Why job creation falters in Indiana

March 28, 2011
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Maybe the media shares some of the blame for Indiana’s doddering entrepreneurship. Follow the logic of Ball State management prof Susan Clark Muntean and decide for yourself.

Writing in a recent issue of Indiana Business Review, Muntean points out the media tends to dwell on expansions and other moves by big companies, many of which are in mature industries. You’ve seen this: If a startup adds a few jobs and the event is covered at all, the story is virtually always short and thinly reported.

Because politicians are under pressure from constituents to support what’s “tried and true and visible,” they tend to create credits, deductions and other traditional economic development tools to help those kinds of companies, she says. Problem is, big companies in mature industries are shedding workers, not hiring them. So politicians could use public resources more wisely, and help pull the state out of its economic problems, by helping armies of companies get off the ground or expand.

That raises another point Muntean has made to the General Assembly twice this year. How can it be that Indiana hosts two of the better entrepreneurship programs in the nation—Ball State’s and Indiana University’s—yet entrepreneurship here is so weak? Indiana is 44th in the percent of employment created by young firms, according to one study. Somewhere there’s a big disconnect.

The fastest route to more jobs is to help entrepreneurs, who already are responsible for most job creation, she says. They need business skills, networks and partnerships, and links with research universities.

The state also must come to understand that “intelligent risk-taking, creativity and innovation is good public policy,” Muntean says. “A failed startup is not a net loss to society.” Everyone involved in the venture will be smarter the next time they try.

Lots to talk about here. Do you agree the media under reports the important stuff and dwells too much on the wrong kinds of companies?

And are you with Muntean when she says politicians should turn their attention to entrepreneurs instead of big companies?

Your thoughts, please.

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  • More ???
    They need more business skills, networks and partnerships, and links with research universities? It's the media's fault, for under reporting stories on entrepreneurship, and dwelling on large company issues? Oh, THAT'S it! All this time I thought the issue was MONEY! The surrounding states, Michigan (see http://www.annarborusa.org/business-accelerator/funding-incentives/pre-seed-fund) & Ohio (see http://thirdfrontier.com/History.htm), have HUGE funds that support start-up companies (without asking for returns) - and let's not mention the coasts, where bankers and angel investors regularly invest in "risky entrepreneurs"; where a start-up company can find $500k without jumping through hoops and spending 50% of their waking hours begging for money instead of starting and operating their company - huh. You think that might have something to do with it? Maybe that's why young entrepreneurs don't STAY HERE and build companies? We're educating and training plenty of them - why would they stay in IN when it's hard to find the real thing that makes new companies work - pre-seed money?
  • Local Policy Changes are Imperative: Mayor & Governor... Where are you?
    Our young people are leaving in droves and we are not attracting new talent, because we are not creating a environment that people want to live in. We need to create the Built Environment, By Design, mixed use with in our existing communities, Cities, Towns, rebuilding our corridors, via funding public/private partnerships, and not continue to overspend, spreading our dollars farther & farther out, creating outgrowth, more expenses, and so many problems that are not sustainable, places that nobody wants to be.

    It is Imperative that we Create Places People Want To Be, were they are already living and build upon this foundation to: Live Eat Work Walk Bike Play Shop; Smart Growth / www.ReBloomUpTown.Com

  • Entrepreneurial Opps
    I think that the article is very accurate, as the oganizations to support entrepreneurial advancement (Crossroads, the State Legislature, etc.) do not support new companies to the extent contiguous states such as Michigan, Ohio, and Illinois do. We talk about our strong technology base, but it is, as the writer notes, primarily Roche, Lilly, the Warsaw Med Device companies and others that have been around for awhile. I think it is very true that new companies are not provided the incentives, infrastructure, linkages and general support which fellow states have. The governor and staff do a great job introducing "outsiders" to the state, but we need more creativity, and nuts and bolts effort, beyond the introduction to close the deal. And despite what another commenter wrote, we do have the workforce here to help entrepreneurs, or at least they are here until they are essentially forced to go outside the state to follow their careers (opportunities here are just less available than other geographic areas).
  • You are dead on Point !!!!
    You know; I must say....

    It has always seemed odd that over 40+ % of the people throughout the United States are employed by small businesses whereby so little resources are provided here in Indiana. Help should not be limited to just throwing out a helping hand but actually offering low interest development, expansion start up loans without all the red tape. If companies (1-20 million in sales/for example) show history of strong financials, they should be given full range of support to stimulate growth. As quoted, ââ?¬Å?intelligent risk-taking, creativity and innovation is good public policy,ââ?¬Â? Muntean says.

    I had sent a "suggested plan of action" to outgoing President Bush and incomming Obama as well as all Congressmen,Senators as well as targeted media; suggesting a basic idea to help jump start the job situation by agressivly funding (qualified)small businesses.... no response from anyone.

    I am deeply concerned for the future health of our free enterprise system with regard, specifically to the small business community. It is a known principle that if you limit capital you limit the upward movement of individual economic advancement. Current numbers show our system moving toward a two class society.

    As the greatest capitalistic country, I feel it to be of highest priority to stimulate small business growth which will in turn create jobs. Victory comes one job at a time. Yes it is much more glamorus to attract and catch whales, however there are more abundent fish that can be caught with less expensive tactics.

    We the people can make a difference by being more deliberte to support the small business.

    Yes, give the tax breaks to the wealthy... but tie the tax breaks to stimulate the funding of small (qualified) businesses. It is the beauty of our system -- risk to reward. We must use "Bio-Mimicry" to emulate nature and constantly recycle capital back into the ground to feed the seedlings of our business livelyhood. As in life, the lack of proper nutrients to all living things will result in.....

    Pray for our leaders and businesses

    ------------------
    spoken from an average Joe business owner
  • Agree
    I could not agree with Susan Clark Muntean more.....it amazing how much Obama spent (of our money) protecting GM and other auto companies - net job losing enterprises...

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