By Jim Jay - President and CEO, TechPoint

People go to school. Companies conduct research and development. Both are investments in knowledge – the critical resource for economic success in the 21st century.
 
News Any agenda for growing Indiana’s economy must be, first and foremost, a knowledge agenda: Helping Hoosiers get the education that allows them to pursue fast-growing, high-paying careers. Helping research institutions and private industry pursue the technological and scientific breakthroughs that translate into new business opportunities and investment.

So it’s no wonder that education and R&D are critical parts of the 2009 legislative agenda for TechPoint, the initiative focused on growing Indiana’s high-tech economy while promoting entrepreneurship. Representing the state’s technology community for more than 20 years, we understand that what’s been called the ‘New Economy’ is really the knowledge economy, for all of our fastest-growing sectors: information technology, the life sciences, advanced manufacturing and logistics.

First, let’s look at the power of education. A recent study by the Cleveland Federal Reserve shows that the educational attainment of a state’s workforce has the greatest positive impact on per capita income. Taking a more global perspective, an analysis of industrialized nations by the Hoover Institution shows that for every additional year of schooling by its average citizen, a country realizes a 10% gain over expected GDP growth rates. To get to the heart of the matter, good jobs and growing businesses gravitate towards educated workers.

In this arena, Indiana falls short. Currently there are about 380,000 Hoosiers in the workforce without a high school diploma. We rank a dismal 32nd among states in our percentage of 25-64 year olds with an associates degree, and 44th in percentage of the adult workforce with a bachelors degree. This puts us at a clear competitive disadvantage, and leaves the average Hoosier earning just 90 cents for every dollar earned by the typical American worker.

To address this challenge, TechPoint supports Governor Daniels’ College Promise plan, an ambitious proposal to extend free tuition for two years to an Indiana university or community college to lower and middle-income Hoosiers. To keep our college graduates in the state after earning their diplomas, we support tax credits or deductions for small and mid-sized firms who hire Indiana students in science, engineering and technology fields. And to address the existing needs of employers, we endorse similar tax incentives for businesses who subsidize their workers’ tuition for advanced training and continuing education.

We also recognize that success in higher education and the workplace begins at the K-12 level, where we support more resources for science, math and technology instruction, a more rigorous curriculum in these areas and movement towards a “one-to-one” computer-to-student environment in every classroom.

While we certainly have some catching up to do on the education front, Indiana starts from a much more favorable position when it comes to research and development. Since 2003, when the General Assembly last increased the state’s R&D tax credit, industrial R&D investment in Indiana has increased more than 36%. TechPoint supports strengthening the R&D credit by allowing businesses to ‘sell’ unused credits to other companies, expanding the availability of capital for private research.

TechPoint also continues to support the 21st Century Fund, a landmark program that provides grants to research institutions and promising start-up companies seeking to commercialize new innovations. The Fund has helped spark a surge in venture capital investment in the state over the last decade, with a growing list of entrepreneurial successes emerging from Indiana’s university campuses and joint ventures among private industry and academia.

At minimum, the state should renew the 21st Century Fund. A more progressive proposal would be to expand the Fund through bonding authority, using its existing appropriation as debt service.

The full TechPoint agenda includes more proposals on education, workforce development, capital formation and digital infrastructure. But the bottom line is building a critical mass of knowledge, helping individual Hoosiers pursue lifelong learning and Indiana companies develop new ideas with appeal in the marketplace. Amid the budget negotiations and other pressing concerns, we urge legislators to recognize that knowledge is the fuel for long-term economic growth. We hope that this perspective finds a hearing during the 2009 session, and becomes a lasting legacy of this General Assembly.