A monthly letter from President Martin C. Jischke
As a new year dawns, Indiana's economy is showing some signs of recovery from decline that has cost our state so many jobs and has cut deeply into the revenues needed to run our public services. However, other states may be rebounding more vigorously, and we still have a lot of work ahead if we are to resolve the underlying problems that have weakened the Indiana economy.
As the General Assembly convenes for the biennial "short session," legislators can take pride in what they have accomplished in recent sessions. A major tax restructuring that promises to make Indiana a more attractive state for new and existing businesses was an important first step toward economic recovery. An economic development package passed in 2003 through the combined efforts of the Legislature and governor's office was one of most courageous and visionary initiatives I have seen in more than 30 years of working with governments in four different states.
While most states were retrenching in order to deal with declining revenues and an uncertain economic picture, Indiana facing the same challenges decided to enact legislation that invests in the future by supporting both the education of the work force and the university research efforts that are seeds of tomorrow's prosperity. The 21st Century Research and Technology Fund creates partnerships among the state, private business and our universities by supporting research initiatives that have the potential to provide long-term economic benefits for the people of Indiana.
Purdue has used grants from the 21st Century Fund to launch initiatives with private firms and other institutions including Notre Dame and Indiana University in the life sciences and high-technology fields. For example, a non-invasive joint repair process promises to relieve the suffering and extend the active lives of people who fracture hips. A device for monitoring the vital signs of premature infants developed by Purdue bioengineers can help these babies grow to live healthy, productive lives.
But there is another benefit. Both of these technologies are being developed and marketed by Indiana companies. These and other ideas developed through partnerships among government, business and higher education are the beginnings of new industries. Our state needs to encourage the start-up of many new idea-driven enterprises. Some of these will be successful, and some will fail. A few may have the potential to grow into industry leaders that employ large numbers of people and even transform the state's economy.
The key is to create a climate that nurtures new businesses, is friendly to investors and entrepreneurs, supports Indiana's existing economic strengths, and encourages talented and educated people to live and work here.
It is essential to nurture an enhanced high-technology economy in Indiana. These business initiatives can develop, in part, out of our excellent universities. The ones that are successful tend to have high-paying jobs that are attractive to well-educated young people. We have inherent strengths in the life sciences, so initiatives such as BioCrossroads and Inproteo, which are public-private partnerships to advance the life sciences in Indiana, are very important. Early successes on this front are encouraging.
However, Indiana traditionally has built much of its economic prosperity on manufacturing, and the revitalization of this sector is a sine qua non of our future success. Many of the jobs manufacturing lost in recent years will never come back to Indiana, but there is still reason for optimism on this front. The manufacturing jobs that remain in the state tend to be highly paid, and Indiana has a large number of well- qualified workers, which is one of the most important considerations for manufacturing firms. It is very important, though, that we recognize the changes going on in the manufacturing sector. To be competitive in a global economy, traditional products have to be made very efficiently with sophisticated processes and by skilled workers.
At the same time, new categories of manufacturing are emerging from discoveries in fields such as nanotechnology. Purdue has proposed the creation of an Advanced Manufacturing Institute at the West Lafayette campus. Such an institute would work with existing companies to improve their processes, serve as a resource for new manufacturing enterprises and be an attraction for corporations now operating in other states and other nations. The university's special strengths in engineering, technology, science and management can be a tremendous asset in strengthening the state's manufacturing base. A related opportunity exists in Indiana's natural advantage as a distribution center for American business. Our Midwest location makes our state a perfect candidate to play this role.
As the new year unfolds and our governmental leaders meet to plan the state's next moves, all these opportunities lie before us. Purdue is well-prepared and eager to be a partner as Indiana moves into a new economic era.