Let's talk business.

• Position: Excelerations 1998 - Roundtable discussion of business experts in Indiana - Panel Discussion

Roundtable of Indiana experts on the needs and benefits of high-growth companies.

Why are high-growth, high-potential companies important at all? Why do we focus on them as a particular group? John, I am going to ask you to open that discussion up.

Mutz: It seems to me that in our current society there is a lot of hand wringing, a lot of concern expressed that the world is moving so fast that we are losing, through consolidation and rollup, the companies that used to be the stalwarts in our local economy. And there's no doubt that that's taking place. Rollups succeed because there are economies of scale. Consolidations and mergers take place because of technological changes and a variety of other factors that we really can't control here in Indiana. So when we talk about an economic-development program, we are always interested in the existing base because clearly that's where most of our growth comes from. We don't want to ignore it in our program. But if we don't key in on new starts, fast-growth companies that become stalwarts of the next decade, then it seems to me we miss one of the most important opportunities that we have. If you don't keep your eye on the newest possibility, then you are going to lose out and so that's why my company cares a great deal about high growth and new starts.

McKean: Are there other reasons why they are important in a local or national economy?

S. Johnson: They are important because of the energy they have and generate in the marketplace. That energy is often duplicated by others, and you can achieve a "clustering" effect. In addition, some of these companies are technology innovators and they can develop some significant technology in critical areas. This in turn can provide important employment opportunities for our university's graduates.

Michel: I think the cost of entry into manufacturing, per se, is a lot less today than it was 10 years ago because of technology. I mean it used to be you had to have a large economy of scale to produce a product. The cost of technology has come down so much, and there are interesting analogies, I think. Take the computer chip. If they had made as much progress in the automobile industry as they have in the computer chip, you could drive 10,000 miles on a thimble of gasoline.

I think you see more and more people who go to work with larger companies, for whatever reason, get discouraged - maybe it's a little more bureaucratic - and then they venture out on their own. They are creative and they have the energy and enthusiasm and are willing to take a risk. And the price of taking that risk, getting into an industry that was usually dominated by a large company, is a lot lower and you are going to continue to see that over and over again. I think one of the keys in this state is continuing to attract high-tech companies to this area. I think that's going to be a real engine of growth. Some of the old companies, they won't go away, but they will become less and less dominant in the market in terms of people they hire. So, that's why we are very enthused about the entrepreneur.

Humke: Innovation, regarding technology and so forth, goes beyond that. Entrepreneurial companies have a tremendous value to any community in which they are involved because they look at things differently. They are not married to the way things were done five to 10 years ago. One of the most enjoyable parts of my practice is the fact that 17 other company structures don't compel us to do things "that" way. They want to ask how can we do it differently, how can we do it better, how can we get more profit from fewer resources, and they are always looking for a different way to approach a problem. As a service provider, that's a lot of fun. That translates into the whole economy that they associate with.

McKean: I'm curious, do you think that these companies add to the excitement of an area and build momentum? Is that an important part of what's going on here?

E. Johnson: It's enjoyable to work with entrepreneurial companies because you can see so much happen so quickly. They are usually starting at a lower base and they have so far to go. They are not typically working with a lot of other consultants so you can just see your work result so rapidly. It does make it a lot more enjoyable.

Mutz: I thinks there's a factor that's clearly taking place in those parts of the country that are identified with lots of new business starts or a specific niche of some kind - Austin, Texas, and Cleveland being examples - where they have zeroed in on a certain kind of technology. What's happening there is the brightest young men and women in the country want to be where the other bright people are. You get the economy moving in a certain direction, and I think the old economic-development tools of location and natural resources are now being replaced by human resources. That is the ingredient the difference in the future and so if you can develop a reputation - this is where exciting things are happening, this is where the brightest and best are working on a specific kind of activity - that's something that makes your community a desirable one.

McDonald: From a staffing perspective, an entrepreneurial environment affords an opportunity to have impact, to actually be a part of the building of that company.

S. Johnson: These companies help create excitement in the business community and help build community spirit and pride. But they also need support from a lot of sectors including those represented around this table. They can also bring these support programs together, which helps build further excitement and momentum in support of these high-growth companies.

McKean: How do you recognize the high growth/high potential?

Humke: From the gleam in the eye. You can see a lot of companies and look at the financials. Some look good, others you couldn't figure out if your life depended on it. When you sit with the president of the company and find out the plans, their eyes light up and say "I'm enthusiastic" regarding finances, plans and employees. The spirit can tell the future of the company.

S. Johnson: I agree with Steve, you can often tell by the enthusiasm, energy, passion and spirit of the leaders. Since we work with companies in developing new technology, we also see companies...