Motorsports, a Halo Industry for Indianapolis
With the 500 Mile Race about to kick off on Sunday, the world’s attention will once again be focused on Indy. As I previously wrote, because of motorsports, Indy is a city known on a first name basis around the world.
But motorsports in Indianapolis is not just a race that people know about all over the world. It’s also an important local industry. A 2004 study by Drew Klacik at the IU Policy Institute found that over 400 firms employs 8,800 people at an average salary of $48,359. That’s as many people as worked at Western Electric back in the day. While these numbers are a bit dated, it’s safe to say motorsports still economically important here.
But the importance of motorsports goes beyond just the number of employees, which is smaller than in any number of other local industries. Motorsports is very important as a “halo industry” for Indianapolis.
In the auto industry, a halo car is a limited production, very expensive model that doesn’t sell a lot of units but embodies the best of the brand’s attributes and demonstrates its technical capabilities, making drivers salivate over a car they may never get to drive. (Auto companies participating in racing do the same thing).
Cities can have similar halo industries as well. The haute couture of Paris’ fashion world both operates as a halo product for their houses — helping to drive sales of ready to wear and very profitable perfume lines — and also for the city of Paris itself. Country music has a similar role for Nashville. And the horse breeding and racing industry is the same for Lexington, Kentucky.
These industries don’t just serve to brand a city, the also can become something of a distilled essence that helps capture and affirm the best attributes of a place, which can then be imbued more widely into other aspects of the community.
In Nashville, the idea of “making it” as a country music star can become translated into an aspiration of making it in life in general in Nashville, and stamping the city as a creative capital even though the city’s major industry is the more prosaic one of healthcare.
Motorsports is that halo industry for Indianapolis. It provides a marquee event that creates a positive image of the city around the globe. It is a sophisticated industry of small, high tech, artisan producers that is probably the most international in the city. It has vast potential for tourism that is yet to be tapped. Just think of the way people visit the Bourbon Trail or the horse farms around Lexington, Kentucky, for example. And it embodies many attributes or values that can shape the community around it: competition, speed, tradition, etc.
Auto racing helps shape how the community thinks about itself. Just ask whether if not for the history of the 500 Mile Race (and high school basketball), Indianapolis would ever have set out to become the amateur sports capital of the world, or had the global mindset necessary to think of the Pan Am Games as a vehicle for that. There’s possibly even a connection between auto racing and the outsized high tech success Indianapolis has had. There are a number of parallels between racing companies and high tech startups: smaller initial sizes, fast moving technology, international teams, competition and drive to win, etc.
In short, the auto racing industry is important economically to the city, but its halo effect makes its impact even greater than its direct employment. It’s something a lot of other cities would kill to have.
