I always wonder what people are talking about when they lament Indiana's "brain drain." Statistics usually follow, detailing the college graduates taking jobs in other states.
It is perhaps a contrarian's viewpoint, but we should, in fact, encourage these young people to go seek their fortunes. The fact that they are leaving is a symptom, not the problem. Our problem is there are not enough Hoosiers who can create the jobs that could employ our young graduates.
We do have a brain drain problem, however. It is the seasoned executives who get "churned" out of Roche Diagnostics or Eli Lilly and Co. (and soon Guidant Corp.) and leave the state. These are the brains that are battle-tested. These are the people who can create companies that create jobs. These are the people we need to transform our Old Economy into an intellectual-property-based economy.
I suggest that our newly minted graduates leave the nest. Go to Japan to see how a world-class manufacturing company gets the last penny out of its costs while increasing quality, or to Germany to feel the intensity a German engineer brings to unraveling a complex technical issue.
To create value from an idea, a person needs to know how business really works, and doesn't work. Making mistakes is how we learn. The cynical answer to the question of what I do is, "I sell the wisdom gained from making bad decisions." The accuracy of this fact was confirmed by the retort, "You should be making more money!"
So how do we keep these caches of wisdom (the old guys) home? After being churned out of Roche, I commuted for a year to St. Louis. While an increasing number of people live this way, there are not many benefits to the lifestyle. After a year, I had had enough.
I chose to stay in Indiana. I like living here. It is my home. The problem was how to support my family. The answer was to found a commercial consulting company. The irony is that, while 2004 was my best year ever, most of that success was outside of Indiana.
That is my challenge and the challenge our state faces. We have a $73 million war chest to support local life-sciences entrepreneurs. I am not aware of any investments that have been made in Indiana, besides in Endocyte, which arguably would have happened anyway and could be classified as a later-stage investment.
Further, the NoInk sale to a California company, recently reported in IBJ, is disconcerting. In the article, NoInk's chairman was diplomatic, yet obviously frustrated, when he stated that three local venture-capital companies had passed on NoInk. Ideally, no NoInk jobs will migrate to California during the integration process.
It is still early. The Indiana Future Fund money was just raised and allocations just announced. Out here, however, tension is building between local entrepreneurs and the holders of the IFF purse strings. I have my own frustrations every time I get on an airplane to fly to California for my own client work.
The first thing we need to do is realize that Indiana's technology and capabilities are just as good as those in California and Boston. They, undoubtedly, have more experience than we do and their base is larger than ours. But our universities are excellent and our pragmatism is what venture capitalists search for. Perhaps it is confidence we lack. If we don't believe in ourselves, others surely won't, either.
Building an industry (or a company) takes time, money, skills, experience and wisdom. Let's wish the "young brains" all the best, be it in Indiana, Tokyo or Munich. But let's make sure we recognize who can create the companies that will support the economic and cultural infrastructures that will make Indiana special. It is not the young brains. It's the old guys. If we support them, the younger generation will be taken care of.
Frank is principal of Bruce R. Frank & Associates, a consulting firm serving technology-based companies.