Indiana Alumni Magazine
The Miracle in the Midwest
How can Indiana turn the "brain drain" into a "brain gain"? The answer, says IU's president, is knowledge-based business.
by Myles Brand
As he begins his seventh year at the helm of IU, Myles Brand shares a vision he sees as both optimistic and realistic.
Photo Annalese Poorman.
For the past year, I've traveled around our state, talking to business and community leaders about the economic future for Indiana, and the role higher education needs to play in helping to shape it.
I've found a rare unanimity of opinion. Hoosiers believe that Indiana must diversify its economy. They think we must build on the strong foundation of our manufacturing economy by developing more jobs in high-wage fields, areas in which knowledge is translated into jobs and products. And they believe we must begin to do so immediately.
I share those views. And through those meetings, I have come to view our state's future with a great sense of optimism. In fact, I can sum up my aspirations for Indiana with the phrase "Miracle in the Midwest."
How will that miracle happen? Partnerships — between business, universities, and government — will drive growth of existing companies and will stimulate start-ups. The economy will diversify, showing substantial growth, especially in biomedicine and information technology. Manufacturing will remain vital, but manufacturers will use advances in information technology to stay competitive. State government will be business-friendly, both in the regulatory environment and the tax structure. Government will spur and support the research necessary for economic growth.
This vision includes a quality of life that's among the best in the nation. What Indiana lacks in mountains and oceans it will more than make up for by being people-friendly — by building communities with safe streets, excellent social services, and superb educational institutions at all levels. Medical research will yield state-of-the-art clinical treatment, and health care will be affordable and accessible. These advantages will help turn the "brain drain," which takes from Indiana her best and brightest young people, into the "brain gain."
Admittedly, this is an optimistic vision. But if we are all truly committed to achieving it, the vision is a realistic one as well.
How do we get there? Four elements must come together to create the culture of entrepreneurship that we will need to succeed:
- Cutting-edge research in university, government, and industry laboratories;
- Educated and skilled workers, from assembly line employees to technicians, service and business professionals, engineers, and scientists;
- A supportive environment, including venture capital and a positive business climate for risk-taking; and
- Active related industry, suppliers, and customers.
Fortunately, we have a growing list of practical models of how knowledge-based business can emerge and prosper.
As one small but significant example, look at Wisdom Tools. The Bloomington-based company, which develops individualized Web-based training programs for businesses, resulted from research that IU Professor Martin Siegel and his colleagues conducted at the IU Center for Excellence in Education. The center's work has plenty of classroom uses, but it clearly has commercial applications as well. With the help of IU's Advanced Research and Technology Institute, Wisdom Tools was spun off into an independent business. Its customers include Eli Lilly, Coca-Cola, Houghton Mifflin, and IBM. In fact, when the Bloomington Economic Development Corp. drew up a list of 45 new IT companies in the area, 38 had ties with IU.
Several small companies won't make up for job losses that result when major manufacturers downsize or close plants, any more than a few grass seeds will replenish an entire lawn. Numbers are critical. When scores of high-tech start-ups are launched, some will fail, others will become successful small businesses, and some will grow larger. Indiana must make itself fertile ground for new businesses to take root and thrive.
What kind of businesses? The federal Department of Labor predicts that 80 percent of all new jobs in the next decade will be in IT-related fields. And the U.S. Commerce Department estimates that by 2006 we will need 1.3 million new IT workers. These jobs will require at least a baccalaureate degree and likely some postgraduate study.
IU's new School of Informatics, one of the first such schools in the country, will play an important role in creating Indiana's future work force. Informatics is an interdisciplinary field that examines how digital information is represented, manipulated, distributed, and used. The school will build on IU's strengths in information technology and new media. It will encourage IT research. And it will enable students to combine interests in fields such as the humanities and social sciences with advanced IT education. Students graduating from IU's new school could help develop high-tech businesses or attract employers seeking a qualified work force. IU's next budget request to the state will propose funding for this new school as the highest priority.
Another promising step is the Indiana Pervasive Computing Research Initiative. Funded by a $30 million grant from the Lilly Endowment, IPCRES will recruit outstanding researchers in emerging IT fields to laboratories in Indianapolis and Bloomington. There they will work with the private sector to develop new technologies and create high-tech jobs. Likewise, the Lilly Endowment's $30 million grant to Rose-Hulman Institute of Technology will have a positive, lasting impact on Indiana's economy. Rose Hulman's Center for an Innovation Economy will advance engineering and science education and turn theoretical advances into practical business uses.
Indiana also has clear growth opportunities in health care and biomedicine. Currently, Indiana's 12,000 health-related organizations account for one out of every eight jobs in the state. Indiana is home to health care giants, such as Eli Lilly and Co., the Guidant Corp., Cook Inc., and Boehringer Mannheim Corp. Indiana's biomedical industry involves products ranging from drugs and vaccines to medical devices, diagnostics, and prostheses.
With the state's only medical school in Indianapolis and medical education centers spread throughout Indiana, IU plays a fundamental role in the state's health-care system. When you talk about quality of life, nothing is more basic than access to affordable, excellent health care. The growing prominence of the IU School of Medicine as a center for education, treatment, and research offers great promise for the future of health care in Indiana.
In looking toward that future, I believe education in the widest variety of fields is absolutely crucial. Education — from pre-K to Ph.D. — must be the driving force in Indiana's transition to a 21st-century economy. Unfortunately, a recent survey by the Indiana Fiscal Policy Institute indicates that more than 40 percent of Hoosier employers are dissatisfied with their employees' written communication and critical thinking skills. The foundation in those areas must be built in primary and elementary schools.
The problems of K-12 education are hardly unique to Indiana and are not simple to solve. We must raise performance standards, enhance teacher education and professional development, and promote innovation in our school system, perhaps through charter schools.
Because workers will change careers many times during their lives, skill enhancement must be continuous. All schools will need to focus on preparing students for a lifetime of learning.
Being a student — particularly an adult student — often won't involve sitting in a classroom. Online instruction will play a key role in continuing education. And educational institutions must provide the just-in-time, site-specific training that Hoosier employers so desperately want.
The state has recently made good progress in targeting some of those needs by developing a community college system. By focusing on job-related training, this new system can meet our workforce needs effectively. This focus will nicely complement the baccalaureate, four-year education offered at IU's and Purdue's regional campuses, as well as Indiana's other public and private institutions.
Other states have developed community college systems, most of them decades ago. As we advance this system in Indiana, we can learn from their experiences to make sure that community colleges meet the specific needs of our state.
To look at one example, consider California. It has developed a tiered system of higher education. Open-admission community colleges provide associate degrees at low tuition. The Cal State system offers baccalaureate and master's programs. Research campuses, the UC system, select students from the top eighth of high school graduates, and offer baccalaureate, master's, and doctoral degrees.
This model works for California, but Indiana's situation is different. Higher education in California operates at capacity now, and policymakers are expecting an enrollment leap of more than 35 percent over the next decade. That so-called second tidal wave will include a high percentage of non-Caucasian students.
In Indiana, there is space in many higher-education classrooms today, and projections are for little overall enrollment growth by 2010. That makes it all the more important to maximize the opportunities for every Hoosier student to receive a baccalaureate degree or higher. To do so in the most cost-efficient manner, we must make certain that our existing system is being used to its full potential.
Indiana also differs from California and most other states in that its premier research universities, IU and Purdue, have admissions policies that make them accessible to a wide range of students. This is a comparative advantage and one that we should strive to maintain.
Despite their relative accessibility, IUB and Purdue West Lafayette do an excellent job of retaining and graduating students. The six-year graduation rate at Bloomington and West Lafayette approaches 70 percent. Statewide, the public university six-year average rate for completing a baccalaureate degree is 45 percent; for an associate degree, it is 23 percent.
In short, Bloomington and West Lafayette are the most reliable and efficient producers of the baccalaureate degree-holders that Indiana needs to compete successfully in the new knowledge-based, global economy.
The Indiana Fiscal Policy Institute survey points out that while 63 percent of employers want more workers with associate degrees, 71 percent want more workers with baccalaureate degrees. That's why all Hoosier students who meet the admission standards should have access to the state's premier public universities.
Again, the new economy requires increased high-level education. To meet Hoosiers' educational needs, we must make certain that the roles of Indiana's community colleges and its existing public institutions, including IU's readily accessible regional campuses, are complementary. There should be seamless transferability among all campuses. Collectively, those institutions should provide the full array of work-force training, baccalaureate, and post-baccalaureate programs vital to Indiana's economic growth.
When people who live outside of Indiana think of IU, they usually don't consider the regional campuses. But they are a central part of our mission. They not only provide flexible educational programs to meet the needs of their local constituencies, but they also act as cultural centers, sources of community pride and cohesion. They attract well-respected scholars, speakers, and performers. Their impact on a community's quality of life can be profound. At all of the regional sites, I am impressed by the allegiance people feel not just to IU, but to their own campuses. We appreciate that support and are dedicated to maintaining strong regional campuses for the future.
Meanwhile, Indiana's research universities can and should be engines of economic development, attracting talent and federal funding to help create a culture of entrepreneurship in Indiana. Currently, the state gets back only 90 cents for every tax dollar it sends to Washington. But IU and Purdue bring home close to $600 million annually in competitively won federal funding. The state and its business community would be wise to make the investments necessary to increase these successes.
I am particularly proud to have played a part in initiating the state's 21st Century Growth and Technology Fund. Under the leadership of Gov. Frank O'Bannon, BA'52, JD'57, the fund was created to allocate $50 million over two years to encourage high-tech, engineering, and medical research in business and university laboratories; attract federal research grants; and stimulate the development of the jobs that Indiana's economy must create to prosper in the new century.
This is clearly a positive step for Indiana. Still, other states have also made strong commitments to advancing basic research and attracting eminent scientists. For example, the Georgia Research Alliance was developed in 1990. A joint effort by research universities, private businesses, and state government, the alliance has received $240 million in state funding. That investment has been supplemented with $65 million from the private sector and $600 million from federal research grants. It's no accident that Georgia has one of the fastest growing high-tech sectors in the nation.
In Kentucky, the General Assembly has designated more than $100 million in matching funds annually for its "Bucks for Brains" program, designed to lure outstanding scientists to the state's universities. Michigan has set aside $1 billion over the next 20 years from the state's share of the settlement with tobacco companies to fund life sciences research. Indiana cannot afford to ignore these examples.
During the upcoming legislative session, Indiana should renew — indeed, increase — its commitment to the 21st Century Fund. Continuation of the fund has the support of many key business leaders who see that it already has paid significant dividends. That progress must be sustained.
An ambitious vision for Indiana cannot be achieved if every sector pursues its goals separately. Collaboration and collective leadership from business, government, and higher education will be required.
As Martin Luther King Jr. once said: "We may have come here on different ships, but we are all in the same boat now." How well we work together to guide that vessel will determine how close we come to fulfilling our potential. 
Myles Brand became Indiana University's 16th president on Aug. 1, 1994. He is also a professor of philosophy.