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Study of orthopedic industry in northern Indiana has annual impact at $3.7 billion

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A new report produced by the Indiana Business Research Center found that the orthopedic industry cluster in Kosciusko County, in north central Indiana, had a total economic impact of $3.7 billion in 2009. OrthoWorx engaged the Indiana Business Research Center (IBRC), a part of Indiana University’s Kelley School of Business, to conduct the study.

The combined effects of the orthopedic devices industry generated 13,000 jobs in Kosciusko County, which accounts for 43% of the county’s employment, according to an OrthoWorx press release. Statewide, the industry’s reported total employment footprint is 16,700 jobs.

“Wages in the county are no doubt buoyed by the presence of headquarters for companies such as Zimmer, DePuy and Biomet,” Matt Kinghorn, an IBRC economic analyst and co-author of the report, stated in the release. “This means that in addition to the production positions created by this industry, Kosciusko County has the full range of professional jobs that accompany headquarters operations.”

The study found that the county’s orthopedic industry in 2009 generated an estimated $2.4 billion in direct output. The total value of orthopedic industry sales generated from Warsaw-based companies was approximately $11 billion in 2009, the release noted.

Additionally, the release stated, every dollar of orthopedic manufacturing output generates an additional 31 cents of economic activity in Kosciusko County. Statewide, the effects climb to 55 cents. As such, the output supported an additional $742 million in economic activity to bring the total “footprint” of the industry to nearly $3.1 billion — 44% of Kosciusko County’s total output. The ripple effects throughout the state of Indiana spurred an additional $581 million in economic activity.

The companies also generate $114 million in state and local government tax revenues.

Kosciusko County has perhaps the largest concentration of orthopedic firms in the nation, the release noted. While Biomet, DePuy and Zimmer are the largest employers, the county also is home to 14 other orthopedic device manufacturers. It is one of only four counties in the country with medical device industry employment of more than 6,000 people.