‘Innovation orchestrator’ boosts Indiana’s economic development

Behind many of the state’s economic development and innovation aspirations is a Bloomington-based not-for-profit helping to craft its strategies, funnel federal dollars to high-value sectors and provide industry expertise needed to persuade companies to invest in Indiana.

Through a partnership formalized in 2022, the not-for-profit Applied Research Institute and the Indiana Economic Development Corp. are working closely to develop long-term strategies and run multimillion-dollar programs, including the state’s three federal tech hub designations.

“Our role is to take a proven innovation framework, littered with some innovation best practices, and deploy that across these ecosystems we support to really drive intentional innovation,” said Brooke Pyne, ARI executive vice president of innovation and strategy.

Established in 2015, ARI considers itself an “innovation orchestrator,” which means it convenes stakeholders in academia, industry and government to design networks—or what leaders now call an ecosystem—to spur innovation through collaboration. ARI uses its model to serve clients, which include the IEDC, the federal government, universities and often companies in areas like defense, energy, technology and more.

ARI views itself as a neutral third party in efforts to make those connections—but it’s no third party when it comes to a primary goal: promoting the state and even the Midwest as the region competes for economic development opportunities.

Therefore, the not-for-profit’s leadership is interwoven with the IEDC and Gov. Eric Holcomb’s administration.

ARI CEO David Roberts was the IEDC’s chief innovation officer until December 2022, when he left to join ARI. ARI’s board includes Holcomb and two IEDC board members. ARI leaders joined the IEDC and Holcomb on their 10-day microelectronics trade trip to France, Belgium and the Netherlands this month.

The IEDC’s partnership with ARI comes after the agency decided to make a concerted effort to tackle entrepreneurship and innovation, said David Watkins, the IEDC’s senior vice president of entrepreneurship and small business. Working with outside organizations like ARI can help tackle those issues in ways that are more difficult for government to do alone, he said.

“That effort really led us to some key programmatic developments and new public-private partnerships,” he said, “but also revealed some areas where the state needed to explore additional opportunities to build broad-based coalitions—not just in Indiana, but in the greater Midwest—in order to capture real federal opportunities for transformational change.”

ARI “works hand in glove” with the IEDC, said Andrew Kossack, ARI’s executive vice president for partnerships and its general counsel. He described ARI as the “state’s innovation partner” with a “neutral third-party posture.”

The hub of hubs

The most fruitful shared endeavor thus far is ARI’s work as a petitioner and organizer behind each of the state’s three federally designated tech hubs: the Silicon Crossroads Microelectronics Commons Hub focused on microelectronics, the Heartland BioWorks Hub capitalizing on the state’s biotech sector and the Midwest Alliance for Clean Hydrogen Hub.

Congress authorized creation of the hubs as part of the 2022 CHIPS and Science Act. Backed by billions in federal funds, the hubs are intended to encourage innovation and domestic production of technologies that are key to economic and national security. The hubs establish networks of diverse members to address needs and innovations in specific categories, such as microelectronics, clean hydrogen production and biotech.

The federal government took applications for hubs from coalitions across the country—and ARI took a lead in creating the collaborations for Indiana and other states and organizations in the region.

Being a part of winning bids for three hubs is the highest participation for any state, state and ARI leaders said.

“Being designated as a hub … is a great reflection of how collaborative our state is,” Pyne said. “That’s a point we, as a state, should be really proud of.”

The federal government structures the funding for each hub slightly differently, but each Indiana-affiliated hub has a significant potential financial upside. The Silicon Crossroads Hub was awarded $33 million in September to launch workforce development programs and buy equipment; it’s awaiting word on additional funding to kickstart research projects.

The Heartland BioWorks Hub is also waiting to hear what its funding package will look like. The Hydrogen Hub could receive upwards of $1 billion in grant funding.

While ARI is leading the hub program, Watkins said the IEDC plays a role in allocating the money. He said the agency participates in making sure the research and the way the federal dollars are spent ultimately leads to commercialization of technology and growth.

And Watkins said a goal is to ensure that the hubs don’t just disappear after a few years but rather continue to increase investment, collaboration and innovation.

In many parts of the country, hubs are led by universities. But Indiana officials say they prefer using a not-for-profit, in part because it’s easier for a third party to convene industry stakeholders in a nonthreatening way.

Kossack said ARI is always looking at the bigger picture of how Indiana fits into an industry’s national and international fabric and how coordinating with stakeholders outside the state, especially with Midwestern neighbors, will help fulfill larger missions.

“It’s a little bit easier for somebody from Michigan or Illinois to partner with the Applied Research Institute than the Indiana Economic Development Corp.,” Kossack said. “This neutral third-party posture that we can take—that will be a little less threatening to maybe folks outside the state borders and who are still going to advance Indiana’s interests.”

Courting companies

But ARI’s work expands beyond convening existing companies and organizations for work on federal projects and priorities. It is also helping the state attract companies to Indiana.

“ARI provides us at the IEDC with a level of industry expertise that makes us all the more effective when we go to secure companies that are looking at investment, particularly in these economies of the future,” Watkins told IBJ. “We can rely on our partners at ARI to play a supporting role in helping us understand those opportunities and the technologies at play.”

Other “innovation enabler” programs the two organizations partner on include INForm, which helps companies navigate the federal Small Business Technology Transfer and Small Business Innovation Research funding programs, and the Innovation Voucher Program, which offers state grants to firms that need help with research, testing or similar initiatives.

ARI has its hand in several other large-scale initiatives and programs with similar goals of growing the state’s economy. Pyne said the group has a “bird’s eye view” of how the pieces in different ecosystems move around and is working to unite the state with opportunities they see looming.

“Not only can we help tie all those high-level things together, but now we have a couple of these executional programs that bleed through all of them that we have at our fingertips,” Pyne said. “So it really starts to unite in a different way than what we’ve seen before.”•