Wednesday, December 02, 2015 12:41 am
There are basically just a few ways to create more and better jobs in Indiana or, for that matter, anywhere.
You can hope that good, existing employers innovate and enlarge their markets and hire new people.
You can try to persuade companies from outside the state to bring their businesses here.
Or you can trust in plain, simple Hoosier creativity. Entrepreneurship. People gettting an idea, figuring out something the city or the region or the world needs and just ... going for it.
It is the modern capitalist dream, the stories of television pioneer Philo Farnsworth, Wendy’s founder Dave Thomas and Sweetwater Sound’s Chuck Surack rolled into one, long narrative of business creativity, luck and courage.
The only problem: Indiana isn’t doing very well at it.
Amid a lot of upbeat statistics in its recent Vision 2025 report, The Indiana Chamber of Commerce’s metrics include one that ranks Indiana 47th in terms of entrepreneurial activity. We were 30th in 1999. Another key measure – venture capital invested – shows Indiana has dropped to 36th among the states, with $7.60 per capita. The U.S. average is $119.60; California, at $731.80, is No. 1.
Why isn’t the entrepreneurial spirit thriving in a state that’s so often described as "business-friendly"?
A big reason appears to be our culture. Conservative by nature, Hoosiers seem more averse to taking risks, and the penalties for failure seem higher here.
"We want wins," Karl LaPan, President and CEO of the Northeast Indiana Innovation Center, said in an interview Wednesday. "We want sure things.
"We probably won’t be swinging for the fences. We’ll just be trying to get to first base."
In risk-tolerant places such as California and Massachusetts, a failed startup can actually be a badge of honor. More startups are encouraged, LaPan said, because "even if they get more failures, they’ll get more successes."
But in Indiana, "failures and pivots and restarts" are frowned upon. "Failure here, there’s almost like a scarlet letter – a life of shame," LaPan said.
Bill Todorovic, an associate professor of small business and entrepreneurship at IPFW, agreed.
"Entrepreneurship is a culture," he said in an interview Thursday, and the culture here does not tolerate those who have startup businesses that go under or who have "new and different ways of doing things."
"We used to have it," Todorovic said. "But we have lost our touch."
The emphasis in Indiana, he said, has to shift to what you could gain through risks, not just what you might lose.
Todorovic faults the community and the media for keeping our goals low: We have difficulty thinking big, he said, because we don’t celebrate our successes.
Cultural conservatism is not the only problem we need to overcome to make Indiana entrepreneur-friendly. The emphasis on raising the average education attainment, improving quality of life and welcoming diversity speaks to a need that new businesses feel keenly: the lack of talented workers to fill challenging positions. "Our ability to generate talent is crucial for startup companies," LaPan said.
All of that leads to a limited pool of "angel investors" with the money to back projects here. "Capital," LaPan said, "is not flowing to Indiana at the rate it is to the hot markets."
But LaPan, whose Innovation Center has a 15-year track record of success in nurturing new businesses, believes northeast Indiana is better-positioned to attract and develop ideas than other parts of the state.
He points to Fort Wayne’s impressive rankings on two national "Best Place to Start a New Business" lists this year: No. 9 on the Forbes List, and No. 11 on WalletHub.
For those who embrace the Farnsworth/Thomas/Surack spirit, those numbers offer hope.