Indiana Workforce Development

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

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

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

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

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

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

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

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

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

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

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

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

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

Where's the disconnect?

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Various think-tanks, foundations and economic development groups release a steady stream of state rankings based on various criteria – assessing their tax climates, classifying them as high-tech hot spots or manufacturing meccas, attempting to measure their attractiveness to college grads or creating other assorted indices of economic vitality.

It would be easy to be overwhelmed by the volume of these reports, or driven to distraction by their ‘horserace’ aspect.  There are often valuable data included in these studies, the challenge is finding them and putting them in proper analytical context.

Having said all that, it may be appropriate to give special weight to the opinions of those who actually make business relocation decisions and have the authority to bring new jobs and investment to a location.  That’s why it was noteworthy that Indiana was ranked as the best place to do business in the Midwest, and sixth best nationwide, in a survey of more than 500 CEOs by Chief Executive magazine.

The magazine’s seventh annual “Best & Worst States” survey asks these corporate leaders to evaluate states based on business tax policies, regulation, workforce and livability factors. Indiana’s 2011 ranking is up from 16th place in 2010, making us one of the fastest-moving states in the survey.

Read the press release lauding the state’s performance from the Indiana Economic Development Corporation here, and view the full rankings here. 

An impressive, bi-partisan group of elected officials and civic leaders have come together to show their support for a regional mass transit system – demonstrating positive momentum behind this critical issue.  The Central Indiana Corporate Partnership was a founding partner of the private sector-led Central Indiana Transit Task Force, which proposed the plan that was delivered to the community through the Indy Connect public input campaign over the last week. 

We continue to support a multi-modal transit system, crafting the best possible final proposal in 2011 while continuing to build support among policymakers and the public-at-large, then pushing for legislative action and popular approval by referendum in 2012.

The text of the letter is below; the piece has drawn praise from the Indianapolis Star’s editorial pages as well.

We join together today as citizens of Central Indiana.  As bipartisan elected officials we represent various constituencies:  As the Mayor of Indianapolis, seeking a more livable city and a stronger economy; as state legislators representing both Indianapolis and our metropolitan area; as your Congressman, representing the core of the region; and as CIRTA, representing the region’s transportation needs.  We are also members of the private sector.

We’re speaking with a common purpose – to move forward on a regional, multi-modal mass transit system that is ambitious yet realistic and affordable to the taxpayers.

We support a system that revitalizes and expands our bus system while adding bus rapid transit routes and passenger rail lines across Greater Indianapolis.  The system should allow both users and those who choose not to use mass transit to move around the region with greater speed and ease.  It should make dramatic improvements in the mobility of the residents of Indianapolis, commuters from surrounding suburbs, and residents of the neighboring counties traveling within their own communities.  The system should give all citizens more transportation options, connect our workforce with job opportunities, enhance our economic competitiveness and encourage investment in our neighborhoods.

Such a system has been talked about for years, and this year enormous progress has been made in developing a specific plan to move forward.   We are committed to taking the next steps toward our future transit system.

Looking ahead to 2011, there is still significant work to be done to create the best possible plan.  A reliable economic analysis of the final system plan must be completed, so that its costs and benefits are transparent to all.  The specifics of a regional transit authority empowered to build and manage the system will be refined.    Input from local officials will continue to be encouraged, and we will seek their support.

Our goal for 2012 is to present a practical transit plan that delivers a strong return on investment to the region’s taxpayers.  Our hope is that the General Assembly will decide on such a plan during the 2012 short session.  This would allow voters in the counties that wish to participate the opportunity to approve a local funding source and governance structure by referendum later that year, while also seeking federal funding for implementing the system.  Any such plan must be deemed affordable in both capital costs and operating costs before it goes to the voters for a referendum.

While large-scale public investments demand exhaustive planning and careful stewardship of tax dollars, we believe that effective mass transit is a regional priority.  The approach of refining and building public support for the plan in 2011, then taking legislative action and giving voters a voice through county-by-county referenda in 2012, will maintain positive momentum for a comprehensive, multi-modal transportation system.

As public servants and civic leaders, we look forward to working together to move this process forward, and pledge constructive action in 2011, 2012 and beyond to make effective mass transit a reality for Central Indiana.

Christine Altman                                                                                             

Hamilton County Commissioner                                                                               

Chair, Central Indiana Regional Transit Authority

Greg Ballard

Mayor – City of Indianapolis

Andre Carson

U.S. Congressman

Bill Crawford

State Representative, Indianapolis

Roland Dorson

Greater Indianapolis Chamber of Commerce

Central Indiana Transit Task Force

Al Hubbard, Co-Chair

Central Indiana Transit Task Force

Luke Kenley

State Senator, Noblesville

Mark Miles

Central Indiana Corporate Partnership

Central Indiana Transit Task Force

John Neighbours, Co-Chair

Central Indiana Transit Task Force

Bob Palmer, Co-Chair

Central Indiana Transit Task Force

Brian Payne

Central Indiana Community Foundation

Central Indiana Transit Task Force

(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.

The jobs keep coming, but we need qualified workers

Steve Dwyer, Conexus Indiana

Indiana’s manufacturing sector has gotten better at churning out an important product recently – new jobs for Hoosiers.

Last week, the Wall Street Journal reported that Indiana leads the nation in job creation this year, buoyed by  industrial growth.  A closer look at data provided by the state’s Department of Workforce Development shows that we’ve added nearly 12,000 new manufacturing jobs in 2010 (only the broad ‘professional business services’ category has added more positions).

This trend is consistent with the economic forecast released by Conexus Indiana as part of our annual Manufacturing and Logistics Report Card – economists from the Ball State Bureau of Business and Economic Research predicted a sharp manufacturing recovery during the second half of 2010 and 2011.  The state’s total manufacturing compensation is projected to grow by nearly $2.5 billion during this period, after falling or staying flat since mid-2007.

Once again, reports of manufacturing’s demise were greatly exaggerated:  The recession took its toll, but every downturn brings a recovery.  The domestic auto industry suffered plummeting sales, bankruptcies and bailouts – but Indiana has attracted international auto plants and seized high-tech opportunities in electric vehicles.  Global competition has challenged U.S. manufacturers – but Indiana has led the nation in attracting foreign manufacturing jobs.  Traditional jobs have disappeared – but high-skill manufacturing careers have emerged.

In short, every challenge is also an opportunity, and Indiana’s heritage of manufacturing strength and innovation prepared us to take advantage.

Recent positive stories like Chrysler’s $300 million investment in its Kokomo plants, EnerDel’s plans to double job creation in Central Indiana, and the recent acquisition of the vacant Delco Remy factory in Anderson by S&S Steel aren’t just isolated announcements, but part of a broader growth trend.  And it’s even more remarkable because we’re starting from a higher plateau – Indiana already has the most manufacturing jobs per capita of any state in the union.

But we can’t afford to be lulled into complacency by good news.  Long-term prosperity is achievable only if we’re willing to outwork and outthink the global competitors eager to challenge our success.

This means making the most of this recovery, maintaining a competitive tax climate and continuing an aggressive economic development effort to make Indiana an attractive destination for manufacturing investment.  We also have to look beyond the next business cycle and concentrate on the strategic issues that will determine our competitiveness for the long-term.

Human capital is clearly one of these issues.  Indiana’s high school graduation rate ranks in the middle of the pack, and we’re among the least-educated states in terms of college graduates in our workforce.  In all, just a third of Hoosier adults hold at least a two-year degree.   At a time when new manufacturing jobs demand high-tech skills and problem-solving capabilities, workers with a high school diploma (or less) just can’t make the grade.  And with Baby Boomer workers retiring in greater numbers (and the average age of the Indiana manufacturing worker hovering around 50), the state faces a looming shortage of qualified employees.

We can’t have sustainable job growth without a parallel focus on education.  Ultimately, trying to grow our economy without training our workforce only frustrates the ambitions of both the companies that can’t find skilled workers and the Hoosiers who continue to find themselves unqualified for better jobs.

Conexus Indiana is working with our industry and educational partners to create new training programs appropriate to emerging careers in manufacturing and logistics, while encouraging young Hoosiers to enroll in these programs through the ‘Dream It. Do It.’ marketing outreach campaign – learn more at dreamitdoitindiana.com. 

In any business you’re always either gaining or losing momentum – for the moment, Indiana is moving forward.  But to keep it up, we still need to make the education connection:  Filling manufacturing jobs doesn’t mean just matching workers with empty spots on an assembly line.  It means sending our workforce back to school – that’s how Indiana will keep our manufacturing edge. 

Steve Dwyer is President & CEO of the Conexus Indiana advanced manufacturing and logistics initiative.

Recent reports seem to indicate that Indiana has weathered the recession and is near the vanguard of the economic recovery – while too many Hoosiers are still unemployed or underemployed, and facing other financial hardships, we’re further along than many of our neighbors.

Most recently, the Wall Street Journal reports that Indiana leads the nation in private sector job creation in 2010.  Department of Workforce Development data confirms that the state has added nearly 50,000 new jobs since December – one of every ten positions created in the U.S. happened here, with manufacturing and ‘professional services’ leading the way.

At the regional level, the Brookings Institute places the Indianapolis metropolitan area in its “second-strongest” tier in its ongoing measurement of the economic performance of the 100 largest metros in the U.S.  Our relatively low unemployment, stable housing prices and strong Gross Metropolitan Product growth put us in good stead, ahead of most of Midwestern areas.  While St. Louis and Columbus (OH) joined Indianapolis in the ‘second strongest’ category, Louisville, Cincinnati, Milwaukee and Nashville found themselves in the middle tier.  Chicago, Detroit and Dayton slipped into the bottom levels.

The numbers are heartening, and there’s also cause for optimism ahead.  Indiana continues to boast the most business-friendly tax climate in the Midwest – as the recovery gathers steam, we’ll be among the most attractive destinations for new investment.  Indiana also made an impressive jump in venture capital investment over the past year, climbing from 41^st to 20^th in VC investment per capita.  This says great things about our ability to grow our own new companies and diversify our economy moving forward. 

Clearly, Indiana still has many hurdles to overcome – strengthening our workforce and closing the income gap that continues to plague Hoosiers, to name just two – but we seem to have positioned ourselves to take advantage of the economic comeback that’s starting to take hold across the country.

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.

Last Wednesday’s Indianapolis Star printed a version of this excellent editorial by Central Indiana Transit Task Force co-chair John Neighbours, reacting to news of the fiscal uncertainties swirling around the IndyGo bus system.  The dismal state of IndyGo burdens both its users, who find it difficult to get to work or other daily errands due to long delays and inconvenient routes, and also local companies that depend on the bus to bring employees and customers to their places of business.

A more secure source of local funding for the system is certainly necessary;  the best solution is a more comprehensive regional system that provides reliable service across the metro area, and is financed and governed accordingly.  We believe the Central Indiana Transit Task Force has presented such a plan, summarized here.

(As a side note, I’ll be addressing the need for regional mass transit in my remarks to the Economic Club of Indiana this afternoon.)

Lack of reliable transit impedes economic growth

Erika Smith’s recent reporting on the fiscal plight of IndyGo paints a picture of a woefully under-funded public transit system in crisis.  It’s a picture that’s all-too familiar for those who rely on IndyGo on a daily basis.

IndyGo ranks 100^th among the top 100 U.S. metropolitan areas in transit funding, to serve the 26^th-largest metro population, leading to inconvenience and delay.  Let’s say you live near 10^th and Rural, and want to get to work near the Pyramids (96^th Street and Michigan Road) by 8:00am – you’d need to walk to the bus stop around 6am, to begin a one-and-a-half hour trip.  The employee of a company at Park 100 on the northwest side who has the misfortunate to live near 46^th Street and Arlington would suffer through a two-and-a-half hour commute (each way). 

These aren’t unusual scenarios.  For those who are dependent on transit, the current system effectively shuts the door on job opportunities and turns simple trips to the grocery store or doctor’s office into painfully-long  journeys.  For businesses dependent on public transit to connect them to a reliable workforce, IndyGo is a barrier to growth, a drag on economic competitiveness.

There is a better way.  In February, the private sector-led Central Indiana Transit Task Force released a comprehensive regional transportation plan that includes a light and commuter rail network, new highway investment and an expanded regional bus system. 

While the rail lines capture much of the public attention, it’s the bus system that actually receives the majority of new operating funds in the plan.  We don’t just envision fixing IndyGo, but transforming it into a regional system that allows commuters to move easily around Indianapolis and the surrounding counties.  The bus network would include more cross-town routes and higher levels of service, cutting wait times and connecting with rail to provide more transportation options for all.

The urgent need to provide adequate bus service is also reflected in the Task Force’s recommendations for public consideration.  While rail infrastructure is built over several years, bus improvements would begin immediately – offering tangible benefits right away.

A comprehensive and convenient bus system is the backbone of any successful transit system, and the private sector blueprint prioritizes and invests accordingly.  The plan is currently on the table for public comment through the ‘Indy Connect’ campaign of the Metropolitan Planning Organization (offer your own feedback at www.indyconnect.org).  Because buses are the closest and most relevant form of transit to much of the region’s population, we expect the agency to receive a large amount of input on how to better serve their riders.

The other major issue is funding.  Financing IndyGo through property taxes is a recipe for failure.  No one wants higher property taxes; indeed, we believe that mass transit investments can help keep property taxes under control by spurring more residential and commercial development. 

The transportation system should be funded by other local options, like small increases in sales or income taxes – funding the entire proposed regional rail and bus system would cost the average family between $10 and $20 a month in new sales taxes, for example.  That’s the price of a large pizza in exchange for greater mobility, a more convenient commute, and the other economic and environmental benefits of transit.

The sorry state of IndyGo lends urgency to the broader issue:  We need a regional, comprehensive transportation system that includes new mass transit options, like the plan envisioned by the Central Indiana Transit Task Force.  It’s time to agree on the approach, find the best way to pay for it, and make it happen.

John Neighbours

Neighbours is a partner at Baker & Daniels, serves on the Board of the Greater Indianapolis Chamber of Commerce, and was co-chair of the Central Indiana Transit Task Force.

Plotting a post-Rust Belt future for the Midwest

Carol D’Amico

What is the future of Midwest cities that have been heavily dependent on the automotive industry?  That was the issue we discussed at a White House symposium last week held at the U.S. Department of Labor in conjunction with the Brookings Institution, a Washington DC think tank.  Representatives from Ohio, Michigan and Indiana attended to discuss our common challenges as we seek to revitalize an economic base that’s traditionally reliant on automotive manufacturing.

A few observations from the day:  First of all, we should be very proud that our region still makes things for a living.  As one participant remarked, we have been and still are innovators.  Things we can't live without were invented in the Midwest - cars, refrigeration, air conditioning, and the bar code among countless others.  The Midwestern work ethic combined with our propensity to “tinker” and seek continuous improvement have helped us build a rich manufacturing heritage.  These traits can  continue to serve us well if we are smart about it.

What also struck me is we have common aspirations to diversify our dependence on the automotive industry and to be the leader in life sciences, alternative energy, logistics and bio agriculture.  We discussed common problems like difficulty in funding of start-up companies and the bias lenders have against manufacturing (too often dismissed as an industry stuck in the past, even as it invests more than any other U.S. economic sector in R&D innovation).  And perhaps the biggest issue of all, the challenge of up-skilling an older, entrenched workforce and shaking off our “rust belt” image to attract young talent to our landlocked states.

For that day we were in solidarity, confronting these common challenges and brainstorming solutions.  But outside the DC conference room,  we are fierce competitors when it comes to attracting new jobs and investment to our states.  It isn’t realistic to think that each of us can  be the leader of the new industries.  One of us is going to be better at it than the others.  So what will it take to stand out in this crowded field and how competitive is Indiana in the race?

First, the basics.  Indiana boasts a pro-growth tax climate.  Central geography and strong infrastructure.  Aggressive and well thought-out economic development efforts.  Enlightened and energized leadership.  All areas in which we excel.

We’ve also already made significant progress towards diversifying our manufacturing sector.  According to an analysis by Ball State University’s Bureau of Business Research, Indiana’s automotive and auto parts manufacturing industry employs more than 110,000 Hoosiers.  This is a tremendous number, but it represents just 16% of the state’s total manufacturing jobs.  Indiana also boasts strength in high-growth areas like pharma and medical device manufacturing, aerospace, HVAC and others.  And even within the automotive sector, we’re positioning ourselves as leaders in more cutting-edge areas like vehicle electrification.

Our Achilles heel in this race is the quality of our workforce.  A recent report that was done showed that we have 108,812 adults of workforce age who have less than a ninth grade education; another 273, 086 have less than a high school diploma.  This year over half the recipients of unemployment insurance lacked a high school diploma.  Unlike the old days, there are no good paying jobs for those adults.  Another 1,125,166 adults have only a high school diploma and no college.  These adults too have limited opportunities in the new economy we aspire to build. 

Until we get serious about addressing this issue our ability as a state to be the economic development leader among the Midwest states is problematic.  And it isn’t just the Midwest states that we compete with – it is all other states and the industrialized world. 

There are no easy fixes – this was the primary takeaway from  our event last week.  We need a more robust adult education system; a more effective K-12 system; colleges focused on graduating more adults within a reasonable period of time; and a modern, government-supported workforce development system instead of the antique we operate under today built in 1945 for a very different economy and era.  Indiana’s progress towards these goals will define our competitive advantage in manufacturing for generations to come. 

D’Amico is Senior Advisor to Conexus Indiana, the state’s advanced manufacturing and logistics initiative.

Mass transit has clear economic benefits in linking our workforce to job opportunities across the Indianapolis metropolitan area, to the advantage of both prospective workers and the businesses that hire them.  Transit infrastructure also pays off in new development opportunities in the adjacent neighborhoods – as in Dallas, where $4.2 billion in business and new housing sprang up along the DART (Dallas Area Rapid Transit) system between 1999 and 2007. 

But transit also adds to the general quality of life of our region by increasing mobility and connectivity to both employment and cultural/recreational amenities.  It makes a ‘walkable urban’ lifestyle a more realistic choice.  It’s an investment in convenience for commuters and visitors, in environmental sustainability and building more vibrant communities.

These are values that are broadly shared, especially by the next generation of young professionals – the up-and-coming college graduates who are choosing where to begin their professional lives or pursue new career opportunities. 

For Central Indiana, continuing to attract new business opportunities and investment in the knowledge-based economy means building a highly-educated, highly-skilled workforce – and that means being a destination of choice for young talent. 

An editorial by Sara Laycock in yesterday’s Star does a great job making the case for mass transit as a necessary investment in our human capital pipeline.  Please take a moment to read it 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.

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.

Last week, our Central Indiana Transit Task Force publicly released its final report, presenting its recommendations to policymakers and the citizens of the region.  This report lays out a regional multi-modal transportation system with financing and governance recommendations, backed up with a rigorous cost-benefit analysis.  Now that the Task Force findings are in the public domain, we’re kicking off a year-long input campaign  – Indy Connect – that will invite a dialogue about Central Indiana’s transportation future, using our plan as a starting point.

I’d like to again thank co-chairs Al Hubbard, Bob Palmer and John Neighbours for their leadership, and all of the Task Force members – including CICP co-chair Jo Ann Gora – for their energy and insight in crafting this impressive study.

Their work will serve the region well.  We’ve lacked an integrated, forward-looking plan for regional transportation, and have paid the cost in terms of economic competitiveness, workforce connectivity, the vitality of our urban core and the potential for new investment and neighborhood redevelopment.  Our blueprint addresses all of these issues; now it’s up to elected officials and the public across the region to make the plan their own and decide if they’re willing to invest in it.  Please offer your two cents at indyconnect.org.

As the public thinks about transit, it’s important to understand the tremendous economic development impact that transit can have – I hope you’ll take a moment to read this excellent editorial from this weekend’s Star from Chuck Cagann of Mansur Real Estate, a Transit Task Force member, that addresses this issue:

Transit investments mean economic payoffs

When we think about economic development, we're likely to focus on tax breaks and other incentives for growing companies, competing against other regions for business opportunities.

That's true, but it's only one part of a bigger picture.  I'd argue that economic development has to be tied to what kind of community we want to build for ourselves and our families:  Do our citizens have access to diverse job opportunities?  Is our region growing?  Do we have great housing options, with thriving retail establishments and other amenities to serve our neighborhoods?

If we embrace this broader definition of economic development, then it's clear to me that a strong regional mass transit system is an important catalyst.

I was proud to serve on the Central Indiana Transit Task Force, a private sector-led group that last week unveiled a comprehensive transportation plan that includes strategic highway investments and an expanded regional bus system connected with light rail to serve the metropolitan area.

As business leaders, we understand a good investment when we see it – regional mass transit is an investment that will pay off in a healthier economy for employers, for taxpayers, for all of us.

Mass transit has been shown to create significant economic investment, as dense commercial and residential development grows along the transit lines.  For example, the Portland streetcar system has generated $1.4 billion along its 4.7 mile loop since 2001, a handsome return on its $300 million cost.  In Cleveland, more than $4 billion in private development is planned or in progress along the Euclid Avenue light rail corridor.  In Dallas, another $4.2 billion in business and new housing sprang up along the DART (Dallas Area Rapid Transit) system between 1999 and 2007.

This transit-oriented development boom can lead to higher property values and a broader tax base, easing the burden for other homeowners and businesses.  In Dallas, for example, high-value development along the DART lines is generating an estimated $127 million in additional tax revenues every year.  In Arlington, Virginia, half of all county property tax revenues are generated from its METRO transit corridors – allowing the county to maintain the lowest property tax rates in the region.

The right system will help our region attract and retain talented people, the skilled workforce that is a magnet for new business opportunities in our knowledge-based economy.  The regions of choice for educated workers provide diversity, arts and culture, an array of recreational amenities.  These regions also offer transit options – the ability to walk or bike to a rail or rapid bus station, to work on your laptop or chat with friends on the way to work.

By allowing employees to get to work more efficiently and affordably, a truly comprehensive regional system also allows local businesses to access a broader workforce, while giving commuters more disposable income to reinvest in the local economy rather than at the gas pump.

The Task Force strategy for mass transit is based on thoughtful planning and a rigorous cost-benefit analysis – but it’s only the beginning.  Now that this plan has been turned over to the public sector for action, every citizen will have an opportunity to weigh in during a series of public meetings and online at www.indyconnect.org. 

The dividends from investing in transit are many and far-reaching: Cutting commutes and putting more job opportunities within reach.  Connecting local businesses with more customers.  Spurring development that creates new jobs and tax revenues while rebuilding our neighborhoods.  The proposed transportation system may evolve over the next year, but it’s certain to be a winning economic development proposition  for all of us – please take part in the conversation and encourage your local elected officials to help turn this vision into reality.

Chuck Cagann is President of Mansur Real Estate Services; he serves on the Central Indiana Transit Task Force, which recently unveiled a strategy for a comprehensive regional transportation system.

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. 

As we’ve reported in this space (here, here and here most recently), Indiana is making progress in building a more entrepreneurial economy, as measured by that most pragmatic of indicators – the amount of capital that private sector investors are willing to commit to the success of promising young companies.

The life sciences sector has led the way in this regard, and earlier this week our BioCrossroads initiative announced another major milestone in this journey towards a more diverse and dynamic ‘bio-economy:’ the creation of the $58 million INext Fund, the successor to the successful Indiana Future Fund announced six years ago as one of BioCrossroads’ first major initiatives.

INext, like the Future Fund, is supported by major institutional investors  - Eli Lilly, IU and Purdue, the Indiana State Teachers Retirement Fund, the University of Notre Dame and the Fairbanks Foundation – and will function as a ‘fund of funds.’  That is, INext will not invest directly in start-up firms, but rather in local and national venture capital firms that will in turn focus on Indiana opportunities.  This strategy lessens the risk to the Fund’s investors, and also attracts a broader pool of capital to Indiana. 

The Indiana Future Fund has been a rousing success, and support for the INext Fund shows the continued commitment among  the state’s corporate, public and university investors for continuing the strategy.  Here is the full press release on INext:

Indianapolis, Dec. 16, 2009 - Capitalizing on the continued strong growth of Indiana's life sciences industry and an active venture capital market, leaders from BioCrossroads, Eli Lilly and Company, Indiana State Teachers Retirement Fund, Indiana University, Purdue University, the University of Notre Dame, Richard M. Fairbanks Foundation, and Credit Suisse today announced the establishment of the INext Fund, a $58 million venture capital fund of funds.

Organized through BioCrossroads, Indiana's initiative to grow, expand and invest in the life sciences, and managed by the Credit Suisse Customized Fund Investment Group, the INext Fund includes investments from Lilly, the Indiana State Teachers Retirement Fund (TRF), IU, Purdue, Notre Dame, and the Fairbanks Foundation. This fund of funds is a capital pool that will invest in venture capital funds that are focused on the life sciences, thus encouraging and facilitating direct investment in Indiana life sciences opportunities.

"Six years ago, we launched the Indiana Future Fund to stimulate and grow Indiana's venture capital sector, and we've made incredible progress building a market where VC firms, both local and out of state, are investing in our promising life sciences companies," said David Johnson, president and CEO, BioCrossroads. "Launching a follow-on fund like the appropriately named INext Fund is proof of concept of BioCrossroads' mission, and evidence of the substantial market opportunities here in Indiana to put private equity to work. Capital formation is a huge problem for every region across the U.S., but Indiana's institutional investors have once again proven ready, willing and able to build and maintain strong funding sources for our entrepreneurial companies."

Lilly, one of the original participants in the Indiana Future Fund (IFF), has committed an investment in the INext Fund.

"The INext Fund will be a catalyst for the continued growth of Indiana's life sciences. Our investment in the fund is smart not only from Lilly's business perspective, but we also view it as a part of a collaborative effort to strengthen our community," said Bart Peterson, Senior Vice President of Corporate Affairs, Eli Lilly and Company. "Lilly's investment strategy is to find the best opportunities, and we look all over the world to find them. It just so happens that some of the best innovations are happening in our own backyard."

The Indiana Future Fund, a $73 million fund, has been the life blood of 14 Indiana life sciences companies, and continues to provide the foundation for Indiana's venture capital growth. The IFF has also been a trailblazer in securing additional capital from beyond Indiana for Indiana companies, helping to bring over $160 million to Indiana start-ups from venture capital firms across the country.

"Given the current challenges in the U.S. economy, building a return-driven fund of this magnitude is very impressive," said Phil Belt of Credit Suisse's Indianapolis office. "Indiana's life sciences industry is full of both promise and opportunity, and progress continues to be made. This state is now a life sciences leader and is on the map for venture capital firms from the east and west coasts and points in between."

Indiana has seen an increase in the number of entrepreneurial life sciences companies, both university-based and private start ups, since the formation of the IFF. One of the investments that the IFF firms made in 2006 was BioStorage Technologies, an Indianapolis based biomaterials storage and inventory management company. Since that time, BioStorage has tripled its workforce, announced a $6.1 million investment in a new facility in Indianapolis and will add another 125 employees by 2012.

"We brought this group of industry, university and community leaders together with a common goal -- to generate good returns on investment while doing good for our community," said Darren Carroll, vice president, Lilly New Ventures and chairman of the INext Advisory Committee. "This is how public-private partnerships work -- giving Indiana's life science companies the opportunity to compete and win in the global economy."

 "We continue to see promising innovations from our technology transfer offices more than 170 patents and 50 companies have come through the Purdue Research Foundation over the last six years," said Purdue University President France Córdova. "Having a vibrant venture capital community and bringing in new dollars from outside the state to help these companies grow is imperative. This funding builds the companies that will advance the life sciences and improve the health of Indiana's citizens."

Indiana University is tapping investments and private contributions to stimulate Indiana's economy. No tax or tuition dollars are involved. In early December, IU announced the formation of the $10 million Innovate Indiana Fund. "With incubators cropping up all over the state and breakthrough research coming out of our university labs, there continues to be great discoveries in our life sciences," said Indiana University President Michael McRobbie. "The INext Fund provides us with another way we can direct capital to talented and innovative companies and gives them another funding resource."

"By investing in INext, Notre Dame is supporting the advancement of the life-sciences industry in Indiana and throughout the nation, with the hope that this support will lead to new applications that will benefit the lives of many and also create successful businesses. It is a good investment from many perspectives," said Thomas Burish, Provost, University of Notre Dame.

Along with corporate and university investments, the INext Fund has received an investment commitment from Indiana's Teachers Retirement Fund as well as the Richard M. Fairbanks Foundation.

'Indiana's robust life sciences industry is one of the key drivers of our economy, and investing in INext is expected to deliver investment returns by capitalizing on that strength," said Steve Russo, Executive Director of the Indiana State Teachers Retirement Fund.

"The Richard M. Fairbanks Foundation is participating in the INext Fund both because we believe it is a good investment, but also because it is supportive of our goal of strengthening the economic vitality of our community," said Leonard J. Betley, president of the Richard M. Fairbanks Foundation.

About BioCrossroads
BioCrossroads (www.biocrossroads.com) is Indiana’s initiative to grow, advance and invest in the life sciences, a public-private collaboration that supports the region’s existing research and corporate strengths while encouraging new business development. BioCrossroads provides money and support to life sciences businesses, launches new life sciences enterprises (Indiana Health Information Exchange, Fairbanks Institute for Healthy Communities, BioCrossroadsLINX, and Datalys Center), expands collaboration and partnerships among Indiana's life science institutions, promotes science education and markets Indiana's life sciences industry.

It’s no secret that U.S. students are falling behind their international peers when it comes to math and science.  The latest Program for International Student Assessment (PISA) test scores shows our students performing below average among other industrialized countries in both math and science – indeed, our average scores rank us 24^th out of 25 industrial (OECD) nations.

Today, the latest National Assessment of Educational Progress (NAEP) math scores show progress has stalled nationally and here in Indiana – another bad sign.

But here in Indiana, our BioCrossroads initiative is tackling the need to improve science, math and technology education through its I-STEM (Science, Technology, Engineering and Math) Network, a resource for K-12 teachers designed to raise the level of STEM education in Indiana.  I-STEM, which brings together higher education institutions with private and philanthropic partners, offers curriculum ideas, professional development opportunities and other resources for educators.

Today, the Lilly Endowment announced its continues support for I-STEM – valuable aid in the battle to boost student achievement in these critical disciplines.  More details:

Investing in the future: $2 million Lilly Endowment grant to CICP Foundation will support Indiana Science, Technology, Engineering and Mathematics (I-STEM) Resource Network I-STEM's services provide rigorous and quality professional development programs  --  more than 6,000 teachers and counting

INDIANAPOLIS, October 15, 2009- The Indiana Science, Technology, Engineering and Mathematics (I-STEM) Resource Network announced today that a $2 million grant from Lilly Endowment Inc. to the Central Indiana Corporate Partnership Foundation will support the I-STEM Resource Network. The initiative was established in 2007 and partially funded by a $3.4 million grant from the Endowment.

The Network is a statewide consortium of 18 Indiana higher education institutions dedicated to measurably improving K-12 student achievement in the STEM disciplines.  Over the last two years, the Network has focused on providing research-based professional development for current Indiana math teachers to help meet statewide academic standards. More than 6,000 teachers, who work with more than 150,000 K-12 students throughout Indiana, have participated in I-STEM professional development programs.

"Lilly Endowment is pleased to support the I-STEM Network, which impressively marshals the intellectual resources of Indiana colleges and universities," said Sara B. Cobb, the Endowment's vice president for education. "This unprecedented collaboration should significantly help

K-12 teachers enhance the impact of their teaching in these STEM disciplines so critical to our state's future," added Cobb.

 While programs are being developed across all STEM disciplines, the I-STEM Resource Network has focused on statewide programs in mathematics, including coursework for middle level mathematics teachers and the development of the Indiana Algebra Readiness Initiative, a series of conferences and workshops led by nationally-recognized experts, to help teachers prepare students for success in algebra.

Algebra is a "gateway" course  and a focus for the teacher training because it is a critical building block for the more advanced mathematics courses. Math educators agree that learning algebra is absolutely critical if a student has any aspirations for a career in the life sciences.

"More than ever, algebra teachers need a variety of resources to help all students in Indiana improve their algebra skills. The Network provides those resources," said Bill Reed, past president of the Indiana Council of Teachers of Mathematics and algebra and calculus teacher at Hamilton Southeastern High School in Fishers. "It is imperative for teachers to continue to improve their knowledge and methodologies for teaching algebra."

"By providing Indiana's current teachers with easy access to rigorous and quality professional development opportunities in the STEM disciplines, I-STEM has provided the foundation for strategic, systemic change in STEM education in Indiana," said Anne Shane, vice president of BioCrossroads and one of the founders of the Network. Improving achievement in science and math will maximize students' opportunities to succeed in the future life sciences workforce. To nurture and help build this life science sector  is one of BioCrossroads' key initiatives.

 "Research shows that the most important factor in accelerating student achievement is teacher quality. The I-STEM Network provides access to professional development that allows teachers to brush up on their subject matter expertise in math and science that they need to be more effective in the classroom," said Tony Bennett, Ph. D., Indiana superintendent of public instruction.  "The programs are also a powerful tool to develop our future workforce and to encourage students to enroll in the STEM disciplines in postsecondary education." The Indiana Department of Education has been instrumental in the development of I-STEM.

Besides providing professional development tied to Indiana's academic standards, STEM Resource Centers at each partnering institution in the Network have been providing grassroots education opportunities for teachers in their regions and throughout the state.

The Math Matters program in Southeastern Indiana is a joint project that Indiana University-Bloomington's School of Education and a team from the Lilly Endowment-funded initiative in the region, Economic Opportunities

2015 (EcO15),  have  instituted to bring project-based learning into math instruction.

K-6 Teacher Science Institutes have been held at St. Mary's College and Integrated Math-Science Workshops (MS2) for teachers in grades 5-9 were organized at Notre Dame. 

PRISM and the Homework Hotline at the Rose-Hulman Institute of Technology, both also funded by Lilly Endowment, continue to provide support to teachers and students looking for information on how to teach and learn STEM subjects.

"Teachers just don't have the time to search online for quality resources to aid in classroom instruction. PRISM has done the research for us," said Diedre Adams, a science and math teacher at West Vigo Middle School in Terre Haute who was a 2008 Albert Einstein Distinguished Educator Fellow at NASA.  "The lessons and information it provides are invaluable in helping STEM teachers supplement classroom materials, locate the latest research, and find new and fun ways to motivate students in science and math."

The Network is also involved in building a strategic plan for science education reform with the Indiana Department of Education.  The development of new professional development programs to be offered through the I-STEM Network for science teachers is in progress.

"In its short history, the I-STEM Network has made significant progress in providing Indiana's STEM teachers with new professional training opportunities, and this additional funding will build upon that foundation," said Bill Walker, executive director of the Network.

"Instructors bring new ideas and energy into these professional development classes. This is good for the teachers and their students."

Purdue University provides day-to-day management for the I-STEM Resource Network.  The participating institutions are: Ball State University, Indiana University Bloomington, Indiana University Purdue University Fort Wayne, Indiana University Purdue University Indianapolis, IU Southeast, Marian University, Northwest Indiana Consortium for Teacher Education (Valparaiso University, Purdue Calumet, IU Northwest, Purdue North Central and Calumet College at St. Joseph), Purdue West Lafayette, Rose-Hulman Institute of Technology, University of Indianapolis, NISMEC (University of Notre Dame, St. Mary's College  and IU South Bend) and the University of Southern Indiana.

Warsaw, IN, September 23, 2009 – The future of Warsaw, Indiana, the orthopedics capital of the world, received a significant boost today: the single largest private foundation grant ever awarded in the region.

“Indiana is indeed fortunate to be home to this extraordinary cluster of orthopedic companies in the Warsaw community,” said N. Clay Robbins, president of the Endowment.  “We are pleased that a promising plan and framework have been developed, after many months of deliberation and good effort, to secure and enhance the region’s competitive appeal to the orthopedic industry now and in the future.

The OrthoWorx initiative was created out of a comprehensive Endowment-funded study conducted by BioCrossroads, Indiana’s public-private collaboration for investment, development and advancement of the state’s signature life sciences strengths.  Released Sept.10, the report, "Warsaw, Indiana: The Orthopedics Capital of the World  -- An overview, analysis and blueprint for future industry and community growth", explores the sector's current assets and challenges and sets forth a series of action-oriented recommendations designed to secure and advance the community's current position as home to nearly a third of the world's orthopedic device industry.

For example, within a talent and workforce development initiative, OrthoWorx will engage the Indiana Department of Workforce Development, Ivy Tech, Grace College and other higher education institutions, to help identify gaps in training and associate and baccalaureate degree programs. They will then work to develop new educational programs through state and federal grants and other sources of funding to fill such gaps. OrthoWorx also will explore ways to enrich and expand K-12 options in the region and develop further the research collaborations among orthopedic companies and Indiana’s research universities. It also will build relationships with the human resources, management and manufacturing departments of the various Warsaw-based orthopedics companies to ensure that companies can get the specifically trained workers they need.

“Much as BioCrossroads has become the supporting brand for Indiana's broad field of life sciences assets, OrthoWorx will become the voice that promotes the presence and potential of the Warsaw-based orthopedics industry and the community that supports it,” said David Johnson, president and CEO of BioCrossroads.  “As the epicenter of the orthopedics industry, Warsaw offers both a unique industry and a unique community. OrthoWorx will bridge the two to put the best strategic opportunities into action.”

“While many have contributed to the development of this plan, we are especially impressed by the leadership and dedication of the president of Grace College, Ron Manahan; the executive director of the Kosciusko County Community Foundation, Suzie Light; and the leaders of the orthopedic industry and BioCrossroads. Without their tireless efforts we would not be here today,” Robbins added.