Study: Regional Cities Initiative generated $1.6B in economic impact
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A new analysis from the Center for Business and Economic Research at Ball State University shows Indiana’s Regional Cities Initiative created a major economic impact throughout the state.
The $126 million initiative was launched in 2015 by then-Gov. Mike Pence, with three regions—northeast, north central and southwest Indiana—selected for funding to support various economic development projects designed to enhance quality of life, stimulate economic growth and attract talent.
The study found that the Regional Cities program fostered “significant” private and public investment across the state, to the tune of $1.6 billion.
Co-author Mike Hicks told Inside INdiana Business the initiative created a natural experiment between the regions that received funding and those that fell short.
“What we were able to determine using sort of causal analysis techniques is that we saw a small but not statistically significant bump in GDP and population in these counties,” said Hicks. “But what we really saw was a pretty reasonable spike in employment, about 1,000 jobs per year in each of those places, over the steady horizon.”
The study examined the impact of the initiative from its inception through 2019. The funding awarded through the program support a variety of projects throughout the three regions, such as The Post House in Evansville, the Ash Skyline Tower in Fort Wayne, and the revitalization of Hotel Elkhart.
Hicks said the initiative also fostered community collaboration among local entities that hadn’t been seen at that scale before.
“The places that are doing well today have two or more decades of history of local elected officials meeting councils of government [and] economic development organizations that are regional—they’re not just one county or one city—and then engaging citizens from all walks of life,” he said.
The study found that the regions that received funding saw an estimated $37 million in GDP growth per year, with approximately 8,000 new residents expected to move to those counties due to the initiative.
“What we saw in the three targeted locations…all three of those places grew faster than the state as a whole,” said Hicks. “The intent of the program was to cause the cities to attract people, to attract jobs by improving quality of life, not paying businesses to relocate. All of those things occurred.”
Hicks noted that the long-term effect of Regional Cities could still be another decade away, and the researchers expect the grant recipients will continue to benefit from the program.
“This analysis implies that well-targeted, place-based programs with substantial input from local communities can positively influence the economic outcomes of a region,” Co-author Dr. Dagney Faulk said in written remarks.
The Regional Cities Initiative served as the precursor to Gov. Eric Holcomb’s Regional Economic Acceleration and Development Initiative, or READI, which is now in its second iteration.
Hicks said READI expanded the scope of what regional collaboration could look like.
“The Holcomb administration had cities and regions self organize, create plans, work through and talk to all the folks in the community, not just the business leaders or not just elected officials, but all sorts of constituent groups,” he said. “And I think what we saw were really much better plans from regions than we saw in Regional Cities.”
Indiana Economic Development Corp. Senior Vice President Mark Wasky provided the following statement to Inside INdiana Business following the report’s release:
“We are thrilled to see the tremendous and continued economic impact of the Indiana Regional Cities Initiative and the state’s focus on improving quality of place and building vibrant communities. The enthusiasm for and the early results we saw from the Indiana Regional Cities Initiative were largely the impetus for Governor Holcomb’s Indiana Regional Acceleration and Development Initiative, which is allocating an unprecedented $1 billion to investing in quality of life, quality of place and quality of opportunity statewide. This study reaffirms what we know to be true – that the state taking a leadership role in making quality of place a priority is aligning communities to invest strategically in their futures, spurring additional public and private investment, and positively impacting economic and community growth. We look forward to this trend growing even more as READI investments take off and can’t wait to see how these efforts improve the lives of Hoosiers for generations to come.“
You can connect to the full study by clicking here.