By: Steve Dwyer, President and CEO of Conexus Indiana
Posted: December 28, 2010

Website: http://www.indystar.com

The 2011 economic outlook remains mixed. Most experts believe the U.S. economy will continue to grow but at a sluggish pace (under 3 percent) that may not be enough to put a significant dent in a stubborn unemployment rate.

Here in Indiana, however, the new year means more cautious optimism. The state's economy is poised to outperform the nation, and our two bedrock industries, manufacturing and logistics, are leading the way.

Nationally, the Institute for Supply Management's manufacturing report shows the sector in its 16th consecutive month of growth as of November. A survey of U.S. business executives by Gallup recently pegged the Midwest as the regional job creation leader, based on the strong performance of manufacturing.

This may seem counterintuitive for those accustomed to headlines decrying the demise of U.S. manufacturing. But while traditional assembly-line jobs have disappeared over the last several decades, they've been replaced by new positions that demand higher skills -- and command higher wages.

This puts Indiana in a strong position as the most manufacturing-intensive state in the country. Economist Michael Hicks of Ball State University recently predicted that Indiana would remain a leader in private-sector job creation in 2011, and although Hoosier workers have suffered a persistent wage gap (earning less than 90 cents for every $1 earned by the average American), Hicks believes that Indiana's personal income will jump by nearly 5 percent next year -- again, driven by manufacturing and logistics, where incomes are projected to grow by 7 percent and 6.9 percent.

In the 2010 Manufacturing and Logistics Report Card also completed by Hicks, he estimates that manufacturing payrolls will grow by nearly $2 billion in 2011.

So while the ups and downs of our economy over the last decade seem to have been driven by overinflating and bursting bubbles in housing and on Wall Street, Indiana's recovery seems to be founded on an old-fashioned concept -- making and moving products. 

But the products being made are anything but old-fashioned: electric vehicles, jet engines, advanced electronics, lifesaving medicines and medical devices. As a leading exporter, our supply chains are global, managed by a sophisticated logistics sector. The 2010 New Economy Index recently released by the Kauffman Foundation ranks Indiana ninth among states in "manufacturing value-add," confirming that Hoosier manufacturers are increasingly focused on high-value, high-tech products.

There's a large caveat to these predictions of a manufacturing and logistics-fueled recovery, however: the premise that our workers will have the necessary skills to take advantage of available jobs. In the same Manufacturing and Logistics Report Card that predicts growing wages, Indiana scores its lowest grade (C minus) in human capital.

As baby boomers leave the work force, younger Hoosiers aren't acquiring in large enough numbers the 21st-century skills needed for manufacturing and logistics careers, the high-tech savvy to run computerized equipment and advanced robotic systems, the teamwork and critical thinking abilities required to work in today's factories.

Indiana's high school graduation rate continues to improve, with 84 percent of students receiving their diplomas on time in 2010 -- an 8 percent improvement over the last four years. It's a testament to the hard work of committed teachers and administrators, state policymakers and, of course, the students themselves. But for industries like manufacturing and logistics, a traditional high school diploma is no longer a guarantee of employment.

Indiana must include more technical education options in its high school curriculum, preparing students earlier for high-tech careers. We also must do a better job of moving young people from high school into advanced vocational training (including certificate and two-year associate's degree programs) that prepares them to be successful applicants and productive employees.

But despite this work-force challenge, most signs for 2011 point toward Indiana remaining a manufacturing stronghold at the Crossroads of America. It's up to us to take advantage of the opportunities presented by our manufacturing and logistics industries to accelerate our economic recovery. 

HOLT: Regional airports can fuel economic development (full article)
By: David Holt, Vice President of Operations and Business Development, Conexus Indiana
Posted: December 4, 2010

Website: http://www.ibj.com/

A strong network of airports, unrivaled interstate access, a pro-business tax climate and central geography have made Indiana an attractive destination for logistics firms and positioned the state as a global logistics leader. We've got a lot going for us, but continued growth depends on strategic investment by both the public and private sectors, and developing plans to leverage Indiana's logistical advantages.

As leaders from Indiana's top logistics firms look to capitalize on emerging opportunities in this industry, positioning Indiana's airports as lower-cost alternatives to other cities is a key economic development strategy.

Indiana has four airports (Fort Wayne International Airport, Grissom Air Force Base, Indianapolis International Airport and Louisville International Airport) with 11,900 feet or more of runway, and has aviation facilities strategically located throughout the state. Indianapolis International is the sixth-largest cargo airport in the country and boasts the second-largest FedEx hub, and Fort Wayne International Airport also ranks in the top 125.

Yet, several of the state's smaller regional airports have excess air cargo capacity, providing an opportunity for Indiana companies to save significant time and money by moving products through them instead of busier hubs like Chicago and St. Louis.

Indiana currently ranks seventh among eight Midwestern states in terms of air transport as a share of transportation and warehousing gross domestic product. If we can develop a plan to bring more goods to Indiana's runways, it will provide a significant advantage to local logistics firms-which will ultimately lead to new jobs for Hoosiers, boosting the state's economy.

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