Indiana receiving effective ROI from funds stimulating R&D
Indiana has seen a growth in jobs, gross domestic product and personal income as part of federal and state efforts to stimulate research development efforts in technology-related fields, says two new reports from Ball State University.
The university’s Center for Business and Economic Research (CBER) examined the results of the $27 million that has been awarded to 74 organizations during from 2010 to 2014 through the state of Indiana’s 21st Century Research and Technology Fund, the Indiana Angel Network and the Indiana High-Growth Fund, as well as the Small Business Innovation Research and Small Business Technology Transfer, two similar grant programs offered through the U.S. Department of Energy’s Office of Science.
CBER found those investment avenues have contributed to the creation of 323 jobs and an increase of gross domestic product of $18 million and personal income of $16 million from 2010-14.
Researchers also found that Marion County had the most award recipients with 34, while adjacent Hamilton County had 14, resulting in a total of $22.3 million in funding.
“Our study shows that these funds have had a significant positive impact on various technology-related firms in Indiana,” said Srikant Devaraj, a research assistant professor for CBER, who conducted the research with Michael Hicks, CBER director.
“More importantly, these organizations are leveraging the funds they receive from Indiana to acquire loans and investments from banks and other venture capitalists,” Devaraj said. “Receiving a grant from one of the funds is seen as a stamp of approval by outside groups. This certainly helps these companies expand.”
Devaraj also noted that Indiana firms receiving the grants have been guided by Elevate Ventures, which manage the state grant funds. In its role the firm also provides business analysis and advisory services.
“Elevate has done a great deal of consulting, providing firms with the resources to expand and manage growth,” he said. “We feel that is a key to these firms being successful.”
In a second study, researchers examined firms whose grant applications either were awarded or rejected by the 21st Century Fund, part of the Indiana Economic Development Corporation (IEDC) as part of an overall review of the organization. CBER conducted an initial study of IEDC in 2010 and recommended several changes to the organization that were implemented by the Indiana General Assembly.
Grant recipients’ employment rose by an annual average of 30.4 percent, they had a 68.6 percent increase in sales and 29.1 percent more productivity after the award when compared to those not receiving an award, the study found.
“It is clear that administrators for the IEDC are effectively choosing firms that succeed better than their non-recipient counterparts,” said Hicks, who is recommending the 21st Century Fund should be continued as currently structured through at least 2020 when additional analysis will be available to address its efficacy.
The studies were funded by the IEDC.
Devaraj may be reached at 765-285-4304 or firstname.lastname@example.org
Hicks may be reached at 765-716-3625 or email@example.com
Senior media strategist
Ball State University
Muncie Ind. 47306