Indiana should think regionally to boost economic, population growth, says analysis

Topic: Miller College of Business

February 17, 2015

Indiana would boost economic growth by crafting policies to strengthen key regional cities and nearby suburban communities, attracting new businesses and households, says a new white paper from Ball State University.

Regional Cities, Small Towns and Rural Places: Policy Issues for Indiana,” a study by the university’s Center for Business and Economic Research (CBER), explains how small towns can better connect to cities, how regional efforts play a role in growing the state’s population and which policies may best help Indiana move forward.

Despite a decade of state policy reforms that have considerably brightened Indiana’s prospects, prosperity is concentrated in only a few places, said CBER director Michael Hicks, who co-authored the study with David Terrell and Richard Heupel, members of the university’s Building Better Communities division.

“Over the past decade, only a dozen of Indiana’s counties have enjoyed population growth that is greater than the nation as a whole,” Hicks said. “Fifty Indiana counties are in relative decline, seeing population and income grow more slowly than the nation, while 30 Hoosier counties are losing people, wealth and earnings.

“The rapidly growing places in Indiana are concentrated in and around metropolitan areas. Less than an hour’s drive from some of Indiana’s most steeply declining communities are some of the fastest and most dynamically growing places in the world. For example, Hamilton County, which still boasts numerous farms and small towns, is enjoying population and personal income growth that places it in the company of the most affluent counties in the Washington, D.C., area and New York.”

To boost regional development, the study recommends:

  • Agencies making regionally specific investments to promote population and commercial growth should consider linkages across municipal and county boundaries.
  • State government should prioritize integration with regions where business attraction and retention efforts are consolidated or have fully integrated services.
  • State agencies should merit funding and operational efforts to entities that have connected regionally.

Hicks said that by thinking regionally, Indiana could boost economic development by connecting larger communities with strong labor markets in surrounding rural and suburban areas, where the vast majority of population growth is occurring.

Hicks points out that Indiana consistently ranks high with respect to business climate measures and has climbed into the highest levels of performance over the past decade, but improvement has not translated into higher incomes and population growth for the state.

“The reason for this is that Indiana clearly has too few places that attract sufficient households to benefit from urban job growth and amenities, known as agglomeration,” Hicks said. “These improvements will materially benefit the non-urban core, surrounding small towns, suburbs and rural places, which can offer amenities and residential options to households who work in larger urban centers. State policy must promote the development of government and private sector linkages within these regions, and all state efforts to improve quality of place and human capital should focus on regions that place significant resources towards these efforts.”

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