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KSM Blog | Katz, Sapper & Miller CPA

Keep Indiana Growing

Posted 3:10 PM by

A few cities in the United States are synonymous with booming growth. These areas, such as Silicon Valley and Austin, Texas, have built much of their success on the back of technology developments. However, a recent Kauffman study, "The Ascent of America's High-Growth Companies," which analyzes the geography and founder mobility of Inc. 500 firms, indicates high-growth companies are not relegated to locating in areas infamous for high-growth. Instead, the study finds cities such as Indianapolis, Salt Lake City, and Buffalo are not only perfectly capable of housing high-growth companies, but are successfully doing so. 

In a recent Indianapolis Business Journal article, "National Shift in 2012 Signals Opportunity Ahead for Indiana Tech," by Mike Langellier, CEO of TechPoint, Langellier points out only five other metro areas produced more Inc. 500 high-growth businesses per capita than Indy in the past 10 years.  

The Kauffman study also finds that the founders of these Inc. 500 companies often choose to stick close to the roots they developed in college. However, 75 percent of Inc. 500 founders start their firms in locations other than the metro area where they last earned a degree. In his article, Langellier points out that Indiana has some great universities and ranks second in attracting out-of-state students. The problem is, 80 percent leave the area once they graduate. Based on the Kauffman report, it is not as if these graduates are necessarily leaving for the coasts and beach weather as some might assume.While these founders are mobile, they often don't travel too far. Sixty-seven percent of the founders prefer to abide in the same region as where they earned that last degree. What does this mean? Indianapolis isn't necessarily competing with Silicon Valley and Austin.  Instead, Indy may be competing with Louisville, Chicago and Cincinnati to retain the talent produced from our in-state colleges and universities.

Wherever the competition, it is imperative to Indianapolis’ growing technology-based companies to retain the talent coming out of Indiana institutions.

About the Author
Charles Decker is a member of Katz, Sapper & Miller’s Tax Department. Charles is responsible for compliance and technical review of federal tax issues. He provides analytical research and planning services in the areas of individual and business taxation. Connect with him on LinkedIn.

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