Indiana's Electronics Manufacturing Lag Is a Warning Label for Today's High-Tech Bets

If your operation is watching the current wave of data center and chip announcements and evaluating whether to participate, economist Morton Marcus ran the numbers you should have in front of you.

From 1998 to 2023, U.S. electronics manufacturing grew at roughly 4.5% per year, broadly in line with national GDP growth. Over that same period, Indiana's electronics sector grew at only 1.1% per year, while Indiana's total GDP grew at 4%. Electronics' share of Indiana manufacturing output fell from 5.1% in 1998 to 2.6% in 2023. The state's big three, chemicals, motor vehicles, and primary metals, deepened their share instead. Chemical manufacturing, which includes pharmaceuticals, now accounts for 6.9% of Indiana's GDP.

The names that once defined towns here, RCA, Delco, Magnavox, Western Electric, did not hold. Marcus asks the right questions: Were Indiana electronics operations mostly branch plants, easy to consolidate or close when corporate priorities shifted? Did state tax and regulatory policy fail to reward capital investment and automation at the right times? Were Indiana operators late adapting to shifts in production, demand, design, and pricing?

He does not name one cause. But the pattern is clear: Indiana underperformed in a sector that should have been a strength.

That is not a history lesson for its own sake. Right now, Indiana is chasing data centers and chip facilities with aggressive incentive packages. The electronics history is a direct filter for evaluating those deals. Branch plant structures extract incentives, hire for a period, and slow-walk new investment when the market shifts. Watch whether current deals require sustained reinvestment, local engineering and design work, and clear clawbacks when milestones are missed, or whether the state is paying to host someone else's production for a few years with no structural commitment to stay.