Another view of Indiana manufacturing

September 29, 2009
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Indiana isn’t the only state writhing with angst over the future of manufacturing. California is, too, and one of its top think tanks, the Milken Institute, cranked out a study recently documenting the decline of the industry there.

The study also frames a competitor state, Indiana, in a somewhat positive light.

California, heavily concentrated in high-tech manufacturing, risks chasing away jobs through regulatory hassles and burdensome taxes, the study warns. California still excels in dreaming up new things to make, most recently in biotechnology, but other states increasingly reap the benefits.

To some extent, California and Indiana are so different that direct comparisons are difficult to make. Indiana’s core strength is making metal and turning it into things. Our top exports are gearboxes and engines.

However, the study found Indiana picking up more drug and medical equipment manufacturing. Indiana also shows serious economic development vigor through a diverse, strategic set of incentives to attract manufacturers. And Indiana’s economic development Web site is the best among the eight states studied.

A yellow flag for Indiana was a slowing in capital investment. These figures came from 2000-2007, but it’s never a good sign when companies allocate resources elsewhere.

As much as Indiana continues to diversify, manufacturing still sustains a lot of towns—not to mention professional firms in Indianapolis office buildings. Take away manufacturing and more than one accounting and law firm would fold.

What are your thoughts about the findings?


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