Indiana's economic report card: C.

• Author: Barkey, Patrick M.
• Position: Indiana Indicators

Indiana is a state with some sharp differences that set us apart even from our Midwest neighbors. That's surprising, since there aren't any mountain ranges or large bodies of water that separate us from the states closest to us. But something in our development helped create a state with a more homogeneous population, a more production-oriented workforce and a more frugal mindset toward government than what you find in most other Midwest states. And, not surprising, the differences between Indiana and states in some other regions of the country are wider still.

Those differences come through in rankings of economic performance, such as the Development Report Card for the states recently released by the Corporation for Enterprise Development, a Washington D.C.-based think tank. The report's bottom line isn't exactly front-page news-Indiana received a "C" grade overall in 2002-but the data and the various rankings that go into this result do provide food for thought.

Many of the report's individual measures depict aspects of the economy that we can be very proud of. We're a state of homeowners, judged by the high rates of homeownership here. Differences in income between rich and poor are less severe here than in many other states. Our manufacturing-intensive employment base gives us a relatively high proportion of households covered by some kind of health insurance. And the report put infant mortality in Indiana as second-best in the nation last year.

We fare worse when compared against our peers in terms of employment and wage growth. That's hardly news to those of us who have followed the state's economic fortunes of late, or to those who are counting state government tax receipts.

What is particularly interesting about CED's report is its inclusion of a number of performance measures that attempt to assess what might broadly be termed "innovation." By looking at such things as funds spent on research and development, the number of patents issued and even the number of businesses spun out of a research university's operations, the report usefully reminds us that the levels of these important, future-oriented activities are not evenly spread among states.

Unfortunately, this is a case where simple rankings fail to communicate disparities. Indiana might take some comfort in its middle-of-the-pack ranking on some of these measures, were it not for the fact that leaders are so far out ahead. For example, the...