The gap between per capita personal income in northeast Indiana and the United States was $8,657 in 2016. A year later the gap amounted to $9,095, according to recently released data.
Figures for last year released by the Bureau of Economic Analysis showed the region’s per capita personal income grew faster than in recent years, but because the growth lagged the nation’s slightly, it wasn’t helping with the region’s goal of narrowing the gap.
“Because the Regional Partnership uses a relational measure — regional PCPI against national PCPI — local income has to exceed the rate of growth of our national counterparts for northeast Indiana to get ahead on this metric,” said Rachel Blakeman, director of Purdue University Fort Wayne’s Community Research Institute.
That’s a tall task, but it’s not impossible.
“CRI’s position is that raising wages is the most available mechanism to raise PCPI in Northeast Indiana,” she said. “Therefore, strategies that create jobs with above-average wages or increase the pay of existing workers are necessary to move this measure up.”
Increasing skills within the region’s workforce by improving its educational attainment levels can help with this.
Indiana has a problem of college graduates leaving the state, but “northeast Indiana does not have that problem,” Blakeman said. “If we can align the educational offerings at area colleges and universities with the local workforce, we’re in good shape.”
PCPI is important for the region because it tells how much income is flowing, on average, to all the individuals of a population in the form of wages, entitlements such as social security, and some types of investments and business ownership.
It is particularly useful because it measures income beyond wages and has been tracked for a long time, going back to 1969. It provides the most complete picture of a region’s economy when used in combination with median household income and average wage data, Blakeman said.
Data from the bureau show northeast Indiana’s PCPI increased 3.3 percent to $42,545 last year as the nation’s rose 3.6 percent to $51,640. Allen County’s grew 3.5 percent to $44,525.
The data show the region is making great strides to increase prosperity but must do more to compete with other regions for jobs in high-growth industries that pay high wages, said John Sampson, president and CEO of the Northeast Indiana Regional Partnership.
The region has identified target industries for special economic development efforts based on their employment growth and higher-than-average wage scales.
“These industries are particularly important because they sell goods or services outside of Northeast Indiana which means they generate new wealth by bringing dollars in from outside the region, rather than recirculating money and wealth that already existed or originated here,” Sampson said in an email.
The careful and analytical approach to the selection of clusters allows economic development efforts to be aligned to the region’s core strengths of employers, skilled talent and infrastructure.
“This assures that valuable but limited resources are put to best use in the retention and expansion of existing employers or the attraction of new employers,” he said. “This applies to resources such as education, workforce development and infrastructure.”
For example, Warsaw is the world capital for the orthopedic device industry. And while the regional partnership has aligned programs and infrastructure to the needs of medical device firms, it does not align resources to companies in pharmaceuticals, given a lack of regional employers or research in that field.
“As the region succeeds in meeting the rapidly changing needs of the core industries, our residents are better educated, trained and prepared to take advancing skill and paid positions,” Sampson said. “Great examples of this progression clearly exist in orthopedics, specialty insurance and vehicle manufacturing. Each of these industries is experiencing and adapting to disruptive technologies in their fields, and our region must adapt as well.”
Institutions of higher education can help with this when they are well-connected and responding to employer trends of the future.
“The hard reality is that employer needs are changing rapidly,” Sampson said.
If higher education is not connected and aligned, student success will devolve to the mission of only graduating students and not equipping students with skills and experience that can be employed.
“Our region is committed to making every effort to connecting higher ed to the current and future needs of employers to make sure that graduates are prepared to be employed successfully,” Sampson said.
The Regional Partnership has built a collaborative of university executives under the identity of the Northeast Indiana Colleges and Universities to foster higher education alignment and connection to the needs of employers now and in the future.
In addition to offerings that help develop important professional skills for the region’s talent pool, its colleges and universities have been teaching students how to start and grow businesses.
An entrepreneurial ecosystem page in the Vision section of the regional partnership’s website says it helped raise $760,000 to establish Elevate Ventures in northeast Indiana, and for every dollar invested in the program, the region has received a $47 return.
Elevate Ventures provides startup funding and business development help for young companies with high growth potential.
“A brief review of the history of current regional employers reveals how the determination and courage of entrepreneurs and the firms they started led to huge impacts in the growth of northeast Indiana’s economy,” Sampson said.
Our region’s list of successful startups includes the now well-known names like Steel Dynamics, Fort Wayne Metals, Vera Bradley and Sweetwater.
“If you continue to look throughout northeast Indiana, you’ll find Metal Technologies, Ford Meter Box, 80/20, Tempus Technologies and many others,” he said. “Clearly, regional efforts to support founders of technology startups will pay dividends for years to come as they have in the past.”
In addition to increasing PCPI, the regional partnership’s Vision 2030 framework supports collaborative regional efforts to improve educational attainment and boost population growth.