10-year plan set to foster Indiana’s entrepreneurial cultures, spark new ideas and companies, and propel long-term economic growth and job creation
INDIANAPOLIS (July 14, 2016) – Governor Mike Pence announced plans today to invest $1 billion over the next 10 years to advance innovation and entrepreneurship in Indiana. During remarks at the eighth annual Innovation Showcase in Indianapolis, Governor Pence outlined a proposal to strengthen and accelerate Hoosier innovation through strategic partnerships, ensuring that Indiana plays a leading role in solving 21st century challenges while supporting long-term economic growth, job creation and talent attraction.
“As a state, we have worked diligently to establish a pro-growth business climate in Indiana and our efforts are being recognized across the nation,” said Governor Pence. “We cut costs, lowered taxes and reduced regulations to allow job creators to invest in what matters most – in their businesses and in their employees. Indiana is ranked first in the Midwest for business and first in the nation for small business regulations, but we’re not done yet. We must build on this economic momentum and increase collaboration between educators, community leaders, industry partners and most importantly, idea generators, to further propel innovation across the Hoosier state for generations to come.”
The 10-year plan, which centers on collaboration between government, education and research institutions, communities and the private sector, will advance Indiana’s current economic momentum and combat potential threats to growth, such as workforce shortages and the availability of capital, by:
- Developing Indiana’s future innovators and entrepreneurs through partnerships with secondary school programs designed to encourage interest in, teach the economics of, and outline the opportunities in innovation and entrepreneurship.
- Supporting education, research and entrepreneurial practice at Indiana’s higher education and research institutions by leveraging strategic partnerships to support and expand current innovation and entrepreneurship programs, advance research initiatives and programs like the Purdue Foundry Accelerator with embedded Entrepreneurs in Residence, and establish a system for sharing best practices across the state’s network of private and public institutions.
- Enhancing regional entrepreneurial culture and investment by supporting start-up costs and program development for co-working spaces, incubators and innovation centers, and providing matching funds for regional and community investments in start-up and scale-up companies.
- Supporting industry-driven strategic innovation and advancements by increasing support of industry initiatives, such as AgriNovus Indiana, BioCrossroads, Conexus, Energy Systems Network and TechPoint, and by spurring development of cross-sector transformational efforts, such as the Institute for Advanced Composites Manufacturing Innovation, OrthoWorx, 16 Tech and the Indiana Biosciences Research Institute.
- Accelerating investments in early-stage, mid-market and high-growth companies and encouraging further investments from private investors, communities and education and research institutes through matching funds to increase Indiana’s network of startup firms and accelerate the growth of mid-market firms.
- Expanding opportunities for small businesses by integrating resources and micro-lending initiatives to encourage local community development while developing new programs to increase opportunities for all Hoosiers to start and a grow a business.
Governor Pence will direct the Indiana Economic Development Corporation (IEDC) to coordinate and oversee the state’s strategy to accelerate innovation and entrepreneurship across Indiana. Through an executive order issued today, the Office of Small Business and Entrepreneurship (OSBE) and its programs, including the Indiana Small Business Development Center (ISBDC), Procurement Technical Assistance Center (PTAC) and Small Business Ombudsman, will transfer from the Office of the Lt. Governor and integrate into IEDC to align and enhance effectiveness of the state’s efforts, creating a one-stop shop of resources, experience and information for entrepreneurs and job creators at all stages of growth and development, partners and investors.
With implementation of this initiative expected to begin this summer, Governor Pence will request funding toward his innovation and entrepreneurship initiative as follows:
- $500 Million: Governor Pence will request that the Indiana Public Retirement System (INPRS) invest a portion of its $30 billion investment fund in early-stage and mid-market Indiana companies that are, in turn, investing in Indiana, creating new jobs and generating tax revenues to local and state government. INPRS, which is one of the largest 100 pension funds in the United States, will maintain all oversight and due diligence to ensure investments are made in the best interests of its members. INPRS has achieved a 7.2 percent annualized return on investment on prior commitments to Indiana-focused, privately-owned companies. Based on past history, INPRS would expect an additional $500 million from outside partners to be invested with INPRS in this initiative.
- $300 Million: Governor Pence will request that the General Assembly continue to appropriate $30 million annually toward the 21Fund, which directs investments and grants into early-stage, mid-market and high-growth companies to help accelerate Hoosier solutions and services into the marketplace. The 21Fund, which includes programs like 21Fund Direct Investments, Indiana Angel Network Fund and Elevate Purdue Foundry Fund, also supports companies receiving seed or early-stage capital from approved angel funds and investment groups which utilize the Indiana Seed Fund, a fund-of-funds initiative. 21Fund initiatives also leverage private capital provided to high-growth companies from venture capital and angel investors.
- $100 Million: Governor Pence will request that the General Assembly approve transferability of the Venture Capital Investment (VCI) tax credit to increase the accessibility of private sector funding for innovators and startup companies. The tax credit program, which is currently capped at $12.5 million annually, is consistently underutilized. This statute will allow Indiana businesses to attract increased capital from investors across the world that have no Indiana tax liability and therefore receive no benefit from the tax credit. With utilization estimated at $10 million annually, the tax credit program, which requires a 4:1 investment ratio from private investors, has the potential to yield a total investment of $500 million over 10 years in Indiana’s innovation and entrepreneurship ecosystem.
- $100 Million: Governor Pence will seek an additional appropriation of $100 million over 10 years from the General Assembly to further advance innovation and entrepreneurship education, programs and practice through strategic partnerships with higher education and research institutes in Indiana. These partnerships would require a minimum 1:1 investment ratio, doubling the state’s commitment to these initiatives at organizations like Ball State University, Indiana University, IUPUI, Purdue University and the University of Notre Dame.
“Indiana’s thought leaders, job creators and public-private partnerships are making tremendous strides in innovation and entrepreneurship today, and we hope that this commitment from the state will spark even more interest and help accelerate these efforts,” said Governor Pence. “With a collaborative and aligned strategy, Indiana will continue to be a global leader in innovation and entrepreneurship, helping to solve tomorrow’s challenges.”
Partners from Indiana’s government and community initiatives, education and research institutions, economic development, private sector and entrepreneurial community joined Governor Pence today as he outlined this innovation and entrepreneurship initiative. In attendance were representatives from AgriNovus Indiana, AT&T Indiana, Ball State University, Battery Innovation Center, Central Indiana Corporate Partnership, Conexus Indiana, Cook Group, Dow AgroSciences, Eli Lilly, Faegre Baker Daniels, Indiana Association of Public School Superintendents, Indiana BioSciences Research Institute, Indiana Chamber of Commerce, Indiana Commission for Higher Education, Indiana Department of Workforce Development, Indiana State Department of Agriculture, Indiana University, Indiana University Health, Interactive Intelligence, Launch Fishers, Purdue Research Foundation, Rook Security, TechPoint, University of Indianapolis and University of Notre Dame.
To sign up for future updates about this initiative, visit http://www.iedc.in.gov/industries/innovation-entrepreneurship.
The Indiana Economic Development Corporation (IEDC) leads the state of Indiana’s economic development efforts, focusing on helping companies grow in and locate to the state. Governed by a 12-member board chaired by Governor Mike Pence, the IEDC manages many initiatives, including performance-based tax credits, workforce training grants, public infrastructure assistance and talent attraction and retention efforts. For more information about the IEDC, visit www.iedc.in.gov.