Friday, August 22nd, 2008
This article is a bit out of sequence. I had intended to write at least one precursor first. But recent news and a recent experience caused me to switch things around.
As I noted in my Pecha Kucha presentation, there can’t be a successful Indianapolis without a successful Indiana. Why should the Central Indiana region care whether the state as a whole is healthy? Two reasons:
- Indy is ultimately dependent on the state for significant support such as money for highway construction. A struggling state won’t be able to afford these. What’s more, with only 25% of the state’s population, Indianapolis is not, like say Minneapolis or Chicago, in a position to dominate the state politically. This means it is dependent on the goodwill of the rest of the state to secure, for example, funding mechanisms for Lucas Oil Stadium. The region will no doubt be asking the General Assembly for help with transit funding and with government consolidation to pick a couple of things. But if Indy is prosperous while the rest of the state is suffering, you can believe that this will inspire resentment. It’s the same all over the world. For example, it is extremely difficult in India to get highways and airports built to serve the emerging technology industry there because the bulk of the people are in dire poverty and they don’t see why the government should be investing to help the already prosperous. It is easy to see how this dynamic could play out in Indiana.
- It’s the right thing to do. People in Indianapolis are culturally Hoosiers. It’s not like NYC and upstate New York or Chicago and downstate Illinois. The bonds of common culture and brotherhood if nothing else should inspire a desire to see everyone share in prosperity. While the poor we will always have with us, our sense of social justice calls us to minimize inequities where we can do so in an appropriate way.
What we see today, however, is a troubling situation. This was recently highlighted by the latest state jobs report. Indiana’s unemployment rate went up to 6.3%, and the state as a whole lost 16,500 jobs, the third highest state total in the nation. Now Indiana’s unemployment situation is better than all of the surrounding states, but that’s a low hurdle to jump. However, while the state is continuing to lose jobs, the Indianapolis region hit an all time high in employment with 918,500 jobs. The Indianapolis area actually gained 5,600 jobs. This means the rest of the state actually lost 22,100 jobs. I’ve read some accounts that suggest that the Indianapolis area accounts for about 80% of the state’s total economic growth. That’s just not healthy.
It’s no secret what is driving this: globalization. Agriculture and manufacturing have been subjected to relentless competition from around the globe. The auto industry in particular is going through a major restructuring. With Indiana the most manufacturing dependent state in America and with a large concentration in the auto sector, it is no surprise it is getting hard hit. Manufacturing output is actually up. Contrary to popular belief, the US is still the world’s largest manufacturer and manufacturing output hit an all time high last year. But the industry has experienced such productivity gains that it is producing that output with far less workers than before.
Globalization is also concentrating economic returns in large cities. Places like London and New York are prospering in the new order. That’s because these cities are where knowledge talent is concentrated, and the economic growth areas for the 21st century are in those fields that require a highly educated workforce. This plays to the advantage of Indianapolis. It is not one of the world’s elite cities by any means, but as a metro area of 1.7 million people, it has achieved the minimum scale to be successful in the globalized world. Most of the rest of Indiana, other than those counties in the shadow of large out of state based metros like Chicago, is not so lucky. Indiana’s smaller metros and rural areas are suffering because they are still manufacturing dependent and have traditionally not been homes to the new economy workforce. The national average for percentage of adults with a college degree is 27%. In the Indianapolis area, 29.5% of adults have a college degree. In the state as a whole, only 19% hold college degrees. Again, when you factor out the above average Indy region performance, the rest of the state must be even lower than that.
Indiana needs help. One logical place to look is to Indianapolis. How can the capital city become more of a motor pulling the rest of the state, or at least the central 2/3’s of it, forward? I have some ideas on this front that I’ll be exploring in this blog. But this is no charity mission. Indianapolis also needs Indiana. Why do I say that? Well, while Indy has the minimum scale to play in the new economy, it is still too small to be a major player in many ways. I’d say a city would ideally have a minimum size of 2.5-3 million people to be able to efficiently support the types of things Indy needs to have to be in the game. For example, Indy is a small market for pro sports teams. It needs to leverage an expanded statewide fan base to the greatest extent possible. It needs an extended regional pull for its airport to get more flights. It would help to have more people to patronize downtown attractions such as the zoo. The more that Indy can tap into that larger market, the better economies of scale that can be achieved. Otherwise Indy’s smallish tax and consumer base will have to support all those things solo.
So while outstate Indiana certainly needs help in getting connected to the new globalized economy in a positive way, there are plenty of things Indianapolis needs as well. This isn’t a mercy mission either way. It is a common people standing together for the common good. As they say, if we don’t all hang together, we’ll surely all hang separately.
How do you get people to do this? Well, before you can work on specific programs, you need to have trust. And one way to establish trust is to share common values, culture, and experience. While Indianapolis is culturally Hoosier, the rest of the state has often been disconnected from it and in fact viewed the city with suspicion and hostility. But I think some things could be changing there in a positive way, and I’ll share some personal experience to show how.
I grew up in a rural area of far southern Indiana across the river from Louisville, Kentucky. In fact, we were part of the Louisville metro area. Thus, while there was a lot of cross-river rivalry, especially in college hoops, we were far more aligned to Louisville than to the rest of Indiana. I remember one day opening the Courier-Journal and seeing basketball standings showing Indiana with a record of something like 5-16, which puzzled me to no end, since I knew the Hoosiers were doing great that year. I had no idea that Indiana even had a pro basketball team, and that it was the Pacers I’d seen listed. I think I visited Indianapolis a grand total of three times growing up. I did briefly read the Indy Star during that short period pre-Gannett when they were doing statewide distribution. But I liked them mostly for the color front page (the C-J was still black and white) and their more conservative editorial stance.
I was recently back home for a high school reunion and there is a big difference. Firstly, the whole area is ga-ga over the Colts. My family has many rabid Colts fans and trips to the games are common. One person in my class who still lives in the old home town has Colts season tickets. Even my 90 year old grandparents follow the Colts. There has probably been no greater force in putting Indianapolis on the statewide map in a positive way than the Colts. Interestingly, this phenomenon seems to hit a wall at the river. The Colts made few in-roads into the Louisville market on the Kentucky side of the river.
Next, one of my classmates had opened a winery and vinyard there. This was where we held the reunion. He had recently entered his wines in the Indy International Wine Competition. He had also participated in other Indy wine events. And his plan for the future is to hopefully get some limited retail distribution in Indianapolis. I was pretty surprised to hear this since I figured his natural market would have been Louisville, but for Indiana based wineries, Indy is where the action is. Similarly I’ve noticed that Indy’s beer geek bars often have brews from around the state. For example, J. Gumbo’s has a selection of Three Floyd’s beers from Munster and Mad Anthony beers from Ft. Wayne. Similarly, Indianapolis restaurants and markets are becoming outlets for much of the local organic agriculture produced in an expanded region. In a sense, Indianapolis is becoming the cultural common ground for artisal producers of various stripes from around the state.
I also noted something similar when it comes to other things. For example, the Star noted gays from Marion and other places around the state who attended Circle City Pride this year. The more tolerant attitude in Indy versus some smaller places can make the city a refuge for those who don’t quite fit in or can’t be themselves elsewhere – and that doesn’t mean they even have to move to Indy to do it.
Not all of the expanded Indy relationships are necessarily positive for the rest of the state. For example, when I was growing up, I couldn’t name anyone in town who had moved off to Indianapolis. However, in my class of 50, multiple people have. I did some research at the reunion and estimate that probably 8-10 people got college degrees, about average for the state. Of those that did, four of them live in Indianapolis – including the top three students in the class. In effect, Indianapolis sucked up 40-50% of the college grads in my class. That leaves fewer educated workers behind for the new economy. My theory on this is that it is logical for cost reasons for people to attend in state universities. And if you go off to an in state university, the companies that recruit there are primarily Indy based. (I actually suggested to a group studying the talent attraction problem in Louisville that they should get more Louisville companies doing recruitment at Indiana’s state schools if they want to retain those grads).
Still, moving away isn’t the end of the world. In fact, that’s one way you build extended statewide connections. How do you connect many of these Indiana counties to the Indianapolis economy? One way is to leverage the embedded relationships that come from people who’ve moved back and forth.
So I think some of the deepening linkages between Indianapolis and the rest of the state are a positive sign. It is these sorts of things that set the stage for working together because you seen that common bond and common ground. How can these linkages be deepened even further in a positive way? Some ideas I have are:
- Focus on being the market for Indiana’s artisinal producers. Every beer and wine produced in the state should be carried by some restaurant or store, preferrably multiple, Indianapolis. The more Indy distribution these products have, the more people in those outstate areas see the benefits of an Indy linkage for themelves. Plus Indy helps wean itself of mass market chain products. A win-win.
- Leverage the heck out of the Colts. The city has just made a gigantic investment in the Colts stadium. I think part of the ROI should be that the Colts organization should go out of their way to establish themselves as a statewide team. That’s in their own best interests anyway. Make sure players and coaches are regularly putting in appearances throughout the state. Show the rest of the state that you care. When Tony Dungy joked about holding the Super Bowl in Fort Wayne, it made the newspapers in there. Those types of small gestures go a long way. Heck, the Colts even have lots of fans in downstate Illinois, which I think is another fertile ground for building Indy connections. Though that would be the equivalent of going for a masters degree when we haven’t finished high school yet.
- Every festival, event, etc. in Indy should try to think about how to cater to an expanded geography. The State Fair is already a statewide event. I mentioned Indy Pride. Others could certainly look for ways to expand their reach. This isn’t just about marketing for more attendees. It’s about finding a way to engage at a deeper level.
- Indy’s cultural organizations already do some work with the rest of the state. This could be expanded. For example, the ISO already plays concerts in various cities. The IMA provides conservation expertise to other Indiana museums. How can organizations achieve a greater statewide engagement in a win-win way?
- Why not try to get more tourist synergies? The fabulous modern architecture of Columbus is only 45 minutes south of Indianapolis, for example. Why not help organize tours there that depart from downtown Indy oriented towards visitors to the capital? Again, the benefit to Indy here is that it is, to put it mildly, not exactly a hotbed of contemporary architecture. This is way to pull up the city’s woeful architectural reputation. Again, a win-win.
Ok, so maybe these suggestions are of the “more of the same” variety, but that’s ok. The trend lines are already positive here. Anyone have other ideas?
Again, I believe Indianapolis and Indiana need each other. Part of figuring out how to work together is establishing trust. These cultural linkages are a big part of making that happen.