Indiana, Watch Your Step! – Economic Pitfalls to Watch Out For

Indiana, Watch Your Step! – Economic Pitfalls to Watch Out For

By Nick Dmitrovich with data from the Purdue University Center for Regional Development

 

There’s no doubt Indiana’s in a really good spot economically. Our unemployment figures are historically low, our 2016 real gross domestic product was a robust $301 billion (Bureau of Economic Analysis), and our GDP is expected to outpace the nation’s throughout the rest of 2018 (Indiana Business Research Center). There’s plenty of reasons to celebrate, as we should. But that doesn’t mean there aren’t still areas of concern we can afford to ignore.

In fact, there are several pitfalls that could trip up our success in the future that we absolutely should remain vigilant in addressing. This divide was described in new research from the Purdue University Center for Regional Development titled “People and Places The Nature and Location of Talent in Indiana – Purdue Center for Research.” In the report, researchers noted several key challenges with things like education, talent, skills, and staffing that Indiana will certainly need to address in order for our state to remain so successful.

Specifically, several of the state’s challenges include the following:

  • Our population growth rate has lagged behind that of the U.S. for the better part of 15 years. Between 2007 and 2016, the pace of growth was ranked 35th among the nation’s 50 states.
  • Indiana’s median household income ($50,532) ranked 36th in the nation and 14 percent of the state’s population fell below the poverty line in 2016.
  • Nearly 19.1 percent of Indiana’s children under 18 years of age were in poverty in 2016.
  • On the education front, we place 5th nationally when it comes to the proportion of adults with a high school degree (or equivalent), but only 25.6 percent of Hoosier adults have a bachelor’s degree or higher, ranking Indiana 43rd among all states.

Those figures don’t exactly scream prosperity as loudly as the state’s more glamourous attributes. In fact, that dichotomy is the very thing that intrigued researchers in the first place.

“It is this mix of statistics — some positive and some troubling — that prompted us to examine the state of education, talent and jobs in Indiana,” Purdue’s researchers said. “What this report has tried to do is examine a core set of data that might provide valuable insights into the troubles that may lie ahead in Indiana’s quest to be a major national and global economic player. The ability of the state to achieve social and economic progress over the long-term will rest, in part, on its capacity to produce, retain and attract talent.”

“Ramping up its supply of educated and skilled workers will not be enough,” the authors continued. “Of equal importance will be the need to accelerate the number of quality jobs that can help stem the outflow of talent to the other parts of the U.S. and beyond.”

The report contained several specific recommendations for economic development officials from throughout the state, including:

Develop more graduates:

Having a growing number of adults in the state with bachelors’ degrees or higher will be important, especially if it hopes to expand the number of high-tech, high-skilled jobs and remain competitive in the global marketplace. Similarly, it will be essential to expand the number of adult Hoosiers with an associate’s degree credential.

Understand the creative sector:

It will be important for state, regional and local economic development leaders and agencies to recognize that a knowledge/creative workforce is not confined to metropolitan areas of the state. (These would be defined as individuals employed in occupations that require a high level of creative problem solving in addition to artistic, cultural, and designer goods and services.) About one in six persons engaged in these occupations are employed in nonmetropolitan areas of Indiana.

Train people for STEM jobs we actually have:

Expanding the number of people with STEM-related training will be a key factor in positioning the state to be an active player in the 21st century economy. However, the ability to retain these STEM graduates will be dependent upon Indiana’s capacity to accelerate the number of STEM-related jobs available to these graduates.

Address the gender earnings gap:

While there are many factors that could be contributing to the median earnings gap, it is an issue that employers will need to address if they hope to attract and retain women to be part of their workforce.

Don’t forget about mid-skill manufacturing needs:

It will be important for the state to pursue a balanced portfolio of economic development activities, one designed to grow STEM and other technology-based jobs, while simultaneously investing in innovative strategies to keep its production-based industries globally competitive.

Preserve nonmetro developments through education:

The long-term success of economic development investments in nonmetropolitan areas of Indiana will depend on growing the number of adults in these counties with formal associates and baccalaureate degrees.

 

Even though these recommendations might seem like a difficult set of feats to implement, they’re going to be necessary to keep our recent successes from backsliding and preserve what we’ve achieved. The added benefit of these concepts is they could very well shift perceptions of Indiana just as much as they’d bring about actual results we can measure, ushering in an era wherein the state stands out as a progressive leader on the world’s stage that supports its economy with forward-thinking actions.

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