By James L. Jay, President and CEO, TechPoint

Can Indiana truly diversify its traditional manufacturing market and create a vibrant knowledge-based economic sector that creates real growth and wealth? As the Indiana General Assembly enters its critical budget determinations, legislators will have a direct say and no small measure of accountability about how this question will be answered in the months and years ahead.

A mere decade ago, many would not have served up a positive answer to this question. Today, as seen in the world-class finalists for TechPoint’s annual MIRA Awards and the creation of thousands of new high-tech jobs, real signs exist that Indiana is indeed achieving real traction toward diversification into a technology-based economy.

Today we see the beginnings of a regional partnership in nanotechnology, led in large measure by the growing nano research and development operations at Notre Dame and Purdue. We see world-ranked super computers being built at Indiana University and Purdue, with the notable advantage of these becoming available to entrepreneurs statewide. And the list of these achievements is growing.

Considerable credit for this move toward economic diversification is owed to Indiana legislators for establishing the 21st Century Research and Development Fund back in 1999. While the Fund has undergone substantial change over the past decade, its powerful driving force in creating jobs and building companies remains unquestioned.

As budget discussions reach fever pitch, legislators may be tempted to reduce funding to critical transformational tools like the 21st Century Fund. Yielding to such temptations would be a major setback to the positive gains Indiana has painstakingly achieved over the past few years.

If you look back in the early 1990s when regions like the Silicon Valley were attracting multiple millions of dollars in venture capital investments and the like, Indiana’s share of high-tech private investment was nearly non-existent. Today that has all changed. Vibrant high-tech, life science, biotech and information technology companies across the state have prospered and created new jobs with seed funding from the 21st Century Fund.

As the national economy begins to move out of recession later this year and early next, Indiana must be positioned to continue its drive toward a diversified high-tech economy. Without innovative capital formation available through the 21st Century Fund for early stage companies and overhauls to Indiana’s antiquated tax climate for IT equipment investment, the state could easily find its successful tech transformation stalling out.

Compared to other states, particularly economic behemoths like California and New York, the 21st Century Fund appears humble in size. But even at its current level of funding it achieves do two critical things: it sends a clear and powerful signal that Indiana is truly serious about transformational technology development, and the Fund helps attract direct and more substantial funding from private investors such as venture capital.

The current financial challenges will end and the national economy will recover. When it does, Indiana must be armed and ready for more growth and transformation, fueled in part by a vibrant and renewed 21st Century Fund. As one Wimbledon tennis champ used to say, “Never change a winning game.” The Indiana General Assembly must act and renew funding for the state’s winning strategy.