In August 2010, this magazine wrote about the launch of a program called "Conexus Indiana," which officials at the time called the first statewide initiative to promote logistics opportunities and to integrate logistics with four other economic disciplines, notably workforce development. The latter connection was critical to job creation in a state that was struggling with a 10.2-percent unemployment rate.
Fast forward nearly seven years. What began with 36 logistics executives identifying ways to combine infrastructure needs, workforce development requirements, and public policy imperatives has mushroomed into a small army of 220. Work that originated on a statewide level has expanded into Indiana's regions and counties, with six regional logistics councils. But one thing has remained the same: The state that pioneered the use of logistics to attract business investment and push economic growth is still the only state doing it, according to David Holt, who has headed Conexus' logistics council from the start. Its success, according to Holt, is based on the idea that the private sector leads and the public sector holds back until it is appropriate to follow.
Holt recently spoke with Mark B. Solomon, DCV's executive editor-news, about Conexus' evolution, why other states haven't copied its approach, and how the group communicates the strengths of Indiana's assets—such as having more "pass-through" interstate surface arteries and being closer to the U.S. population's mid-point than any other state.
Q: How did Conexus Indiana get started?
A: We were founded by the Central Indiana Corporate Partnership, which had five economic clusters, one of them being logistics. We were seeded with a $3 million grant from the (Eli) Lilly Endowment. That was used for workforce development and allowed us to begin communicating with logistics executives about the role they could play in helping the state support their companies. I was brought in with a background in transportation and workforce development. I had also worked at the White House and in Congress, so I understood the nuances of the political process and its impact on industry.
In 2008, we created an educational curriculum of logistics and advanced manufacturing, and began connecting with schools to build interest and participation. We divided Indiana into three regions—North, Central, and South—and we partnered with high-level logistics executives around the state. We went to market in 2010 with a statewide logistics plan that basically identified all logistics needs for the next 30 years.
Q: Where is the organization today?
A: The executives we are involved with have always been volunteers, and we have far more of them today. Our expanded roster was vital in helping us begin the next major phase of our work, which was to help coordinate projects on a local level. The six regional logistics councils drafted infrastructure plans that identified road needs of all 92 counties. We delivered the plan to INDOT (the Indiana Department of Transportation), which it funneled to our General Assembly. The General Assembly is now debating mechanisms to fund about $2 billion per year in road infrastructure, maintenance, and new capacity projects.
We have also expanded our efforts in workforce development, especially when it comes to working with universities. We have worked to get high school students and students attending (two-year) junior colleges interested in the field. We have endorsed logistics curriculums at Ball State University and the University of Evansville. We send executives to business schools to talk to students about getting logistics degrees. We will then bus interested students to logistics companies so they can get a feel for the work at these facilities.
Q: You played a role in helping reroute westbound intermodal traffic from the Chicago area to Indiana, where it could be moved via rail faster and more cheaply to the Port of Prince Rupert in Vancouver, B.C. You also helped scotch a state tax rule that would have discouraged companies from relocating to Indiana. Yet you consider Conexus' mission, and the council's role in it, to be that of a catalyst rather than an initiator. How does that square with those two achievements?
A: Those efforts came from the private sector. Conexus is more of a connecting point. We come up with ideas, and the private sector drives the work. We connect the ideas to the right people. If you build, design, and make available the assets so our economic developers can support our companies, then the state can attract new companies because we have what they need. For example, when a transport funding bill was up for debate, the chairman of the House transportation committee asked Conexus to identify people to testify. We asked a real estate developer, who testified about what would be needed to attract warehouse and distribution center development to the state.
We don't have any hard data to illustrate how our work has generated economic benefits. Any data would come from the Indiana Economic Development Corp. (IEDC), which does the deals. Sometimes IEDC will bring us in, but most deals have confidentiality agreements, and we are not privy to the information in them.
Q: Why haven't other states replicated your efforts?
A: I've visited a number of states, and they ask me how we've done it. I tell them that our state made the decision to let the private sector lead and that it would follow up with the necessary implementation that only government can do. States have this idea that economic development needs to run through the government. But that throws up a roadblock. The private sector has a skeptical view of government's lead role. As a result, it will be reluctant to share information. Our experience has been that when the private sector leads, it will be more willing to share ideas, resources, and best practices. In our state, it comes down to the private sector getting together and saying with a collective voice, "This is what we need to make it happen."
That said, we've had tremendous backing during the past seven years from governors Mitch Daniels and (current Vice President) Mike Pence. Both administrations understood the value of Indiana's location on the map and were extraordinarily engaged in making logistics work for the state's economy and its people.
Q: So what is your message to other states?
A: That the private sector, when brought together, can solve a lot of problems. It does take leadership to bring them together, and that's where an organization like Conexus, which has long experience working with the public and private sectors, can be a valuable asset. We have people who can connect with executives, who understand the industries they work in, and who can demonstrate how logistics activities benefit their companies and the state. The key is getting the private sector's commitment. If they grasp the benefits for their company, you will get great engagement.
Gartner, Inc.
