A Roadmap to Inclusive Growth

by Thomas P. Healy

Income inequality is a roadblock to economic development progress for cities and regions across the country.

But not in Indianapolis. A new set of practices and policies called the Inclusive Incentives Roadmap [PDF] establishes a framework to deliberately advance inclusive growth as an integral component of economic development goals.

For example, each incentivized job must pay a minimum of $18 per hour and provide healthcare benefits. Subsidy recipients are expected to allocate 5% of the total to workforce training, transit, and childcare. Emphasis is also placed on local hiring and Minority/Women/Veteran/Disadvantaged business enterprise status.

Speaking at the July 25 launch of the Roadmap at Ivy Tech’s Midtown campus, Mayor Joe Hogsett said the initiative “repositions incentive programs to advance a more equitable and inclusive economy.”

Relying on four key pillars—business growth, physical investment, skills development, and support systems—the Roadmap aims to address ongoing racial and economic disparity by incentivizing responsible development, and broadening education access. “True prosperity in Indianapolis must exclude no one,” Hogsett said.

The Roadmap is a product of collaboration between the Hogsett administration and the Indy Chamber in conjunction with a diverse working group of partners from public, nonprofit, community development, and education sectors.

Local Initiatives Support Corporation (LISC) is one of the nonprofit partners. Executive director Tedd Grain said this is the perfect strategy for this moment in time for Indianapolis: “We now have a business case for inclusive growth.” The timing is fortuitous given Indy’s low unemployment rate and a workforce shortage. “Right now we have the luxury and opportunity to pivot our economic development efforts to make sure to attract the right types of companies that actually have living-wage jobs, that have health care, and do it in a way that actually connects them more to community efforts,” he said.

Grain mentions a 2016 Brookings Institution study that found that 72% of job creation in the country came from 1% of businesses—small businesses with 10 to 30 employees. “If you’re talking about actual job creation—not just jobs moving around—then this is the strategy. What the Roadmap does is it incentivizes those smaller job-creating businesses. That’s huge.”

Deputy mayor for community development Jeff Bennett agrees. “We all want to hit a home run—the 1,000 job announcement—that’s great. But 10 jobs here, 20 jobs there add up really quickly and those jobs are more sustainable.”

He said the Roadmap grew out of conversations about ways to attract jobs back to where they once were—in the middle of neighborhoods. “As the economy changed, the jobs went away, and the neighborhoods suffered.” Those jobs required neither a college degree nor a car. “A strategy around putting the right jobs back to where jobs were has become a philosophy that will carry us into the next century,” Bennett said.

TARGETED INVESTMENT

The Roadmap includes provisions for cataloging all publicly owned properties in the city and guiding private investment to distressed areas. LISC’s Grain calls this a key criterion. “It’s not just any job, not just any business, not just the size of business—all those matter. It’s also where the business is located that matters. If you don’t get jobs in proximity to people who need them, in the right place, in the right neighborhood, then a lot of this effort will not be as successful as it ought to be.”

Indy Chamber CEO Michael Huber said all businesses seeking support to relocate here or to expand existing operations will be introduced to the Roadmap. “When you’re negotiating incentives you’re not likely to have that moment again, so can you enter into a conversation with the company,” he said. “If a company is going to receive incentives, we’re going to expect them to make investments in workforce and/or childcare, and to support mechanisms that help more and more people access jobs.”

He said the Roadmap is so important because it not only gives the city another tool to address workforce gaps but also “makes a statement about who we are as a city: These are our values.”

Many of the partners see the “values” piece as an important way for Indy to differentiate itself from peer cities. And no element of the Roadmap is a stronger expression of those values than the Community Impact Network. “It is going to be a key component because that will be the connectors, the warm handshakes,” said deputy mayor of economic development Angela Smith Jones. “It says we’re here to partner with you to make great connections so everybody wins.”

Jeff Bennett adds that since the City is going to ask more of the business community, they cannot be expected to figure things out on their own. That’s where the Community Impact Network enters the picture. “It is the entity that can provide wraparound services for the business community to think about the types of programs that may benefit their workforce at the same time benefiting the entire community: access to transit, access to childcare, access to a trained workforce.”

This approach also adds transparency to a process that is often opaque, according to Ian Nicolini, vice president of Indianapolis Economic Development (Develop Indy). Develop Indy is a business unit of the Indy Chamber that partners with the Department of Metropolitan Development to lead the City’s incentive programs, including tax abatements and training grants. “We’re not just telling companies ‘you shall do this!’ but saying ‘this is what you’ve said matters to you, to your workforce. We’ve got great partners that can help you make that a reality.’”

All of the partners are committed to the long-term strategy of building a more inclusive economy. “One of the great things about Indianapolis is it’s a great, welcoming place,” Nicolini said. “Everyone talks about Hoosier Hospitality. We’re a city of great neighborhoods. This is the time where we have to put our money where our mouth is.”

A version of this article appeared in the August/September 2019 issue of the magazine.

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