New governor brings business mentality to state government:

December 26, 2005

As he took office in January, Gov. Mitch Daniels' first order of business was just that: Apply a business mind-set to state government.

That meant efforts to improve the efficiency and cooperation of state agen- Envisioned by Republicans as a publicprivate partnership, IEDC swallowed and replaced more than half a dozen boards and agencies such as the Indiana Depart cies. It also meant key changes to economic development. The creation of the Indiana Economic Development Corp. was one of his largest initiatives. ment of Commerce.

Daniels, a Republican, named Patricia Miller, co-founder of Fort Wayne-based Vera Bradley Deigns Inc., his secretary of commerce. He also made Michael S. "Mickey" Maurer, IBJ Corp.'s co-owner, president of IEDC.

In many cases, Daniels tapped promising young executives to fill key slots in his administration. One was Ronald Stiver, 31, a former brand strategy manager for Eli Lilly and Co., who became Indiana's commissioner of work-force development. Stiver immediately reorganized his agency, carving the state into 11 distinct regions, pushing for improvements to data-gathering, and planning an increased focus for Indiana's training dollars. However, Stiver was disparaged when his agency overhaul slowed distribution of unemployment checks.

Some of Daniels' choices from the business community proved controversial. Bureau of Motor Vehicles Commissioner Joel Silverman, a former Galyan's Trading Co. president, angered many with his plan to shutter several dozen license branches around the state-including the only branch in Democrat-dominated Gary.

Silverman faced more criticism when the public realized he'd added 24 former Galyan's employees to the BMV payroll.

Meanwhile, IEDC tightened its use of key incentives. For example, with just $9 million available every two years for the state's certified technology park program, the IEDC reorganized it. Now grants must be tied to the actual attraction of new companies, not the hope that they might someday come.

Similarly, IEDC changed the focus of the $75 million Indiana 21st Century Research and Technology Fund. Its investments had previously skewed toward the research side of R&D, underwriting discoveries in university laboratories. IEDC wants to concentrate on development, emphasizing job creation in small, entrepreneurial, highgrowth companies.

But the policy change with perhaps the most potential impact was Daniels' reorganization of the $12 billion Indiana Public Employees Retirement Fund. Under its new management, PERF began exploring how to diversify $506 million of its assets into private equity investments, such as venture capital. It was PERF's $20 million foundation investment that originally helped spur BioCrossroads' Indiana Future Fund.

As the year closed, Daniels lost a key member of his team when Miller stepped down to resume management of Vera Bradley. But few expect IEDC to miss a step. Daniels immediately named Maurer as her replacement.

Daniels Maurer Silverman
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