Generally, cities have two main functions. First, it needs to help create and maintain jobs for its residents. Second, a city should provide internal functions and services, including public safety, educating its youth, utility and road infrastructure, and amenities, like parks and sidewalks.

For the remainder of this page, we'll focus on the first function as we examine how a city creates and maintains a large suite of local businesses or industries. The next page will focus on the second function of a city as it is a core, market area that serves its local population.

Creating an Economic Base
Whenever I travel to a new city or town, I'm always interested to learn the different types of jobs found there. In the Pacific Northwest, you see (and smell) big trucks hauling freshly cut timber. Driving through beautiful West Virginia, you see workers eating at a McDonald's covered in black soot from the coal mines. In rural Colorado, abandoned gas stations have become Marijuana dispensaries, creating a pungent smell in the air, but also a job one can't legally do in Indiana.

In sum, from city-to-city, state-to-state, region-to-region, there are so many different types of occupations, with different areas specializing in certain jobs. Of course, here in Indianapolis, we have certain jobs that you really don't find in many places, including motorsport-related jobs, jobs in biochemical and life sciences, and hosting big sporting events and conventions. Indianapolis depends on these specific industries as they provide jobs to the locals and comprise our economic base.

Cities, states, and regions can create and/or sustain a local economic base by attracting or specializing in specific industries. Below is a list of cities and regions and the key economic base found there. As mentioned in the previous chapter when discussing Toyota and Evansville in this video, many of these are basic industries that are crucial not only because they provide a key local economic base and source of many, many jobs, but they also increase the number of non-basic industries.

Detroit	Automobile manufacturing
Seattle	Aeronautics
Los Angeles	Entertainment
New York City, Chicago	Finance/Business
Nashville, TN	Music
San Diego, Pensacola, Camp Atterbury (Edinburgh, IN)	Military
Las Vegas	Sin
Orlando, coastal Florida, Black Hills, Brown County	Tourism
Rockies, Appalachians, southwestern Indiana	Mining
Great Plains, Midwest, rural Indiana	Agriculture
Pacific Northwest, Appalachians, eastern Canada	Logging
Gulf Coast, Texas, northern Canada	Oil/Petroleum

Case Study: Motorsports and Indianapolis
Motorsports matters in Indiana and Central Indiana and is a key part of the economic base here. After all, this course would not exist anywhere else in the world. Why here?

First, Indiana has often had a pro-business environment. This statement is based on the types of incentives the state government offers businesses with potential for growth. An example of Indiana's pro-motorsport legislation is the Racecar Sales Tax Exemption. Under this exemption, every racecar component or part (not including tires) sold in Indiana is exempt from the state sales tax. Another example is the Venture Capital Investment Tax Credit. This encourages Indiana investors to invest in small Indiana high-tech companies, including motorsports.

Second, Indiana has a favorable cost-of-living. All types of businesses cite our affordability (i.e. cheaper wages) as a key reason to locate here. Third, the central location of Indiana and the "Crossroads of America" means we are rather well-connected to all of the country's transport corridors. With racing happening all over the country (and continent), being located in the middle does have its cost savings and shorter trips.

Fourth, we have a rather skilled workforce, but demand lower wages compared to our neighbors. As I tell people, we are somewhat "Southern" because we have low wages, but we're also kinda "Northern" because we have higher skill sets (education levels). In a state emphasizing STEM education along with possessing a large proportion of automotive and manufacturing jobs, motorsport provides the Hoosier State a key source of new innovations and technologies and occupations in engineering and manufacturing. What types of skills are emphasized in Indiana that are directly applicable to motorsports? 3D design, CAD, aerodynamics, mechanical engineering, electrical engineering, fabrication, computer programing, and thermodynamics.

Finally, and perhaps most important, we have a racing heritage that dates back to the early 20th Century. Including drag strips, we have the most race tracks per capita in the country.

Although slightly dated, recent IUPUI research by SPEA's Drew Klacik has examined just how big our motorsports industry is here in Indiana (click HERE to view). They found over 400 motorsport-related firms employing 8,880 and generating $425 million in wages. These facts are a great response for when someone asks you, "Is motorsports relevant?"

Even further, unlike the British and Charlotte clusters, Indianapolis is also home to several pinnacle motorsports events. Silverstone might have an F1 Grand Prix (for now), and Charlotte has a big NASCAR race. But Indianapolis has the world's biggest races: the Indianapolis 500; drag racing's biggest event, the NHRA U.S. Nationals; NASCAR's second or third biggest race, the Brickyard 400; the world's biggest figure-8 race.

Below is a map of all "motorsport manufacturers" in Indiana from the Indiana Motorsports Directory from the Indiana Motorsports Association. They compiled this list in 2010, so the information is dated, although still useful. I asked them for more info but they went defunct. A "motorsport manufacturer" includes any entity that makes a product used for racing. This includes engines, chassis, and tires, but also safety gear, decal makers, and pit equipment. The map shows a clear pattern: motorsport matters in Indiana, especially Central Indiana.

Not only does Indianapolis host the Indianapolis 500 Mile Race, the largest annual sporting event in the world, but many of the teams competing in the IndyCar Series are also based within the Indianapolis cluster. That said, IndyCar race teams represent only a fraction of the extremely diverse types of race teams found throughout our state. In fact, of the 778 race teams identified in a 2010 survey of the Indiana motorsports industry produced by the Indiana Motorsports Association, 656 or 84% or race teams in Indiana competed in grassroots, local drag races in a division known as NHRA Sportsman. With so many race teams and entrants, no wonder there is also a cluster of safety equipment manufacturers (e.g., Impact Racing) clustered in Indy, too.
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Cumulative totals of race teams in Indiana based on the type of racing series (Indiana Motorsports Directory, 2010).

Since 2000, an increasing number of national-level, professional drag racing teams have also relocated to Indiana in Brownsburg, a nearby suburb of Indianapolis. This cluster of race teams has brought economic vitality and development to an area of Brownsburg now known as “Nitro Alley” (top-level drag racing teams use nitro methane fuel).

Motorsport events, much like music festivals, conventions, and football games, can benefit places as they bring in large numbers of spectators to the host area, stimulating the local economy, particularly hotels, gas stations, restaurants, and other hospitality-related businesses. This economic impact is considerable in Indianapolis where some of the biggest races in the world are held, attracting thousands of spectators.

That said, of the 54 motorsport venues in Indiana, the majority are found in small, more rural towns as these locales can also benefit from hosting events, albeit at a much smaller scale than Indianapolis. During the Indiana summer, race tracks across the state host weekly events attracting many local and regional participants and spectators to their locale. Many of these smaller venues are dirt, oval tracks less than a half-mile long. In fact, these dirt oval race tracks are the most common venue type found in Indiana. The remaining tracks are a mix of drag strips, paved ovals, road courses, and of course, one very famous superspeedway. Note: The indoor track is the Rumble in Fort Wayne's Coliseum at the end of December.

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Percentages of active motorsport venue types found in Indiana (Indiana Motorsports Directory, 2010).