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).

Our colleagues at BioCrossroads yesterday publicly announced the successful fundraising for Indiana Seed Fund II, an $8.25M venture fund aimed at promising early-stage companies in the life sciences sector.  This shows the continuing confidence and commitment of our state’s institutional investors in our entrepreneurial sector’s ability to innovate and commercialize scientific breakthroughs into successful businesses.  (BioCrossroads had already raised more than $135M in risk capital for life sciences ventures.  HALO, a network of angel investors organized by our TechPoint initiative, plays a similar role directing early-stage funding to high-tech start-ups.)

The ability to finance homegrown, high-potential businesses is of vital importance to our economic future.  As Indiana works to emerge from the shadow of the national recession, every effort must be made to attract new investment and jobs to the state as well as incentivize growth among our existing headquartered companies.  But ultimately, it will be our ability to encourage new businesses from the ground up that will yield the best returns in jobs, innovation and wealth creation.  (Start-up firms are responsible for all net job creation in the U.S. over the last thirty years, and the knowledge-intensive employment base created by fast-growing businesses in technology and the life sciences are critical to erasing Indiana’s per capita income gap.)

Legendary entrepreneurs like Colonel Eli Lilly, W.G. Irwin (of Cummins Engine) and Bill Cook helped reshape the Hoosier economy to this day.  Supporting their future counterparts through efforts like the Indiana Seed Fund is essential to building the economy of tomorrow.  Read more about the BioCrossroads’ announcement here.

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.

Conexus President & CEO Steve Dwyer authored this piece on Inside Indiana Business last week on the need to upskill Indiana’s manufacturing and logistics workforce. A recent study from the Georgetown University Center on Education and the Workforce asserts that 60% of all U.S. jobs within the next decade will require some sort of post-secondary education – this trend certainly applies to manufacturing and logistics, an increasingly high-tech sector where advanced robotics and sophisticated supply chain management systems are now the norm. 

If Indiana fails to upgrade our educational pipeline to train the next generation of manufacturing and logistics employees, we’ll quickly find our position as the most manufacturing-intensive state, and the ‘Crossroads of America’ logistics hub, in serious jeopardy.

Indiana’s grade on manufacturing and logistics workforce: Incomplete.

Steve Dwyer – President & CEO, Conexus Indiana

Last month, Conexus Indiana and the Ball State Center for Business and Economic Research released our 2011 Manufacturing and Logistics Report Card. Each year, economists at Ball State pull together relevant economic data to ‘grade’ the vitality of Indiana’s manufacturing and logistics industries, analyzing a sector that collectively employ one of every four Hoosiers.

Manufacturing is leading Indiana’s economic recovery, and we score several A’s on this Report Card. We rank among the national leaders in per capita employment in both sectors. We benefit from a pro-growth tax climate, and are a winner in the global marketplace as measured by foreign investment and strong exports.

We’re barely average, however, in a critical area – Human Capital. The state’s ‘C’ grade 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 available jobs as Baby Boomer workers leave the workforce in growing numbers.

This is especially troubling given the transition of manufacturing and logistics into the information-based economy. Once upon a time, employers grew their operations based on the availability of natural resources, proximity to other industrial centers and customers, and access to transportation infrastructure, with competitive tax and regulatory policies sweetening the pot. Indiana was well-positioned on all these, and prospered accordingly.

But global competition and market demands accelerated the push for productivity and innovation. The traditional assembly line (once a bold innovation in its own right) was gradually transformed by computerized equipment and robotic systems. Distribution centers evolved into modern supply chain operations, meeting the ‘just in time’ needs of customers around the world with track and trace technologies and enterprise management software.

As the industries changed, so did the jobs. And while location, infrastructure and business climate continue to be important factors, workforce readiness emerged as a top priority for growing companies. 

Manufacturing and logistics careers now demand advanced technical skills, technology savvy, troubleshooting and teamwork abilities. This means some education beyond high school – within the next decade, 60% of all jobs will require post-secondary education. The same trend holds true for manufacturing and logistics. Yet a recent study by Indiana University estimates that 60% of current Midwestern manufacturing workers have only a high school diploma, and Indiana’s plight is likely even worse.

So our ‘C’ grade in Human Capital does more than keep Indiana off the honor roll – it poses a direct threat to our competitiveness. We can (and do) have a great position as Crossroads of America, unparalleled access to highways, rail and maritime shipping, a strong manufacturing heritage, low taxes and an unprecedented hot streak on international investment. But if we aren’t preparing the next generation of Hoosier workers for high-tech manufacturing and logistics jobs, we’ll quickly lose our edge.

There’s a lot of good news in this year’s report. Indiana continues to rank among the most manufacturing and logistics-intensive states in the nation, helping us find our footing more quickly than many in this post-housing bubble, post-financial crisis economy. But it isn’t an exercise in self-congratulation – it’s a confirmation of the challenges we face in continuing to make and move products in the global knowledge economy.

The bottom line of this Report Card is clear – for Indiana’s younger workers, it’s time to head back to school and try to raise our manufacturing and logistics GPA.

(View the entire 2011 Manufacturing and Logistics Report Card at www.ConexusIndiana.com.)

Steve Dwyer is President & CEO of Conexus Indiana, an initiative focused on the workforce and other needs of the state’s manufacturing and logistics industries. He formerly served as Chief Operating Officer of Rolls-Royce North America.

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.

Another member of our CICP Board of Directors, Collina Ventures’ Mark Hill, has penned a compelling piece on the need to reform local government – part of an ongoing editorial push on the part of the Indianapolis Star and a network of other Indiana newspapers to raise awareness of the need to streamline and consolidate the thousands of political offices that form a haphazard patchwork of bureaucracies across the state.

As someone who’s spent his career in the tech sector, Hill understands the power of technology to cut costs and enhance productivity.  A tech pundit once estimated that if progress in the rest of the economy matched progress in the computer sector, a Cadillac would cost $5.91, while ten minutes’ labor would buy a year’s worth of groceries.

Unfortunately, Indiana’s system of local government is anti-innovation – instead of becoming more efficient, it’s grown increasingly outdated and cumbersome.

Here is Hill’s op-ed:

Power of innovation can fix local government

Last week, the Indiana General Assembly convened at the statehouse to face the most daunting fiscal situation in a generation or more – a billion dollar deficit. 

But budget problems aren’t confined to the state level, and our lawmakers’ responsibilities don’t stop there either.  Across Indiana, local communities are dealing with the dual effects of the recession and property tax caps; Indianapolis alone faced a $50 million shortfall for its 2011 budget. 

The state legislature can help our cities and counties do more with less, by mustering the political courage to reform our broken system of local government. 

My career has been spent in the technology sector, a field that thrives on new ideas and change.  The power of high-tech innovation tends to cut costs and increase productivity.  My experience tells me that the big gains from technology actually come using the technology to change the process.

Unfortunately, our system of local government has not materially changed for more than a century-and-a-half; so instead of evolving to become more efficient and less costly, it’s done just the opposite.  It’s grown into a cumbersome and confusing maze of bureaucracy, notable for the quantity of political offices rather than the quality of public services provided.

An entire layer of government – the townships – exists to deliver services that could be more efficiently managed by counties.  And at the county level, too many elected officials perform purely administrative tasks – like coroner, recorder, or surveyor – that should have nothing to do with partisan politics. 

Township government is a perfect example of what’s wrong with the system.  The major responsibility of township trustees is delivering poor relief.  But there’s no common standard or procedure for doing so.  Half the townships report serving less than twenty households, and the average trustee spends eight times more in overhead to deliver every dollar in direct assistance than a typical private charity (using the United Way of Central Indiana as a baseline).  I know at United Way we work very hard to keep our overhead down so that we can deliver resources to those in need.

The situation cries out for change.  But the lack of visibility of these offices insulates them from public scrutiny – most township officials run unopposed in general elections, attracting little attention from the citizens they profess to serve. 

Township government should be abolished altogether, or at the very least have their budgets overseen and approved by county councils to bring some accountability to their taxing and spending decisions.  Counties should have the option to consolidate administrative offices and adopt a single executive form of government.

Defenders of the status quo have defeated these proposals during the last two legislative sessions.  But this year could be different.  Governor Daniels is a strong advocate of reform, and the new majority in the House of Representatives may be willing to put their belief in smaller government into action.

These changes represent their own kind of innovation, the kind of change that’s long-overdue for a system designed in an age of travel by horseback rather than broadband communications.

Hill, managing partner of Collina Ventures, chairs the Central Indiana Corporate Partnership's TechPoint technology and entrepreneurship initiative.

(The following column also appeared in the Indiana Connections e-newsletter, presented by Inside Indiana Business in partnership with Conexus Indiana, and on the Conexus Indiana blog.) 

College completion rates, manufacturing and logistics success go hand-in-hand

Andre Lacy

If asked to identify one statistic that predicts future economic success, it’s hard to ignore the percentage of young people with college degrees.  Education drives innovation, productivity and higher wages.   If the up-and-coming generation of workers is well-educated, the economy is well-positioned to grow.

That’s why it’s such a concern that the United States has slipped to 12^th among developed countries in our percentage of 25 to 34-year-olds with an associate degree or higher.  A few weeks ago, President Obama called for the United States to return to the top of the rankings by 2020 – a daunting goal that will require a 20% increase in college graduates over the next decade.

In Indiana, the climb is even steeper – we’re well below the national average in the educational attainment of young adults; just one of three young Hoosiers goes on to complete a college degree.  We’ll need to almost double that to be competitive with countries like Korea, Canada and Japan.

This educational deficit puts our future at risk.  Our capacity for technological and scientific innovation is the biggest competitive advantage that the United States has left in the global economy.  As more highly-educated workers (the Baby Boomers) begin retiring, we confront a younger workforce ill-equipped to innovate.  To be blunt, you can’t sustain a knowledge-based economy without knowledgeable workers.

In Indiana, the impact of a less-educated workforce will threaten the very foundation of our economy, manufacturing and logistics.

In June, Deloitte Consulting and the U.S. Council on Competitiveness released the annual Global Manufacturing Competitiveness Index for 2010.  The study (based on a survey of 400+ manufacturing CEOs worldwide) ranked access to educated workers capable of supporting innovation as by far the biggest determinant of success, ahead of factors like the cost of labor and materials, energy costs, and tax/regulatory climates.

Not surprisingly, the same study shows the United States slipping to fourth place in its manufacturing index rankings.  The third place country, Korea, finished far ahead of the U.S. in its percentage of younger workers with college credentials.  The top two finishers, China and India, have vastly expanded their pool of educated workers in recent years (the number of Chinese college graduates entering the job market each year has grown more than 600% from 1999 to 2009).

It’s clear that improving college completion rates is essential to maintaining our domestic manufacturing base.  In Indiana, the erosion of this base would also jeopardize the logistics industry that gets manufactured goods into the hands of customers across the country and around the world.  And as global supply chains become more complex and ‘just in time’ inventories the norm, the logistics sector faces its own skilled worker shortages.

Many of President Obama’s proposals to boost higher education focuses on affordability, aiming to increase Pell Grants and expand tuition tax credits.  But while the cost of college is a key issue, we face other hurdles in Indiana specific to manufacturing and logistics:  Too many young Hoosiers aren’t aware of the high-tech jobs available, and there’s a lack of educational programs that deliver the specific skills that employers are looking for.

These challenges make up a large part of Conexus Indiana’s mission:  We’re working to promote manufacturing and logistics careers through our ‘Dream It. Do It.’ campaign.  At the same time, we’ve used industry input to create a very specific, multi-layered skills template that details what manufacturers and logistics companies are looking for in new employees.  The Indiana Department of Education and Commission for Higher Education have both embraced this template, and we’re working with our educational partners to create ‘industry-approved’ programs that can steer students into the most in-demand job openings.

But clearly this issue is bigger than any one organization, school or government agency.  We need focus and coordinated action among policymakers, employers, educators and opinion leaders to push Indiana up the rankings in college completion rates and preserve our manufacturing and logistics edge.  The same kind of attention is needed at the federal level to build a world-class workforce.

The only certainty is that a lack of action will cause us to fall even further behind in educational attainment and economic competitiveness.  We must act now, before today’s challenge turns into tomorrow’s crisis.

Andre B. Lacy is Chairman of LDI Ltd., a holding company that focuses on value-added distribution businesses.  He is an emeritus member of the Central Indiana Corporate Partnership, and chairs the Workforce Development Task Force for Conexus Indiana’s Logistics Council.

It’s obvious to all that the Internet has fundamentally changed the business of marketing, transforming consumers from passive recipients of messages through TV, radio and print to active participants in a dialogue about the products and services they prefer through online research, user-generated reviews, blogs and other web-based media.  Jim Jay of our TechPoint initiative summed it up nicely by saying, “Today, a viral video can spark more views and ‘buzz’ than a well-placed TV ad.  A well-conceived e-mail campaign can trigger a stronger response than a blizzard of direct mail…”

Marketers have adapted.  From 2003 to 2008, the traditional media sector—including media agencies, publishing, and broadcast and entertainment—lost 32% of its market value (nearly $137 billion), while new media (online content and services) gained 102%, or $58 billion.  A recent Chief Marketing Officer survey by the American Marketing Association says that CMOs plan to triple the budgets allocated to social media over the next five years.

All of the change that’s roiling the media/marketing landscape creates great opportunities for innovators and cutting-edge companies.  Fortunately, Central Indiana is home to a growing cluster of marketing and media firms and institutions that put our region in a great position to capitalize on these trends – businesses like ExactTarget,  Compendium Blogware, Aprimo (which launched from Software Artistry), Vontoo, 5 Buckets, Lights Out Intelligence, Market Path, Cantaloupe, Delivera, Formspring and many more.  There are more than 70 companies operating in this space in the state of Indiana.

This growing e-marketing sector is also served by leading research institutions.   Our own Ball State University is a national leader in digital  media research and development through its Center for Media Design. 

It’s time for Indiana to capitalize on the potential of this high-tech ‘micro-cluster.’

Today, TechPoint, with the support from the IEDC, announced Indiana’s Measured Marketing Initiative, a national media relations campaign to position Indiana as the leader of this fast-growing, emerging technology business category encompassing social and digital media and marketing – TechPoint has dubbed it “measured marketing.” The goal for this initiative is to raise awareness, generate customers for existing businesses and attract companies to create jobs and investments in Indiana.

Measured marketing companies provide a platform or service for digital marketing via email, social media, search, video, mobile and other rapidly evolving technologies, and they provide clients with return-on-investment tracking.

Check out the press release here.  For more information on Indiana’s Measured Marketing Initiative, please go to www.indianameasuredmarketing.com.

CNBC has released its annual Top States for Business rankings – while Indiana ranks a fairly pedestrian 21^st on the overall list, the sub-category rankings are more interesting, giving several reasons for optimism and at least one looming cause for concern.

The state continues to score high in costs of doing business, ranking 9^th among states (up from 13^th in 2009), and we continue to rank among the top handful of states (6^th) in transportation infrastructure, anchoring our strong logistics sector.

We made significant progress in access to capital, moving from the bottom third of states (36^th) in 2009 to the middle of the pack (26^th) this year.  This blog has covered Indiana’s progress in making venture capital available to promising start-up firms – the state has bucked national trends by growing equity investment over the last two years, even as the national venture market contracted during the recession.  We made a tremendous jump from 41^st to 20^th in venture capital investment per capita from 2008 to 2009.

We moved up five spots in the ‘Economy’ category (mainly a measure of economic diversity and success in attracting corporate headquarters) and stayed about the same in Cost of Living (a perpetual strength) and Technology/Innovation.

Our biggest challenge continues to be found in the Workforce arena, where we slipped ten spots from last year’s rankings, from 31^st to 42^nd.  CNBC considers the educational attainment of the workforce, union membership, available workers and the placement success of vocational training programs in arriving at this category.  While the exact conglomeration of data can be argued, the broader point cannot – certainly Indiana faces a shortfall in educated workers that must be addressed.

CICP’s initiatives are working against this daunting task – Conexus Indiana is collaborating with higher education partners to create ‘industry-approved’ training programs in manufacturing and logistics, and marketing these programs to young Hoosiers as the path to high-tech careers.  The BioCrossroads life sciences initiative has partnered with Purdue University, Notre Dame and others on programs like the I-STEM Network, a resource to improve math, science and technology education at the K-12 level, as well as expanding access to Advanced Placement coursework to ease the transition from high school to college.

It will take these efforts and the focused attention of policymakers, educators, corporate and civic leaders to climb the ranks of educated states.  But in today’s knowledge-based economy, no other area is as important in predicting our future economic success.

Read more about the CNBC rankings and view the state listing here.

October 27^th will be a hectic day for those who care about scientific and technological innovation and the future of Indiana’s economy.

On that day, CICP’s BioCrossroads initiative will host the Indiana Life Sciences Summit at the Westin Hotel in downtown Indianapolis, while our TechPoint initiative holds its annual Indiana Innovation Summit across the street at the Indiana Convention Center.

Both events highlight the bold strides Indiana has made towards a more diverse, knowledge-based economy.  The nearly a decade, Indiana has added life sciences jobs faster than the national average, annually ranking among industry leaders by groups like BIO (the international life sciences trade organization).

BioCrossroads has bolstered this growth, raising more than $150 million in dedicated venture capital focused on life sciences start-ups, and providing support services to nearly 250 Hoosier biotech companies.  The Life Sciences Summit provides a venue to explore new opportunities and discuss hot topics like financing scientific innovation, the impact of healthcare reform, and successful strategies in bio-focused economic development.

The Innovation Summit, formerly the Tech Summit, is now in its second decade of bringing Indiana technology executives and policymakers together for a similar purpose – sharing ideas, setting a common agenda for the industry, and building a community that encourages new business opportunities.  Rebranding the event as the Innovation Summit acknowledged that new ideas are the primary fuel for growth in all high-tech industries – and the event certainly has attracted a thought-provoking keynote speaker this year, in iconoclastic author Nicholas Carr.  (TechPoint President Jim Jay recently penned this piece in the Indianapolis Star on the power of innovation and Carr’s role at the Summit.)

The Innovation Summit also includes a heavy emphasis on how high-tech entrepreneurs can find venture funding in today’s market, as well as panel discussions on social media (Indiana is earning a reputation as a digital marketing leader), smart grid technologies (ditto for energy innovation), cloud computing and more.

We hope you’ll be a part of these great events – learn more about the Innovation Summit here, and about the Indiana Life Sciences Summit here.

Inside Indiana Business reported this morning that Smart USA has chosen Indianapolis as a test market for its new Smart fortwo electric drive vehicle.  Executives from Smart say the Indianapolis region is an ideal test market for the new electric model because of plans for investment in charging infrastructure for plug-in vehicles, part of the Project Plug-IN effort being coordinated by CICP’s Energy Systems Network (ESN) initiative.

Project Plug-IN will place more than 100 plug-in vehicles in service with commuters as well as government and corporate fleets across the Indianapolis metropolitan area with the goal of anticipating and solving the challenges that come with the use of plug-in cars and trucks.  These include the deployment of residential and public charging stations, enabling off-peak charging, and resolving billing issues.

In addition to EnerDel, Project Plug-IN partners include Duke Energy, Indianapolis Power & Light, Think Global, Nissan, Smart USA, Navistar, Cummins, Delphi Corporation, Bright Automotive, ITOCHU Corporation, IBM, Simon Property Group, Midwest ISO, Purdue University, the City of Indianapolis, the State of Indiana, and the Rocky Mountain Institute.  Collectively, these partners have received nearly half a billion dollars ($490.4 million) in federal stimulus grant funding.

Through milestones like the recent U.S.-China Advanced Technology Vehicle Summit and commercialization activities like Project Plug-IN and the Hoosier Heavy Hybrid Partnership (a partnership geared towards the production of medium- and heavy-duty electric trucks), ESN has made real progress in its first year towards making Indiana a recognized leader in vehicle electrification – we’re proud of their efforts.

First U.S.-China Advanced Vehicle Summit pays off in productive dialogue, new deals between Chinese and Indiana companies

ESN hosts delegation of Chinese officials and auto executives, sharing the state’s expertise in electric vehicle technology development and manufacturing

(INDIANAPOLIS, Ind., May 28, 2010) Nearly 100 Chinese government officials, trade association leaders and auto executives visited Indiana on Thursday and Friday for the first U.S.-China Advanced Technology Vehicle Summit, organized by the Energy Systems Network (ESN) on behalf of Indiana’s leading manufacturers of components and technologies for hybrid electric vehicles.  The event featured several signed deals, substantive dialogue between the two groups, and the promise of more business opportunities for Hoosier companies in the world’s fastest-growing automotive market.

“It’s appropriate that we hold the Advanced Vehicle Summit on the eve of the Indy 500 here in the racing capitol of the world,” noted Joe Loughrey, ESN chairman and retired president of Cummins.  “Indiana is also in a race to attract new jobs and investment in the electric vehicle industry, and this Summit presents us with a historic opportunity.”

Indiana participants in the Summit included Allison Transmission, Cummins, Delphi, EnerDel, and Remy International.  The lengthy list of Chinese companies included BYD, Chery, Dongfeng Electric Vehicle, Shanghai GM, FAW Group, Geely and others.  All of China’s major state-owned, joint venture and private auto manufacturers are producing or have announced plans for hybrid and electric models; the country is projected to grow its global share of the electric vehicle market from 3% to 35% over the next decade.

“This is the largest delegation of Chinese automotive company executives and officials to travel to the United States to visit with American automotive parts manufacturers,” noted Assistant Minister of Commerce Wang Chao. “We are confident the visit will result in stronger business relationships between the Chinese and American automotive companies, especially for hybrid and electric vehicles.”

Assistant Minister Wang Chao’s confidence was shared by Indiana officials, and quickly proved to be well-founded.  On Thursday, Indianapolis-based EnerDel signed a joint venture agreement with Wanxiang Group, the largest auto parts producer in China, to provide advanced lithium-ion battery systems.   The deal between the two Summit participants could more than double EnerDel’s job creation plans for Central Indiana, to 3,000 new green jobs.

“We’re excited about our new partnership with Wanxiang and we look forward to the many other opportunities for collaboration this ESN summit has presented,” said Charles Gassenheimer, Chairman of Ener1, the corporate parent of EnerDel, and a Board member of ESN.  “Meetings like this one set the stage for companies like EnerDel to build new mutually beneficial relationships with Chinese businesses looking west for strategic partners.”

Along with the EnerDel-Wanxiang deal, the China Investment Promotion Agency and the Indiana Economic Development Corporation signed a Memorandum of Understanding to strengthen future trade and economic development opportunities on Friday morning.  Strategic cooperation agreements between Cummins and two Chinese companies, Guangxi Liugong Machinery and Zhengzhou Yutong Group, were also signed. 

Finally, an agreement between the Energy Systems Network, the China Chamber of Commerce for Import and Export of Machinery and Electronics, and the China Association of Automotive Manufacturers set the stage for future meetings.  “We’re pleased to announce that our organizations have agreed to explore another Summit, this time in Beijing, focused on the broader new energy technologies market,” said ESN President Paul Mitchell.

“The Summit is paying off in new jobs and investment,” Mitchell continued.  “These Indiana manufacturers have attracted more than $300 million in federal stimulus grants for advanced batteries and vehicle electrification, and we’re pleased to help them leverage these investments into global business opportunities.”

The U.S.-China Advanced Technology Vehicle Summit was co-presented by the Energy Systems Network, the China Chamber of Commerce for Import and Export of Machinery and Electronics, and the China Association of Automotive Manufacturers.  In addition to presentations by U.S. and Chinese companies during the day-long Summit, events included a welcome dinner hosted by Indiana Governor Mitch Daniels and a Friday evening dinner reception hosted by Indianapolis Mayor Gregory Ballard featuring keynote remarks by David Sandalow, Assistant Secretary for Policy and International Affairs for the U.S. Department of Energy.

Later this week, our Energy Systems Network initiative will be hosting a historic meeting between the largest delegation of Chinese automakers ever to visit the U.S. and the growing cluster of Indiana firms that are manufacturing components for electric cars and trucks.  The U.S.-China Advanced Technology Vehicle Summit is a first-of-its-kind forum that represents a global opportunity for Hoosier companies.

China is the world’s fastest-growing market for electric cars, and this Summit will set the stage for stronger relationships and new business opportunities among the participants while showcasing Indiana as a potential site for future investment.

Indiana participants in the Summit include EnerDel, Remy, Allison Transmission, Cummins and Delphi.  EnerDel is one of the region’s brightest economic development success stories of the last few years, and the other firms are mainstays of our manufacturing economy that have positioned themselves on the cutting-edge of the hybrid electric market.  Visiting Chinese companies include such powerhouses as Chery, Geely, Dongfeng and BYD (recently ranked #1 on Bloomberg BusinessWeek’s Tech 100 list).

We’re optimistic that the Summit will pay off relatively quickly in new business opportunities for Indiana firms, supplying more components to the booming Chinese market (China is already the fastest-growing market for Hoosier exports).  The longer-term prospects for Chinese investment in Indiana are also intriguing.  I’d like to excerpt a piece I wrote back in 2008 after a trip to Shanghai:

Back in the 1980s, Americans watched with growing concern as Japanese manufacturers captured a growing share of our markets – in cars, consumer electronics and steel.  There was an outcry against ‘unfair competition;’ publicity-seeking congressmen went so far as to smash Japanese-made TVs and radios on the Capitol lawn.  Here in Indiana, Japan even became an issue in the 1988 campaign for Governor, with barbs about “giveaways” to Japanese companies. 

Fast forward twenty years, and the landscape has completely changed:  Japanese investment is universally recognized as a fundamental strength of Indiana’s economy.  Foreign firms employ more than 90,000 Hoosier manufacturing workers, with companies like Toyota, Honda and Subaru leading the way.  The attraction of the Greensburg Honda plant is recognized as the signature economic development victory of Governor Daniels’ first term. 

Japan has turned from economic villain to valued partner.  It’s an experience we should learn from as we look towards China, another Asian powerhouse that’s stirring protectionist fears.  How can Indiana anticipate and take advantage of future investment from China, as its economy reaches the tipping point that Japan started to reach 20 years ago?  I recently read an interesting report from Deloitte Consulting (“The Coming Investment Wave from China”) that starts providing some of the answers.

To be certain, with the country’s massive population and resources, Chinese companies are still focused on domestic growth, serving international customers through exports.  But this is changing – in 2007, Chinese firms invested a record $37 billion in foreign countries, a 76% increase over 2006.  In Zhejiang Province in eastern China, an epicenter of private development, nearly 900 private companies invested overseas in 2006.

According to the Deloitte report, the list of industries that will experience the first wave of Chinese foreign investment will be topped by the automotive sector, one of Indiana’s strong suits.  Other key industries for overseas investment include pharmaceuticals and electrical equipment – other areas where Indiana has a significant base, existing workforce and fast-growing exports to China. 

The driving forces behind Chinese foreign investment are also likely to mirror the Japanese overseas wave, including the desire to get closer to customers and integrate distribution and supply chain functions.  Indiana’s central geography and strong transportation infrastructure can serve us well in meeting these needs, just as with Japanese automakers and other international firms.

All of China’s major automotive companies have released or announced plans for electric models, and international partnerships and joint ventures are very much a part of their plans.  This Summit could mark the beginning of significant and long-term economic benefits for Indiana.  Read more here and here.

Featured today on Inside Indiana Business:

Hoosier students must graduate high school ready to succeed

Mark Miles

Last week, the Indiana Commission for Higher Education began providing a valuable new tool for Indiana high schools – specific reports that show how many of each school’s graduating class went on to college, where they enrolled, and how many required remedial math or English classes once they made it to campus.

I’m guessing that many, if not most, school districts are in for a rude awakening when they receive these reports.  Statewide data show that more than a quarter of all recent Hoosier high school graduates needed at least one remedial class as college freshmen.  Two-thirds of all community college students needed remediation.  We aren’t preparing our students at the K-12 level to succeed in higher education.

This creates a domino effect that eventually takes a steep toll on our economic competitiveness.  It places another burden on our higher education system, forcing these institutions to teach material that should have been mastered in high school.  The students who receive remediation start out behind and struggle to catch up – less than ten percent graduate from a four-year college program in six years or achieve a two-year degree within three.

These trends contribute to our generally dismal educational track record.  Just a third of Hoosier adults hold at least a two-year degree.  Indiana is mired in the middle of the pack in associates degrees awarded per capita, and we’re one of the least-educated states in the nation as measured by four-year college graduates in our adult population.

 In today’s economy, failing to complete some education beyond high school is tantamount to surrendering to a life of low wages, high unemployment and missed opportunities.  The days when a high school diploma served as a ticket to a good job at the local factory are long gone.  Indiana’s fastest-growing industries, like the life sciences and technology fields, demand a highly-skilled workforce.  In manufacturing, traditional assembly line jobs have disappeared at a dizzying pace, while new jobs (in areas like electric vehicles and aerospace) require advanced training.

At the macro level, a weakening workforce discourages new business investment in Indiana, as growing companies look to states and regions with strong human capital to locate and expand.

So what are some ways that can better prepare our young people to carry on their education after high school?

Many of our strategic economic initiatives are already working to address this issue.  BioCrossroads’ I-STEM initiative provides resources for K-12 teachers to better educate their students in the STEM disciplines – science, technology, engineering and math. 

Conexus Indiana is working to develop a high school curriculum that will prepare students to take advantage of high-tech careers in advanced manufacturing and logistics, leading them seamlessly into technical training and associate’s degree programs.  Conexus is also working with ‘champions’ (teachers and counselors) in 28 area high schools to promote careers in these industries to students, emphasizing technical education and the need for training beyond high school.

TechPoint has focused on alternative school models, sponsoring the New Tech High program at Arsenal Tech through its Foundation.  The New Tech program integrates technology and 21^st century learning strategies into the state curriculum, and is getting results.  Currently, the New Tech students’ passing rate for the Indiana Graduation Qualifying Exam is twice that of any other open-entry program on Arsenal’s Tech’s campus of 2,700 students.

We also have to recognize that the issues that hinder students from graduating from high school ready for college begin long before ninth grade.  During the legislative session, CICP was part of an effort to refocus our schools on early reading education, including a policy ending social promotion from 3^rd to 4^th grade unless students can read at grade level.  This is consistent with the Indiana Department of Education and State Board of Education, both of which have made reading education the top priority. 

It’s clear that students who have serious problems with reading early on continue to struggle throughout their academic careers – many drop out before graduating from high school, and their chances of completing a college degree are nearly nonexistent.  Making sure that these students get the extra attention they need starting in the critical K-3 years is an approach that will eventually lead to graduating classes more prepared to tackle post-secondary coursework.  Ultimately, the General Assembly empowered the Indiana Department of Education to enact this critical reform as part of a broader strategy for improving reading achievement.

There’s no ‘silver bullet’ strategy that will make every high school graduate ready for college or post-secondary training on day one.  But the data being generated by the Commission for Higher Education show that this is a challenge that demands our attention, part of the ‘big picture’ effort to raise our educational attainment and build a stronger workforce.  Being ready to continue one’s education after high school means being ready to succeed in our knowledge-based economy, and to be a valuable contributor to Indiana’s economic success.

Mark Miles is the President & CEO of the Central Indiana Corporate Partnership.

On the heels of the state’s success attracting federal grants in the vehicle electrification arena, more good news – this time in health information technology.  Indiana Health Information Technology, Inc., a newly-formed statewide organization that includes BioCrossroads’ Indiana Health Information Exchange (IHIE) initiative, has received a $10.3 million stimulus grant designed to help link electronic medical records across the state.

Information technology has the potential to transform the U.S. healthcare system, reducing medical errors, improving care and cutting waste and red tape.  Indiana has been on the cutting-edge of this trend through efforts like IHIE, which has pioneered a unique collaboration among healthcare providers, insurers and others in the process to share clinical data through an electronic network to enhance the quality of care while improving efficiency. 

Governor Daniels wisely observed towards the beginning of his first term that “Government does not create jobs; it only creates the conditions that make jobs more or less likely.”  Opinions vary on the effectiveness of economic stimulus, but it is fair to say that federal grants like these do help advance Indiana’s efforts in areas where the private sector and state-level collaborations have already generated momentum.  Health IT is clearly one of these areas.

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.