Central Indiana Corporate Partnership and TechPoint and Economic Development and Health Care & Life Sciences and Life Science & Biotech and Manufacturing & Technology and Technology

Merger would consolidate technology initiatives under CICP

November 13, 2006

When Mark Miles returned to Indianapolis in January to lead the Central Indiana Corporate Partnership, he began making the rounds, meeting with area business leaders. By summer, he'd arranged lunch with Techpoint CEO Cameron Carter and Chief Operating Officer Jim Jay.

Making one another's acquaintance was the meal's only agenda.

But now that meeting has blossomed into negotiations to merge Techpoint into the Central Indiana Corporate Partnership--a move that would leave Miles, 53, atop all three of Indiana's major business-development initiatives.

"Due diligence is required," said Miles, a former Eli Lilly and Co. executive who most recently served as CEO of the Florida-based Association of Tennis Professionals. "But we don't see, from our perspective, any issues that should stand in the way of getting this done."

Techpoint's leaders are also optimistic they'll seal the deal.

"We've worked together with them for years and years. If it makes sense to consolidate efforts, we'll do that. If not, we'll continue along the path we're on today," said David Becker, CEO of First Internet Bank and a Techpoint board member involved in the negotiations.

"Things are moving forward, and we'll see what comes of it. Hopefully, it works for everybody," Becker said.

Established in 1999, CICP represents CEOs of Indiana's largest corporations. The state's best-known technology advocate, Techpoint was formed in 2002 when the former Indiana Information Technology Association merged with the Indiana Technology Partnership.

A merger of Techpoint into CICP would consolidate the state's major business initiatives in one organization. CICP is the parent of the life sciences enterprise BioCrossroads, and is developing a similar effort for advanced manufacturing, distribution, transportation and logistics.

The potential merger is rooted in a study CICP commissioned in 2001 from the Columbus, Ohio-based Battelle Memorial Institute. It identified biotech, advanced manufacturing and information technology as Hoosiers' most promising economic clusters for development.

Since forming in 2002, BioCrossroads has marketed Indiana as a life sciences hub and has raised $73 million for business investment through its Indiana Future Fund.

Under CICP's umbrella, Techpoint would attempt to mimic BioCrossroads' approach, expanding work-force-development, entrepreneurship and capital-formation efforts.

Techpoint's immediate priority is to reassure its more than 330 member companies, universities and economic development groups that its existing services will continue if the merger closes.

The annual Indiana Technology Summit will continue each fall, Jay said, as will Techpoint's Mira Awards ceremony every spring. So will its monthly Tech Tuesday and New Economy, New Rules networking meetings.

"The opportunity is very exciting to discuss, or we wouldn't even be discussing it," said Jay, who became Techpoint's interim CEO when Carter stepped down last month.

"The board did meet [Nov. 8] to consider really moving forward with merger discussions, and that's what we've decided to do. But nothing is final."

The merger talks that began during the lunch at McCormick & Schmick's last summer have intensified over the past two months, said Miles, CICP's CEO. And they're fast approaching conclusion.

"This is something that won't drag on," Miles said. "Either both boards will be in a position to move forward in December, or we'll have decided not to do it."

More murky is the fate of discussions to consolidate CICP with three other major central Indiana business organizations: the IndyPartnership, an economic development organization that markets central Indiana; the Greater Indianapolis Chamber of Commerce, a networking forum that advocates on behalf of businesses; and Indianapolis Downtown Inc., which shepherds development downtown. IBJ reported last month that the organizations were quietly studying whether to merge.

J. Albert Smith, president of Chase Bank's Central Indiana Division and the chamber's chairman, is spearheading those four-way discussions. He said talks are proceeding, but declined to share more detail.

"The work continues," he said. "We'll see where it ends and go from there."

The merger of Techpoint into CICP could spark a breakthrough in those negotiations, if what happened in Lafayette is any indication.

There, local leaders spent 2-1/2 years merging six local economic development groups into the new Lafayette-West Lafayette Economic Development Corp. Don Gentry, its interim CEO, said early success built momentum and helped silence skeptics.

"We started here with groups that were hesitant," Gentry said. "But once we got the first couple of boards to sign on, it was easier to get the next boards to sign on."

What's more, doubters might come around now because of fear they'll be left behind if they don't board the consolidation train.

"The number one thing that comes out of this is marketing and visibility. That's the name of the game," Gentry said. "[Other local business groups] will see the financial base and business and government support going to the new organization. Everyone wants to be on the side where the support base is."

Consolidating local industry advocacy resources can increase their impact, said Bruce Jaffee, professor of business economics at Indiana University's Kelley School of Business. That's important, given the strength of the competition Indiana faces from other states.

"We've got to be careful, strategic and efficient, much more than, say, New York, New Jersey, Massachusetts or California," Jaffee said. "We're not the 800-pound gorilla. But we can be agile, in the right place at the right time."

Miles expects eliminating duplicated administrative functions could shave up to 15 percent of Techpoint's $792,000 in expenses.

Any gains from cost reduction would be plowed back into Techpoint's mission, Miles said. Perhaps more important, consolidation of similar economic development organizations eliminates competition for donors.

"The Lillys of the world don't have infinitely deep pockets," said Techpoint board member Mark Long, CEO of Indiana University's Research and Technology Corp. "They're starting to say, 'Why do we belong to this and this, when they do almost the same thing?'"

But cost savings aren't the primary motivation. Aligning strategies to maximize impact is the ultimate inspiration, Miles said.

Each of central Indiana's areas of strength "is enhanced when we don't treat them like silos," Miles said. "The important thing is an alignment of directions. This could be a really good fit."

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