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KSM Location Advisors’
Roundups and Forecasts

Jan 10, 2018 KSMLA Tags: , , ,
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To say 2017 was a newsworthy year for the state of Indiana would be an understatement. From the Amazon HQ2 buzz to record-breaking economic development deals, the Hoosier state was proactive in all the right ways. But, as we kick off 2018, what can we learn from the past year’s successes, and how will they impact economic development in the future? Tim Cook and Katie Culp weigh in.

Biggest Indiana Economic Development Story of 2017

Tim: Gov. Holcomb’s economic development agenda. He made a commitment early in his administration to make infrastructure and workforce a priority, and astutely steered clear of social issues to work with the legislature to secure significant funding for both of these areas. Additionally, the Indiana Economic Development Corporation had a record year under the governor’s leadership team, which is a testament to his success.

Katie: Indiana’s tech successes. This industry has seen explosive growth in recent years and has been a boon for Indiana’s economic development efforts overall. While I’ve personally seen the majority of this activity occur in Central Indiana – with successes such as Levementum, WorkHere, Fizziology,, Spot Freight, Moser Consulting, Galvin Technologies, GadellNet, and more – the entire state had strong tech growth in 2017.

Most Innovative Regional Economic Development Effort in 2017

Tim: Fort Wayne really stood out to me last year. They have been investing in their downtown for many years, and when you go downtown you can clearly see where that money’s being spent. I’ve seen this on a macro level with the city’s overall downtown revitalization efforts, and on a micro level as our parent company, Katz, Sapper & Miller, recently moved its Fort Wayne office into the Metro Building in downtown Fort Wayne. Mayor Tom Henry has an extremely supportive city council, and the county council of Allen County has been equally engaged. Lastly, you have an economic development organization in Greater Fort Wayne Inc. – with a visionary leader in Eric Doden – that has robustly promoted these efforts.

Katie: I’ve been particularly impressed by what’s happening near the Indiana/Kentucky border. Communities like Jeffersonville, New Albany, and other localities in Southern Indiana have benefitted greatly from the Ohio River bridges project. This significant capital investment has resulted in organic growth on the Indiana side of the river, not to mention the relocation of some Louisville-area businesses into southern Indiana. One Southern Indiana has a great reputation throughout the region in bolstering these efforts. This part of the state has a lot to be proud of in the economic development arena.

National Perspective on Indiana

Tim: As we work with clients across the country who are looking to expand or relocate their operations, we find that they really like what they see in Indiana. The companies that ultimately decide to locate here continue to reinvest and expand their Indiana operations, which underscores their commitment to Indiana. For example, our client, Levementum opened their Indianapolis location earlier this year and has been so impressed by everything the state has to offer – from the quality of their workforce to the support of the IEDC – that it continues to double down on the growth of its Indiana operations.

Katie: Indiana, and Central Indiana in particular, are really beginning to garner a reputation as a tech hub. If you look at the list of big tech projects that have made major announcements in the past couple of years – InfoSys and Salesforce, to name a few – these companies are not locating here by accident.  They like what they see here: a low cost of doing business, a growing tech workforce, and an engaged community. However, one area Indiana continues to draw unwanted attention is its perceived conservative social culture. This reputation doesn’t appeal to the sensibilities of a lot of the tech companies and their management. Indiana will need to combat this reputation in the coming years to continue build on its past successes.

The Amazon Effect and Predictions

Katie: It’s impossible to talk 2017 economic development and not discuss Amazon. Central Indiana, in particular, pulled major resources together to vie for the deal in 2017. I think it was important for the state to bid; otherwise, it would have been as if the state wasn’t ready for prime time. These efforts can have a transformative effect going into 2018 if Indiana is intentional about building off of the strengths of their proposal. I think there will be long-term rewards to come from this effort. For example, the research and collateral Indiana put together for this proposal can be repurposed for future proposals. Plus, going through the Amazon exercise will help the city and state learn from this experience, win or lose.

Tim: I echo Katie’s sentiments. As far a winner is concerned, although Indiana put its best foot forward, my sense is that the winner of the Amazon HQ2 deal will be an East Coast city with a natural connection to Amazon. Look for cities such as New York and Philly to be in the mix, but at the end of the day I think it will be Boston. They have been the frontrunner from the beginning. Their proposal was very impressive, and they check a lot of boxes Amazon listed in their RFP.  I put D.C. at a close second, though. Jeff Bezos just built a big home there, recently purchased the Washington Post, and will need political support in the years to come as Amazon navigates a variety of regulatory and other minefields. This makes D.C. a very attractive option.

2018 Economic Forecast

Katie: There’s no indication that the national economy is slowing down. We are seeing growth across every industry – whether it’s tech, industrial, retail, or healthcare. The one challenge to growth – both nationally and in Indiana – is the low unemployment rate and the inability to fill open positions. While people often joke that low unemployment is a good problem to have, at some point the lack of available qualified workers to fill positions could become a real problem.

Tim: We are continuing to see a lot of activity with our client base, not just locally but nationally. With tax reform now a reality, this will likely inject additional fuel into the economy. I fully expect the economy to continue on its upward growth trajectory in 2018.