Indiana Workforce Development

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.

Clearly, entrepreneurial companies will play a tremendous role in pulling the U.S. out of the recession – these businesses create an estimated two of every three new jobs and are the major source of innovation and productivity growth in today’s economy. 

A recent study by the Kauffman Foundation may make us take another look at what the next generation of entrepreneurial pioneers who will forge a path out of the slump will look like.  The popular image of the entrepreneur is young – the Silicon Valley whiz kid, or the ‘creative class’ guru ready to strike out on his own.  But the Kauffman report – “The Coming Entrepreneurial Boom” – turns this picture on its head:  In every year over the last decade, the rate of entrepreneurial activity has been highest among Americans aged 55 to 64, far outpacing their younger (20-34 year old) counterparts.

Cementing this data, Kauffman conducted a survey of 5,000 young companies (launched in 2004) and found that two-thirds of their founders were between the ages of 35 and 54.

Kauffman attributes the rise of the older entrepreneur to a number of factors, including increasing job turnover among Americans of all ages and a desire for second or third careers within a workforce that’s staying healthier and living longer.

From my anecdotal perspective, this makes sense.  Working with our TechPoint initiative in particular, I’ve encountered any number of ‘serial entrepreneurs’ who are still starting and mentoring new firms at an age when our fathers and grandfathers would have been settling in for the stretch run towards retirement.  They bring invaluable experience to these new ventures from having been ‘around the block.’

For Indiana, attracting and retaining young college-educated workers must still be the top economic development priority – we desperately need to increase the educational attainment of our workforce, starting by catching those who are dropping out of high school or failing to pursue education beyond 12^th grade.   But we shouldn’t ignore the entrepreneurial ambitions of the 1.6 million Hoosiers between the ages of 45-64; according to Kauffman, they could represent a significant opportunity for new business growth.

Indianapolis, September 10, 2009 – Now generating more than $11 billion in annual revenues, the global orthopedics sector concentrated in Warsaw, Indiana, represents more than half the U. S. market share and more than one- third of the world’s market for developing orthopedic medical devices. 

How does an industry -- contained within a community -- continue to maintain its strong economic presence and position itself for future growth?  BioCrossroads, Indiana’s organization for investment, development and advancement of the state’s signature life sciences strengths, explores and outlines a series of action-oriented responses to this question in a new published report, Warsaw, Indiana: The Orthopedics Capital of the World  -- An overview, analysis and blueprint for future industry and community growth. 

The report represents one of the most comprehensive studies ever conducted of Indiana’s outsized share of this remarkable industry, and it suggests a range of broadly supported steps that the industry, the community and the State can pursue to ensure this sector continues to thrive on Hoosier soil.

Initiated through a planning grant funded by the Lilly Endowment, Inc., the BioCrossroads report reveals stunning statistics that highlight the growth of a sophisticated business sector and the community supporting it:

Kosciusko County has grown its Health & Biomedical employment base by 39 percent since 2001 compared with 15 percent for both Indiana and the U.S.

In 2007, the concentration of jobs in Kosciusko County in the medical devices and equipment category had a location quotient of 51.86, which is nearly 50 times that for the national average, [resulting in] a location quotient that is literally “off the charts.”*

When compared with the larger Metropolitan Statistical Areas analyzed nationally in the Battelle Technology Partnership Practice biennial state by state industry analysis for the Biotechnology Industry Organization (BIO), the Warsaw, IN Micropolitan Area (population 12,500) would rank as the 15th largest regional employer in medical devices and equipment in the U.S.

“The Warsaw orthopedics community is one of the most robust and concentrated medical equipment development sectors in the world, and a world-class economic asset that powers growth for all of Indiana,”  said David Johnson, President and CEO of  BioCrossroads.  “The integration of all this research has resulted in a picture of an industry cluster in Warsaw, that is currently robust, respected and globally competitive.  While this orthopedics device sector has been tremendously successful to date, our research and the truly global scale of this sector’s reach make it very clear that global pressures now confronting our whole economy, including all our life sciences sectors, have sparked a broadly perceived need for a community and industry engagement strategy focused on education, talent recruitment and retention, workforce and community development to ensure sustainability. 

“We’re now in the process of developing a Warsaw-based, regionally focused organizational initiative that can better define and prioritize the challenges and opportunities, and then seek funding to bring the best and most responsive ideas to life,” Johnson added.

The report details seven initial focus areas for such an initiative to explore:

•             Branding and Awareness – promote the Warsaw community as the orthopedics capital of the world

•             Community Enhancement – develop and add specific, cultural and recreational amenities

•             Education – enhance options and opportunities for K-16 education

•             Talent and Workforce Development – further and focus the necessary collaboration among industry, government and education to identify future needs for this industry’s highly skilled management and workforce

•             Transportation and Logistics – analyze regional transportation challenges and develop specific options for improvement

•             Industry/Technical Support Enterprises – research market opportunities and business cases for specific enterprises that could provide valuable “business infrastructure” for Warsaw’s diversified orthopedics industry

•             College and Research University Engagement – promote and establish specific mechanisms and programs for collaboration among Indiana’s academic and research institutions and between academia and industry to promote innovation and enhance processes for research and development.

“The medical innovation coming out of Warsaw is some of the best in the world, so it’s critical that we have a plan for sustainability and growth.  With true and widespread business and community participation, BioCrossroads has created a roadmap to move us forward, and we are fortunate to have such an action-oriented champion for our community,” said Cheryl R. Blanchard, Ph.D., Chief Scientific Officer and Senior Vice President, Zimmer, Inc.  “Community and industry leaders are eager to become engaged in this effort and find the best ways to make a positive impact on our community.”

 “Warsaw’s economic vitality is driven by our orthopedics companies, not only for the success of the largest industry leaders, but also for the entrepreneurs and service companies that support this sector,” said David Findlay, Chief Financial Officer and Executive Vice President of Administration, Lake City Bank.  “The work that BioCrossroads has done in developing this strategic framework will help our community progress, enhancing our assets and filling in our gaps.  I can readily report that there is a lot of energy surrounding this initiative.” 

The report is available on the BioCrossroads Web site:  www.biocrossroads.com

The BioCrossroads report draws heavily upon research by Battelle– both a 2001 study and an update to that work completed in 2009.  In addition, a community study, including a number of in-depth interviews and facilitated discussions with key business and community leaders in the Warsaw region, was conducted and facilitated by Mary Walshok, Ph.D., an international expert in community and economic growth, professor of Sociology at the University of California, San Diego, and a principal in Global CONNECT at UC-San Diego.  The report also includes specific recommendations for new types of enterprises and facilities developed by distinguished orthopedic surgeons.

A trade delegation led by Governor Daniels is scouring the Far East in search of new jobs and business opportunities this week, meeting with business and government leaders in China and Japan in hopes of adding to the historic influx of foreign investment Indiana has enjoyed over the last several years.   Today, the Hoosier State is home to more than 200 companies from Japan alone, employing as many – or more – workers than Detroit’s Big Three automakers here.

That’s the upside of the global economy: Manufacturing jobs, lured to Midwestern states like Indiana by the weak dollar, a ready workforce and proximity to the world’s biggest consumer market.  But we also have to be mindful of the threats posed by globalization, primary among them the erosion of the United States’ biggest competitive advantage, our capacity to innovate. 

It’s great that Indiana is attracting jobs based on our low business costs, the technical proficiencies of our workers and our geographic advantages.  But to create long-term prosperity in the high-tech economy, we also have to be a place where new technological advances and scientific breakthroughs are brought to life and commercialized. 

But as a nation, we’re falling behind in the race for innovation.

We aren’t encouraging innovation the way we should.  A new study by the Information Technology & Innovation Foundation shows that we now lag behind many industrialized and rapidly-developing countries in R&D tax incentives.  We were the first nation to reward innovation through the tax code, implementing the R&D credit in 1981.  But over the last decade, we’ve slipped to 17^th among OECD countries in R&D tax generosity, and developing nations like China, India, Singapore and Brazil are also employing more aggressive R&D strategies.  (China, for example, provides a 150% tax deduction on R&D expenses if companies increase investment by 10% or more over the previous year.)

Ultimately, though, tax credits don’t create innovation – people do.  But the U.S also lags in the human capital competition.  I’ve written previously about the massive investments China has made in higher education over the last decade, but a few numbers bear repeating:  More than 800 new colleges and universities built, the number of students in higher education more than tripled, and the number of graduates exploding from 8 million annually to more than 30 million.

Because of these trends, it’s widely recognized that there will be significantly more PhD engineers and scientists in China  than in the U.S. as early as next year.  A broader study by Rice University makes the startling projection that, again by 2010, 90% of all the world’s PhD-level engineers will live in Asia. 

We can’t surrender our numerical superiority in scientists, engineers, and other skilled workers without eventually seeing our innovation edge disappear.

And in fact, we’re already seeing the impact.  This thoughtful piece by TechPoint Chairman Mark Hill explores how the U.S. is slipping in our innovation-based economy relative to global competitors; for example, over the last decade, the $30 billion trade surplus that the U.S. used to enjoy in advanced technology products turned into a $53 billion deficit.

The overseas exploration that Governor Daniels and regional economic development groups like the Indy Partnership are engaged in is a critical part of succeeding in the global economy.  But it’s also essential to tend to our innovation infrastructure here at home – building an educated, creative workforce and incentivizing them to bring new ideas to market.

Some negative economic news today, as Indiana’s unemployment rate inches into double digits.  As Department of Workforce Development officials target losses from the automotive industry as a culprit, I wanted to refer you to this insightful piece by Conexus Indiana CEO Steve Dwyer in the Indianapolis Business Journal on the diversity and resilience of the state’s manufacturing sector – an industry that goes far beyond the Big Three.

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

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

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

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

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

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

Our Conexus Indiana initiative today released its annual Manufacturing & Logistics Report Card, which assesses how our state measures up in several areas related to these two important industries – which continue to employ more than one of every five Hoosiers and account for more than a third of our Gross State Product. 

There are really any shocking revelations in the Report Card for those of us who follow economic development trends – Indiana remains the most manufacturing-intensive state in the nation, with the greatest share of per capita employment in the sector.  (While manufacturing employment has taken a hit during the recession, the decline has been across the board – not more dramatic in Indiana or the Midwest than the rest of the nation.)  We’re also among the top ten states in logistics employment, befitting our geographic advantages as the ‘Crossroads of America.’

We’ve also established a strong global position in manufacturing, both in exporting manufactured goods and attracting foreign direct investment from across the globe (indeed, we’re the only state in the Midwest to attract manufacturing investment from every continent…except Antarctica, of course).  The recession will slow our export growth, but the last several years have seen sustained record levels of manufacturing goods flowing outside of our borders.

Our tax climate is also very competitive, and leaves us well-positioned for future growth.

Our most negative ‘grade’ in this report card was in human capital – the strength of our workforce. Indiana ranked 29^th among states in our percentage of the workforce with a high school diploma and 42^nd in college-educated workers; we were also a dismal 35^th in first-year retention rates in the community college system.  In today’s knowledge-based economy, workforce is a critical competitive advantage – and Indiana is falling behind, as has been detailed extensively in this blog and elsewhere.  Manufacturing and logistics are high-tech industries that demand post-high school education/training – as the economy picks up and mass Baby Boomer retirements begin, thousands of positions could go unfilled – leading to missed opportunities for growth.

You can view the entire report card, with good scores and bad, here.

Americans continue to view globalization with mixed feelings.  According to polling by the Chicago Council on Global Affairs, support for globalization has waned: 64% of adults thought globalization had been mostly good for the U.S. in 2004, but only 58% thought so last July, and only 56% felt that way in September 2008.  To our north, a recent Big Ten Battleground poll shows that 55% of Michiganders think that “free trade agreements like NAFTA, and organizations like the World Trade Organization” are “a bad thing for the United States.”

Well, here in Indiana, the benefits of globalization continue to be felt.  According to the recent annual Global Location Trends study by IBM (released October 22), Indiana led the nation in attracting new jobs through foreign investment (on a per capita basis) for the second consecutive year.

This ranking owes much to the aggressive efforts of Governor Daniels and the Indiana Economic Development Corporation, a highly-productive Hoosier workforce (which leads the Midwest in output per worker), and the relative ease of serving the U.S. market from Indiana’s central location (with two-thirds of the nation’s population and businesses within one day’s truck drive).  It also shows that Indiana is well-positioned to compete and win in the global economy, if we continue to leverage our advantages and step up to the plate in addressing looming challenges (like strengthening the educational attainment of our workforce).

You can download the IBM report here.

As we continue to debate various mass transit options for Central Indiana, I wanted to share an experience from my recent trip to China with a delegation from Indiana State University.  On the way to the ISU conference, I made a stop in Shanghai.  As in previous trips there, I took the opportunity to use one of the world’s most advanced high-speed trains to reach downtown from Pudong International Airport – the Shanghai Maglev Train, which can reach speeds of more than 250 miles an hour during normal operation (and has recorded a top speed of over 300mph).

Not to dive too deeply into the technical details, but “maglev” stands for ‘magnetically levitating’ – the train is actually suspended and propelled by magnetic forces, making it quieter, smoother, and faster than conventional locomotives.  If maglev is the most advanced technology, though, it’s also one of the most expensive – the Shanghai project cost about $1.1B (U.S.) to complete.  And with a one-way fare costing about $6, the fare revenues cover just a fraction of this pricetag.

But the government of Shanghai saw the investment as worthwhile, viewing the maglev train as symbolic of their “brand” as a cutting-edge, world-class city.  During the 7 minutes it took me to travel the 20 mile route, it led me to muse about our own mass transit controversies.

I’m not necessarily suggesting that Central Indiana invest in anything remotely comparable to the Shanghai train.  What we need, however, is a comprehensive regional transportation system that accomplishes more pragmatic goals – connecting workforce to jobs, creating meaningful economic development and neighborhood redevelopment opportunities while reducing traffic congestion and pollution. 

A system that’s workable and effective will also serve a broader purpose, as a boon to our region’s image in the all-important battle to attract and retain talented people.  Today’s young educated workers often look for places they want to live and then find jobs, not the other way around – and the regions that rank high on their lists reflect priorities like the environment, arts and recreational amenities, and diversity.  These regions also offer transit options – the ability to walk or bike to a rail or rapid bus station, for example, and work on your laptop or chat with friends on the way to work.  It’s a quality of life investment that helps attract a skilled workforce, who in turn help bring new business opportunities.

Our efforts to jump-start such a system to date have centered on a rail line in the northeast corridor from downtown Indianapolis to Noblesville.  It’s a well-intentioned project that I fear doesn’t think broadly enough.  To me, it’s still debatable whether light rail is always the best alternative, versus bus rapid transit (BRT) – or, most likely, an integration of these and other modes, connected to an overhauled regional bus service, pedestrian routes and more. 

But the overriding issue is that we need a vision for a system that serves all of Central Indiana, not a piecemeal series of pilot projects.  This system would be truly regional and integrated, and be relevant to all of us – to commuters, but also to visitors to the region, to consumers of our cultural and recreational assets, and in meeting our day-to-day travel needs.  And such a system should be built with a reasonable and defined timeline, not an ever-expanding planning horizon that stretches out of our foreseeable future.

This is an issue that I believe is critical to our economy, and we’ll be spending more time and resources on it in months to come.  Watch this space for more, and I’d welcome any thoughts you have to offer.

Carol D’Amico is President and CEO of Conexus Indiana, the state’s advanced manufacturing and logistics initiative.

Yesterday, our friends at the Indiana Chamber of Commerce released another in its series of “Letters to our Leaders,” providing policy advice to our gubernatorial candidates.  The latest deals with workforce development and the idea of funding training and education programs through private management of the Hoosier Lottery.  We agree.

Building a 21^st century workforce must be a top priority for all of us – the private sector, policymakers, philanthropic and civic organizations alike.  CICP and Conexus Indiana have put human capital squarely on our agenda, and recognize how an educated workforce moves the needle on economic development (see ‘The Power of Human Capital,’ below).

We also feel that private management of the Lottery is a common-sense way to generate much-needed funds for workforce efforts without raising taxes.  Frankly, government shouldn’t be in the gambling business in the first place – and as it stands, 85% of the Lottery’s operations are already executed by private contractors.  Turning the final 15% over to a private manager would net the state as much as $2 billion to invest in our most valuable resource – our people – while realizing a $200 million annual payment over the life of the contract to meet existing obligations.

Such a new revenue source could provide the funds necessary to help move more young people into the higher education pipeline, building our future workforce, as well as addressing the critical need to retrain our incumbent workers.

Some worry that private management of the Lottery is tantamount to a further expansion of gambling.   Under the legislation considered last session, at least, the private manager was specifically prohibited from expanding the menu of lottery games.  It should also be noted that Hoosiers spend less on our lottery than the average American.  We rank 26^th among the 41 states with lotteries in per capita spending ($118 per person).  All adjacent states rank higher in lottery spending, from $135 per person in Illinois to $195 in Michigan…new management would certainly be incentivized to market the lottery aggressively, but it’s unlikely to turn Hoosiers into a pack of gambling addicts.

It’s the very mention of “privatization” that has made this measure controversial.  Well, privatization isn’t a four-letter word – but “grow” is.  It’s a word that summarizes what’s good about the lottery proposal – growing our skilled workforce, growing the career options available to Hoosiers with more education, growing our economy. 

It would be hard to find an industry on a bigger hot streak than the life sciences in Indiana:  More than $2 billion in private and institutional investment in the sector since 2005, a top five ranking in concentration of employment while adding jobs at twice the national average, with the heart of the state (the Indianapolis MSA) ranking as the 9^th largest life sciences metro according to the Battelle Memorial Institute.

The deal to sell Eli Lilly’s Greenfield labs to Covance reported today is another indicator of our positive momentum – even a story that could have been bad news for the region has turned into a new opportunity with potential for job creation.

The Greenfield Laboratories no longer fit Eli Lilly’s business model, and rumors of a sale or closure were eminent.  The sale to Covance was the best possible outcome – Covance, a growing global drug development company, already has a strong Indiana presence and has offered positions to all Lilly employees currently working in Greenfield.  Indeed, Covance officials plan to double or triple the workforce at the Greenfield plant over the next five years, turning this transaction into a major economic development announcement.

This announcement also fits into our BioCrossroads initiative’s Linx effort – a program to match Indiana’s impressive contract pharma manufacturing and development capabilities with new business opportunities, primarily from the west coast.  In this case, it’s an all-Indiana partnership, as Lilly commits to $1.6 billion in drug development business (testing and clinical work for potential new medicines) to Covance over the next ten years.  It’s the expansion of a great business relationship, a potent life sciences supply chain here in Central Indiana.

It’s important to recognize good news, and this is a win-win story – Eli Lilly makes a move to stay competitive and remain an industry leader, Covance gains the capacity necessary to grow and expands its business relationship with Lilly, and our region stands to gain more good-paying life sciences jobs.

There’s no simple one size fits all solution to the fundamental riddle of economic development  – every region has its own assets, its own opportunities, its own route to prosperity.  In Central Indiana, for example, we’ve focused on our most dynamic industries – the life sciences, advanced manufacturing, technology and logistics – while building a more entrepreneurial economy.

But one thing is increasingly clear – in today’s knowledge and innovation-based world, any strategy for success must take into account the power of human capital, a skilled workforce.  A new study by economists at the Federal Reserve of New York and University of Maine adds to the already impressive storehouse of data and analysis linking educational attainment to higher per capita income, job creation and other key indicators of economic growth.

In Human Capital and Economic Activity in Urban America, Drs. Jaison Abel and Todd Gabe use regression analysis to explore the link between economic output (GDP) growth and a number of variables within metropolitan regions.  They found that a one percent increase in educational attainment in a region leads to a 2.3% increase in GDP – the strongest growth effect, outpacing capital equipment investment and overall population increases as the next biggest contributors to economic success.

This isn’t surprising.  It means that Indiana’s dismal ranking of 44^th in the percentage of college educated workers in our adult population could fundamentally undermine our prospects for future growth.  (Carol D’Amico of our Conexus Indiana initiative explores this concept further in this op-ed in the Star over the weekend.)  On the other hand, starting from a lower position means more opportunities to jump-start our economy by realizing more rapid gains in attainment…

We have a critical need to focus our resources – public, private, and philanthropic – on getting more of our young people on the track to education beyond high school, keeping more of our college graduates in the state after they earn their diplomas, and providing greater opportunities for education and training for our incumbent workers.  Our challenge is clear – our will to tackle it remains to be seen.