Here’s a breakdown of factors industry leaders and experts said helped contribute to the state becoming a tech magnet.
(TNS) -- Indiana has emerged as a tech haven in the past decade.
The state has produced two billion-dollar deals to acquire Hoosier-grown tech companies, a feat that has put Indiana on the map as a tech player. The $1.4 billion sale of Indianapolis-based Interactive Intelligence to Genesys in August is just one example of that.
“In the past 10 years, we’ve had now 20-some acquisitions and initial public offerings of tech companies,” said Mike Langellier, president and CEO of TechPoint, an Indianapolis organization that works to accelerate the growth of Indiana’s tech community.
Langellier said Indiana has a mix of things that are a draw for tech companies and workers. The low cost of living, limited government regulation and steady stream of qualified applicants are among the key ingredients that make Indiana a tech hot spot.
Here’s a breakdown of factors industry leaders and experts said helped contribute to Indiana’s rise as a tech haven:
Indiana has a steady stream of computing talent coming from Indiana University, Purdue University and Rose-Hulman Institute of Technology. The state has a trained, eager workforce ready to tackle whatever challenges are thrown at them, experts said.
“Any of these tech companies, they run more on talent than anything else,” Langellier said. “Access to talent is really, really important. That’s where the success is that we’ve had with Interactive Intelligence, Salesforce and ExactTarget.”
According to the U.S. Bureau of Labor Statistics, 114,782 people worked in Indiana’s tech sector in 2014. About 68 percent of those jobs were computer-skilled positions, as opposed to non-computer skilled jobs supporting tech companies.
Almost half of all tech jobs are located in Central Indiana.
“There is a robust labor pipeline,” said Brad Wheeler, vice president of information technology at Indiana University.
“We have a strong, high talent pipeline. You’ve heard before about the concerns about the Indiana brain drain, but that gap is now closing.”
One of the most important stimulants for tech growth is proof that it can happen. ExactTarget and Interactive Intelligence are bold examples that companies can make it and expand in Indiana, said Raj Acharya, dean of the School of Informatics and Computing at Indiana University.
“Role models are important in this business,” he said. “There are plenty of role models in California and the Northeast.”
Indianapolis-based ExactTarget was acquired for $2.5 billion by Salesforce in June 2013. Salesforce has grown its footprint in Indiana so much that it recently renamed Chase Tower to Salesforce Tower when it leased 250,000 square feet of office space.
Genesys, the San Francisco-based tech company that purchased Interactive Intelligence, plans to grow Interactive Intelligence’s Indiana workforce, which consists of 1,000 employees.
Although Indiana grew slightly faster than the national tech growth average of 3 percent, the Indianapolis metro area grew at 5.9 percent in 2015, according to CompTIA, a nonprofit trade association for the information technology industry.
“When you compare Indianapolis’ growth to the national rate, that is a very solid figure,” said Tim Herbert, senior vice president for research and market intelligence at CompTIA.
Indiana offers a far more affordable life to tech workers than the East and West coasts. What a tech worker earns in Indiana goes farther than what a person earns in California.
A tech worker earning $100,000 a year in Indianapolis would have to have their salary increase to $272,891 to have the same standard of living in San Francisco, according to bestplaces.net, which details cost of living expenses.
According to a comparison of the two cities, San Francisco is 173 percent more expensive than Indianapolis. Housing in San Francisco is 626 percent more expensive than Central Indiana.
“We have a very reasonable cost of living and a modestly low tax base,” Wheeler said, adding that young professionals can save money and build a financial future.
In other cities, people might be shelling out $3,000 a month for a downtown apartment, he said. In Indy, people can live Downtown for less than half that.
The average tech worker salary in Indiana is $71,800. The average private sector wage across the state is $42,900, according to a report compiled by CompTIA.
The corporate culture of Indiana’s tech companies is a stark contrast from ones in California, Langellier said. People stick with companies and build their careers, he said.
In Silicon Valley, it’s common for people to change jobs after less than year. Sometimes, the only stay in a position as long as six months, Langellier said.
“The sense of community here is so much stronger than in a lot of places,” he said. “It’s collaborative and supportive — there’s something about the culture in our region that’s very collaborative. You end up with companies and a community of people that support each other.
“It’s not so cutthroat.”
Indianapolis has attracted two types of tech workers: Recent college graduates and people looking to build careers while raising a family.
“People are not hopping jobs every six to 12 months,” Wheeler said. “They get in firms they are invested in and you are able to have a much, much lower turnover here in the heartland than we have in the coastal operations.”
Earning a decent living, owning a home and having the ability to plan for the future are all things people easily can do in Indianapolis, Wheeler said. Raising a family and home ownership are harder in larger, more expensive cities, he added.
In addition to a low cost of living, Indiana also offers a less expensive environment in which to run a business.
According to a study by CBRE Group Inc., the cost of running a 500-person company in California is about $55 million. Running the same company in Indianapolis would cost about $32 million.
“That’s a significant amount of cost savings,” Langellier said.
Additionally, Langellier said Indiana has “low government barriers” for doing business. In states like California, there are more regulatory hurdles and forces at play, he added.
©2016 The Indianapolis Star. Distributed by Tribune Content Agency, LLC.