilities.

The manufacturing workforce got smarter, but it also got older. Back in 1980, 70 percent of the nation's manufacturing workers were younger than 45. Today, half the workers are older than 45, and the percentage age 25 to 34 has dropped by more than a third.

As the baby boomer generation retires, jobs open up. But young workers are ill-prepared to step into the shoes of their parents and grandparents. According to the Organization of Economic Cooperation and Development, the U.S. is the only industrialized country where educational attainment among those just entering the labor market (25 to 34 year olds) is less than those about to leave the labor market (55 to 64 year olds).

Even in Indiana, the most manufacturing-intensive state in the nation, we haven't changed our academic approach since the rise of the assembly line. Post-high school training will be mandatory for 60 percent of all new jobs in manufacturing and logistics over the next decade, but we remain stuck in a bygone era when a basic high school diploma was sufficient to earn long-term employment at the local factory.

Conexus Indiana represents companies in the automotive industry, aerospace and defense firms, logistics businesses -- a wide spectrum of high-tech manufacturing and supply chain fields. We convene groups of them regularly to discuss critical business issues. The consistent message is that they all need skilled workers, but that despite high unemployment, the right kind of labor is scarce.

That's why we act as a bridge between private industry and higher education partners such as Ivy Tech, Vincennes University and Harrison College to ensure that quality post-secondary programs are available to prepare young Hoosiers for these challenging (and high-paying) careers. But we must do more, catching the next generation of manufacturing and logistics workers even earlier -- in high school.

It's clear that students begin seriously thinking about their career choices while still in school. Research by the ACT confirms that high schoolers who were fairly certain about their occupational choices by their junior/senior years are more likely to succeed in college and ultimately earn positions in their chosen field.

Conexus is now working with Indiana employers and the state Department of Education to develop an advanced manufacturing and logistics (AML) high school-level curriculum, a mixture of online and hands-on courses that will expose students to these industries and give them a solid foundation of knowledge to carry on after they earn their diplomas.

The AML curriculum was created in alignment with state standards and with broad-based feedback from industry, ensuring that it carries real value for students. It has been endorsed and is eagerly anticipated by school superintendents and technical education directors across the state who see the need to prepare their students to participate in a sector that today employs one of every four Hoosiers.

Conexus is completing private fundraising to finalize the curriculum and provide it to school districts at no additional cost. The private sector has embraced the opportunity to invest in this effort, a concrete demonstration of the demand that exists for a revitalized workforce pipeline. For too long, employers have been disengaged from the educational system; now, companies are realizing that they must push for relevant programs, work with local schools and put money into training efforts to develop the human capital they need.

Without qualified employees, advanced manufacturing and logistics companies can't grow; without good job opportunities, young people can't become productive taxpayers. The process of closing our skills gap will begin in classrooms and technical education centers across Indiana -- and it has to start now. It's up to us to make sure local high schools have the tools to engage and educate our future workforce.

Dwyer is president and CEO of Conexus Indiana, the state's industry-led manufacturing and logistics initiative; he formerly served as chief operating officer of Rolls-Royce North America.

The story of downtown Indianapolis over the last 40 years is a narrative of self-determination, of a committed civic sector ambitious enough to believe they could make the mile-square into the vital heart of the region.

In the late ’60s, downtown was a hollowed-out core, under siege from more attractive suburban retail, with little business activity and just a few hundred hotel rooms. The area that is now IUPUI was acres of dilapidated neighborhoods and shuttered storefronts.

The city had one advantage—our corporate and community activists. In partnership with a string of strong mayors, they went about exploiting opportunities to build a vibrant downtown.

They used sports as a catalyst, luring the Pacers downtown, attracting the Colts and creating a prime destination for championship events. They supported the growth of the modern IUPUI campus and of White River State Park as an enormous urban renewal project. They also embraced a unique spirit of public-private partnership to bring investment of all kinds to the mile-square—corporate headquarters, Circle Centre mall, refurbished and new cultural attractions.

Today, we face a new challenge. Bill Hudnut famously proclaimed that Indianapolis couldn’t be a “donut city” with an empty downtown. Today, downtown thrives —the hole in the donut is solid. But now this core is constricted by a concentric circle of blight separating it from our robust suburbs.

While we were building up the downtown, Center Township overall lost 67 percent of its population.

The same energy and ingenuity that we devoted to building downtown must be applied to the surrounding neighborhoods, four to six miles outward. Failing to address their plight would pose a corrosive threat to the entire region. Here is a three-part prescription to start the rebuilding:

First, we must adopt an integrated strategy to reinvent promising urban neighborhoods into interesting places where people want to live. This means transforming housing, physical and social infrastructure, and creating neighborhood-serving commercial districts.

We have isolated examples of how this approach can work—the revitalization of Fall Creek Place, the effort underway in the Meadows led by Strategic Capital Partners, and the Near Eastside Legacy partnership between neighborhood groups and the Super Bowl Host Committee. The challenge is scaling up these best practices into a strategy that can be applied to other areas with the right mix of grassroots leadership and market activity.

Next, education. Failing schools are a primary reason for the flight of people and capital. We must reverse the status quo in urban education. The neighborhood schools of our future must educate current residents and attract new families to our urban core.

There are examples, in Indianapolis and nationally, of inner-city schools that are thriving. These great schools share common characteristics—school-level governance, leadership that embraces innovation and accountability. Our vision for rebuilding our urban core must set schools free to embrace this model and move urgently toward the creation of a broad portfolio of high-performing schools.

Mass transit is also a vital priority for rebuilding urban neighborhoods, giving residents the mobility to connect with jobs and their other daily needs. Dense residential and commercial development also grows along rail and bus rapid transit routes, attracting new people, investment and jobs.

The evolution of downtown took a generation, and this transformation will take the same long-term focus. Just as our sports strategy started with a few big wins that coalesced into a plan, we’re seeing progress in neighborhood redevelopment, education reform and transit planning.

Now is the time to harness this momentum and apply big thinking and sustained commitment to the tasks ahead. Decades ago we weren’t prepared to accept this city as a donut with downtown as the void in the middle. Looking forward, we have to broaden our focus to the next ring out by rebuilding and creating a truly prosperous region with a vibrant urban core.

An excellent article in today’s Wall Street Journal about ‘hot spots’ for entrepreneurial activity in various economic sectors – validating the industry cluster approach that CICP has employed over the last decade in launching initiatives focused on particular industry opportunities.  And indeed, Central Indiana’s life sciences sector is recognized as a prime example of a growth cluster, supported by the activity of our BioCrossroads initiative.

See the full article here or read through the text below:

Where the Action Is

Across the country, new industry hubs are drawing entrepreneurs and investors—and offering start-ups support and safety in a turbulent economy

By EMILY MALTBY

Location matters.

·         Read the complete report .

It's a lesson that's all too easy to forget in a world driven by mobile devices, cloud computing and home offices. There are big benefits to setting up shop in the right spot—especially among lots of peers in the same field.

Just ask sports-gear makers in Ogden, Utah. Or health-care companies in Nashville. Or nanotechnology researchers in Albany, N.Y.

These cities, and others like them across the country, have become hubs for specific industries. Entrepreneurs are moving there and flourishing in the teeth of a bleak economy. The cities, in turn, are nurturing the entrepreneurs by giving them access to funding, mentors and facilities.

All in all, these clusters can be ideal spots for an entrepreneur in the field. Being there means getting access to a much wider range of suppliers, customers, employees and industry experts. What's more, industry peers are often willing to support each other as they get off the ground, sharing recommendations about staffers, potential sales leads and attractive office space, or giving each other guidance and insight about the industry.

Jeffrey Logsdon can attest to that. Five years ago, he moved his cybersecurity firm from Phoenix to San Antonio—a city that's seeing a surge in business for companies in the field. Company revenue doubled within three years of the move.

"I'd attribute a lot of our success to the location," he says. "I think the availability of cybersecurity talent and the low cost of doing business here has helped us. And because there are so many different cybersecurity companies, we have improved each other's business through partnerships."

As a hub grows, it brings other benefits to small firms. For one thing, even as businesses cooperate, they challenge each other to innovate—to come up with new ideas that make them stand out from the crowd. "Specialization in a region increases patents, business formation and higher wages," says Rich Bryden, director of information products at Harvard Business School, who's working with a team mapping industry hubs in the U.S.

Infomen

When businesses come together, they also catch the eye of big players with deep pockets—especially beneficial when the economy is weak and financing is limited.

"It's easier to be on the radar for investors when you're part of a critical mass," says John Fernandez, assistant secretary of commerce for economic development at the U.S. Economic Development Administration.

Hubs also catch the eye of government, says Dan Carol, senior fellow at the New Policy Institute think tank in Washington, D.C. A concentration of small firms in the same field is more likely to be recognized on the municipal level, where funding programs and policies can be created to stimulate their growth.

Here's a look at seven up-and-coming innovative centers. All have solid partnerships between the public and private sectors, a growing work force to fuel the industry and long-term strategies for development. And entrepreneurs say being there is vital to their success.

INDIANAPOLIS

LIFE SCIENCES

Indianapolis used to be the quintessential Rust Belt city. Now it's at the center of a statewide boom in the life-sciences business.

Endocyte

The state has added 8,800 jobs in the life sciences in recent years, and today some 825 medical-device companies, drug manufacturers and research labs call Indiana home.

Indianapolis, which is home to big names in the field such as Eli Lilly & Co. and health insurer WellPoint Inc., is leading the transformation. Corporations like these have added the lion's share of the state's new life-sciences jobs. Now they're helping smaller companies get off the ground, too—by spinning off new businesses as well as by backing independent start-ups. Eli Lilly, for instance, has contributed roughly $60 million to seed and venture funds that are supporting entrepreneurs.

That isn't the only way big companies are easing the way for small ones. With new firms arriving to supply the large drug makers, start-ups are getting access to a range of services at competitive prices.

"We have access to companies in Indiana where we can outsource functions like toxicology, analytics and clinical supply," says Ron Ellis, president and CEO of Endocyte Inc., a 65-employee firm that's testing a cancer treatment.

Many small firms, meanwhile, are helping others get off to a good start. David Broecker, president and chief executive of BioCritica Inc., an Eli Lilly spinoff, says his peers have referred employees, suggested work space and given information on tax and financial incentives.

It's just the environment he hoped for when he left the East Coast to build a company. He considered other spots but settled on Indianapolis because "it's all new and exciting here for these folks, so there is a hunger for doing this type of thing."

SAN ANTONIO

CYBERSECURITY

Washington, D.C., has usually taken the lead in creating Internet-defense systems. But the Alamo City is poised to give the Beltway a run for its money. There are more than 80 information-technology and cyber-related businesses in San Antonio, and that figure is increasing rapidly, according to the city's Chamber of Commerce.

Andrew Watson

Many entrepreneurs are anticipating a flood of government contracts from the new Air Force Cyber Command headquarters in town. The military chose San Antonio in part because the armed forces have always had a strong presence there—and many of the city's workers have security clearances from the Defense Department and the National Security Agency. Another big plus: a stream of skilled graduates from the Institute for Cyber Security at the University of Texas at San Antonio.

But not all the firms in town are counting on government contracts. The city has a growing group of businesses that cater primarily to the private sector, like MainNerve Inc., the company Mr. Logsdon moved to San Antonio. The firm helps health-care companies secure digital records and servers. "The quantity of people here allowed us to show more discernment in our hiring," says Mr. Logsdon. "It was the best place for us to find qualified and certified cybersecurity professionals—and it doesn't hurt that they have military experience."

ALBANY, N.Y.

NANOTECHNOLOGY

The capital of New York state is becoming a big player in a field that deals with small things—nanotechnology. The city now boasts more than 4,000 people in the industry, centered on the College of Nanoscale Science and Engineering at the University at Albany.

Mia Ertas/CNSE

The school has doubled in size during the recession to its current 800,000-square-foot complex. Dozens of nanotechnology companies have established a presence there to take advantage of research facilities and business incubators; since 2008, nearly 50 new start-ups have launched within its walls.

The build-out was part of a state plan, formulated years earlier, to revive the economy in upstate New York. Financing came partly from the state and partly from corporations like International Business Machines Corp., which now have offices there alongside entrepreneurs. That means companies can share the cost of equipment and labor—and start-ups get to associate themselves with big names.

"The prestige of being here and the credibility is amazing, which helps when you are talking with VCs and investors and large companies," says Primal Fernando, CEO and chief technology officer of Resource Management Technology Systems Inc., which moved to Albany from La Junta, Colo., last year. "And the equipment available here is not available elsewhere."

Many companies are launching off-campus, as well, in laboratories that are opening in once-vacant buildings. And financiers and other vital players have been moving in to be a part of the action.

"Venture capital has been growing to feed the innovation," says Alain Kaloyeros, a physics professor and senior vice president of the college. "Suppliers and law firms are moving to the region to support this ecosystem, so it will be quite an exciting venture to watch."

KANSAS CITY

INFORMATION TECHNOLOGY

Welcome to "Silicon Prairie."

Kansas City, straddling the Kansas and Missouri state line, is home to tech giants like Sprint Nextel Corp. and Cerner Corp., but its industry ranks have been swelling with smaller firms. In 2009, the number of tech companies rose by 5% to 2,900, trumping the growth rates of well-known hubs like Silicon Valley, Boston and Austin, Texas, according to a 2010 study published by the TechAmerica Foundation.

Dataworks, Inc.

Part of the lure for entrepreneurs: a high-speed fiber network from Google Inc., which chose Kansas City over 1,100 other cities to set up the service. Expected to roll out next year, the network will run 100 times faster than current broadband, which will likely bolster cloud-based technologies and pave the way for high-definition streaming services that will be hard to find elsewhere.

The Google initiative will be "an excellent platform for innovation," says Bryan Richard, founder of iCode Inc., a Web start-up that posts profiles of software developers. "Everyone in the technology business is talking about it here in town, and everyone wants to do something with it and maximize it."

Entrepreneurs who have relocated from the coasts also tout the friendly business environment. It's far less expensive to build a firm and develop technology, they say, and there are fewer state and city regulations to worry about. And, as in other hubs, many entrepreneurs are helping each other. "Numerous times people have asked me for things I have expertise in and there are times where I call competitors…for specific problems," says Donald Rossberg, president of Dataworks Inc., a technology-support and consulting start-up. "In the end, we all benefit."

ASHEVILLE, N.C.

BEER BREWING

Craft beer is a small industry, but it has a devoted customer base. One Southern town is going after those fans with vigor.

John Warner

Asheville, a Blue Ridge Mountain town of 75,000, has 10 breweries, with two on the way. That can't compare with the 40 in Portland, Ore., but it stacks up to other beer havens like Milwaukee and Boulder, Colo., which both have fewer than a dozen. "Asheville is definitely on the map and well recognized in the craft-brewing industry," says Paul Gatza, director of the Brewers Association in Boulder.

Entrepreneurs new to the area seek mentoring from the established brewmasters and the Asheville Brewers Alliance, formed to exchange ideas and promote the industry. They also tap Blue Ridge Food Ventures, an incubator for developing and commercializing products.

Competition among the breweries is a key driver of growth. "Every time a new brewery opens, it has to create its own creative edge, and then the other breweries have to be creative to become relevant again," explains Bill Drew, owner and brewmaster at Craggie Brewing Co. "So it's good when the new guys come in; it keeps the old guys on their toes."

In fact, the beer culture has permeated the town, with a host of businesses cooking up beer-flavored edibles and artists making tap handles and bottle labels. The environment gives brewers a place to source ingredients and fuel creativity. "By local companies teaming together, it's pretty much a win-win," Mr. Drew says.

NASHVILLE, TENN.

HEALTH CARE

Early last year, the federal government passed legislation calling for a host of health-care reforms. And Nashville is poised to benefit from the overhaul.

There are more than 250 health-care companies in the city, and their numbers are rising. Employment in nursing, hospital and ambulatory services jumped 16% between 2004 and 2008, for instance. That, in turn, provides fertile ground for companies that create medical devices and patient-care systems.

Shareable Ink

The entrepreneurial spirit "is infectious," says Leon Dowling, founder and chief executive of IMI Health Inc., which collects and organizes health records to give insight into the best patient-care practices. "Within 10 miles of my office, I can have more potential clients than any other city in America."

Last August, the city launched an entrepreneur center to spur innovation; two-thirds of the firms that have sought mentoring and financing are related to health care. State programs have also helped propel the industry. Recently, some $180 million in public funds has been made available to burgeoning firms.

It's an attractive spot for entrepreneurs like Stephen Hau, president and chief executive of Shareable Ink Corp. The company, whose digital pen records doctors' notes and transfers them to an electronic format, launched nearly three years ago in Boston and established a presence in Nashville last year. Today, 60% of the company is in Nashville.

"The community here is so well versed in health care that it keeps us plugged in to the key issues and how to resolve them," says Mr. Hau. "And in terms of the investment community today, people are careful about where they place their bets. Being here, [investors] see we are aligned with thought leaders."

OGDEN, UTAH

OUTDOOR SPORTS

Ogden, a small city some 40 miles north of the capital, packs a concentrated punch in the outdoor and recreation industry.

Goode Skis

Ogden made headlines in 2002, when it hosted events for the Salt Lake City Olympic Games. Those Olympic facilities, along with acres of pristine mountains, canyons and rivers, are the main reason outdoor-apparel and equipment companies have been moving to town: The site offers a perfect spot for testing new products, and it's easily accessible from a nearby airport that supports direct flights to Europe. What's more, business owners say, the growing base of competing companies in the area push each other to design the best equipment.

Utah has a relatively modest share of the industry; the state estimates it's home to about 5% of the outdoor-products firms in the U.S. Still, companies that expanded in or relocated to Utah have created at least 2,550 jobs in the past six years, according to the Economic Development Corporation of Utah.

Industry goliaths get partial credit for the surge in Ogden. Amer Sports Corp., the company behind Wilson, Atomic and other brands, consolidated its U.S. operations in 2007 and moved them to the town. Quality Bicycle Products Inc., a distributor based in Bloomington, Minn., set up its second location in Ogden in 2010.

Quality's founder, Steve Flagg, liked the growing retailer base, easy access to the West Coast and strong labor pool. But, he says, "the game changer was the transformation that the city was going through," as other companies moved in, and the local government actively recruited more.

Local leaders are also helping start-ups like Kahuna Creations Inc., a longboard, surfboard and landpaddle company, launch and grow. Kahuna founder Steve McBride says the mayor's office helped him land funding and find a low-rent facility in 2008. The company has grown 30% to 50% annually.

"You get a network of people who really want to help," Mr. McBride says. "We've been flourishing here."

Ms. Maltby is a small-business reporter in The Wall Street Journal's New York bureau. She can be reached at emily.maltby@wsj.com.

When it comes to small business, the Indianapolis region faces a good news/bad news scenario.

Usually, we feel slighted at being left out of an economic ranking of top metropolitan areas. But the region’s absence from a recent report by leading micro-lender Kiva and Visa Inc. (“Small Business Trouble Spots”) was cause for relief: As reported by Norm Heikens at the IBJ’s Small Biz Matters blog, the study ranked the large metros that saw the demise of 1% or more of its small enterprises (10 employees or less) during the recession (2006-2008).

Among our regional peers, Kansas City and Columbus, Ohio lost 2% of their small businesses, while Cincinnati, Cleveland, Detroit, Louisville, Milwaukee, Memphis and St. Louis all made the list of those losing at least 1%. Greater Indianapolis stayed roughly even, which was good enough to outperform much of the urban Midwest.

That’s the good news. But because small businesses have been our most reliable job creators in the recent economic past, treading water won’t drive our recovery going forward. Another recent report ("Starting Smaller, Staying Smaller: America's Slow Leak in Job Creation"), this one by the Kauffman Foundation, warns that smaller ventures aren’t producing new positions at the same rate as prior decades.

For the last thirty years, larger companies have created and eliminated jobs at roughly the same rate, accounting for a slight loss in total positions. Small companies have been responsible for all net job growth.   But the total jobs being created by small enterprises as a percentage of total U.S. employment has steadily shrunk – from 3.5% in the 1980s to an even 3% in the 90s, to 2.6% during the last decade (2000-2009), according to Kauffman. As seen in the Kiva-Visa report, the number of new employer businesses being created plummeted during the recession, as the survival rate for existing small firms dropped as well.

Though Indianapolis has fared reasonably well in terms of job growth and other measures of economic progress (i.e. population growth), it’s clear that we will have to continue to focus on the issues that are critical to small businesses – access to start-up capital, entrepreneurial support services and infrastructure, and continuing to encourage a risk-taking business culture.

Ivy Tech Community College President Tom Snyder penned this editorial in today’s Indianapolis Star about Hoosier manufacturing powerhouse (and CICP member) Cummins – a company has that continued to invest and create jobs in Indiana, while at the same time dominating its global market and generating handsome returns for its shareholders.

Cummins helps power Indiana's economy

It may be a function of Hoosier modesty, or the old adage that admiration and familiarity are strangers, but it often takes an outsider's perspective to remind us about what's truly exceptional in our everyday lives. I was struck by this feeling leafing through Fortune magazine's latest annual Fortune 500 list.

At No. 186 was Cummins, the Columbus-based engine-maker. That's no surprise; Most of us are familiar with Cummins, and have some idea of its size and recent success. We regard Cummins as a valued partner in our effort at Ivy Tech Community College, as well as other organizations I'm involved with, like the Energy Systems Network and Conexus Indiana.

But as I read further, I was amazed by how this Indiana manufacturing stalwart stacks up against its peers.

From 2009 to 2010, Cummins climbed from No. 218 to No. 186 on the list of the nation's 500 biggest companies, boasting more than 22 percent growth in revenues. And that's just the beginning.

Over the past decade, Cummins boasts the best growth in profits of any U.S. company. An automotive manufacturer, outpacing dot-com juggernauts like eBay and Apple, insurance and health-care giants, biotech pioneers. It beats its nearest competitor by more than 10 percent in annual earnings-per-share growth. So it's no surprise that Cummins also represents the second-best investment for shareholders over the past five years.

Clearly, Cummins' growth is due to successive generations of visionary management willing to make aggressive moves. Cummins was a pioneer in exploring overseas markets in the 1960s, and today thrives in places like China, India and Brazil. The company also is on the cutting edge of green technologies: A Cummins engine powered the first diesel-electric hybrid truck in 2005; the company is a leader in putting hybrid busses on our streets, and a partner in the Energy Systems Network initiative to bring new energy innovations to market here in Indiana.

Through it all, Cummins has been unwavering in its commitment to southeastern Indiana. Over the past six years, the company has invested more than $300 million into new facilities and expansions in the region, projects that will account for more than 2,000 jobs.

Manufacturing is leading Indiana's economic recovery. While the nation as a whole suffers through a largely jobless recovery, manufacturing employment in Indiana has grown nearly 5 percent since the end of the recession. Clean technologies and renewable energy offer promising economic opportunities for our state. It's easy to forget that these macro-economic trends are based on the collective efforts of thousands of firms across the state, led by extraordinary businesses like Cummins.

Cummins has been a valued corporate citizen and a steady contributor to our state's economic growth, engaged in critical issues like workforce development. But even so, it sometimes takes a moment like reading the Fortune report to remind us of how fortunate we truly are to count Cummins among our home state headquarters.

In 1919, 40 years after Col. Eli Lilly decided to launch his own medical wholesale company 45 miles north in Indianapolis, a businessman named W.G. Irwin decided to help a self-taught mechanic named Clessie Cummins start his own diesel engine business. Out of such historical footnotes, economies are built -- and Cummins continues to support the vitality of Indiana's economy today.

Snyder is president of Ivy Tech Community College.

Energy Systems Network President & CEO Paul Mitchell pens this editorial in today’s Indianapolis Star on Indiana’s position at the front of the pack when it comes to developing and deploying electric vehicles. 

While economists worry about a ‘jobless recovery’ nationally, here in Indiana manufacturing employment has risen nearly 5% since the end of the recession – but how do we keep this momentum going?

On Friday, CICP's Conexus Indiana initiative and the Ball State Center for Business and Economic Research released the 2011 Manufacturing and Logistics Report Card, an annual analysis of the strengths, challenges and opportunities from two of the state’s most critical industries.

The Report Card predicts a ‘record year’ for Indiana manufacturing, noting that the state ranks among the national leaders in per capita employment in both manufacturing (2^nd among states) and logistics (9^th).  It credits strong export growth and foreign investment, a competitive tax climate and big productivity gains, but warns that our weakness in education/workforce readiness along with rising healthcare costs could jeopardize future success.

Download the 2011 Report Card here, and check out the press release below:

Indiana scores ‘A’s on 2011 Manufacturing & Logistics Report Card, but poor showing on workforce threatens future growth

(INDIANAPOLIS, Ind., June 10, 2011)  Conexus Indiana and the Ball State Center for Business and Economic Research today released the 2011 Indiana Manufacturing and Logistics Report Card, an annual “grading” of the strengths, challenges and opportunities impacting the two industries that collectively employ nearly one of every four Hoosiers.

This year’s Report Card confirms that Indiana’s strengths in ‘making and moving’ products have buoyed the state’s economic recovery.  Indiana continues to rank among the top tier of states in manufacturing and logistics employment, and Ball State economists predict that the next 12 months will be a “record year” for manufacturing in the state.  Indiana's manufacturing employment has risen by 4.6% since the end of the recession.

The Report Card gives Indiana overall ‘A’ grades in Manufacturing Industry (ranking first among states in share of the economy focused on manufacturing), Logistics Industry, Global Position (measuring manufacturing exports and foreign investment) and Tax Climate.  The educational attainment of the Hoosier workforce, however, continues to be a long-term concern.

The state’s ‘C’ grade in Human Capital is a step forward from last year’s C-, based on strong enrollment in community college programs and improved high school graduation rates.  But Indiana’s adult population continues to rank among the least-educated in the nation, leaving Hoosier manufacturing and logistics firms struggling to find qualified applicants for jobs that demand increasingly advanced skills.

“This year’s Report Card reiterates that Indiana must do a better preparing the next generation of manufacturing and logistics workers,” said Steve Dwyer, Conexus Indiana’s President & CEO.  “Today’s jobs aren’t about standing at assembly lines – they’re about running computerized equipment and robotic systems, about teamwork and problem-solving.

“We have to give introduce young Hoosiers to these careers early on, and give them opportunities to acquire the skills they need at all levels to create the pipeline of talent that manufacturing and logistics employers need to grow.”

As the state’s manufacturing and logistics initiative, Conexus Indiana is working with its corporate and academic partners to develop industry-endorsed educational programs, and marketing the careers to young people through its ‘Dream It. Do It.’ marketing campaign (at www.DreamItDoItIndiana.com).

The state’s ‘A’ in Logistics Industry was a first in the four-year history of the Report Card, up from a B+ in 2010 based on stronger infrastructure investment relative to other states.  Conexus Indiana has prioritized and advocated for critical investments through its Indiana Logistics Council, an industry forum that gathers input from logistics employers across the state.

“Indiana starts with a competitive advantage in logistics based on our position as the ‘Crossroads of America,’” Dwyer noted.  “But we have to keep making smart choices to keep our edge.”

Other key findings from the 2011 Indiana Manufacturing and Logistics Report Card:

·         Indiana ranks second among states in per capita manufacturing employment and 9^th in logistics employment;

·         Indiana ranks first in per capita income derived from foreign-owned manufacturing operations, 9^th in manufacturing exports per capita and 13^th in export growth;

·         Indiana scored a ‘C-’ in Benefit Costs, based on poor rankings in healthcare and fringe benefit costs;

·         Indiana generally ranks in the top tier of states in terms of tax rates – and the recently-enacted corporate income tax cut should bolster the state’s current ranking of 21^st in corporate taxes;

·         The state’s ‘C’ grade in Productivity and Innovation represents a mixed-bag of indicators, with strong rankings in manufacturing productivity (9^th) and R&D investment (15^th) offset by poor performance in patents-per-capita (32^nd);

·         With rankings of 31^st in percentage of the workforce with a high school diploma or greater, 42^nd in college-educated workers, and 26^th in younger workers with a two-year degree, human capital remains Indiana’s biggest long-term hurdle to future manufacturing and logistics growth.

“This year’s analysis shows that Indiana is clearly still a manufacturing state that is taking advantage of its central location and pro-growth business climate,” said Michael Hicks, Director of the Ball State Center for Business and Economic Research and primary author of the Report Card.  “But I’d echo the warning that every investor has heard – ‘Past performance is no guarantee of future results.’ Policymakers need to focus on areas like workforce development and healthcare costs to maintain our competitiveness.”

Launched by the Central Indiana Corporate Partnership, Conexus Indiana is the state’s advanced manufacturing and logistics initiative, dedicated to making Indiana a global leader.  Conexus is focused on strategic priorities like workforce development, creating new industry partnerships and promoting Indiana’s advantages in manufacturing and logistics.  Learn more at www.ConexusIndiana.com.

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Commencement Address – IUPUI School of Public & Environmental Affairs

Mark Miles, May 15, 2011

Thank you, Dean Graham, Associate Dean Baumer, and the graduates and their families.  I take away two things from that gracious introduction – first, I’m getting old.  Two, I never really figured out what I was going to do to make a living.

That’s why, when I was approached about speaking at your commencement today, I must admit that my first reaction was to decline – though I have at least my share of gray hair, I don’t feel qualified to give career and life counseling, which is normally the topic of the day on occasions like this.

But then, I thought about SPEA.  I thought about what the school stands for – informing a smarter, better future for our society – and what it teaches – how to serve others and make a difference.  Most of all, I thought about what brought you here today – your desire to serve, to make our community and the world a better place.

I am also mindful that for many of you, the completion of your academic goals represents particularly significant sacrifices.  Many of you are already working and some of you already have families to support.  For you, earning this degree is a special achievement, and you deserve special congratulations from your loved ones and from all of us.

I’d offer a tip of my hat, but I don’t think I can get this back on, so let’s just offer applause to show our appreciation for these extraordinary accomplishments.

So, It was thinking about SPEA, and you, and that changed my mind.

I understand that SPEA has a motto that says, “Better You, Better World.”

I’d be inclined to reverse that. To me, it means that working to make a better world makes a better you, because public service makes your life better, more enriched, more fulfilled than a life based mainly on self-interest or private gain. You get more out of this work than you put into it.  Certainly, I have always found that to be the case, so it’s in that spirit I am happy to be here to offer words of congratulations and encouragement, and to share a few thoughts with you today.

On the topics of service and leadership…

I came across the thoughts of two great American leaders whom I admire very much, two men who have improved and are shaping our world….

Harry Truman and Mitch Daniels.

Coincidentally, they share similar sentiments about leadership…and they are equally vertically and folically challenged.

Truman said, “Men make history and not the other way around. In periods where there is no leadership, society stands still. Progress occurs when courageous, skillful leaders seize the opportunity to change things for the better.”

Governor Daniels once noted in another commencement address – “Many generations fail miserably at the challenges they confront, and their societies take steps backwards as a consequence.  Consider Japan before World War II, or Americans in the decades before the Civil War. 

“And yet in both those instances and many others, the people who followed did great things, not only redeemed all the failings but built better, fairer societies than their nations had seen before.  In fact, true greatness can only be revealed by large challenges, by tough circumstances.  And your opportunities for greatness will be large.”

With these thoughts in mind, I’d suggest that it is incredibly fitting that you are celebrating your commencement in this particular place today.  The Governor talked about the broad sweep of history, but I’d like to focus more locally: Right here, in this building, in the heart of this downtown, we’re reminded of one such example of great things, and  great leadership.

Let’s think for a minute about what’s happened at the heart of this city over the last forty years.  I must admit I’m horrified that this summer I’ll attend my 40^th high school reunion. So while I can claim no credit for this history, I do feel like I’ve been fortunate enough to have had a birds-eye view as these events actually unfolded…

You probably can’t imagine what downtown Indianapolis was like the year I graduated from high school.  (Candles for street lights, horse-drawn wagons instead of cars…well, it wasn’t that far back, but still…)

Young people called it Naptown, outsiders called it Indy-a-no-place.  We felt like there was nothing exciting to do.  Our aspiration was to go to college, then start our careers somewhere else.

A few other differences to add some perspective:

-        There was nothing resembling IUPUI.

-        The so-called Purdue extension was an ugly brick building on West 38^th Street.

-        The Med School and the other paltry academic buildings that made up the campus here were surrounded by very challenged neighborhoods.

-        Just south of campus – there was no White River State Park, no Indianapolis Zoo, no NCAA or Eiteljorg Museum; there was no Natatorium or Track and Field Stadium…you get the picture.

-        Downtown Indianapolis had 475 hotel rooms – and no respectable person would stay in most of them. (This year we added the new JW Marriott to get to the current total of 6,500 rooms, allowing us to host events like the Super Bowl and to pursue a whole new market of conventions and tourism.)

-        There was no Convention Center, and look what we have today.

-        There was no downtown mall.

-        I’m not sure anyone has an accurate count, but the number of people who actually lived downtown numbered in the hundreds.  Riley Towers was about the only market-rate option.  (Today more than 25,000 live downtown, and we will hit 40,000 before we know it with a vibrant mix of apartments, condos, new and historic homes.)

-        The Pacers played at the State Fairgrounds, in the Coliseum.  There was no Market Square Arena, no Conseco Fieldhouse.

-        There were no Indianapolis Colts – no Hoosier Dome or Lucas Oil Stadium. 

-        There was a theater on the Circle and one where the IRT now sits, but they were tired and beginning to crumble

-        Certainly, there was no Cultural Trail.

Fast forward 40 years later, and  Indianapolis is a much different place.  We tend to take it all for granted and sometimes even criticize aspects of it, but the development of Indianapolis didn’t have to happen – look at Detroit or Cleveland. People made it happen, and Indianapolis is one of America’s few, unique urban success stories.

Our city had the benefit of a remarkable generation of leaders, and they inspired and led our community to do great things. 

-        They came from the private sector.  It was expected that CEOs would be deeply engaged.

-        They came from the philanthropic sector…wealth was organized for philanthropy, and the Lilly Endowment and Lilly Foundation led the way in investing in Indianapolis.

-        We also had terrific government leadership: Lugar, Hudnut, Goldsmith, Peterson and now Mayor Ballard.

This was our special sauce.  Before anyone invented the term ‘public-private partnership’ – the leadership of our community was already working closely together.

These civic leaders had a bold vision. They embraced a huge challenge:  They were determined to do nothing less than make an ordinary city into an extraordinary city.

-        They marshaled resources;

-        They were innovative;

-        They had courage – Mayor Hudnut made the decision to build the Hoosier Dome before the Colts had even agreed to move here – a bold move with the potential of political suicide that proved visionary.

-        They brought people together to build bridges between Republicans and Democrats, between the races…

They built the kind of place where 38,000 people volunteer to help stage the Pan American Games. And where, now, when we host the Super Bowl, we raise $25 million in private contribution to meet our obligations to the NFL, but we also raise five times that (more than $125 million) for the Super Bowl Legacy initiative to meet the needs of the people of the Near East side.

Today, the leaders who made all this possible are getting a little long in the tooth; what’s left is largely gray hair.

And yet there’s much to be done to fulfill our city’s promise. Here are a few for you all to sink your teeth into – in my view, the defining priorities:

-        We must find a way to develop a workable multi-modal mass transit system.

-        We must rebuild our center city neighborhoods to create the kind of inspiring, livable places our City must have if we are going to improve everyone’s quality of life and keep and attract talented people.

-        We must create schools and a system of public education that are the envy of urban America.

Already, these goals are work in progress, but they will need your help and leadership if they are going to happen. More importantly, some of you will need to set our future course, and figure out what will define our community for your generation.

I suspect Dean Baumer is about to give me the hook, so let me just conclude by saying congratulations for attaining your academic goals at SPEA.  Congratulations for choosing a life of public service.

You’ve chosen a life that will be personally fulfilling because it will be dedicated to helping others.

I hope you will set your sights on doing great things – and I hope you’ll do them here in this community.

We are counting on you.

The 2011 session of the Indiana General Assembly will likely be remembered best for the passage of far-reaching education reforms – more options for parents, the expansion of charter schools, and an emphasis on teacher quality and accountability. 

On a less positive note, however, local government reform again stalled at the Statehouse – another defeat for taxpayers and the cause of accountability at the expense of entrenched political interests.  Legislators refused to take any significant steps towards streamlining an outdated system of local government (designed during the Civil War-era) that includes a layer of township offices that provide services in an inefficient patchwork while making taxing-and-spending decisions largely outside of public scrutiny.

Proposals to eliminate township advisory boards (and providing for the complete elimination of township government by countywide referenda) were derailed by the vehement opposition of rural lawmakers and ultimately sidelined by the month-long legislative walkout. 

Two more modest bills passed both chambers but ultimately failed after conference committees.  HB1022, a proposal that curbed nepotism and conflicts of interest in local government offices, emerged from conference committee only to be rejected by the House of Representatives by a 31-64 vote.  SB526 focused on Marion County reforms, including the elimination of the county’s nine township advisory boards and transferring fiscal oversight to the City-County Council; the conference report passed the House but was defeated in the Senate by a narrow 24-26 margin.

The defeat of even these incremental reforms demonstrates the General Assembly’s continuing reluctance to disturb the status quo, which comprises a potent statewide network of local elected officials and patronage workers.  While some legislators may still believe the outdated trope that township government represents government ‘closest to the people,’ it has become clear to most (thanks to the tireless reporting of the Indianapolis Star and other media across the state) that these offices represent a drain on our tax base and an affront to transparency. 

The partnership between CICP and the Indy Partnership has served Indianapolis and the region well, connecting the regional business attraction and marketing aspects of economic development with the expertise of our industry-specific initiatives - this synergy will continue.  

But we’ve also never lost sight of our mandate to maximize every dollar we receive from our investors.  Since its launch four years ago, Develop Indy has grown into a robust and aggressive organization in its own right. So today we have two mature organizations with nearly identical structures and complementary missions – one bringing new business to the region as a whole, one focused on Indianapolis, the core of the region.

It simply makes sense to merge their  operations – marketing communications, accounting and administration, certain business development and research functions. In doing so, we’ll achieve significant financial efficiencies and drive a greater share of resources towards promoting ourselves as a destination for economic opportunities.  Simply put, the move allows us to be more competitive, even as we are outspent by many of our competitor regions (on a per capita basis) in economic development.

Here's the press release with additional detail:

Develop Indy, Indy Partnership to consolidate operations for more efficient, effective economic development effort

(INDIANAPOLIS, Ind – February 15, 2011)  Two of Central Indiana’s leading economic development organizations will formally join forces to create a more streamlined effort to maximize business attraction and marketing for Indianapolis and the greater region. 

 Indy Partnership, the regional group representing the nine-county Indianapolis metro area, and Develop Indy, the local economic development engine for Indianapolis/Marion County, will consolidate their marketing, fundraising and administrative operations to create a more efficient and effective enterprise.   The two groups will maintain their separate brand identities while pursuing their respective economic development missions.

Since 2001, Indy Partnership has promoted the Indianapolis region in partnership with local economic development organizations (known as “LEDOs”) in each of the metro counties.  Indy Partnership works to attract new businesses to the region, and provides research and project management support to the LEDOs for their local business development efforts.

Develop Indy was launched in 2007 as the stand-alone LEDO for Indianapolis/Marion County, and works primarily to help existing businesses grow and expand in Marion County.  It has grown its organizational capacity significantly over the last three years.

“We have two organizations pursuing similar missions – one representing the region, one representing Indianapolis, the core of the region,” said current Indy Partnership President and CEO Ron Gifford.  “It makes sense to bring them together in a more formal fashion to achieve our strategic goals, realize financial efficiencies, and give investors more ‘bang for their buck.’”

“We’re in a very tough competition for new opportunities, often going up against cities and regions that can’t match our business climate but do have more money to tell their stories,” said Scott Miller, Develop Indy’s President and CEO.  “This new model will allow us to maximize every dollar spent so we can aggressively pursue new job opportunities and investment from around the globe.”

The two organizations will combine operations in areas like marketing, fundraising, accounting, human resources, and IT.   Develop Indy will continue to focus on local Indianapolis business development issues, while Indy Partnership will continue focusing its marketing and business attraction efforts on behalf of the entire region. 

A new Indy Partnership Executive Committee, made up of private sector business leaders and representatives from each of the county LEDO partners, will oversee the regional effort.  The Develop Indy Board of Directors will serve as the legal governing entity for fiscal and administrative matters for both entities and will continue to oversee matters related specifically to Indianapolis/Marion County. 

Veteran economic development professional Scott Fulford will become the Executive Director of Indy Partnership, as current CEO Ron Gifford assumes the position of Executive Vice President for Policy for the Central Indiana Corporate Partnership (CICP), the regional alliance of CEOs and university presidents.  Gifford will also become a member of the Develop Indy Board of Directors.  Scott Miller will remain as CEO of Develop Indy.

“Since 2007, Indy Partnership has been part of CICP, and that relationship has fostered collaboration with CICP’s industry-specific initiatives – BioCrossroads [life sciences], Conexus [manufacturing and logistics], TechPoint [technology] and the Energy Systems Network [energy and clean technologies],” said Mark Miles, CICP’s President and CEO.  “We see this new alignment between Indy Partnership and Develop Indy as creating an even stronger regional platform to promote these clusters to new business prospects.  

“At the same time, we are committed to maintaining the synergies among these groups focused on economic growth in Central Indiana,” Miles continued.  “Ron’s new roles with CICP and Develop Indy will help ensure that industry expertise from the private sector is available on call to support economic development for the entire region.”

The new structure will also enhance regional efforts by giving the county LEDO partners a larger role in the expanded Indy Partnership Executive Committee, and by encouraging more direct participation in the region’s marketing and business attraction efforts.  A formal agreement on regional cooperation will also ensure that each member county has a fair chance to make its case to new companies looking at the region. 

“To companies located around the country, ‘Indianapolis’ is the brand that we’re all selling, whether we live in Marion County or not,” said Dax Norton, Executive Director of the Boone County Economic Development Corporation.  “By combining the marketing efforts of these two organizations, we can more effectively promote the region while giving every county a seat at the table.”

A joint fundraising campaign will take place for both organizations, ensuring that corporate supporters will not face multiple solicitations on behalf of the area’s business attraction efforts.

The consolidation of operations will become effective at the end of February.  Indy Partnership will share office space with Develop Indy in the Chase Tower in downtown Indianapolis.