FROM THE CICP BLOG

The Central Indiana Corporate Partnership (CICP) is an alliance that includes the CEOs of many of our major employers and the presidents of our research universities, coming together to advance a common goal ??? growing our regional economy. 

I???m Mark Miles, CICP???s President & CEO, and this blog will offer our thoughts and perspectives on the latest economic news and other issues that affect the future of our region.  Thanks for visiting.

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:

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.

Congratulations are in order for the team at BioCrossroads, which celebrates its 10-year anniversary this week as CICP’s initiative focused on the state’s life sciences sector. It’s been a decade of great success for the organization, ably led by David Johnson and the rest of his team – BioCrossroads was CICP’s first foray into launching subsidiary initiatives to catalyze growth in promising economic clusters, and it has established a model that has won national (even international) attention for how a cluster initiative should operate in pursuing new business opportunities and addressing broad challenges like human capital and risk capital needs.

To quote from BioCrossroads’ 2011 annual report:

“2011 was another milestone year for BioCrossroads and Indiana’s life sciences industry. More companies were formed and funded; more pharmaceutical and medical device products made their way from Indiana into the global marketplace; more and better data tracked the development of our sector; and more recognition came to our community as a regional hub of America’s life sciences industry – an industry with a $44 billion total impact on Indiana’s economy.

“For the first time, we identified, organized and analyzed a wide range of nationally significant indicators through a landmark study, authored by Walter H. Plosila, Ph.D., a globally recognized expert on developing life sciences clusters and initiatives, and based on data gathered by the Indiana Business Research Center at the Indiana University Kelley School of Business.

“The results illustrate a decade of substantial growth and measurable progress for Indiana’s life sciences sector, including the state’s rank as the third highest exporter of life sciences products in the U.S. ($9.1 billion), behind only California and Texas; a 21% increase in life sciences employment since 2002, adding more than 8,800 new jobs to the industry; and a total sector employing more than 50,000 workers across 825 companies…

“One of 2011’s most gratifying moments came in August, when the Wall Street Journal, in an article appropriately titled ‘Where the Action Is,’ singled out Indianapolis as one of seven “new industry hubs” for start-ups across the country – and the only one to make the list in the life sciences. Our sector is at last beginning to get the national attention it deserves.”