State rallying troops to increase Department of Defense spending in Indiana

Reaching Gov. Eric Holcomb’s goal of tripling federal defense spending in Indiana by 2025 is going to take significant collaboration, industry experts say, but the state is on its way.

Holcomb has made defense development a top priority, adding it to his Next Level 2020 agenda and tasking the Indiana Economic Development Corp. with achieving the aggressive goal: increasing Department of Defense spending in Indiana from $3.4 billion to $10.2 billion in the next five years.

During the inaugural Indiana Defense Summit, a program presented Friday morning by the state, IBJ and the National Defense Industrial Association Greater Indiana Chapter, Major General Omer Tooley Jr. told attendees it’s going to take partnerships and collaboration among all involved to reach Holcomb’s lofty goal.

The event brought together key stakeholders, state and federal officials and businesses innovating within the sector. They included Lisa Hershman, chief management officer for the Department of Defense; Indiana Sen. Todd Young; and company representatives from Rolls-Royce, Pierce Aerospace and Pruv Mobility Ecosystem.

Tooley was appointed by Holcomb to lead the Indiana Office of Defense Development, a business unit of the Indiana Economic Development Corp., and is helping to spearhead the effort.

He told attendees Indiana reached peak defense spending in 2008, when 1,000 Indiana companies had active contracts with the defense department, accounting for $7 billion in obligations.

Last year, Indiana companies captured $4.6 billion in obligations, ranking 23rd in the nation. More than 600 companies had active contracts in 2019.

To achieve Holcomb’s goal, the office of defense development can work to increase federal defense employee pay in Indiana and/or the amount of products and services the department of defense buys. The latter will be easier, he said.

Currently, the Department of Defense is moving from a 20th century defense model to a 21st century one, creating an opportunity for Indiana to grab a larger piece of total spending–so long as it adjusts to the department’s needs.

To elevate Indiana products and services, the state must differentiate itself, he said. It will need to create an ecosystem capable of delivering optimal solutions to the defense department and help Indiana companies win more defense contracts.

The Indiana Office of Defense Development is preparing now to build a digital platform that reduces the barriers that exist between businesses and the DoD, especially small businesses. It’s also planning to build a lab and product demonstration/staging environment that allows the state to reduce the risk of failure and elevate Indiana products and services to an experiential level.

“We’re going to do this through collaboration and with public private partnerships,” he said. “We’re going to build this thing as we fly. … Our objective is by July of next year to have a fully deployable, fully operational, industry 4.0 innovation ecosystem in play.”

It’ll take a combined effort of thousands of people to move the needle for Indiana in the defense market space, he said.

“We’re really convinced that repositioning Indiana as a national leader, on a national and international level, really relies on working together in a collaborative fashion in order to transform Indiana’s defense innovation and industrial base.”