Inside Edge e-newsletter

Higher education makes entrepreneurship a priority
David Becker

There’s a growing recognition in Indiana that when it comes to economic growth, we have to think small – small business development, that is. Entrepreneurship is becoming an economic priority, but we still have significant work to do to take advantage of the dynamic growth opportunities that come by “growing our own” new companies.

A survey released just last week by the National Federation of Independent Businesses indicates that small business optimism is on the rise nationally, with nearly 20% of small companies expecting to add jobs in the near future - the strongest reading since 2000. Over the last decade, entrepreneurial companies have added approximately 7 out of every 10 new jobs to our economy.

Indiana, on the other hand, has been far too dependent on relatively large employers. It’s a natural part of the business life cycle – when companies reach a certain size, they tend to become more focused on budget efficiencies than innovation, demanding costly economic incentives or eyeing cheaper labor markets like Mexico or Asia.

That’s why Indiana must make entrepreneurship a top economic development goal. It may be wise to use incentives to attract a 500-job factory. But it’s just as important – if not more so – to create an entrepreneurial climate that spawns 20 new companies with 25 employees each, companies that will be churning new ideas and aggressively seeking growth.

Indiana has expanded its entrepreneurial capacity. The BioCrossroads initiative is focused on forming new life sciences companies and events like the semi-annual Indiana Venture Conference and TechPoint’s Entrepreneurial Bootcamps are great opportunities to learn and network.

Encouraging entrepreneurship means learning new ways of doing business, so it’s natural that our academic institutions also play a part. For example, Purdue University’s Burton D. Morgan Center for Entrepreneurship is filling an important educational role; for Purdue students, the Morgan Center’s New Ventures Laboratory provides hands-on experience working with start-up companies. For entrepreneurs, the Center is hosting a statewide series of workshops that teach the basics of creating a successful business plan. Purdue is also working to bring the best ideas to the market by offering much-needed seed funding: last year, Purdue awarded over $450,000 through various business plan competitions, and in 2004 prospective entrepreneurs are competing for more than $150,000 in prizes through the school’s “Opportunity for Indiana” Business Plan Competitions in West Lafayette, Fort Wayne and Hammond.

Our research universities are also our strongest source of new technologies and scientific breakthroughs. Through its Technology Transfer Initiative, Purdue is encouraging its faculty to take academic research into the marketplace to form new ventures that will create jobs and generate tax revenues. The University already has a great history of supporting commercialization efforts and nurturing new companies; the Purdue Research Park is among the nation’s largest university-affiliated business incubators, hosting over 100 start-up businesses.

Our other universities are also working to create entrepreneurial capacity. IU’s Emerging Technologies Center, for example, is one of the nation’s fastest-growing university incubators, and Ball State’s entrepreneurship program is consistently ranked among the nation’s best. A coalition of Indiana universities also came together in 2003 to form the Indiana Venture Center, a clearinghouse for entrepreneurial support services.

Progress is being made, but building an entrepreneurial culture is a complicated proposition for a state like Indiana. We need a strong partnership between government, the private sector and academia. The efforts of Purdue and our other institutions of higher education efforts represent steps in the right direction – but there’s still a marathon ahead of us. Crossing the finish line, however, means a stronger, more diverse economy that provides jobs and opportunities for Hoosiers.

David Becker is Chairman and CEO of First Internet Bank, an Internet-only financial institution that he founded in 1999. A past recipient of the Ernst & Young Entrepreneur of the Year award, Mr. Becker has a history of successful start-up companies in financial services and technology. He also serves on the Board of TechPoint, Indiana’s information technology trade association.