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Suburbs topping Indy in chase for high-end jobs

August 22, 2015

Coming out of the Great Recession, the counties surrounding Indianapolis have sprinted ahead in their numbers of high-tech jobs and highly educated workers.

Meanwhile, Marion County has been sucking wind.

Those are two key findings from an analysis released this month by BioCrossroads, the Indianapolis-based group that works to grow life sciences businesses in the region.

jobs-bars.gifThe report, conducted by Ohio-based consulting firm Battelle, focused on “advanced industries” companies such as Eli Lilly and Co., Cummins Inc., Rolls Royce Corp. and Salesforce.com that do a significant amount of research and development and sell their products and services around the country or world.

Those industries rely on workers with skills in science, technology, engineering and math, and a bachelor’s degree or higher. The report looked at the availability of those workers.

Such companies grew their number of jobs nearly 28 percent from 2009 to 2013 in 10 counties around Indianapolis. That means the advanced industries added 6,200 jobs in some or all of the following counties: Boone, Brown, Hamilton, Hancock, Hendricks, Johnson, Madison, Morgan, Putnam and Shelby.

For example, software maker hc1.com in Zionsville is adding 175 jobs there and security-products maker Allegion in Carmel has added 300 jobs.

But the center of the Indianapolis region, Marion County, saw jobs in advanced industries tick down 0.10 percent from 2009 to 2013, according to Battelle’s analysis of data from the U.S. Bureau of Labor Statistics. 

That’s a loss of nearly 600 jobs. Eli Lilly, by itself, trimmed more than 2,000 workers from its Indianapolis workforce in 2009 and 2010.

Marion County is still home to two-thirds of the nearly 87,000 advanced-industry jobs in the Indianapolis region, according to Battelle. That’s a higher percentage than in the central part of peer cities Denver; Nashville, Tenn.; Baltimore; Pittsburgh; and Columbus, Ohio. 

But the lack of growth in Indianapolis is a problem for the region’s future, because urban centers are the primary places high-growth startups in advanced industries locate.

“Suburbs can also be competitive sites for attracting clusters of industry activities of knowledge-based and technology-intensive sectors,” wrote Mitch Horowitz, the author of Battelle’s study on Indianapolis. But “the metropolitan core represents the ‘creative habitat’ par excellence for these new industry clusters.” 

Suburban push

Marion County still has lots of advantages.

Sean Brady, president of the Americas headquarters being opened by European marketing software firm Emarsys, said he was always focused on locating the company’s office downtown so he could hire talented workers from the entire metro area, without forcing them to make long commutes.

“We can draw in from what I consider the four corners—north, south, east and west,” said Brady, who plans to hire 167 workers over five years at Emarsys headquarters at 10 W. Market St. “It’s just more advantageous from a talent standpoint.” 

Brady said he was a bit surprised that the suburbs were having so much more success than Marion County in growing high-tech jobs. But, he added, the suburban communities are being aggressive.

Like Fishers, which created an incubator for high-tech startups called Launch Fishers. The first company to graduate from that incubator, Bluebridge, then received help from the city to stay and grow there.

jaramillo-santiago-mug12.jpg Jaramillo

Even though Bluebridge, which sells a mobile-app-making platform, had just eight employees at the time, Fishers Mayor Scott Fadness and local economic development personnel spent five hours showing potential office locations to Bluebridge founder Santiago Jaramillo.

“It was local government support and the entrepreneurial vision of what the city was going to become,” said Jaramillo, who was also at the time considering office space in Broad Ripple, downtown and the Keystone Crossing area.

Jaramillo, who lives in Marion County, said Fishers has been a good location for his workers—who now number 34—many of whom live in the northern suburbs.

Indeed, the Battelle study also found that the counties around Indianapolis are proving more attractive to highly educated residents.

From 2009 to 2013, Marion County lost 5,353 adults with at least a bachelor’s degree, versus an out-migration of 859 adults with bachelor’s degrees from the Indianapolis suburban counties. During that same time, the Indianapolis suburban counties gained 7,223 foreign-born adults with at least a bachelor’s degree, while Marion County gained just 2,016.

The number of Marion County residents with at least a bachelor’s degree still grew 3 percent over that four-year period, as more locals got degrees during the long period of joblessness that followed the recession and as more Hoosiers moved to the Indianapolis area.

But Marion County’s growth in residents with college degrees was significantly slower than the national average of 11 percent.

Joe Hogsett, the Democratic candidate to be Indianapolis’ next mayor, said the study pointed up a significant challenge.

“To be clear: Growing jobs across the region is still a good thing for Indianapolis, and no one is helped when our economic development strategy consists of simply trying to poach jobs from one county to another,” Hogsett wrote in an email. “But we must recognize that our surrounding counties continue to see double-digit growth in advanced industries, and we risk being left behind if our city leadership does not take meaningful steps to improve our attractiveness to both employers and employees.”

He recommended a mix of policies: reducing violent crime, celebrating successful schools and improving struggling ones, redeveloping brownfields, worker training programs, and better marketing of the city to other regions.

Messages left for the campaign staff of Chuck Brewer, the Republican candidate for mayor, were not returned before IBJ’s deadline.

‘Destination environment’

BioCrossroads, which commissioned the Battelle study, has been promoting the development of an “innovation district” north of IUPUI that would become a hub of scientists, engineers and other tech workers. It would serve as a recruiting tool for companies that rely on such talent and give employees a place to interact and see the long-term need here for their kind of skills.

david johnson Johnson

“We need a destination environment to come and live and set up a career. We’re not there yet,” said BioCrossroads CEO David Johnson.

Michael Huber, president of the Indy Chamber, said Marion County’s slow growth in high-tech jobs and highly educated workers is concerning. But he said there are lots of recent signs of positive momentum.

Michael Huber Huber

Some of Marion County’s advanced industry companies—Lilly, Cummins, Royce Rolls, Allison—are seeing their businesses grow, he said, and Marion County is seeing lots of development of neighborhoods and amenities that are attractive to younger, educated workers—and the companies that want to hire them.

“These quality-of-place developments in neighborhoods—that is spurred by the Cultural Trail. The growth in the local food, local brewing, local maker industries—in the last decade, but [especially] in the last three years—has been huge. There’s the Midtown redevelopment plan, with amenities we’ve never seen before,” Huber said. “That’s huge for people who want an urban lifestyle.”

Johnson said each part of the metro area needs the other parts to grow.

“In the same way that the suburbs need Indianapolis, Indianapolis also needs the suburbs,” he said. “We ought to be able to have both-and.”

Carmel Mayor Jim Brainard struck a similar note. He said when he worked to recruit American Specialty Health Inc. to move its corporate headquarters from San Diego to Carmel, he pitched the entire Indianapolis area—and even talked about the short drive from Carmel to Lake Michigan.

“When I was making presentations in San Diego, I talked as much about Indianapolis as I did Carmel. I’ve got to sell the entire region,” Brainard said. “Our competition isn’t Indianapolis or Fishers; our competition is really across the globe.”•

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