CSG has identified several existing market sectors with particular importance to Indiana and its economy; “clusters of innovation”, which CSG believes will represent attractive investment opportunities for the Program. These clusters of innovation include:

Indiana has developed a vibrant biosciences industry over the last ten years and has become a recognized leader in the advancement of biosciences in the United States. Since 2001, Indiana has increased bioscience jobs by 14% to nearly 60,000. Furthermore, Indiana is one of only two states with a specialized employment concentration in four of the five major subsectors [1] of life sciences. Indiana’s specializations include agricultural feedstock and chemicals; drugs and pharmaceuticals; medical devices and equipment; and bioscience-related distribution. Today, Indiana’s life sciences sector contributes $44 billion to Indiana’s economy and one third of its exports.

Indiana is home to many of the largest life sciences and healthcare technology companies in the world including Eli Lilly and Company, Biomet, Cook Group Inc., Roche Diagnostics and Zimmer. Furthermore, the Indiana University School of Medicine is the second largest medical school in the United States. The Indiana University Research and Technology Corporation has also served as a highly successful business incubator which houses many biosciences companies [2]. By supporting the collaboration between established companies, university researchers and other key stakeholders, Indiana has created a foundation from which it can continue its biosciences growth in the coming years.


Indiana’s information technology sector is one of the most developed in the Midwest and is home to corporate leaders such as Sony Digital Audio, Hitachi, Hurco Companies Inc, ChaCha, ExactTarget and Interactive Intelligence. Support from trade groups such as Indiana-based TechPoint, which promotes technology-based enterprise and economic development through lobbying and government advocacy, educational and networking programs, and strategic economic development initiatives, have helped foster investment and innovation in Indiana’s technology sector. Furthermore, TechPoint seeks growth in Indiana's emerging technology clusters, including advanced manufacturing, logistics, health and life sciences, and information technology.

In order to support technology and telecommunications infrastructure in the state, Indiana passed the Telecommunications Reform Act, which resulted in new investment in broadband and fiber optic networks across the state. Furthermore, the Act deregulated broadband markets allowing for competition between network providers. Indiana’s commitment to more expansive and affordable telecommunications services has also created a more favorable business environment for companies in the state that rely on connectivity to run their businesses.

Over the last ten years there has been $1.3 billion of capital invested in information technology which represents approximately 4% of total equity invested over the same period [3]. Indiana is making progress as it continues to draw information technology and media companies from the traditional tech hotspots on the coasts.


Indiana, with its central location, diverse workforce and long history of manufacturing innovation and development, is well positioned to become a national hub for energy research, development and production. Indiana has benefitted from the increasing focus on alternative energy in the 21st century and has taken advantage of clean energy incentives, such as the federal renewable energy tax credit, to help stimulate growth. Furthermore, Indiana’s world class research institutions, which include Purdue University, Indiana University, the University of Notre Dame, and Rose-Hulman, have given Indiana a sustainable competitive advantage in attracting and supporting advanced alternative energy companies. In addition, Indiana’s economic and development partners have collaborated to create a competitive atmosphere that has boosted growth in the clean technology sector and resulted in the creation of thousands of clean technology jobs.

As a result of Indiana’s drive to the forefront of the new energy economy, Indiana has begun to benefit in the form of new jobs and new businesses focused on innovative energy solutions.   Indiana’s clean energy jobs have grown by over 11% between 2003 and 2010 [4]. Indiana’s government has also been committed to clean energy and was the first state government with electric vehicles in its fleet.

Although the regulatory outlook for Indiana’s alternative energy industry may be uncertain due to the widespread political debate regarding extension of the renewable energy tax credit instituted in 2009, Indiana is continuing to develop alternative sources of energy production. Earlier this summer, Indiana Gasification LLC received approval from the Indiana Department of Environmental Management to begin construction of a $2.8 billion plant in Southwest Indiana that will create hundreds of jobs and lower Indiana’s dependence on outside sources of energy. As shown by its investments in wind, solar, and clean coal, Indiana has embraced an “all of the above” energy policy that should help it grow and sustain energy infrastructure despite possible political issues in the future. 


Agriculture has long been a central part of the Indiana economy.  With over 15 million acres of farmland dedicated to the production of corn, soybeans, hogs, poultry, popcorn, and tomato products, Indiana’s agriculture continues to be a major contributor to the Hoosier economy.  Furthermore, Indiana has made a considerable effort to promote the production of ethanol and biofuels, including those derived from corn and soybeans, in order to capitalize on the growing demand for biofuels and alternative sources of transportation fuel. Indiana’s adoption of a comprehensive clean energy production incentive package has encouraged agricultural investment in Indiana and ensured that agriculture remains a vital part of the Indiana economy. Private equity and venture capital have also played a role in the development of new agriculture technologies in Indiana providing financing to promising new ventures in agriculture and food sciences.

Indiana has a distinct advantage in energy production and distribution due to its feedstock availability, transportation infrastructure and proximity to consumers. Looking to the future, this sector continues to hold tremendous promise as global demand for alternative fuels increase. Furthermore, increased usage by both military and commercial planes as a result of new goals set by the USDA could present a major opportunity for Indiana’s biofuel industry. By 2018 the USDA hopes to replace one billion gallons of the petroleum-based fuel currently used in commercial planes with biofuel. The Air Force alone wants to replace half its jet fuel with biofuels by 2016 [5]. Given Indiana’s position in the biofuels market, it could stand to gain substantially from these USDA guidelines should they be implemented.

Indiana’s leadership in the field of biofuels production and distribution has served as a model for neighboring states as Indiana currently ranks 3rd in the country for public availability of ethanol.  By focusing on the technology of the future and meeting the increasing demand for E85 ethanol and other biofuels, Indiana has positioned itself to grow its $2.5 billion biofuels business [6].


Indiana has long been a stronghold of automotive production with more than one of every ten cars produced in the United States being assembled in Indiana, ranking Indiana as one of the largest auto producing states in the United States According to the United States Bureau of Economic Analysis, Indiana's automotive industry is the second largest in the country, producing more than $9.8 billion in goods annually. Furthermore, the Hoosier State is home to more than 630 automotive companies, including automobile assembly facilities from six different Original Equipment Manufacturers (OEMs), more than any other state [7]. Indiana is home to a plethora of large foreign and domestic auto & auto part manufacturers.

Additionally, foreign investment in Indiana’s motor vehicle manufacturing activity has increased substantially over the last half-decade, particularly from European Union (“EU”) based companies. The estimated EU investment in Indiana in transportation equipment has totaled close to $1.5 billion since 2003. Examples of these foreign investments include $50 million from Rolls Royce for the purpose of designing engine control systems in Indianapolis and ThyssenKrupp, who has invested over $50 million in Indiana for the purposes of producing automotive components, primarily in Terre Haute.

Europe’s investment in Indiana’s motor vehicle industry is likely to increase as European firms take advantage of training grants and tax credits provided by the state. In fact, European firms have cited Indiana’s business climate as a major factor in their decision to invest in the state. The fact that European firms have entered the state at all stages of the automotive supply chain signals that direct investment from Europe will continue to play a role in the growth of Indiana’s automotive sector. 

Over the last few years Indiana’s automotive industry has continued to grow and mature due to Indiana’s business friendly climate and centralized geographic location.  In addition, Indiana has capitalized on new initiatives and technologies that could bring it to the forefront of electric vehicle technology and implementation.  When $2.4 billion in federal stimulus grants aimed at accelerating the United States advanced battery and electric vehicle component industries became available in 2009, $416 million went to Indiana companies and universities focused on increasing the number of advanced hybrid and plug-in vehicles on the road in an ambitious project called Project Plug-IN [8].  As the initiative progressed, companies began to take notice. Toyota Motor Corporation partnered with Duke Energy and Energy Systems Network, the non-profit industry initiative leading Project Plug-IN, on a new pilot project in central Indiana [9]. With recent investments and initiatives to test plug-in technology and electric vehicle infrastructure, Indiana is positioning itself to be a leader in developing and manufacturing plug-in vehicles and their components. 


Indiana has a robust financial services sector with several major investment banks and commercial banks based in the Indianapolis region. In addition to its investment banking infrastructure, Indiana has also relied on commercial and farm loan banks to provide financing to farmers and ethanol producers.



[1] Battelle: Advancing Indiana’s Life Sciences Competitiveness and Strategic Collaborations, Battelle Study for BioCrossroads (May 2012).

[2] Indiana Economic Development Corporation – Life Sciences.

[3] PitchBook – Accessed September 25th, 2012.

[4] Mark Muro, Jonathan Rothwell, and Devshree Saha, “Sizing the Clean Economy,” prepared for The Brookings Institution, 2011.

[5] USDA’s Use of Biofuels Could Benefit Indiana, DiBiase Michael. Indiana Public Media. April 21, 2012.

[6] Fact Sheet: Biofuels Plants in Indiana, Indiana Governor’s Office - Released June 2012.

[7] Indiana Automotive Council Official Website.

[8] Indiana Leading the Nation in Vehicle Electrification – Indianapolis Business Journal Indianapolis Business Journal › May 21, 2012.

[9] Press Release – Energy Systems Network – Aug 22nd, 2012 – Accessed via MarketWatch on September 26, 2012.