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Finance expert: NWI economy is stagnant

Updated: February 20, 2013 6:12AM



Despite ups and downs over the past 20 years, the Northwest Indiana economy has remained largely stagnant.

Until the region sees significant population growth, that is unlikely to change, according to Bala Arshanapalli, professor of finance at Indiana University Northwest. Arshanapalli shared his views on the economy Friday at the morning business hour at First Financial Bank in Crown Point.

“In 20 years the region has not grown. I think this is a serious problem,” Arshanapalli said.

While both the national and state economies have shown relatively steady long-term growth since 1992, despite dips caused by the recession, the local economy was rife with peaks and valleys and today is about where it started 20 years ago.

“We are not growing. The reason being, we don’t have population change, population growth,” he said.

Business growth is directly tied to population growth. Arshanapalli said Northwest Indiana has a good business climate, low taxes and the types of communities desirable to young families but still it is not luring the kind of population growth that is being seen throughout the state and in the Chicago area.

Northwest Indiana with all its assets should be luring new residents from Illinois, he said. As the population grows, businesses will follow. Initial growth will be in the retail and service sectors but eventually will spur the type of commercial development that creates higher-paying jobs.

The reason the region is falling behind is exposure. The unique advantage of being on Lake Michigan’s southern shore is not being touted the way it should.

“We are not promoting that advantage. I strongly believe local politicians are not doing what they are supposed to be doing in promoting the region,” he said.

Education and awareness about what makes Northwest Indiana a desirable location must increase if any change can be expected, he said.

“We have to work together. Leaders are not promoting the region (as a whole),” Arshanapalli said.



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