2009 TechPoint Public Policy Agenda

Technology Policy to Transform Indiana's Economy

TechPoint continues to be committed to growing Indiana’s high-tech industries and diversifying our economy through entrepreneurship, a mission we’ve pursued from the origins of our initiative in the 1980s. Success in the 21st century economy will be enjoyed by states and regions with a skilled, educated workforce, a critical mass of high-tech innovation and the ability to accelerate the movement of new ideas into the marketplace: TechPoint is a catalyst for helping Indiana build these competitive advantages.

Within this broader context, we’ve not lost sight of our core purpose – the development of Indiana’s technology industry, a sector that has generated more than $1 billion in new Hoosier wealth creation and reinvestment over the past decade. TechPoint today serves as the preeminent voice for Indiana's growing technology-based economy, including a strong role in public policy advocacy.

Over the last several years, Indiana's elected officials have made significant public policy changes that have strengthened our position in the New Economy:

Favorable tax treatment for software purchases;
A permanent research and development tax credit at 15%;
Property tax abatements on information technology and transportation, distribution, and logistics equipment; and
Favorable tax treatment for patents developed in Indiana, among many others.

We achieve these results in part by advocating for progressive policy changes that enhance technology-based enterprise and employment in Indiana. TechPoint is grateful that much has been achieved thanks to bi-partisan support of past agenda items. However, we remain mindful that the only constant in today’s economy is change, and that we must remain proactive and stay on the cutting-edge of pro-technology, pro-innovation policy development..

To that end, TechPoint's 2009 agenda addresses these broad issues:

Economic Development Tools
Economic development today is a fierce competition for new jobs and investment. The success of our economic development initiatives will depend on constant innovation to stay ahead of jurisdictions that are working to emulate our success. The State of Indiana needs to continue to create a favorable tax environment and incentives that embrace the new economy.

Research & Development Investment
Research and development ("R&D") by Indiana's business, academic, and public sectors is critical to innovation, new investment, and our State's future economic growth. Wherever you find dynamic economic progress, you will almost always find it is a product of vigorous R&D activity by a combination of private enterprise and universities.

Education
Indiana, like the rest of the U.S., has fallen behind other industrialized nations in educating workers in the technical fields – science, technology, engineering, and math (STEM). This has become a serious economic hurdle for new economy companies, and it starts with K-12 education and continues at the university level.

Workforce Development
Connected to the quality of our educational system is the ongoing challenge of preparing our workforce for specific high-tech careers today – and tomorrow. In today's economy, jobs go where the skilled people are, not the other way around. The quality and availability of the workforce are at the top of the list in nearly every business investment decision, especially expansion and relocation. Simply stated, the condition of our workforce will determine our economic future.

Digital Infrastructure
Like the canals and roadways that spurred commerce in the past, fiber optics and 100-megabit per second broadband connections are the critical commercial infrastructure of the future. TechPoint renews its call for universal and reliable broadband connections to all Indiana homes and businesses. While much has been done to change the regulatory environment, Indiana can do better with respect to last mile connections and investments in next-generation fiber optics.

Capital Formation
Like the rest of the nation, access to capital for Indiana entrepreneurs, particularly early-stage capital, continues to be the most pressing challenge to financing new Indiana business investment and job creation, especially in capital-intensive, technology-based enterprises. Indiana must renew its commitment to foster the creation and growth of new, creative partnerships to help capital flow into Indiana.

Public Policy Recommendations for 2009

The following outlines TechPoint's public policy recommendations for 2009 within the broad categories described above:

Economic Development Tools Policy Recommendations:

Pass enabling language defining how the High Growth Fund may be used to recruit high-tech workers and aggressively use the money to grow the tech sector
Business investment decisions require an environment of certainty and predictability. Therefore, we encourage legislators and state officials to oppose any attempt to repeal or reduce successful economic development incentives or initiatives enacted in past sessions.
Encourage companies to retain and grow jobs in Indiana through "in-sourcing" high-wage, high-skill jobs.
Indiana's reliance on personal property tax is disproportionately large compared to neighboring states that do not have a personal property tax. Enact a pilot project to eliminate personal property tax in designated districts to help these areas continue to diversify our economy and reclaim unused assets into high-wage jobs.
Consider amenity-style economic development incentives, such as retail, entertainment venues, markets or arts districts, to improve quality of life of Hoosier communities and to compete with other states.

Research & Development Investment Policy Recommendations:

Restore the appropriation to the 21st Century Research and Development fund to its historical level of $75 million. Leverage this investment by bonding for $1 billion in R&D/growth capital funds for start-up companies, using the existing Fund appropriations for debt service.
Allow businesses to sell unused R&D tax credits to other users, increasing the availability of capital for further R&D activity and other entrepreneurial business investment.

Education Policy Recommendations:

Continue to increase the attainment of bachelor degrees by supporting the Hoosier College Promise plan, a program that would provide Indiana high school graduates with more affordable access to higher education.
Provide increased support for K -12 science, technology, engineering, and mathematics instruction while creating incentives for exemplary students to pursue science and mathematics instruction careers. This support should include the Governor's plan to help teachers by offering them a tax credit for supplies they purchase for their classrooms as well as the Woodrow Wilson teaching fellowship for STEM higher education students who obtain a masters in teaching and who will commit to teaching three years in urban and rural schools districts.
Develop STEM literacy in all students which will prepare them for entering college prepared to graduate with a STEM degree by increasing the use of research-based, inquiry-centered K-12 science classroom curricular materials. STEM literacy will also prepare students for success in algebra and the rigorous study of mathematics and increase the numbers of students passing STEM-related AP courses.
All virtual learning programs offered in Indiana high schools should be based on state standards and those virtual programs should be taught by state-certified teachers.
Promote 21st century learning in Indiana by planning and making progress towards a one-to-one computing environment for all students.
Support the expansion of New Tech schools in the State of Indiana.
Permit computing technologies and digital resources to be substituted for textbooks at local option.

Workforce Development Policy Recommendations:

Provide Indiana employers with a tax credit or tax deduction so that they may subsidize tuition costs for employees pursuing certificates and associate's degrees at select education institutions.
Stop the brain drain by providing a tax credit or tax deduction to small and medium-sized companies who hire and retain interns and new graduates in the STEM-disciplines (science, technology, engineering, and mathematics). Link potential opportunities to job-matching and intern databases.
Pass a joint resolution urging the U.S. Congress to reform visa and immigration policies (i.e. the expansion of H-1B visas) to help companies acquire the high-skill talent they need when they cannot find qualified workers domestically.
Adequately fund the unemployment compensation fund without putting an disproportionate burden on small employers.

Digital Infrastructure Policy Recommendations:

Connect the "I-Light" fiber optic network to Indiana colleges and universities by July 1, 2009.
Keep “last mile” connections and new generation investments for universal and reliable high-speed Internet access an urgent public policy goal while allowing the market to direct deployment of high-speed communications with de minimis government interference.

Capital Formation Policy Recommendations:

Implement a program using contingent tax credits or tax deductions to entice private investors to put money into a fund that would invest in new businesses that commit to establishing a presence in Indiana.
Promote creative state policies that spur international capital markets to choose Indiana to make investments during all stages of a company's development.

Call to Action:

TechPoint calls on the Administration and the Indiana General Assembly to adopt the progressive, transformational public policies – many outlined in this agenda – necessary to achieve our common goal of making Indiana a global leader in entrepreneur-driven, technology-based economic development that will create high-wage jobs for Hoosiers.

TechPoint Public Policy Agenda Key Contacts:

Ron Brumbarger                                                     Jim Jay                                Mark Shublak
Board Member                                                         President & CEO               Partner
TechPoint                                                                 TechPoint                            Ice Miller LLP
Ron.brumbarger@bitwisesolutions.com          jjay@techpoint.org            Shublak@icemiller.com
(317) 805-4376 x 221                                            (317) 275-2083                  (317) 236-5981