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Indiana PYs 2020-2023 Published Approved

Located in:
  • II. Strategic Elements

    The Unified or Combined State Plan must include a Strategic Planning Elements section that analyzes the State’s current economic environment and identifies the State’s overall vision for its workforce development system.  The required elements in this section allow the State to develop data-driven goals for preparing an educated and skilled workforce and to identify successful strategies for aligning workforce development programs to support economic growth.  Unless otherwise noted, all Strategic Planning Elements apply to Combined State Plan partner programs included in the plan as well as to core programs. 

II. a. 1. A. Economic Analysis

The Unified or Combined State Plan must include an analysis of the economic conditions and trends in the State, including sub-State regions and any specific economic areas identified by the State.  This must include—

  • i. Existing Demand Industry Sectors and Occupations

    Provide an analysis of the industries and occupations for which there is existing demand.

  • ii. Emerging Demand Industry Sectors and Occupations

    Provide an analysis of the industries and occupations for which demand is emerging.

  • iii. Employers’ Employment Needs

    With regard to the industry sectors and occupations identified in (A)(i) and (ii), provide an assessment of the employment needs of employers, including a description of the knowledge, skills, and abilities required, including credentials and licenses.

Current Narrative:

(A) Economic Analysis. The Unified or Combined State Plan must include an analysis of the economic conditions and trends in the State, including sub-state regions and any specific economic areas identified by the State. This includes:

(i) Existing Demand Industry Sectors and Occupations. Provide an analysis of the industries and occupations for which there is existing demand.

(ii) Emerging Demand Industry Sectors and Occupations. Provide an analysis of the industries and occupations for which demand is emerging.                                 

(iii) Employers’ Employment Needs. With regard to the industry sectors and occupations identified in (A)(i) and (ii), provide an assessment of the employment needs of employers, including a description of the knowledge, skills, and abilities required, including credentials and licenses.

 

State Economic Overview: Over the last three and a half years, Indiana has been acknowledged as a national leader in economic development. The Pacific Research Institute ranked Indiana as the number one least burdensome state in the country to start a new business.[1] CNBC found Indiana as the number two state in the country in terms of the cost of doing business.[2] Indiana currently holds an AAA Credit Rating. Additionally, Indiana broke economic development records in 2017 and 2018 with a commitment to create over 31,000 jobs and nearly $7.4B in investments in 2018 alone.

In addition to our strong economic development efforts, Indiana’s state government was ranked number one in the country by U.S. News and World Report.[3] The state’s budget has remained balanced for the last 15 years, and there is nearly $2B in reserve. The current environment for continued economic growth is rife with opportunity. 

Indiana’s economy will continue to thrive with the number of supportive initiatives and programs that provide education and training, as well as supportive services, to our target populations. The state is investing in everything from Pre-K through careers to provide Hoosiers and businesses the support they need to prosper. On My Way Pre-K awards grants to 4 year olds from low-income families so that they may have access to a high-quality pre-K program the year before they begin kindergarten. The state’s new high school graduation requirements, Graduation Pathways, will assist in shifting from a one-size-fits-all examination requirement to one in which students can choose the pathways that assist in finding the right fit at the right time for each student. Governor Holcomb’s Next Level Jobs Initiative, which includes an individualized approach with the Workforce Ready Grant program and an employer-led initiative with the Employer Training Grant program is helping Hoosiers gain the necessary skills to move into high-wage, high-demand jobs.. Each of these programs provides recent high school graduates and returning adults opportunities to access shorter term education and training programs aligned to Indiana’s priority sectors. Taking advantage of these programs, or any number of other opportunities to complete a postsecondary education, will enhance one’s ability to have the requisite knowledge, skills, and abilities for career advancement in the 21st Century economy.

The Indiana economy includes a rapid expansion within the tech sector and is home to the third most collegiate graduates in STEM related fields in the nation. To help continue and support this growth, Governor Holcomb supported and advocated for legislation requiring computer science be taught throughout grades K-12. Other initiatives, such as The Last Mile, which connects offenders with high-value credentials and access to employers for job recruitment before they ever leave campus, also help support the state’s growing tech sector.

Indiana is also home to one of the country’s most flourishing philanthropic communities. Indiana became the second state to be named a Skillful State by the Markle Foundation. This means investments by Wal-Mart, Microsoft, Lumina, and other philanthropies, non-profits, and foundations join an already vibrant philanthropic presence in Indiana. These investments, along with a more coordinated approach across other state and federal programs, provide Indiana with a unique opportunity to serve a number of target populations more effectively and efficiently, propelling more Hoosiers toward economic prosperity.

Existing Demand and Employment: The largest private sector industry in Indiana is manufacturing. This accounts for nearly 28% of the state’s Gross Domestic Product (GDP). Financial services, business and professional services, healthcare, and government round out the top five industries in Indiana based solely on GDP. Agriculture continues to be another leading industry in Indiana, as we rank in the top ten for the number of farms and agricultural exports. Indiana ranks in the top five in the production of: ducks, popcorn, ice cream, tomatoes, pumpkins, turkeys, corn, soybeans, watermelons, and hogs.

From 2013 to 2018, total employment grew by 202,652 jobs (7.1%) overall for all industries, including both public and private employment. This is measured from the Quarterly Census of Employment and Wages, annual average employer reported data. This is the most recent full year of data at the time of this report. QCEW is the best measure of true employment levels, from which other surveys (such as the CES cited in the introduction) are benchmarked annually. The chart highlights the employment growth and decline in Indiana by sector. As shown, over the most recent five year period, over half (54%) of the increase in jobs bas been in three sectors in Indiana:

  • Manufacturing has seen the largest growth in raw numbers with gains of 50,097 or 25% of the total jobs gained since 2013. This sector remains the largest increase in the recovery of total jobs of all industries. Manufacturing had a growth rate of 10.2% as an industry for Indiana and pays wages greater than average, with average weekly wages of $1,205 during 2018.
  • Healthcare and Social Services increased by 36,376 jobs or 18% of the growth since 2013. Healthcare and social assistance facilities have grown by 9.0% in the last 5 years with an increase of 36,376 jobs. This sector growth includes physicians’ offices, hospitals, and a wide range of providers. Wages in this industry increased by 11.6% in 2018 to an average weekly wage of $1,036.
  • Transportation and Warehousing gained 22,565 jobs or 11% of the jobs gained since 2013.[4] Transportation and Warehousing has grown by 22,565 from 2013-2018. This industry has also been a target for economic development for several years. This industry grew by 17.2% during this five year period. The average weekly wages for Transportation and Warehousing were at $902 for 2018.
     
    The remainder of job growth was in the following sectors:
  • Professional and Technical Services has shown healthy growth from 2013 to 2018. This is an industry that will be key to Indiana’s future. Among the industries this sector contains are Legal Services, Architectural and Engineering, Research and Development, and Computer Systems Design and Related Services. Many of these areas have been the focus of Indiana’s recent economic development. The sector has grown 17,224 jobs at a 16.8% gain over the past five years. The average weekly wages for 2018 for this sector are above the state average at $1,340.
  • The Construction industry grew by 17,760 or 14.4% between 2013 and 2018. This sector’s growth slowed early in the economic recovery but has gained momentum in recent years. The average weekly wages for this industry are at $1,123 for 2018.
  • Administrative Support and Waste Services has grown by 14,443 over this 5 year period at a rate of 8.2%. Gains have been dominated by growth in temporary employment services. Once concentrated in office support or manufacturing, recent growth indicates employment services now provide temporary labor to a wide variety of industries throughout the state. Wages for these industries vary widely, and the weekly averages may include part time workers. During 2018 the average weekly wage for this industry sector was $635.
  • The Accommodation and Food Service industries have grown at a rate of 7.2% since 2013, adding 18,154 jobs. While many of these jobs are lower- or middle-wage jobs, growth in these industries indicates an increase in consumer spending and confidence and may indicate positive economic trends for the state. This industry includes many part time workers, and average weekly wages were just $320 during 2018.
     
    The following industries are among those that have shown employment declines over the time frame from 2013 to 2018. This is based on the annual average estimates from QCEW and includes public and private jobs:
  • Information saw the biggest declines over this 5 year period. This sector declined by over 6,000 jobs from 2013 to 2018. This was a decline of over 15%.
  • Utilities is one of the smaller industries in Indiana. From 2013 to 2018 the sector declined by 263 jobs and a -1.6%. Utilities are also one of the higher paying industries and had a weekly wage of $1,789 in 2018.
  • Mining is the smallest industrial sector in Indiana. Over the 2013 to 2018 time frame this industry lost 749 jobs or a loss of -11.2% of its total. Mining does have a very high average wage of $1,355 but wage growth has also stalled in this industry.
Indiana annual average employment by industry

 

In looking at the employment changes by Industry from 2018 to 2019 outlined in the chart below, we can see that nearly every sector saw employment growth. Currently, there are approximately 100,000 job postings across the state. Nearly 40% of those postings are located in the Indianapolis metro area (workforce regions 5 and 12). However, there are at least 2,500 current postings in each workforce region.[5] The employment growth that we have seen throughout the state over the last 6 years demonstrates the need for continued focus on increasing our labor force participation rate and ensuring that Hoosiers receive career coaching and navigation regardless of when they interact with talent development system. By pairing an individual’s career interests with the appropriate education and training, we will have the talent pool necessary for continued economic growth.

IN employment change over the month, year-to-date and over the year

[6]

 

Identifying Occupational Needs: Indiana utilizes an occupational ranking methodology to rank each of its approximate 800 occupations. This ranking methodology incorporates projected short-term (2 year) openings, long-term (10 year) openings, and wages by which to sort all occupations. Job seekers, employers, educators, counselors, parents, and other workforce partners can visit the Indiana Career Ready to see which occupations are available now and which occupations are projected to grow in the future. Some of the occupations ranked the highest using this methodology are listed below.

  • Accountants
  • Immunologists
  • Auditors
  • Automotive Engineers
  • Financial Managers
  • General and Operations Managers
  • Health Services Managers
  • Industrial Engineers
  • Management Analysts
  • Mechanical Engineers
  • Medical Assistants
  • Nurses
  • Nurse Practitioners
  • Physicians
  • Software Developers

 

The entire list of occupations and their projected outlook can be found here.

The GWC is examining the current occupational ranking methodology. There are some programs, such as the Workforce Ready Grant, that receive funding based upon the occupations for which an individual may pursue after completing their chosen education and training program. Only the programs that include occupations that are ranked high enough using the occupational ranking methodology are eligible for funding. As such, the methodology is under review to determine if it makes sense to continue to fund programs in this way and to confirm that the elements within the methodology guarantee alignment to the changing state of Indiana’s economy. Based on analysis of occupational projections data (including supply, demand, and wages), Indiana has identified six priority sectors for continued economic growth. Those are: advanced manufacturing, agriculture, building and construction, health and life science, information technology and business services, and transportation and logistics.

As technology and innovation continue to transform the landscape of all industries, this presents a unique opportunity for the Hoosier economy. Historically, Indiana has lagged behind the nation in terms of educational attainment. This has created an environment in which the availability of jobs has been tied closely to recessionary contractions. As demonstrated below, the density of routine jobs with predictable and repetitive physical and cognitive tasks in Indiana was quite high in 1980 and continues to be high to today.

 

Routine occupation share of employment by commuting zone, 1980Average automation potential by state, 2016

 

Routine jobs transcend all industry sectors and all education levels. While we continue to see growth during this unprecedented economic expansion, now is the time for the state, employers, and individuals to invest in new skills that will endure the next economic downturn. By embracing technological changes and innovation and by leveraging programs that are easily accessible to employers and employees, we can begin to insulate Hoosiers from the cyclical vulnerabilities that might arise because of our reliance on occupations that are at risk to automation. As outlined in Automation and Artificial Intelligence: How machines are affecting people and place, Indiana is the state that is most susceptible to automation.

Automation potential, US States

 [7]
 

New Opportunities for Continued Economic Growth: While the number of jobs available and the wages of Indiana’s workers has continued to improve over the past several years, more can be done to improve the economic outlook of our state and the personal prosperity of Indiana’s citizens. In December 2018, the Metropolitan Policy Program at Brookings released, Advancing Opportunity in Central Indiana. This report focused on Central Indiana, but laid the foundation for a larger statewide study and analysis that is currently underway. An analysis of the types of jobs that exist in Central Indiana identified that roughly half of all jobs were “good” and “promising.” Good jobs provide middle-class wages and benefits. Promising jobs are entry-level jobs that, while they do not provide the pay or benefits of a good job, enable the workers who hold them to reach a good job within 10 years.[8] While we have seen employment growth in nearly every sector across the state, more can be done to grow the types of jobs that allow for economic mobility and career advancement.

Increasing the education attainment across the state provides an opportunity for economic growth and personal prosperity. According to the Commission for Higher Education’s Return on Investment report, higher education not only improves individual outcomes, it also helps build stronger communities and strengthens the economy. Over the course of a lifetime, each class of Indiana public college graduates contributes at least $13 billion or more in additional spending and tax revenue to the economy compared to Hoosiers with only a high school diploma.[9] This has been recognized at all levels of state government by creating opportunities to meet individuals where they are along their career path to provide access to additional education and training opportunities to help advance their career.

Investment in our state’s educational attainment can also be paired with capital investments to spark new innovations that cut across all industries to drive economic growth. The state’s NextLevel Fund has a mission to make targeted investments in Indiana venture capital funds and businesses to generate competitive investment performance as well as support increased entrepreneurship and innovation across the state. As illustrated below, Indiana compares favorably to neighboring states for the amount of per capita venture capital investments. Venture capital investments tend to be targeted at technologies that can drive economic growth and wages by way of specialized knowledge and skills and human capital.

Venture capital investments of regional states

[10]

 

Both characteristics—higher educational attainment and venture capital investment—illustrate opportunities for Hoosier leaders to focus. With positive change, Indiana could drive its labor force in a direction better suited to acclimate to the inevitability of cyclical unemployment turbulence. Artificial intelligence, robotics, and a host of other important areas will increasingly become the topics of economic opportunity and the main drivers in business investment, while freeing production demands from labor pools that are unavailable.[11] The state’s focus on both raising educational attainment and increasing venture capital investments bodes well for diversifying our economy and increasing opportunities for Hoosiers to have more economic mobility.

By continuing to promote higher education attainment and making investments in new innovative companies that drive new types of economic growth, there will be opportunities for the emergence of new occupations and industries across the state. The Cabinet can work with employers, state agencies, sector organizations, and education institutions to align and promote the necessary skills for these opportunities.  

Skills for a Changing Economy: The skills necessary for the changing economy will continue to rely on transferrable and durable skills that we continue to hear are needed by employers. Skills such as critical thinking, problem solving, communication, and collaboration will only continue to be more important as the world gets smaller due to the globalization of the economy. Indiana has focused on these employability skills through policies and legislation enacted the past several years. Demonstration of these employability skills through a project-based, service-based, or work-based learning experience is now a requirement within Indiana’s Graduation Pathways and employability skill standards have been developed for grades K through 12.

In addition to these skills, more advanced technical skills will be necessary as technology continues to transform the way in which work is done. According to Brad Rhorer, Chief Talent Programs Officer at Conexus Indiana, manufacturing is a leading industry that is being impacted by automation and robotics. “When I started into the industry nearly 30 years ago, we had a lot of manual welding and hands working on the different pieces of equipment. Now, we have a lot of robotics and other technologies to improve the production of our products. … You’ve still got workers that remember what mom and dad or grandma and grandpa’s life was like in manufacturing. In some cases it was tough. It was dark. It was dirty and kind of dingy. But with innovation and technology now, it looks like a different industry in many ways. A lot of people still have the wrong perception of what manufacturing and logistics is.”[12] Manufacturers today need multi-functional engineering technicians who possess traditional and technology-enhanced manufacturing and engineering skills, along with transferrable skills such as communication and collaboration. Manufacturing is not the only industry in Indiana impacted by these changes. Each industry is adjusting to the pace of change and a more highly-skilled workforce is necessary to keep Indiana globally competitive.

 

[1] Pacific Research Institute. The 50-State Small Business Regulation Index.

[2] CNBC, 2019. Top States for Business.

[3] Indy Star, 2017. Why Indiana’s government ranked No 1.

[4] Indiana Department of Workforce Development: Indiana Economic Analysis Report.

[5] IndianaCareerConnect.com. February 2020 Job Postings by Economic Growth Region and County.

[6] Data represent the January 2018 to January 2019 time period.

[7] Metropolitan Policy Program at Brookings Institution, 2019. Automation and Artificial Intelligence.

[8] Metropolitan Policy Program at Brookings. Advancing Opportunity in Central Indiana, 2018.

[9] Commission for Higher Education, 2018. Return on Investment Report.

[10] This illustrates the amount of venture capital dollars per capita in U.S. and neighboring states.

[11] Indiana Business Research Center. Indiana’s Outlook for 2020.

[12] Weise, Michelle R., Hanson, Andrew R., and Saleh, Yustina. The New Geography of Skills: Regional Skill Shapes for the New Learning Ecosystem. Indianapolis, IN: Strada Institute for the Future of Work, 2019.