Tech Firms Driving Local Economic Growth

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StartupBlocks

By Jimmy Clark
JLL Indianapolis

If you’re at all in tune with the Indianapolis business climate, you know as well as I do that tech companies have been dominating the Indy Star and IBJ headlines as of late.

Whether it’s a recent cash infusion from a venture capital partner (see Salesvue), rapid job creation (see hc1.com), or a shake-up in the executive suite (see ExactTarget), these companies are making all sorts of moves. On the surface, it’s relatively obvious what types of benefits these companies provide to the Indianapolis economy – adding jobs, bringing top young talent to the area, increasing the tax base, and creating more efficient B2B and B2C capabilities – but what about on other levels?

A recent Blackstone op/ed piece by Vice Chairman Byron Wien regarding the current state of the national economy points out that “productivity is not increasing” and that “earnings have been growing at 5% to 10% over the past few years even though the economy has been growing at less than 3%”. There are ways to combat the disparity between these two figures, one of which being an overall increase in the economy’s health. However, another more controllable way is to increase the effect that technological advances have in our community. Tech companies both large and small can make a significant impact on productivity measures and therefore put our economy in a less exposed position.

President Obama has mentioned in previous State of the Union addresses that more needs to be done to help American entrepreneurs and small business owners. Unfortunately, several contributing factors as to why the startup rate is so low at the moment have to do with Washington’s policies since the 2008 financial crisis. As policies (hopefully) become less stringent as the economy is now in much better shape, we should start seeing more incentives for entrepreneurs.

Here in Indiana, a state that is in a superb financial position, tech companies currently doing business here can enjoy tax incentives based on job creation and capital investment. Hopefully this will only lead to other entrepreneurs deciding to start their new business here as opposed to other, less stable states in the Midwest. The overall end goal here is keeping tech companies happy, so they can continue their work helping to grow the local, state and national economies organically.

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