World class: smaller Indiana companies building global markets with innovative products.

• Author: Hromadka, Erik
• Position: INTERNATIONAL BUSINESS - Cover story

INTERNATIONAL BUSINESS is increasingly becoming part of Indiana business as Hoosiers find record markets for their products overseas and foreign investment in the state continue to grow.

Indiana exports rose to a record $21.5 billion in 2005, with its 12 percent increase outpacing the national average and making the state the 11th-largest exporter in the country, according to data from the Indiana Business Research Center and the Kelley School of Business at Indiana University

International business has almost doubled the state's exports during the past 10 years and Indiana now sells products to 198 countries around the globe. The state's exports are led by trade with Canada, by far the state's main destination for products, with $9.5 billion of exports in 2005. However, the state's economy is also being boosted by a 42 percent annual growth in exports to China and more than 20 percent growth in exports to France, Australia and Korea.

Not surprising, vehicles and machinery continue to top the list of Indiana exports. However, pharmaceutical products are a rapidly growing area with an annual increase in exports of almost 47 percent, mostly to countries in Europe.

"Certainly the trend is heading in the right direction," say Steve Akard, director of international business for the Indiana Economic Development Corp. He notes that international markets have brought both competition and opportunity to Indiana companies.

"Explore export markets," Akard advises. "There's growth potential there and to remain competitive in a global market, you need to think globally."

SOUNDING OUT FOREIGN MARKETS

One company that understands the importance of international business is Klipsch Audio Technologies, a leading global manufacturer of high-performance loudspeakers that is headquartered in Indianapolis.

Klipsch, which was formed in 1946, may be an unlikely candidate for an international success story, as the consumer-electronics marketplace has seen drastic turmoil and countless failures. Yet its founder's vision continues as the unique Klipschorn is the only speaker to remain in continuous production for 60 years and the company now has worldwide operations.

That global perspective is much to the credit of Indianapolis businessman Fred Klipsch, who has a background in health care and real estate. Klipsch was intrigued by the loudspeaker his second cousin had invented and decided to visit the company's operations in Arkansas in 1989. At the time, the company...