Accelerate Indiana Innovation

The State That Works:
Accelerate Indiana Innovation

Policy Goal: Create new jobs and economic growth by commercializing more ideas from our universities and private research institutions and by bringing companies from around the country with the best ideas to Indiana.

Vision Plan Goals Served:

  • Goal #1: Increasing private sector employment
  • Goal #2: Attracting new investment in Indiana, with emphasis on manufacturing, life sciences, agriculture and logistics

Policy Steps:

  • Work with business leaders and university executives to launch an industry-driven research institute, the Indiana Applied Research Enterprise (IARE), to accelerate commercialized innovation in our universities and life sciences companies.
  • Create an Executive Innovation Network charged with bringing more entrepreneurship, capital, and business expertise to university-based innovation.
  • Create a “Jobs Cabinet” comprised of CEOs who will serve as ambassadors for Indiana’s economic environment.
  • Host a first-ever, high-level site selection conference with the nation’s top business relocation professionals.

Rationale:

A recent IU Kelley School of Business study shows how dependent Indiana’s job growth is on young entrepreneurial ventures and from companies that move into the state. During our last economic expansion, large established firms actually saw employment growth drop by 0.6 percent, while young, growing firms grew by 24.8 percent and companies moving into the state grew by 90.8 percent.[1] If we care about job growth, we have to care about launching more high-growth, high-impact firms and about luring more companies into the state (see Figure 1). Investing in new technology and commercialization and aggressively recruiting outside firms are essential to increasing Hoosiers’ job prospects, income, and overall prosperity.

Our strategy will focus on bringing more private capital, business expertise, and entrepreneurial capacity to our state’s innovators and inventors, as well as bringing more talent into Indiana from outside the state.

The first step is to partner with industry and university leaders to launch an industry-driven research institute, the Indiana Applied Research Enterprise (IARE), to accelerate commercialized innovation in our universities and leading life sciences companies.

The IARE will exist as a private institution aimed at substantially growing the entrepreneurial capability and commercial viability of researchers and inventors in Indiana. It also will serve as a magnet for the most commercially-minded researchers outside Indiana who are looking for a place that enables them to make the most of their discoveries.

The IARE will be fueled by private industry investment rather than the traditional model of federal grant-seeking, which our universities already employ. It will create a freer environment for university researchers to pursue their breakthroughs and inventions. As such, it will seek to create the “Wild West” of university-based research.

To create momentum from the start, the IARE will begin with a targeted focus on life sciences because of the tremendous opportunity for jobs and economic growth in bioscience and because of the commitment by Indiana’s life sciences leaders to the effort. The IARE will ultimately help our leading sectors grow faster, add more jobs to Indiana’s economy, and bring more investment to Indiana.

The timing for such an initiative couldn’t be better. The corridor formed from Bloomington through Indianapolis to West Lafayette and reaching as far as South Bend is positioned for faster growth. While our universities are generating a lot of new innovation, a more intensive statewide approach can better help their efforts. Currently, our universities lag other Midwestern rivals in patents.[2]  They rank well on some measures used to assess research universities, and Purdue University especially has performed well on one national assessment of university commercialization, but overall, there is room for improvement given their immense research capacity and talent.[3]

There is widespread agreement among business leaders that entrepreneurs and investors are too disconnected from commercial opportunities that would benefit both the university and business communities alike. A recent Battelle study confirms this intuition: “Indiana’s industry and academic leaders are missing key opportunities for collaboration at a time of rapid competition and change. Indiana has the assets, but not the culture of industry–university collaboration needed at a time of rapid competition for resources to support life sciences research and innovation.”[4]

Today, our life sciences sector contributes $44 billion to Indiana’s economy and a third of all our exports. The Battelle study identifies more than $330 billion in market potential in this sector alone, with growth rate potential of five to 20 percent for each core product type (see Figure 3). While Indiana already claims an outsized share of this global market, there are clearly tens—if not hundreds—of billions of dollars more in unrealized market potential for Indiana’s life sciences sector alone, most of which depends on better collaboration between our commercial and research institutions.

 

Second, the state also should create an Executive Innovation Network charged with bringing more entrepreneurship, capital, and business expertise to university-based innovation.  The Network’s sole focus will be to bring more investment and faster commercialization to new inventions and discoveries in our universities. Chaired by a Cabinet-level representative of the Governor, the Network will consist of business executives, entrepreneurs, investors, and university executives—all appointed by the Governor—who will regularly invite university researchers to pitch current research they are conducting that has commercial potential.

The Network’s activity will:  (1) help fill the gap that currently exists between capital and research opportunity; (2) provide IARE with additional commercial opportunity; and (3) provide the Governor, the Commission on Higher Education, and university trustees with recommendations on how to boost the job-creating, revenue-generating potential of research in Indiana’s chief university corridors.

Third, we should recognize that our CEOs are a powerful force for marketing Indiana’s attractive business environment, and we need to take full advantage of their strengths. The state should create a “Jobs Cabinet” comprised of CEOs who serve as ambassadors for Indiana’s economic environment. As governor, Pence will work closely with a cohort of CEOs to ensure they are equipped with the latest data and information about the state’s business climate. They will work together to identify suppliers, customers, entrepreneurs and investors outside Indiana as targets to bring to the state. The governor will lead trade delegations not only overseas, as is the common practice, but to talent centers in places such as Silicon Valley, New York, Boston, and Austin to bring more inventive talent to the Hoosier state. The Jobs Cabinet will be open to all IEDC board members and also will include CEOs who are not affiliated with IEDC.

Finally, the state should host a first-ever, high-level national site selection conference with America’s top business relocation professionals. The first conference will be held in 2013 and would be an annual event thereafter. The event’s benefits would be twofold. First, it would bring to Indiana, all in one place, professionals who can advise us on what companies are looking for and what we can do to improve our business climate. Second, it would give us a captive audience for marketing our state. We will create side events that feature the best of Indiana, tailored to attendees’ interests.

Site selectors have become a powerful industry influencing states’ economic development decisions. Very few states or municipalities have aggressively courted them as an industry, however. One notable exception, the city of Denver, Colo., has been hosting an annual site selection conference for a number of years and claims it is one of the city’s most important marketing tools.[5]

Site selectors recently formed an association, the Site Selectors Guild, which held its first annual conference in January 2012 in Orlando.[6]  So there is presently a growing interest in gathering site selectors together, and Indiana should get out in front of this trend and take advantage of it.

Back

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[1] Timothy Slaper and Ryan Krause, Where the Jobs Are: A Report on Job Creation in Indiana, Indiana Business Research Center, Kelley School of Business, Indiana University (January 2012), p. 2.
[2] 2011 Patent Rankings of University Portfolios, IFI Claims Patent Technology Report, http://ificlaims.com/index.php?page=misc_2011_universities.
[3] The Top American Research Universities: 2010 Annual Report, The Center for Measuring University Performance, Arizona State University (2010), pp. 16-17. See also http://www.purdue.edu/newsroom/research_park_foundation/2011/111205HornettAUTM.html.
[4] Advancing Indiana’s Life Sciences Competitiveness and Strategic Collaborations, Battelle Study for BioCrossroads (May 2012), p. ES-8.
[5] http://www.metrodenver.org/blog/site-selection-conferences--an-annual-ritual-for-job-attraction.html
[6] http://www.siteselectorsguild.com/orlandorecappage.php