Category: Economic Development
In the knowledge-based economy we live in today, it is critically important for governmental entities, private sector businesses, and educational institutions to collaborate with one another to foster the development and commercialization of new technologies. Indiana University and Purdue University have recently embarked on the creation of an important initiative, the Indiana Innovation Alliance (IIA).
The purpose of the IIA is to expand life sciences research & development activities in the state by leveraging the core capabilities of each institution and collaborating in the development of new technologies. The IIA has the potential to positively impact income levels and the quality of life of all Hoosiers for decades to come.
The Hoosier state was late to the game in terms of launching a focused, technology-based economic development strategy. Some of these initiatives, such as the creation of the Research Triangle Park in North Carolina, trace their roots back to the 1950’s. By the mid-1990’s, when Indiana started a technology initiative, several other regions and states across the nation were already engaged in aggressive efforts to grow technology companies. In 1995, I had the privilege of working with Scott Webber, Todd Leyden and former Mayor Stephen Goldsmith to create the High Technology Task Force (HTTF). The HTTF was comprised of a group of 40 technology and economic development leaders focused on examining the best ways to grow the number of technology-based companies and jobs in the Indianapolis metropolitan area. The HTTF embarked on a nine-month effort to benchmark the Indianapolis region against 12 other areas that had experienced varied levels of success in growing their technology sectors. We examined regions such as Austin, Pittsburgh, Raleigh-Durham, Salt Lake City and Seattle, to learn what worked well and what did not.
One of the most important lessons learned from the HTTF process was that regions must have a “three-legged stool” comprised of academia, government and the private sector to have a successful technology-based industry sector. In the dozen regions we benchmarked Indianapolis against; all had successfully built and leveraged these “three-legged stools” to support the growth of technology-based companies. While some geographic areas were more successful than others, all 12 had created a structure to leverage government, the private sector and academia. First, we found that the higher educational institutions possessed a philosophy of strong support for research & development activities. The academic institutions allocated financial resources, created a flexible revenue-sharing structure with university researchers, and had faculty who embraced and encouraged research activities involving professors and students. Second, we found state governments that were active partners in supporting research & development activities at universities. These states were investing in university-based research activities, helping to fund the construction and equipment of research facilities, and providing different types of economic development incentives to researchers to encourage economic growth (e.g., exempting income taxes on patent revenues up to a certain level and employing an aggressive research & development tax credit). Finally, in successful regions, we found business communities that were engaged as partners in the research & development process with their higher educational institutions. Companies were investing in university-based research activities, hiring professors and/or students to work on research projects and communicating with academic leaders what type of workforce they needed to be successful.
To come full circle, the creation of the IIA creates the vital three-legged stool for Indiana that the HTTF discovered in its work a decade ago. The IIA is especially important for our state in these challenging economic conditions. We all realize that Indiana’s economy has always been and still is today, more heavily dependent on manufacturing jobs than most states. Thus, this initiative is even more important as our state’s population feels additional pain as the manufacturing sector continues to evolve. As a result of Indiana’s tardiness in the development of a technology-based economic development strategy, there is even more urgency to this effort. The Hoosier state cannot sit on the sidelines when it comes to the funding of this vitally important initiative.
We all recognize that the poor national economy has impacted and will continue to impact the revenue of state government. Clearly, members of the Indiana General Assembly have a tough job ahead of them in the preparation of the new biennial budget. However, the funding of this initiative should be viewed as one of the top economic development strategies for the next decade. We need to remember that critical investments made in the next few years should leverage tremendous results for Indiana well into the future. Any Hoosiers concerned about future employment opportunities for themselves, their children and/or grandchildren, should actively support this important effort. It’s our chance, and we must seize it.
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