Pence today introduced several new policy proposals, as well as an executive order, meant to foster entrepreneurship. The initiatives range from investing state pension money in fast-growing companies to making venture capital tax credits transferable.
Pence unveiled his plan during a 9:45 a.m. address to the Innovation Showcase at the Dallara IndyCar Factory in Speedway. The Innovation Showcase is an annual event that connects investors with businesses. Pence plans to tout the policies as a $1 billion investment in entrepreneurship over 10 years, state officials said, although the eventual number is likely to be much different.
The proposals would tie together a mix of new money and continued state spending in an effort to grow Indiana's reputation for supporting innovation.
"The governor sat down with us and said, 'I want to put a stake in the ground to basically say we are an international center for innovation and entrepreneurial success,' " said Jim Schellinger, president of the Indiana Economic Development Corp. "He wanted to do it in a big, big way."
Pence's proposals come as he awaits word on whether he will be named presumptive Republican presidential nominee Donald Trump's running mate. Pence has spent plenty of time with Trump this week, including a Tuesday appearance at a rally in Westfield and a Wednesday meeting at the governor's residence. Trump has said he will name a running mate by Friday.
In the meantime, Pence is calling for state investment in startups and high-growth companies that would outlast his tenure as governor even if he remains in the state and wins his re-election bid. Here's what Pence is seeking:
- A $500 million investment over 10 years by the Indiana Public Retirement System on what the IEDC refers to as "early-stage and midmarket Indiana companies." The state pension fund has about $30 billion in assets.
- Continued state spending of $30 million a year, or $300 million over 10 years, toward the 21Fund, which invests in, and provides grants to, growing companies.
- A bill from the General Assembly to make venture capital investment tax credits transferable. Indiana has a $12.5 million venture capital tax credit program that benefits only investors with tax liability in the state. Pence wants out-of-state investors to be able to sell their tax credits to people and companies that have tax liability in Indiana to generate more money for companies based in the state.
- A $100 million investment by the state over 10 years in partnerships with higher education and research institutions that would educate and support entrepreneurs.
Pence's proposals come with some challenges. The General Assembly would have to approve Pence's requests for continued investment in the 21Fund and making venture capital tax credits transferable. And INPRS, the system that handles retirement investments for public workers, would have to agree to push more money toward Indiana-based companies — and then find enough worthy, relatively safe companies to invest in.
Micah Vincent, director of the state Office of Management and Budget, said investing $500 million over 10 years would be a target for INPRS rather than a mandate.
"You want to chase the right investments," Vincent said. "That's a huge part of this, and we're going to continue to use the same due diligence we do in all our investments."
The goal of investing pension money in Indiana companies, he said, is to encourage growing companies to move to the state and spur local companies to compete for that money.
"Word of this will get out, and it will be seen nationally by people in the startup company space, the entrepreneurial space," Vincent said. "And they will see Indiana can be a place where I can go start my business and do well. What happens is you get a wider pool of companies to invest in."
The scope of Pence's proposals is aimed at attracting new companies to the state and supporting startups and maturing companies that need access to capital, Vincent said. While the policies naturally would benefit technology companies, he said they're not limited to the tech sector.
"I think this is a big, bold, courageous idea, and I couldn't be more excited about it," Schellinger said of Pence's innovation plan. "We know if we have that, if we have that entrepreneurship, it's going to attract talent, it's going to keep talent, it's going to drive up wages, it's going to help companies get creative."
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