Major Industries In Indiana

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

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

David Holt

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

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

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

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

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

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

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

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

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

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

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.

Global trade paying off for Indiana manufacturers – and Hoosier economy

Two reports from last week show again how manufacturing is driving economic growth in Indiana – and why we must continue to look around the world seeking markets for Hoosier-made products.

The Bureau of Labor Statistics released a regional look at GDP growth in 2010, measuring economic activity by metropolitan area. For several Indiana cities, manufacturing continues to lead the recovery - durable goods manufacturing contributed 11.4 percentage points to the Elkhart-Goshen region, and more than 6 percentage points in Columbus and Kokomo. 

Nor was manufacturing’s effect confined to a few metropolitan districts. An earlier BLS study showed that Indiana’s overall GDP growth ranked third in the nation, behind only North Dakota (driven by its oil industry and the lack of a housing bubble to recover from) and New York (where a Wall Street rebound led the comeback). For Indiana, manufacturing was the catalyst – durable goods production contributed more to our GDP growth than any other state (2.3% of the 4.6% total increase).

These statistics confirm what we already know – Indiana is a manufacturing state, and we’ve ridden the sector out of the economic trough. Our annual Indiana Manufacturing and Logistics Report Card, released earlier this year, notes that Hoosier manufacturing employment has grown by 5% since the end of the recession, while the nation as a whole has suffered through a largely jobless recovery.

Another study, this one by the Indiana Business Research Center at IU, gives us some perspective on this manufacturing success. With the U.S. economy stagnant, Indiana set a new record in manufacturing exports in 2010. 

According to the IBRC analysis, Indiana exported nearly $29 billion in goods last year, up 25% from 2009. We outpaced the Midwest and the nation in export growth; manufactured products accounted for the vast majority of our exports, with vehicle parts, pharmaceuticals and industrial machinery leading the way.

Of course, this export boom was also made possible by a strong logistics sector supported by world-class infrastructure – international airports, maritime ports and unparalleled interstate access – creating a vital link in a global supply chain.

Hoosier manufacturers are exporting more than ever before, by choice and by necessity. Looking at the national economy, it’s hard not to sound pessimistic – job creation stuck in neutral, incomes flat, the real possibility of a double-dip recession. It adds up to sluggish domestic demand, as individuals are spending less and businesses are hesitant to invest. Looking abroad for opportunities is a must, and our trading relationships with Canada, the European Union and China are increasingly critical.

Conexus Indiana is generally focused on what Hoosier industry leaders, policymakers and educators need to do to make our manufacturing and logistics sector more productive and successful – working together to build a stronger workforce, collaborating to exploit market opportunities in areas like automotive and aerospace. But we do speak out occasionally on federal issues – for example, the need to repair failing locks and dams on the Ohio River and Lake Michigan.

Free trade is also a national priority worthy of support. Indiana’s manufacturers need more opportunities to compete in global markets to drive continued growth.

By concentrating on issues like human capital here at home, we’re making sure that when Congress does act on trade agreements with Columbia, Panama, South Korea and others – and we encourage them to do so – we’ll be ready.

Steve Dwyer is President & CEO of Conexus Indiana, an initiative focused on the workforce and other needs of the state’s manufacturing and logistics industries.

Indiana has earned more kudos from economic developers across the country, according to a recent report by Area Development, a trade journal for business attraction and site selection professionals.  A national survey conducted by the magazine named scored Indiana 6^th among states (and best among Midwestern states) for business climate.

In a nod to our strong logistics infrastructure, the Area Development survey also ranked the state second in rail and highway accessibility.

Another recently-released report, the Milken Institute’s Best Performing Cities 2010, offers more cautiously optimistic readings for Central Indiana.  The Best Performing Cities index factors in a number of statistical measurements, including job creation, wage and salary growth, high-tech GDP growth, high-tech GDP location quotient (the concentration of high-tech industry as compared to the national average), and the number of high-tech industries with a GDP location quotient higher than the national average.

Using this data, the Indianapolis metropolitan area ranks 112^th, squarely in the middle of the pack among larger cities – but we did move up 13 spots (from 125^th in 2009).  We were better than average in job growth, and in a testament to the continued growth of our high-tech economy, earned the best sub-rankings in high-tech GDP growth (48^th) and concentration of high-tech industries (39^th).

And just to the southwest, Bloomington made a major splash in the Milken rankings, placing 16^th among the Best Performing (Small) Cities.  Using the same data, Bloomington ranked 8^th in job growth over the last year, and third in high-tech industry concentration. 

Combined with the continued vitality of our life sciences industry and steady improvement in venture capital investment, all indications are that Indiana’s pro-growth business climate is supporting an economic recovery that should see the state emerge with a stronger high-tech sector along with a solid industrial base. 

CICP’s BioCrossroads life sciences initiative received national recognition this week from the Brookings Institution, one of the nation’s most influential think-tanks on economic policy.

Brookings released a paper, “The New ‘Cluster Moment,’” reemphasizing the concept of industry clusters as a cornerstone of smart economic development planning.  Industry clusters are groups of inter-connected businesses and organizations that locate in close geographic proximity.  Clusters often start with some key competitive advantage (i.e. the presence of a major research university or large corporate headquarters) and grow as other firms seek common sources of innovation and human capital along with opportunities to form strategic alliances and streamline their supply chains.

According to Brookings, clusters are the building blocks of the ‘real economy’ – instead of driving growth through consumption and debt (as with the housing and financial bubbles), companies cluster together to drive productivity and maximize economic output. 

Clusters of firms also tend promote innovation and entrepreneurial growth, as knowledge flows more easily among companies and research institutions and more discoveries are ‘spun off’ into new business ventures.

“The New ‘Cluster Moment’” report cites Indiana’s life sciences sector as a model regional cluster, anchored by the presence of Eli Lilly and other major industry players, research institutions like IU and Purdue, and leading orthopedic device manufacturers.  It recognizes the efforts of BioCrossroads in identifying the critical needs (i.e. access to capital, encouraging industry connectivity and start-up opportunities) to maximize the growth of this cluster over the last eight years.

The BioCrossroads story was also told from a first-hand perspective this week by John Lechleiter, Chairman of Eli Lilly, in a keynote speech to the Regional Innovation Clusters Conference, sponsored by Brookings and other key public policy groups in Washington DC on Thursday.  Lechleiter, who supported CICP’s efforts in forming and setting the strategic course for BioCrossroads, discussed Lilly’s strategy for innovation and how building a life sciences ecosystem in Indiana has furthered these efforts.

He went further in asserting that the BioCrossroads model is one that should be replicated in our national effort to revitalize the economy:  “The successful effort to build a thriving life sciences hub in Indiana – in the face of some pretty strong headwinds in the state’s economy – is reason to believe that our country can overcome the economic challenges we face today.”

Read more excerpts from John Lechleiter's speech here, and view the Brookings Institution’s ‘Cluster Moment’ report here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A recent report released by the major global life sciences trade organization provides further validation of our state and regional strength in the bio-economy.

The Battelle Institute and the Biotechnology Industry Organization (BIO) released their annual “State BioSciences Initiatives” report at the BIO International Conference in Chicago earlier this week.  The results show that the major life sciences firms headquartered in Central Indiana and across the state continue to thrive, and that the efforts of BioCrossroads and others are paying off in encouraging new opportunities and entrepreneurial growth.

Among the highlights – Indiana has outpaced the nation in life sciences job growth over the last decade.  Indianapolis ranks second in the nation in metropolitan employment in pharmaceuticals, leading other Central Indiana metros like Lafayette, Bloomington, and Columbus that also ranked among the leaders (adjusted for size) in this sector. 

The Bloomington MSA also ranked number one among smaller metros in the Medical Device and Equipment sector.  (The BIO report did not include Warsaw, Indiana, home to nearly a third of the global orthopedic device industry, because it did not rank among the metros ranked due to population.)

The report overall shows that Indiana’s life sciences sector demonstrates strength across a number of industry sub-sectors, displaying a healthy economic diversity and potential for continued growth.  It echoes a comment from the June 4, 2009 edition of The Economist that our colleagues at BioCrossroads are fond of quoting: “Though every state wants to be a hub for life sciences, Indiana really is one...”

Learn more about the BIO/Battelle report here.

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

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

Keep focus on tomorrow’s workforce

Joe Loughrey

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

December brings gifts for our economic growth

We haven't had many weeks, in good times or bad, like the week of Dec. 14, one that saw nearly $120 million invested in Indiana's future as a life sciences community.

The Indiana University School of Medicine's announcement on Dec. 15 was first: a monumental $60 million grant from Lilly Endowment to implement a new Indiana Physician Scientist Initiative. This wonderful grant has many features, but at its heart the funding will allow the medical school to recruit, retain and advance a highly promising pool of talent, including 20 physicians who are researchers and innovators as well as practitioners. These current and emerging leaders in fields such as cancer, neurological and mental illness and diabetes will be looked to for discoveries that can transform health care 0 Comments »

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.

INDIANAPOLIS (October 6, 2009) – Senior Business Development Director Scott Fulford accepted Indy Partnership’s three Excellence in Economic Development Awards today at the International Economic Development Council annual conference in Reno, Nevada.

Indy Partnership was named the winner in two award categories and received an honorable mention in a third. The annual Excellence in Economic Development Awards are meant to recognize the world’s best economic development programs and partnerships, marketing materials, and the year’s most influential leaders. The awards are broken down into three population tracks – under 50,000; 50,000-200,000; and more than 200,000 people. Indy Partnership competed in the population of more than 200,000 people category.

Excellence in Economic Development Awards won by Indy Partnership include:

·Best Economic Development Website in America – WINNER

·Best Economic Development Newsletter in America – WINNER

·Best Economic Development Magazine in America – Honorable Mention

Indy Partnership President Ron Gifford, who is currently in China with the Indiana Pacers on a business and cultural exchange, said that this is the second time this year that Indy Partnership has been recognized for excellence by national and international organizations. Site Selection, a leading national economic development trade magazine, named Indy Partnership one of the top 10 economic development groups in the country in May.

“The International Economic Development Awards are our industry’s Academy Awards or Grammy’s,” Gifford said. “When you consider that we were competing against regions that are many times our size – regions including more than 100 other major metros such as New York, Los Angeles, Chicago and Houston – it really speaks to the quality of the work that Indy Partnership is doing on behalf of Central Indiana.”

For Indy Partnership, these awards follow 18 months of strategic planning and execution of a new brand identity, which includes the award winning website, newsletter and magazine.

The Indy Partnership website (www.indypartnership.com) is an advanced interactive economic development tool with geographical information system (GIS) mapping that allows both point data and thematic data to be plotted on the same map. Indy Partnership’s site was the first dedicated economic development website in the U.S. to offer this technology, which is marketed as Indy InSite™ to site selection consultants and corporate location managers worldwide.

The Indy Partnership monthly electronic newsletter, which also carries the Indy InSite moniker, is distributed nationally to site selection consultants, business leaders and Indy Partnership investors. The newsletter prioritizes data and information downloads, quick-read facts and figures, and multimedia that appeal to a broad economic development audience.

Indianapolis Region, which received an honorable mention for best marketing magazine in America, is a 52-page annual profile of the Indianapolis Region. It includes 10 original feature articles on the advantages of doing business in the 10-county Indianapolis Region, and other content of interest to economic development and general business readers. Indianapolis Region is produced in partnership with and as a supplement to the Indianapolis Business Journal.

The Excellence in Economic Development Awards are adjudicated by a distinguished, international group of economic development experts from both the public and private sectors.

About The International Economic Development Council

The International Economic Development Council (IEDC) is the premier membership organization dedicated to helping economic development professionals create high-quality jobs, develop vibrant communities and improve the quality of life in their regions. Serving more than 4,600 members, IEDC represents the largest network of economic development professionals in the world. IEDC provides a diverse range of services, including conferences, certification, professional development, publications, research, advisory services and legislative tracking. For more information about IEDC visit www.iedconline.org.

About The Indy Partnership

The Indy Partnership is a privately-funded, not-for-profit organization dedicated to bringing new jobs and capital investment to the Indianapolis Region—10 central Indiana counties including Boone, Hamilton, Hancock, Hendricks, Johnson, Madison, Marion, Morgan, Monroe, and Shelby counties. Working collaboratively with local economic development officials, government, universities, and the business community, the Indy Partnership secures the Indianapolis Region relocation of companies through superior economic development services. Key services include point of contact for business development leads, incentives assistance, business research and demographic data, and regional marketing. For more information about Indy partnership visit www.indypartnership.com.

Back to school season has brought a flood of new students to Ivy Tech Community College campuses across Indiana; Ivy Tech is welcoming more than 110,000 students to classes this week, a nearly 30% increase from 2008’s fall semester.

The Ivy Tech enrollment boom has caused some strain on the system, with overflowing classrooms and rush to hire new teachers.  But we agree with Ivy Tech President Tom Snyder that the increase is a good sign for the state – last week, Steve Dwyer of CICP’s Conexus Indiana penned this thoughtful column on the need to reenergize the state’s technical education pipeline to prepare young people for ‘middle skill’ jobs in industries like advanced manufacturing and logistics.

Hopefully, the Ivy Tech experience shows that more and more Hoosiers are acknowledging the truth of Dwyer’s words, especially in the midst of economic turmoil: “In today’s knowledge-based economy, a high school diploma doesn’t cut it.”

Don’t forget about middle-skill job opportunities

Steve Dwyer – President & CEO, Conexus Indiana

It’s hard to believe that summer has slipped by so quickly, and ‘back to school’ season is just around the corner.  Unfortunately, too many Indiana college students are making the fateful decision to drop out of school rather than head back to class.

A  recent report from the American Enterprise Institute (AEI) shows that many Hoosier students are struggling once they enter college to pursue their bachelor’s degree – just over half (53%) eventually graduate within six years.

Dropping out of college puts these young people back at square one when it comes to their job search, far behind their peers with a diploma:  2008 data from the Bureau of Labor Statistics shows that unemployment is twice as high and average earnings just over half as much for high school graduates versus those with a bachelor’s degree.

But high school graduates who don’t choose the 4-year college path don’t have to resign themselves to a life of low wages and limited career choices.  There are a wealth of opportunities in today’s job market that demand advanced training but not a bachelor’s degree.

Let’s start with a dose of reality:  In today’s knowledge-based economy, a high school diploma doesn’t cut it.  Twenty years ago, high schoolers could look forward to making a good living at a local factory after graduation.  Manufacturing jobs are still out there – one of every five Hoosiers has one – but they’ve become high-tech, and demand more education and training beyond high school.

A 2007 report by The Urban Institute (“America’s Forgotten Middle-Skill Jobs”) defines ‘middle skill’ occupations as those that require a two-year associate’s degree or some sort of certificate training, in areas like manufacturing, logistics, computer support, sales, skilled construction trades, and some administrative/clerical work.

The report estimates that these occupations make up roughly one half (48%) of all American jobs, with 35% of the remaining positions requiring a bachelor’s or advanced degree and 15% falling to service and unskilled labor. 

It also asserts that “wage gains per year of schooling for those with associate’s degrees are comparable to those with bachelor’s degrees.”  Paychecks don’t lie – these degrees in high demand, a trend that  should continue:  The Bureau of Labor Statistics has projected that 45% of all job openings from 2004 to 2014 require middle-skill qualifications, as compared to 33% high skill and 22% low skill.

Let’s look at manufacturing, the industry where I’ve spent my career.  Everyone knows that basic assembly line jobs have been disappearing for years, made obsolete by new technologies or moved overseas.  But new middle-skill jobs are being created, as today’s manufacturing workers need computer skills; ‘soft skills’ like critical thinking and teamwork; and advanced technical expertise operating high-tech equipment.  These jobs pay an average of 40% higher than the Indiana median income.

In Central Indiana alone, it’s estimated that more than 5,000 manufacturing openings will be available over the next year as skilled Baby Boomer workers retire.  And new growth is expected in exciting fields like hybrid-electric vehicles, aerospace, nanotechnology and more.

In logistics, we’re seeing similar trends – Indiana ranks among the top ten states in logistics jobs per capita, and employment is projected to expand at a steady pace over the next several years.  With manufacturing output and exports growing and the ‘just in time’ nature of business today, demand for middle-skill occupations like supply chain managers is robust.

The problem for Indiana isn’t a lack of middle-skill jobs, but a lack of middle-skill workers.  Statistics from the Lumina Foundation show that just 7% of the state’s younger workers have an associate’s degree (46% have a high school diploma or less, 23% have a bachelor’s degree or more).  As Baby Boomers start leaving the workplace in greater numbers, we face a severe workforce shortage at the middle-skill level – and if businesses can’t find qualified workers, industry will begin to shun Indiana.

The fact that half of our incoming college freshmen don’t finish their degrees is a major problem.  Indiana is a perennial bottom-dweller among states in the educational attainment of our workers – more emphasis needs to be placed on education at all levels, and our colleges and universities have to work harder at keeping students on the right track.

But it’s clear that the opportunities of the ‘information economy’ don’t just apply to people with four-year degrees.  If the bachelor’s degree seems daunting, these students must explore the many other educational options that are open to them – associate’s degrees through Ivy Tech, Vincennes University and others, a host of technical/vocational training programs. 

Preparing yourself for middle-skill opportunities means a better chance at a rewarding, well-paying career that you can be proud of – and a stronger economy for Indiana.

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

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. 

Midwest Real Estate News published a story today about the Indianapolis region’s thriving construction industry, fueled by more than $3 billion in ongoing public infrastructure investments headlined by Lucas Oil Stadium, the new Indianapolis International Airport terminal and the expansion of the Indiana Convention Center.

These projects, along with the new JW Marriott convention center hotel, were critical parts of our successful bid to host the 2012 Super Bowl, and opens the region to a multitude of other major event opportunities (including commitments for NCAA Final Fours every five years for the next three decades).

But beyond the hospitality industry, Indianapolis’ changing skyline makes a broader statement about our status as a dynamic, growing region.  Our own Ron Gifford sums it – “The new developments suggest a city where progress is happening…People want to put their business in places that are moving forward. Successful companies want to be in a place that is growing and thriving. A personality of a community can go a long way in helping businesses make those decisions.”

In a couple of weeks I’ll be headed to China as part of an Indiana delegation led by Indiana State University.  China is an increasingly important trade partner for our state – Indiana exported more than $758M in goods to China in 2007, and nearly $485M through June 2008 (a projected annualized increase of more than 50%). 

Liaoning Province, where we’re headed, is a major industrial center, and nearly half of our exports to China are industrial and electrical machinery.  Global trade isn’t a zero sum game – it creates new opportunities for all trading partners.  Just look at the record levels of foreign capital coming to Indiana from Asia, and the 90,000 Hoosier manufacturing workers whose jobs depend on global investment and exports.

China is also making tremendous investments in higher education, trying to leverage their dense population into a skilled workforce that would provide an incredible competitive advantage in the knowledge-based economy.  The Chinese are trying to move from “Made in China” to “Created and Designed in China” by graduating more and more engineers and scientists.  It’s a trend that Indiana must be mindful of as we try to prepare our own workforce for the challenges of 21^st century employment.  I write more about this topic in this week’s IBJ – check it out when you have a moment.

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.

Welcome to the new Central Indiana Corporate Partnership (CICP) blog – thanks for visiting.  This is our first venture into the blogosphere, so bear with us as we work out the kinks and learn as we go.

If you’ve found your way here, you probably know that CICP is a regional alliance that includes the CEOs of many of our major employers and the presidents of our research universities.  We bring this group together to focus their collective brainpower and clout on the “big picture” economic challenges that face our region.

Clicking around our website, you’ll also see that we’re the parent organization to a family of economic development initiatives, broadly defined – focused on bringing new businesses to the region, but also taking advantage of growth opportunities in industries, like the life sciences, advanced manufacturing, logistics and technology.

We’re not a trade organization, we’re non-partisan, and we’re not reflexively wedded to any particular ideology.  But that doesn’t mean we won’t take a stand on issues that are important to the future of our economy.  In this space we’ll talk about subjects like government reform, tax policy, economic incentives, preparing Hoosier workers for the New Economy…the list goes on.  Thanks again and we look forward to the conversation.