Viewpoints: Strengthening Arizona's economy
March 7, 2013
The following article appeared March 3 in The Arizona Republic Sunday Viewpoints section, which focused on the state's economy and used as a base the Morrison Institute for Public Policy report, Arizona’s Economic Development Landscape: Charting a Unified Course. The article's authors were Ken Western, a longtime journalist and chief researcher for the Morrison Institute report, and Ioanna Morfessis, president and chief strategist of IO.INC.
Arizona’s economy is growing again. And for recession-weary Arizonans, the improved outlook for jobs and economic prospects is a welcome change.
But just how well-prepared is Arizona to retain existing jobs, replace the nearly 300,000 that were lost in recent years and compete for the new ones that inevitably will be created as the U.S. economy continues to recover from the Great Recession of 2007?
The good news is that, for the first time in recent history, Arizona has a portfolio of programs and tax policies designed to elevate the state’s competitiveness vis-a-vis some of the best states for business.
Gov. Jan Brewer and the Arizona Legislature have overhauled the state’s economic-development structure, creating the public-private Arizona Commerce Authority and improving the state’s position in the intensely competitive, high-stakes, economic-development arena.
In 2010, Arizona lawmakers responded to the recession with a major job package that featured business-tax reductions and job incentives. That was followed in 2012 by Jobs Bill 2.0, with more programs aimed at fostering job growth.
While Arizona’s competitive position is significantly stronger than in years past, the state still has much work to do on several critical fronts. The impact of cuts to education — preschool through post-graduate education — over the past several years imperils Arizona’s ability to prepare the workforce that is needed to compete effectively for 21st-century jobs.
This and other challenges are outlined in a new report by the Morrison Institute for Public Policy at Arizona State University, Arizona’s Economic Development Landscape: Charting a Unified Course. The report was sponsored by Freeport-McMoRan Copper & Gold Foundation.
As Arizona works to build a better, more diversified economy and capitalize on the state’s growing reputation as a center for entrepreneurialism, innovation and opportunity, other challenges outlined in the report include:
The huge number of jobs lost in the recession has reinforced the need for Arizona to wean itself off the booms and busts associated with the real-estate/development industry.
Many of our smaller rural communities are struggling to find their footing coming out of the recession.
Arizona is not producing nearly enough of the STEM — science, technology, engineering and math — graduates that are essential to competitive economies in the 21st century.
Many of our cities, towns and counties lack an economic-development plan and have less than one full-time person working on economic development. Without a plan, communities lack a sound understanding of where they are, where they want to go, and how they are going to get there.
So, what can business, government and civic leaders do to help Arizona retain and grow jobs, businesses and enterprises? For starters, here are some immediate actions:
Cities and counties: With so many different and sometimes competing interests, and severely constrained resources, cities and counties must develop a culture of collaboration to provide the workforce, infrastructure and competitive business climate that are crucial determinants in business locations and job creation. All cities and counties should either have their own economic-development strategy or be an integral part of a regional strategy. In rural Arizona, this collaboration is especially critical.
Local elected officials: Economic development is a marathon, not a sprint, and therefore needs a big-picture, long-term view — longer than even an incumbent’s term of office. It also is a team sport, requiring the active engagement of many to help retain and expand existing business, recruit new businesses and jobs, and support small businesses and entrepreneurship. Mayors, council members and county supervisors need to be catalysts for change and growth. A first step is making sure that their own jurisdiction has a clear idea of where it stands and where it needs to go.
Arizona Commerce Authority: With new leadership, staff and $10 million budget, the state’s economic-development organization needs to be able to count on stable funding and continued support from the Legislature and private sector. Even under the best of circumstances, it can take five to 10 years to turn around a state’s economy. The authority is rolling out its “Arizona Know How” branding campaign, touting the state’s abundant assets for business, industry and entrepreneurs. Telling the “Arizona Know How” story — inside of Arizona, in key markets across the country and around the world — is a vital step toward improving the state’s image.
Arizona Legislature: Lawmakers must stay the course on the positive programs and policies instituted in recent years. Those programs and policies need a chance to work, and economic-development success requires focus, commitment and continuity. The Legislature also needs to support efforts that will diversify Arizona’s economy by targeting such cutting-edge sectors as bioscience and advanced electronics, while also protecting and expanding such traditionally strong sectors as aerospace and aviation. Of particular import are the significant opportunities in the research and development of unmanned aircraft systems in such cities as Yuma, Sierra Vista, Prescott and Safford.
In addition, the Legislature must restore funding to our education systems and institutions — primary, secondary, post-secondary — including community colleges and the state’s three public universities. This will go a long way toward improving Arizona’s economic-development competitiveness and reputation. And let us not overlook the critical importance of being a state that values and welcomes diversity, a basic requirement in today’s globalized economy.
Business community: Arizona’s business community needs to champion policies more than those that benefit their own firms or industry sector. Business leaders should get behind the Arizona Commerce Authority and regional groups such as the Greater Phoenix Economic Council and Tucson Regional Economic Opportunities, , as well as their local economic-development agencies and organizations. Business also must join legislators, community and business leaders, and educators in efforts to improve Arizona’s P-16 education systems and institutions, along with federal immigration reform. Finally, all Arizona business owners and executives must make themselves familiar with Arizona’s assets and tout them to their employees, boards of directors, customers and investors.
Although Arizona has much to celebrate, we still have much to do. Economic development and competitiveness will come only with continued collaboration, relentless work and investment — investment of time, commitment and purposeful action. Every resident in our state stands to gain when all communities across Arizona prosper. It’s up to every Arizonan to help make that happen.