Indiana Clean technology

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).

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.

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.

I wanted to draw your attention to this insightful column by former Cummins Vice-Chairman Joe Loughrey, who chairs CICP’s Conexus Indiana and Energy Systems Network initiatives.  Loughrey emphasizes the need for a proactive focus on workforce development to maintain Indiana’s competitive edge in ‘green economy’ areas like vehicle electrification (as highlighted by the U.S. Department of Energy's visit to Indianapolis-based EnerDel last week). 

A version of this piece appeared in today’s Star, here.

Keep focus on tomorrow’s workforce

Joe Loughrey

Last week, a delegation from the U.S. Department of Energy visited Central Indiana to finalize a $118 million grant to Indianapolis-based EnerDel, the only current U.S. manufacturer of lithium ion batteries for hybrid and plug-in electric vehicles.

Leveraging this grant and private investment, EnerDel is creating more than 1,400 new jobs in Central Indiana, building a new manufacturing facility in Greenfield.  It’s a major economic success story for the region.

EnerDel is just part of a growing ‘green vehicle’ industry in the state.  Last year, Think North America chose Elkhart as the site of the first U.S. factory for its line of electric cars.  In Anderson, Bright Automotive is also engineering state-of-the-art plug-in hybrids.  Established Indiana manufacturers like Cummins, Remy, Delphi and Allison Transmission are also major producers of hybrid components.

We can be proud that Indiana is a leader in putting electric vehicles on the road, helping our environment and making the U.S. less dependent on foreign oil.  Taking advantage of the growing market for plug-ins and hybrids is also good for Indiana’s economy.  But we do face a longer-term challenge to sustaining and strengthening this leadership position in the green economy – educating the next generation of employees for this fast-growing, rapidly-evolving industry.

The factories that produce hybrids and plug-ins are increasingly high-tech, just like the cars themselves.  These vehicles feature microcontrollers and other advanced technologies, along with the standard automotive electronics – installing, testing and troubleshooting these components takes a skilled workforce, with technical training beyond high school or two-year associates degrees.

It’s not just the green automotive industry that requires more educated employees.  There are very few ‘low skill’ jobs left in manufacturing in general today.  In a study by the Federal Reserve Bank of New York (‘A Leaner, More Skilled U.S. Manufacturing Workforce’), economists divided manufacturing jobs into low-, medium- and high-skill and observed that between 1982 and 2002, high-skill manufacturing occupations grew 37% while low- and medium-skill jobs declined 24% and 18% respectively.

Indiana boasts a rich reservoir of engineering talent and a strong manufacturing workforce – it’s a key competitive advantage that allowed us to attract companies like EnerDel, and why other clean technologies firms are looking to locate and expand in the state.  But to maintain this edge, we have to ensure that our workforce pipeline stays strong, with young workers getting the right degrees and certifications to take advantage of advanced manufacturing careers in electric vehicles and other high-tech fields. 

Initiatives like Conexus Indiana are hard at work bringing private industry and higher education together to create up-to-date manufacturing training programs, and marketing these career paths to young people through its ‘Dream It. Do It.’ campaign.  Purdue and Ivy Tech Community College received a $6 million federal stimulus grant to create specific degree and technical programs for electric vehicles, and the state’s Department of Workforce Development is also focused on green job training.  At the K-12 level, it’s critical that technical education programs are spared from budget cuts to get students on the right track early on.

These efforts have to be a top priority for policymakers, educators and manufacturers alike.  Pursuing economic development without a parallel focus on education will ultimately frustrate the ambitions of both the companies that can’t find skilled workers to fulfill their growth plans and the Hoosiers who find themselves unqualified for better jobs. 

Announcements like EnerDel’s are great news for Indiana’s economy; a steady supply of talented workers has been a catalyst for this success.  But we also have to keep a proactive focus on tomorrow’s workforce to keep the momentum going.  Looking ahead, degrees and certificates awarded are economic development metrics just like jobs and investment – the path towards a green advanced manufacturing economy for Indiana starts in the classroom.

Loughrey is the retired Vice-Chairman of Cummins, and chairs the Conexus Indiana and Energy Systems Network initiatives for the Central Indiana Corporate Partnership.

The last week has brought positive stories from several areas of the Indiana economy that are represented by CICP initiatives – anecdotal evidence that these industry clusters continue to represent our best prospects for future growth.

Last week, U.S. Department of Energy (DOE) officials traveled to Indianapolis-based EnerDel to meet with company officials and representatives of Central Indiana’s clean technology industry, recognizing our region’s emerging leadership position in vehicle electrification.

EnerDel, the only U.S. manufacturer of advanced lithium-ion batteries for hybrid and plug-in electric vehicles, received a $118.5 million grant from the Department of Energy through the American Recovery and Reinvestment Act (ARRA) in August.  EnerDel and other partners have also joined in a major demonstration project of electric vehicles in the Greater Indianapolis region, dubbed Project Plug-IN, under the auspices of CICP’s Energy Systems Network (ESN) initiative.

The DOE team led by Gil Sperling, Senior Advisor to the Office of Energy Efficiency and Renewable Energy, highlighted both developments, applauding EnerDel’s role in enhancing U.S. innovation and manufacturing capacity in clean energy and recognizing Project Plug-IN as an important initiative that will help make plug-in electric vehicles a practical choice for the American driver.  Indiana’s growing ‘green vehicle’ industry represents a great opportunity for both our energy and advanced manufacturing sectors.

In logistics, s2f Worldwide, a third-party logistics and supply chain service provider, chose to locate its operations in Plainfield this week, a deal projected to create 250 new jobs by 2013.  Central Indiana continues to strengthen our position as a global distribution hub, leveraging our strong infrastructure and inherent geographic advantages into new logistics opportunities.  Our Conexus Indiana initiative is poised to release a comprehensive logistics strategic plan for the state, and is also working to expand intermodal capabilities at the Avon railyard in Hendricks County, putting the region in an even stronger position going forward. 

Indiana continues to rank among the top ten states in logistics employment per capita – these efforts are paying off in good jobs for Hoosiers.

And finally, in technology, I was struck by an interview on Inside Indiana Business with Gerry Dick with Bill Godfrey, Chairman of on-demand marketing software provider Aprimo.  Godfrey asserts that Indiana is becoming a market leader in the e-marketing arena, with companies like ExactTarget, ChaCha, Compendium, Cantaloupe and others joining Aprimo here.  Jim Jay, President of our TechPoint initiative, wrote a piece on this very topic at about this time last year – check it out here.

And speaking of TechPoint, the organization has extended the deadline for its Mira Awards, celebrating Indiana’s high-tech success stories – go here to nominate an Indiana technology innovator today.

Spring is finally right around the corner - to belabor a metaphor, stories like these appearing with greater frequency seem to foreshadow an economic thaw for Indiana to match the warming weather.

The New Year has brought new opportunities for Indiana’s growing green manufacturing sector – the first few weeks of 2010 have seen several announcements that, collectively, show the momentum behind Hoosier manufacturing’s effort to electrify vehicles, make renewable energy sources a practical reality and more.

First, there was the news that Think North America had chosen Elkhart as the site of its first U.S. factory for its line of electric cars, joining Electric Motors Corp and NaviStar as the hub of a growing green vehicle cluster along Indiana’s northern border.

In Central Indiana, EnerDel – the only U.S. manufacturer of the cutting-edge lithium ion batteries that power hybrid and plug-in electric vehicles – announced a major manufacturing facility in Greenfield, Indiana, expanding a footprint that already includes its northeast Indianapolis headquarters and facilities in Hamilton County.  The Greenfield site will ultimately employ nearly 1,100.

Elsewhere, Brevini Wind (in Muncie) has earned $12.8 million in federal tax credits for its work manufacturing the gear boxes and other technologies for the turbines that generate electricity from wind.  Just two weeks ago, Secretary of Energy Chu visited Columbus to announce $54 million in federal stimulus grants to Cummins to increase engine efficiency.

Just like any technology-intensive, innovation-driven industry, a skilled workforce is a critical need for green manufacturing.  Here too, Indiana is moving forward – the state’s Department of Workforce Development recently earned a $6 million grant from the U.S. Department of Labor to create new curricula and retrain industrial workers from other sectors to take advantage of new green job opportunities.

Look for more announcements ahead from Indiana’s green manufacturing and clean technologies industries, as well as CICP’s Energy Systems Network initiative, as the state continues to solidify its position as a crossroads of energy innovation. 

President Obama visited Northern Indiana on Wednesday, August 5, to announce $416 million in federal stimulus grants to Hoosier companies focused on vehicle electrification and advanced battery technologies.  In all, Indiana received the second-largest infusion of federal grants for green vehicles of any state, behind only Michigan (where most of the money flowed to automakers already being supported by bailout funds or companies receiving significant state incentives to boost the struggling economy there).

In Indiana, the grants will accelerate the momentum of the state’s clean technologies sector, already making great strides in developing critical components for the next generation of plug-in electric/hybrid vehicles (from passenger cars to heavy-duty trucks).  While government has often proven itself ill-suited to picking winners in the marketplace, the volume of grants to Indiana certainly recognizes our rich heritage of energy innovation and the fact that companies here are working together (through initiatives like the Energy Systems Network) to bring exciting new technologies to market.

Please take a moment to look over two editorials by Paul Mitchell, President & CEO of CICP’s Energy Systems Network, which offer key insights on how these grants can trigger even more growth and investment in our cleantech industry:

Jump start for green vehicles - Indianapolis Star, August 17, 2009

Let’s end the week with some positive news for our state’s economy, as a new study from the Pew Charitable Trusts documents an 18% increase in Indiana clean technology jobs over the last decade.

Cleantech is a booming industry that’s seeing dramatic growth and attracting significant new investment, based in part on ambitious federal goals that include doubling renewable energy use within three years and putting a million new hybrid vehicles on U.S. highways.  The cleantech sector saw more than $7.7 billion in venture capital investment in 2008; especially impressive considering that cleantech venture capital made up just 1% of total VC financing in 2004 (the first year it was widely tracked).  The 2008 figures represent 20% of last year’s venture investment.

According to the U.S. Energy Information Administration, overall market demand for alternative energy and related products and technologies will continue to grow at a rapid pace for the foreseeable future.  The EIA projects 3.3% annual growth in renewable energy consumption through 2030, as well as a sharp increase in light-use hybrid vehicle sales from just 2% of the current market to 38% in 2030.  (Industry experts estimate that nearly 500,000 new hybrid vehicles will hit U.S. highways in 2009 alone.)

Other EIA analysis of cleantech sub-sectors like wind and solar power, plug-in/hybrid electric vehicles, second generation biofuels, distributed power generation, and systems integration project each to grow to more than $70 billion over the next ten years, collectively accounting for a more than $350B global market.

Look for more news on cleantech and Indiana’s emerging leadership position from CICP’s new Energy Systems Network initiative. 

The U.S. auto industry has obviously seen better days, with Chrysler becoming the first major automaker to enter bankruptcy since the Great Depression and General Motors pursuing a similar path (though facing legal challenges from Indiana’s pension funds).  Sales have plummeted and the future is cloudy.

The automotive industry represents around 16% of Indiana’s total manufacturing jobs.  Our manufacturing industry is immense (employing one of every five Hoosiers and accounting for more than a third of our Gross State Product), but clearly companies like GM have a huge presence.

One thing is certain – manufacturing will continue to be the foundation of Indiana’s economy for the foreseeable future.  But like every sector of our economy, manufacturing continues to evolve…

That’s why it was interesting to note a new Milken Institute report on high-tech metropolitan areas ranked the Indianapolis region #5 nationally in pharmaceutical manufacturing and #10 in medical instrument manufacturing.  This comes on the heels of an IU study that showed that the life sciences sector increased its share of the state’s total manufacturing output from 11% in 1997 to 20% in 2007.

Clearly this is good news at the intersection of two of our largest and most dynamic industry clusters, advanced manufacturing and the life sciences.  And while we all hope for a robust economic recovery that includes the auto sector, it also tells us that we have other emerging manufacturing opportunities that we need to pursue, in the life sciences, ‘clean technologies,’ nanotechnology, aerospace, and more.  The automotive industry is hugely important, but diversity is strength in this economy.

What we make and how we make it is changing and will continue to change.  We have to be agile in adapting our economic development, business climate and workforce policies to welcome these new opportunities in addition to playing to our traditional strengths. 

Yesterday marked the public launch of an initiative that CICP has been working on for nearly two years (along with the Governor’s Office, our Conexus initiative, and support from organizations like the Rocky Mountain Institute) – the Energy Systems Network, a bold effort to make Indiana a global hub for ‘clean technologies’ and energy innovation.

The energy industry today faces tremendous challenges – and the cleantech sector has the potential for explosive growth as it provides the solutions. Indeed, cleantech sub-sectors like wind and solar power, plug-in/hybrid electric vehicles, second generation biofuels, distributed power generation, and systems integration are each projected to grow to more than $70 billion over the next ten years, collectively accounting for a more than $350B global market.

And there’s certainly a sense of urgency: The Obama administration has pledged to double renewable energy use within three years and put a million hybrid electric vehicles on our highways by 2015.  A growing share of the public, concerned about the environment, dependence on foreign oil and other issues, is fueling market demand for clean energy products.  And the inevitability of federal climate change legislation means technological breakthroughs in energy will be critical to curb huge potential price increases for carbon-based power for businesses and families.

Indiana has a unique opportunity to seize a leadership position on the cutting edge of this green revolution.  More than twenty years ago, GM and others engineered the first electric vehicle (the EV1) here – today, we’re home to firms working on nearly every key component of hybrid and plug-in vehicles, from engines and transmissions to advanced batteries.  We’re leaders in biofuels, clean coal technology, and benefit from the presence of innovative utility partners (like Duke Energy) focused on the development of ‘smart grid’ technologies that will help consumers better control their power use and supply.

In short, all of the assets are in place – and now we have another competitive advantage: The collaborative spirit embodied by the ESN.  This initiative recognizes that no single company has the solutions to the energy challenges that we face – companies and research institutions must work together to bring these solutions to market.  And of course, it’s our preference that these partnerships begin in Indiana and that we capture as much of the economic benefit as possible for Hoosiers.

The ESN is led by an all-star Board of Directors and is being ably managed at the staff level by Paul Mitchell, former policy advisor to Governor Daniels.  The Network already has two exciting projects in its commercialization pipeline: The Hoosier Heavy Hybrid Partnership is focused on bringing more cost effective light, medium, and heavy duty  hybrid trucks to market.  Project Plug-IN will integrate plug-in electric vehicles and ‘smart grid’ technologies providing a green transportation solution for Central Indiana commuters in one of the nation’s first large-scale pilot projects.

I’d encourage you to visit the landing page we set up for the ESN launch to learn more about this new addition to the CICP family – you’ll be hearing much more from the ESN in the weeks and months to come.