Indiana

INDIANA Spend Less, Make Cuts Early

Indiana’s Place in the Rankings 7th

Export Intensity

7th

Budget Gap

8th

Growth in Share of National Exports

10th

Business Tax Climate

14th

High School Advanced Placement Intensity

While Indiana avoided much of the housing boom and bust, its manufacturing-driven economy was hit hard by the recession. Yet the state was able to maintain its balanced budget and is one of the few to hold a AAA credit rating. This year’s two-year state budget does not increase taxes, and is projected to leave Indiana with a $1.1 billion surplus by 2013, which will trigger a taxpayer refund and pension fund replenishment if reserves exceed 10 percent of revenue. The 2012–2013 budget includes an increase of $150 million in education funding after $300 million cuts in both 2010 and 2011.

15th

Cost of Living

17th

Small Business Survival Index

17th

Higher-ed Degree Output

20th

Export Growth

20th

Transportation Infrastructure Performance

The 21st Century and Beyond

23rd

Export Intensity Growth

To help drive economic development and job creation, the state has created the 21st Century Research and Technology Fund, also known as the 21 Fund. The

24th

Short-term Job Growth

24th

Median Family Income

support and assistance to make the transitional leap from research to product development. By supporting high-tech companies during this crucial stage—often known as “the valley of death”—the 21 Fund encourages entrepreneurial success and is intended to keep the state’s most promising technologies within its borders.

25th

Productivity Growth

intensive state vulnerable to the economic downturn. of state government, eliminating redundancies, and making cuts where necessary. By 2009, the state had reduced government spending by 20 percent (excluding K-12 education and Medicaid), and had reduced the number of state employees by 10 percent, or roughly 3,000 workers. Yet just 5 percent of the layoffs were involuntary, facilitated by a special task force charged with reviewing the need to replace workers after any state job was vacated.

The 21 Fund does not focus on a particular technology or area of application in selecting companies to work with. This allows the state’s market-driven competitive advantages to direct investment intelligently through a rigorous review process. Avoiding pre-selection of technology focus areas ensures that the 21 Fund plays an unbiased role in diversifying the state’s economy.

The 21 Fund stimulates an environment of innovation and 54

cooperation among the state’s universities and businesses to promote research activity through collaborative partnerships. These partnerships consequently lead to a higher incidence of technology transfer, a process that has been proven to create jobs for Indiana communities.

The 21 Fund also sets aside a portion of its budget for a Small Business Innovation Research (SBIR) Program for or have received competitive federal SBIR or Small

Business Technology Transfer (STTR) awards. The 21 Fund’s SBIR/STTR Phase I Matching Program has been expanded to support later-stage commercialization activities of Phase II SBIR/STTR awardees. With the support of the Indiana Economic Development Corporation, these programs make awards through a setaside of 20 percent of the 21 Fund’s annual appropriations.

or replaced (21.6 percent of the state’s inventory), and more than $10 billion will be invested in major new construction and preservation projects. These efforts are having a positive impact on state employers, with roughly 94 percent of contracts awarded to Indiana companies.

In recent years, the 21 Fund has reformed its business model to shift its investment focus towards small business and high-tech startups, while increasing the role of job creation as a criterion for funding and supplementing its technical review process with an enhanced business review. The Fund also adjusted its strategy to focus on projects near commercialization and prepared to execute a rollout plan. In 2011, Indiana is using its $34.3 million allocation from the federal State Small Business Credit

Indiana’s ranking of seventh-highest state export intensity and its increasing national export market share place it in a tie for ninth on our list of export states. The state shipped $28.7 billion in exports in 2010, of which $8.0 billion was in transportation equipment and $7.6 billion in chemicals. The state has been supported in these efforts by a partnership with the U.S. Department of Commerce’s Export Assistance Center (EAC). The EAC assists Indiana

and high-growth lending opportunities. The state also plans to use $1.5 million of the SSBCI funds to fully fund the state’s Capital Access Program for the next two years.

Bringing Outside Dollars Home

sales, by helping them to develop an effective export

position itself as one of the nation’s leading exporters.

Recognizing the increasing importance of transportation trade, in 2005 the state launched a ten-year, $12 billion transportation plan, known as Major Moves, to improve and expand Indiana’s highway infrastructure. A total of $2.6 billion was committed to Major Moves from the $4 billion long-term lease of the Indiana Toll Road. The Major Moves plan called for 104 new roadways with 1,600 lane miles by 2015. With $11 billion being invested between 2005 and 2012, the Indiana Department of Transportation (DOT) is now investing an average of more than $1.5 billion in construction dollars annually to improve Indiana’s transportation infrastructure, with no increase in year of the Major Moves plan, 41 roadway projects were rehabbed or replaced, and nearly $5.7 billion was invested in major new construction and preservation projects.

By 2012, the DOT is looking to have 65 roadway projects complete or substantially under construction, and as many as 800 bridges rehabilitated or replaced—15 percent of the state’s inventory. By the end of calendar year 2015,

Clusters in Indiana Largest Cluster: Biomedical/Biotechnical (Life Sciences), 305,821 jobs Largest Growth Cluster: Biomedical/ Biotechnical (Life Sciences), 44,973 new jobs since 2002 Most Competitive Cluster: Apparel & Textiles, 5,730 new or retained jobs due to state competitive advantage Most Concentrated Cluster: Primary Metal Manufacturing, 5.41 times the national concentration level

or substantially under construction and 4,000 miles of highway will be resurfaced (36 percent of the state’s inventory). In addition, 1,190 bridges will be rehabilitated 55