State and federal investments are helping spur research and development growth in Indiana’s tech-related industries, new research says.
The Indiana Economic Development Corp. paid for the study, which was conducted by Ball State University’s Center for Business and Economic Research.
CBER researchers examined results from $30.8 million in state and federal funding that was awarded to 74 organizations around the state between 2010 and 2014.
Those awards contributed to the creation of 323 jobs, and an increase of gross domestic product of $18 million and personal income of $16 million during that period, the study says.
The awards came from three state-based programs: Indiana’s 21st Century Research and Technology Fund, the Indiana Angel Network and the Indiana High-Growth Fund. Awards also came from two similar grant programs offered through the U.S. Department of Energy’s Office of Science.
“Our study shows that these funds have had a significant positive impact on various technology-related firms in Indiana,” CBER Research Assistant Professor Srikant Deveraj said in a written statement. Deveraj, along with CBER Director Michael Hicks, conducted the research for this study.
Recipients were also able to leverage their state funding to acquire loans and investments from banks and venture capitalists, the study revealed.
“Receiving a grant from one of the funds is seen as a stamp of approval by outside groups. This certainly helps these companies expand,” Deveraj said.
The lion’s share of the deals went to central Indiana organizations. In Marion County alone, 34 entities received a total of $17.4 million in funding. Another 14 entities in Hamilton County received a total of $4.9 million in funding. In Madison County, three entities received a total of $1.5 million in funding. One Hancock County entity received $125,000 in funding.
"These new studies from Ball State University are promising, concluding that 21 Fund investments contributed to an organization’s growth in productivity, sales and employment while generating a 23.8 percent average annual return on investment to the state of Indiana," IEDC spokeswoman Abby Gras wrote in an e-mail to IBJ. "The study does acknowledge that a high number of these investments were made in Marion and Hamilton counties from 2010-2014. Over the last several years, we have expanded the reach of these funds across the state through programs like the Purdue Foundry and Elevate Ventures’ Entrepreneurs in Residence. This report shows that we must continue these efforts and enhance them where necessary in order to realize substantial statewide growth in innovation and entrepreneurship."
Gras said the IEDC is hoping for similar results for future programs.
"This summer, [the state] announced plans to invest $1 billion in innovation and entrepreneurship in Indiana, and investing in early-stage, mid-market and high-growth businesses is a key component of this initiative, she wrote. "The Ball State report suggests that we have the tools in place to support the success of these firms and we hope to continue building on these efforts through increased annual appropriations from the General Assembly."
Elsewhere in the state:
- In Tippecanoe County, 5 entities received a combined $1.2 million.
- St. Joseph, Monroe and Lagrange counties each were home to three funding recipients. Grant awards totaled $800,000, $300,000 and $229,740, respectively.
- Vanderburgh County entities received two awards totaling $175,000.
- Dearborn, Whitley, Greene, Scott, Allen and Elkhart counties each had one funding recipient. Those awards ranged from $1.9 million in Dearborn County to $37,500 in Elkhart County.
A second study by CBER showed that grant recipients had stronger growth in employment, sales and productivity as compared to firms who had applied for but not received an award.