Diving into the Data about Manufacturing Readiness Grants

Hoosier manufacturing firms have been making some big technological advances lately, with some taking advantage of the additional funding options available through the Manufacturing Readiness Grant program to make their upgrades. The purpose of these grants is intended to keep our state competitive as a hub for advanced manufacturing. It’s been a little over two years since the program was launched, and new data has been published that provides insight into the impact that’s been happening throughout the industry.

One thing’s for sure – Hoosier manufacturers have been investing in some pretty cool things. It’s a whole new era of production, with the addition of things like robots, advanced sensors installed in all kinds of equipment, machine learning, interconnected devices, 3D printing, and a whole lot more. The manufacturing industry is experiencing a period of transformative change, and here in Indiana the new financial support from partnering organizations like Conexus Indiana, the IEDC, and the Next Level Manufacturing Institute have been equipping many firms with the funds needed to upgrade their operations.

How Much Has Been Awarded?

At the time of this writing, about $17.4 million in grant funding has been awarded since the program was launched in mid-2020. There were 212 companies that received grants, which amounts to about 2.3% of all Hoosier manufacturers. These firms were located all over the state in about 60 counties, with distinct clusters in areas like St. Joseph/Elkhart counties, Whitely/Allen, and surrounding Indianapolis. More than 400 firms submitted applications for their intended projects.

The $17.4 million in awarded grant funds will help support about $138.9 million in total proposed project investment.

The most recent disbursal occurred in summer of 2022, when 43 businesses received awards totaling $4 million. This round of funding was expected to support about $46.1 million in technology-based capital investment.

What Impact has this Created?

At roughly the two-year mark in the grant program’s history, Conexus partnered with the Dauch Center for the Management of Manufacturing Enterprises at Purdue University to measure the impact the funding has generated for Hoosier industries. Officials estimate a roughly 26% internal rate of return for the State of Indiana, given that many companies have been able to add jobs, increase wages, and also increase their revenues.

As for the capital investment this funding has supported, researchers estimate a seven-to-one leverage ratio. Or in other words, for every $1 of grant funding, $7 of industry investment is generated. There were several interesting trends throughout all of this investment, for example:

• Automation and advanced technologies have become more widespread in manufacturing operations, and as a result, companies are adding jobs and increasing wages.
• Small and medium-sized companies are accelerating technology adoption at a pace similar to large firms. This has been supporting growth and improving productivity.
• Digital adoption is demonstrating value across a wide array of industry segments, including fabricated metal products, plastics and rubber, food and beverage, and furniture.
• Business drivers for technology investments include improved product quality, customer service improvements, onshoring, and expansion into new markets.

Examples of Investments

There’s been a lot of variety to the projects that Hoosier firms have launched with their Manufacturing Readiness Grant funds and private investments. Some examples include:

• Prime Cut 41 ($10,000 award) is a family-owned business that raises livestock in Fountain County. They’re building a new processing facility and is investing in an automated cutting system.
• Rathburn Tool & Manufacturing ($170,000 award) is a DeKalb County precision metal machining company that serves lots of industries. They are investing in smart robotics and automation, including cobots.
• Paragon Medical Inc. ($105,000 award) is a contract medical device manufacturer in Kosciusko County. They are investing in additive manufacturing, with a focus on metal 3D printing.
• Green Sign Company Inc. ($50,000 award) is a custom signage manufacturer in Decatur County that is investing in two UV-LED flatbed digital printers to automate the cutting process.
• Diamond K Sweets & More LLC ($137,500 award) is a confectionary manufacturer of gourmet chocolate and candy products. They are investing in automated equipment to level up to commercial scale.
• POLARIS Laboratories LLC ($36,700 award) is a laboratory services company in Marion County that tests materials for other manufacturers. They are investing in autonomous robotics to prepare samples for spectroscopy analysis. The company is also using artificial intelligence and machine learning software.

Not Stopping Yet

Given the success of the Manufacturing Readiness Grants, officials have been working to help award another $20 million through fiscal 2023. That’s more than double the amount awarded up to this point, so exciting times are likely ahead. It’s a safe bet that we’re going to be seeing a lot of varied manufacturing growth in the coming year as more firms upgrade their capabilities, add workers, and branch out into new markets.