Indiana will never be known for its beaches and mountains. Though in all fairness we do have at least one great beach at Indiana Dunes National Park in our north, and some excellent sled riding hills all over our south. The state actually has a long list of beautiful outdoor amenities in every direction of it. It’s just not what non-Hoosiers think of first when it comes to us or our home.
Imagine being the person in charge of recruiting a business to locate in the state. The short list of what Indiana wants from them includes modern, high-paying jobs for people who need them, the local investment a new headquarters or manufacturing facility requires, and of course, the tax revenue the business will create. So, what do virtually all new business recruits want from Indiana in return?
The incentives historically have started with some sort of tax abatement or specific financial incentive offered by the state or local government, or both. It is so common in specific deal-making here, that creating as many of those incentives across the board is what the primary policy making goal has become. Our top pitch, our most attractive feature our state’s salespeople will point to is its foundation of cheapness–many of the financial incentives are available to anyone interested. It makes sense, the math is easier to explain when it’s simple.
The Indiana Destination Development Corporation touts the state as being ranked the “fifth best state in the nation for business, and first in the Midwest.” This ranking comes from a 2019 article in Chief Executive. The article features this reasoning for the high ranking from Dan Starr, CEO of Do It Best, a $3.7-billion home-center-retail supplier in Fort Wayne that is the largest privately held outfit in the state: “It has a very low tax burden and a regulatory environment that is somewhat favorable to business…and when you look at the state budget, there is no looming unfunded public-pension liability or something like that.”
Makes sense. At least it makes sense for a home-center-retail supplier. The math is simple. But apparently keeping or making Indiana attractive is no longer that simple in the view of Dave Ricks, chairman and CEO of Indianapolis-based drug maker Eli Lilly and Co.
Ricks spoke to the Economic Club of Indiana on Wednesday and gave the state some advice that on the one hand was newsworthy, and on the other hand has become brutally familiar. Yes, the simple math is still simple and still true, but the state is far behind the curve in other critical ways.
“Our education attainment in the state is not good. The ability to reskill the workforce, I think, could improve. Health, life and inclusion…conditions rank poorly nationally in our state. And also workforce preparedness…is a liability for us,” Ricks said.
He’s talking about investing in people. It is something our policy makers have trouble prioritizing. The math is more complicated. The investment strategy is longer term. And while it’s easy to argue the virtues of investing in public health and public education, it is hard to overcome the parochial nature of who will receive those investments and when. Unless, of course, the strategy includes everyone.
Sadly, politics can make that unnecessarily difficult.
Conserving and protecting the natural beauty of the state would also be a wise investment in keeping it competitive. But again, this is a long-term play. It reminds me of a question a neighbor once asked me: “When is the best time to plant a tree? Thirty years ago.”
But Ricks touched on this issue too.
“If we cannot offer energy that has a sustainability mix to it, we won’t land the next big employer here in the state,” Ricks said. This is counter-intuitive around here, but not so much everywhere else. Again, it is a long-term play, but then so is locating a large business operation in a new place.
The work Indiana has done in creating a pro-business environment has not been void of value, but it really is limited by its potential. Cutting taxes has a floor, and regulatory burdens are already so low here, it’s hard to make that pot any sweeter. However, the potential of a healthy, well-educated population, and a cleaner, safer environment all have a collectively high ceiling. The value of investments in those things can grow.
Ricks has said all of these things before Wednesday, and he will say them again. They are only provocative because too few decision makers have been listening.