Two professors of the Indiana University Northwest School of Business and Economics have developed a tool that measures the degree of confidence of Northwest Indiana business owners and executives on their companies’ prospects.
Dubbed the Business Confidence Index, or BIZCONF, the resource is modeled after a similar tool created by professors at IU East, and made possible by a Regional Economic Development (RED) grant from IU’s Council for Regional Engagement and Economic Development (CREED).
It is the first business confidence index available to help small- and medium-sized business owners make decisions in Northwest Indiana. While other indexes, such as consumer confidence, economic, inflation, and price, can help professionals stay on top of business trends, BIZCONF is the only one that can help local business owners zero in on the confidence level of their peers for the future of the region.
Helping Northwest Indiana thrive
Professor of Marketing Subir Bandyopadhyay and Professor of Economics Tin-Chun Lin surveyed 100 business owners and managers in Lake, Porter, and LaPorte counties in July about their business demographics, performance, and forecasts. The participants reflected on their performance in 2018 as compared to the previous year and made projections about 2019.
The results of the inaugural survey are serving as a baseline. A numerical measurement will be assigned next year, and in subsequent years, using 2018 results as a benchmark.
According to Lin and Bandyopadhyay, the inaugural survey revealed a few interesting points about the business forecast in the region. For instance, as compared to this year, in 2019:
- 63 percent of respondents expect to experience growth in business activity;
- 40 percent expect to hire new employees;
- 43 percent expect to realize higher profits; and
- 71 percent expect to see a higher cost of doing business.
Lin explained the possible benefits to having such an index to help guide decisions.
“This index will help business leaders gauge whether the economy is doing well or not,” Lin said. “If they see their peers are confident about the future, for example, they may invest more.”
Lin added that the index can assist government agencies and help drive policy decisions.
“For example, if I’m the mayor and I see a BIZCONF index of over 100, which would be the baseline,” Lin speculated, “I can use that to attract more firms to my city and create policies that support that.”
Lin and Bandyopadhyay were impressed with the number of respondents for the inaugural year and expect the sample size to grow each year. They hope to expand their collaboration with IU partners around the state.
“Once business leaders begin to see the value in the index and more choose to participate in the yearly survey,” Bandyopadhyay said, “the tool’s credibility will grow. Having such an index will give business leaders a way to gauge the climate of their industries locally, stay up on trends and make more deliberate and smart business decisions.”