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March 4, 2011 Presentation to the Indiana Economic Development Association
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The Indiana Business Growth NetworkThe Indiana Business Growth Network
IEDA Annual Meeting, Indianapolis
March 5, 2011
Scott HutchesonPurdue Extension
Purdue Center for Regional Development
Successful Communities Build Networks to Support Business Growth
Focus BOTH on new enterprises (entrepreneurship) and helping existing businesses grow.
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
Which Are “Growth” Businesses?
• BBQ Restaurant
• Local Drycleaner
• Beauty Shop
• Personal Trainer
• Mini Blind Manufacturer
• Medical Device Developer
Growing Businesses Are Innovative Businesses
• An innovative business introduces new products and/or processes each year
• Only 15% of businesses are typically innovators – usually have high growth trajectory
Growth & Innovation Can Come from Unexpected Places
• A BBQ restaurant starts bottling and selling sauce• A dry cleaners develops a new “green” process
and licenses the new process• A beauty shop develops a new way to train
stylists and goes nationwide
http://www.acenetworks.org/upload_files/file/Regional%20Flavor%20June.pdf
Growth & Innovation Can Happen Anywhere
Helena, MontanaPink Gloves Boxing
A Tale of Two Growth Companies
A Tale of Two Growth CompaniesA Tale of Two Growth Companies
• Founded in Washington (State) in 1971
• Initial investment - less than $8,000
• 2006 sales were $7.8 billion
• Created 145,800 jobs
• This is their founder
A Tale of Two Growth CompaniesA Tale of Two Growth Companies
• Founded in Washington (State) in 1971
• Initial investment - less than $8,000
• 2006 sales were $7.8 billion
• Created 145,800 jobs
• This is their founder
• This is their logo
A Tale of Two Growth CompaniesA Tale of Two Growth Companies
• Founded in Washington (State) in 1971
• Initial investment - less than $8,000
• 2006 sales were $7.8 billion
• Created 145,800 jobs
• This is their founder
• This is their logo
A Tale of Two Growth CompaniesA Tale of Two Growth Companies
• Founded in Indiana in 1985
• Initial investment - less than $2,000
• 2006 sales were $1 billion
• Created 14,743 jobs
• This is their founder
A Tale of Two Growth CompaniesA Tale of Two Growth Companies
• Founded in Indiana in 1985
• Initial investment - less than $2,000
• 2006 sales were $1 billion
• Created 14,743 jobs
• This is their founder
• This is their logo
A Big Difference Between A Big Difference Between Starbucks and Papa John’sStarbucks and Papa John’s
A Big Difference Between A Big Difference Between Starbucks and Papa John’sStarbucks and Papa John’s
The Billion $ Question
What makes a community a great place for businesses to grow?
Understanding Business Growth
Stage 4 (500+ Employees)
Stage 3 (100-499 Employees)
Stage 2 (10-99 Employees)
Stage 1 (1-9 Employees)
Second-Stage Businesses
• Privately-held businesses• 10-99 employees • Revenue of $750,000 to $10 million• Dealing with growth issues instead of
survival issues• Intent and capacity to keep growing
Second-Stage Firms in Indiana
Establishments Jobs
MSA 2006 2008 2006 2008
Self-Employed 34.5% 36.1% 5.7% 6.4%
Stage 1 (1-9) 55.4% 55.7% 28.9% 30.6%
Stage 2 (10-99) 9.5% 7.7% 36.9% 35.9%
Stage 3 (100-499) 0.5% 0.4% 15.4% 14.8%
Stage 4 (500+) 0.07% 0.05% 13.1% 12.3%
YourEconomy.org – Edward Lowe Foundation
Focusing on Business Growth is Something New
Business Attraction • Cheap land• Cheap labor• Cheap taxes• Cheap utilities
Business Growth• Information• Infrastructure• Networks
What “Information” Do Second Stage Firms Need?
• Help in articulating and realigning with their Core Business Strategy
• Market Intelligence to answer important questions
• Guidance on search engine optimization and effective use of social media
• Leadership & management team development to make sure people are slotted right
Success in Littleton• Littleton, CO developed and began to
execute the strategy in 1989• Focused on “wealth” creation not “job”
creation• Eliminated all incentives and tax breaks for
business recruitment• Since 1989, more than doubled the number
of jobs from 15,000 to 35,000• Sales tax revenue tripled from $6.8 million to
$19.6 million
Indiana Business Growth Network
• IBGN is a growing network of business- support organizations (Purdue, SBDC, LEDOs) piloting economic gardening and other business-growth tools with two regions currently engaged:– North Central Indiana (Greater Lafayette and
Greater Kokomo– Central Indiana
Example IBGN Projects• Analytical Test Laboratory needed
information about global competitors and ideas to attract more potential customers to their website
• Manufacturer needed list of potential customers that meet certain criteria including a commitment to sustainability
Adding Business Growth to Your Strategy Portfolio
• Investing in Business Growth services to help your community’s Second Stage companies grow.
• Demonstrate Value to a new group of companies in your community
For More InformationFor More InformationScott Hutcheson
Purdue Extension & Purdue Center for Regional Development
Burton D. Morgan Center for Entrepreneurship1207 W. State Street, Room 227
765-494-7273 (office)765-479-7704 (mobile)