You'll have to excuse Larry Wallman and his friend, Noel Atkinson, for being skeptical. Larry and Noel hear the same reports that the rest of us do about how Central Indiana is competing with other states to become a center for biotechnology. They are familiar with reports praising the economic vision and determination of our politicians and business leaders. But when they hear these reports, Larry and Noel have their doubts.
It wasn't so long ago that Indianapolis was known for the prowess in electronics.
It's not that Larry and Noel want to be wet blankets. The problem is that they have spent most of their professional lives working in the electronics industry here in Indianapolis - and they feel like they're members of an endangered species.
Now, before we go any farther with this story, it might be worthwhile to stop and remind ourselves that it wasn't so long ago that Indianapolis was known for its prowess in electronics. Companies like RCA, Regency, Mallory, Western Electric, Bell Labs, Magnavox, Arvin and Electra all had operations here. The transistor radio, pocket calculator, early video games, the color VCR, bearcat scanner, your car's cruise control, the nation's air traffic control system, the first one mega-bit computer memory chip and the electronic controls for your microwave oven all had their origins in Indiana.
"Indianapolis was one of the most vibrant centers for electronics in the country and the world," Larry says. "We employed almost 25,000 people in the field. Today, its 2,500 and we're the laughingstock of the nation."
Larry and Noel don't exactly look as if they've stepped out of an iPod commercial. But they're far from being over-the-hill. They were here when innovative electronics were being developed in Indianapolis. And they've watched in disbelief as the city and state let this industry get away. As Larry puts it, "They've never understood the electronics industry, so they ignored it."
According to Noel, who himself has been involved in the development of six patents dealing with avionics, the cordless phone and radio scanning technologies, Indiana has lost over 325 electronics companies and 95,000 jobs over the past 25 years. Policymakers in Indiana have tried to explain away these losses by saying that the jobs these firms represented went to other countries. Larry and Noel say these policymakers are in denial. In fact, 75 percent of these companies moved to states with higher taxes and costs of doing business.
It's this history that makes these guys so skeptical about the odds for success when it comes to biotech. "Electronics is pervasive in everything we do," Noel observes. "You can bet your life that the Guidant defibrillator and pacemaker products have computer chips at the heart of their designs. The electronics industry is the foundation of all high technology, and all main bio/life science clusters are first and foremost electronics based, such as North Carolina's Research Triangle Park and Silicon Valley."
Larry and Noel believe that Indiana still has the infrastructure in place to support a successful electronics industry. But they think the state and city's emphasis on life-sciences, IT, advanced manufacturing and logistics/warehousing will prove to be an ineffective formula without the presence of a major electronics anchor. Indiana, they claim, should make its first priority the attraction of a major computer chip/semiconductor manufacturing plant.
These plants typically cost about $2 billion to $3 billion and employ approximately 2,000 people. It is estimated that, given the on-going demand for new electronics, there will be a need for 35 of these plants in the U.S. in the next five years. Other states have launched major initiatives to land one or more of these plants and it's easy to see why. They become catalysts for clusters of related businesses. A $3 billion Motorola plant in Richmond, Va., attracted 175 new companies in two years. Austin, Phoenix and Albuquerque have experienced similar growth spurts following the establishment of major chip plants.
What really gets Larry and Noel is the way that Indiana policymakers have tried to pass off pedestrian business ventures as high-tech breakthroughs. True high-tech, Noel says, is the actual creation and development of technologies. It is not merely using computers or other appliances to accomplish tasks. Indiana's wishing that credit card processing, phone bill auditing, publishing and Web page development from canned software counts as high-tech business does not make it so. The Purdue Research Park, Larry says, has insurance companies, an appliance repair parts warehouse, a radio station, a bank, a TV station and an accounting firm. It's the same age as the Research Triangle Park in North Carolina, which has 4,200 true high-tech employees.
Ask Larry and Noel why they think our government and business leaders let our electronics industry all but disappear and they get quiet. What's happened doesn't make sense. At times it seems as if Indiana's leadership class has simply given up on the rest of us. "After all," Noel says finally, referring to the state's most recent swap of an electronics plant for a warehouse facility, "we've got a new warehouse in Marion."