Why Indianapolis & Indiana Need Each Other to Win
I’ve been writing about how greater Indianapolis communities need to think as a region to succeed. The Indianapolis region is a single economy and labor market, and needs the scale of the whole region to achieve the needed labor market thickness and support the amenities required to compete.
But regional thinking in Indianapolis is required for Indiana as a whole to be successful as a state. This in turn is important for the Indy region. Indianapolis is not a place like New York City or Minneapolis-St. Paul which are big enough to impose their will on their states, and independent enough that they can succeed without the rest of their states.
Indianapolis and Indiana need each other in order to win. And a regionally-minded Indianapolis plays a big role in that. I previously linked to a chart from a Brookings Institution report showing the job growth in different size tiers of cities.
Regions of one million or more have been doing the best since 2010, with regions in the 250,000 to one million holding their own. There’s no guarantee this will continue into the future, however. But remember, as I previously wrote, larger places in general do have some advantages in adapting to the 21st century post-industrial knowledge economy.
We see this playing out in Indiana. Indiana has one large metro area of more than a million people entirely within its borders, Indianapolis. However, Indiana counties are part of three other large metro areas with a population more than one million: Chicago, Cincinnati, and Louisville. And Indiana has three regional midsized metros in that 250,000 to one million range: Fort Wayne, South Bend, and Evansville.
So quite a bit of Indiana’s geography is part of an urban region that should be well positioned to benefit from these competitive trends. If we draw these as regions on the map, we see them here:
This is Indiana’s economic geography rendered as a map of regions that are advantaged by present day trends. We are already seeing this map emerge in the data about the state. Here’s a map of recent county population growth from the Indiana Business Research Center (IBRC) at the IU Kelley School of Business. Blue is growth and orange is decline.
We see the strongest growth near Indianapolis and Louisville, with other growth clusters around Fort Wayne, South Bend, and Evansville. Look where the counties experiencing decline are. They are roughly in two bands, one stretching from northeast to east central Indiana, and the other along the western edge of the state. Those orange bands are the gaps in the regions, the parts of the state that are too far away for easy commuting to one of these advantaged large- or medium-sized regions.
We see this even more starkly in a map of projected changes in the size of labor force between 2015 and 2025 that the IRBC released in 2018.
Again, blue is growth and orange is decline. This chart illustrates the demographic challenges facing the state. Between 2010 and 2018, 57 out of Indiana’s 92 counties lost population. Population decline or stagnation shows up in the labor force statistics, and potentially in a bigger way because of our aging population. People who retire exit the labor force but may continue to live where they always have. This chart shows that.
Ultimately the size of the labor force puts a cap on how many jobs the state and its communities can attract. It’s hard to grow jobs over the long term if your labor force, the number of potential employees in a region, is declining.
We see on this IBRC map that labor force growth in Indiana is going to be concentrated almost exclusively in these large- and medium-sized urban regions. Only a few counties outside of these regions are projected to increase the size of their labor force.
Now plenty of counties inside these regions are also experiencing demographic challenges. And I don’t think we have to accept the current trends or future forecasts as a given. We can and should look to re-write these maps over time.
But when it comes to maximizing Indiana’s chances to make that happen, connecting as much of the state as possible to these advantaged large- and medium-sized regions is important.
Having a strong region around Indianapolis is especially important, because it is the only large metro area located entirely within the state, and whose regional center is within the state. And as I also previously wrote, at its greatest extent, the Indianapolis region covers about half of the state’s population, stretching from Cass and Miami Counties in the north to Lawrence County in the south and from the Illinois to the Ohio state lines. So for those communities, Indianapolis is the only proximate economically advantaged region for which they can connect.
If the rest of Indiana fails, it’s hard to see how Indianapolis ends up being successful. Conversely, it’s tough to see how Indiana thrives if the Indianapolis region in its various definitions does not. Other regions in the state need to do their part in becoming as successful as they can be, but for about half of Indiana, connecting to and making greater Indianapolis a highly successful region is the best route to local success as well.
