June 7, 2010—Building Arizona’s Future: Jobs, Innovation & Competitiveness

By Barbi Reuter

TREND REPORT

June 7, 2010

Days after Arizona’s debate-provoking passage of the nation’s toughest immigration law, the 96th Arizona Town Hall convened in Tucson under the banner “Building Arizona’s Future: Jobs, Innovation & Competitiveness.” Against a backdrop of both real and perceived economic impact, the timing resulted in a sense of urgency for Town Hall participants to craft strategies and solutions that would best posture Arizona for economic opportunity.

First, the forum and format. What is Arizona Town Hall? Arizona Town Hall is an independent, nonprofit membership organization that serves as a “think tank” for Arizona leaders and a catalyst for important policy changes. Participating in Town Hall is exposure to consensus-building at its best, but the “rubber meets the road” in the months and years following each session, where members, participants and community leaders work to implement Town Hall recommendations.

Background reading for each Town Hall includes an extensive research document, produced by one of Arizona’s public universities. The University of Arizona led the 96th Town Hall’s effort, coordinated by Eller College of Management’s Vera Pavlakovich-Kochi. The study is notable for its depth and breadth, with 20 contributing authors collaborating to conduct and publish this report under unprecedented budgetary pressure.

At the summit attended by 140 Arizonans from diverse backgrounds and communities, two keynote speakers addressed the issue of competitiveness in economic development. First, Joe Kalt, Tucson native and Harvard economist, spoke from the heart—rather than charts and graphs—about Arizona towns and cities being “top feeders” in recruiting high-paying jobs. Not surprisingly, themes with the fit of an old glove continued to reverberate: quality of life, and top notch education. Second, Brian Cole, a community and economic development consultant hailing from rural Oregon, highlighted his 25-point methodology for strategically building communities.

Any forward-thinking gathering worth its salt considers the current situation: a good old-fashioned SWOT analysis. Among many key assets, the consensus report trumpeted, “Arizona’s greatest economic strengths are the diversity and entrepreneurial spirit of its people.” Within my panel, a subgroup of the Town Hall, the most lively and progressive discussions were “chicken-egg” debates. Should Arizona focus on attracting quality people or quality jobs first? While recruitment and retention of quality jobs is an economic development mantra, “if you build it, they will come” resonates when creating a sense of place where the creative class wants to live, collaborate and create.

On the flip side, elements weakening Arizona’s economy begin with “the lack of strong, visionary political leadership and the failure to fund Arizona’s educational system adequately.” More specifically to the first point, the consensus report notes compensation and term limits as hindrances to legislative accountability and institutional memory.

Arizona’s significant relationship with Mexico as a trading partner cannot be understated and was underscored in the advance research document, spirited discussions and the final report. Mexico is our state’s largest trading partner, Each year, Arizona businesses sell nearly $6 billion in exports to Mexico, and in 2008, Mexican visitors spent $2.7 billion in retail stores, hotels, restaurants and other spending-related activities here.

So, what to do? With common themes calling for a statewide vision for economic development, enhancing capital allocation and formation, and funding education at all levels, the 96th Town Hall developed a 12-point menu of priority actions to sustain and develop our statewide economy. As noted in the report, “These priorities are so closely interrelated that they must be pursued simultaneously for Arizona to achieve its desired economic future.” While more detailed in the full report, following is a summary of the actions identified:

• Education – “Inextricably linked to economic development;” emulate the world’s best practices to develop our human capital.

• Strategic Planning – The state and its economic development stakeholders must speak with a common voice and vision, and plans must include clear implementation goals, actions and accountability.

• Changes in Governmental Structures and Political Ideologies – Abandon the dominant “hands off approach” and proactively target industries and jobs; remove impediments to economic development.

• Capital Formation – Provide public backing, promote public/private partnerships, encourage capital infusion into Arizona companies, and promote a venture capital fund of funds for early-stage development.

• Reputation Management – Implement damage control and “promote a positive state image regionally, nationally and internationally.”

• Infrastructure – Enhance our networked business environment through transportation and data connectivity improvements, assure sufficient utility delivery and modernize the power grid.

• Broadening the Tax Base – Imperative that Arizona has a “broad based, diversified and stable tax structure.” Consider increasing revenue and eliminating the downward bias in tax policy; avoid disproportionate reliance on sales tax.

• Preserve Quality of Life – Cultivate and preserve arts, sports, recreational amenities and cultural and natural resources. Develop a strong sense of place in our communities.

• Pursue Jobs in the Renewable Energy Industry – Pursue “international investment capital to fund development activities.” Encourage, promote and support renewable energy goals, development and production with a clear roadmap for developing the industry.

• Job Training Programs – Fund and promote job training and skill-specific programs aligned with the industries we wish to retain and attract.

• Other Economic Development Actions – Fund business incubators, support small business, consider tax abatements for relocations, work to site the F-35 training programs in state, improve our strategic alliance with Mexico, and pilot a guest worker program.

• Other Activities that Influence Economic Development – Pursue multimodal transportation planning, encourage Arizona graduates and former military to stay in Arizona.
While Arizona Town Hall is very much about process, it is action and implementation that solidifies the organization’s value, sustainability and reputation for making a difference. Consensus building has been called many things. Perhaps at one extreme, inspiration is watered down to the lowest common denominator. However, on the positive side, diverse opinions unite.

Visit Arizona Town Hall’s website (www.aztownhall.org) for comprehensive information pertaining to the 96th Town Hall, as well as previous reports and recommendations and information on membership and future participation.

Barbi Reuter is a Principal and Associate Broker with PICOR Commercial Real Estate Services, leading the firm’s operations, research and finance activities. In addition, she connects clients and associates to resources and relationships through PICOR’s affiliation with Cushman & Wakefield’s global services platform and leads PICOR’s new media efforts. She can be reached at (520) 546-2744, via email at [email protected], and @BarbiReuter on Twitter.