Growth Challenges (Guest Commentary)

As the country works its way out of recession, Arkansas and its cities have to reassess economic development strategies for the comeback.

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Many of our sure bets for jobs growth have taken a hit, at least in the short term. We can’t blame anybody or any strategy because no one predicted the magnitude of the recession, but we have to be willing to accept significant economic shifts.

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The aerospace industry was a nice growth area for Little Rock in particular, especially after 9/11, but now that private jets have fallen out of favor because of lack of financing, companies that can’t afford them anymore and companies that couldn’t withstand the public outcry against the executive perk.

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The Fayetteville Shale Play was projected to have an ongoing impact of billions of dollars for the next several years, and now we’ve seen a huge cutback because natural gas prices have fallen so low. Arkansas will still benefit from natural gas drilling for many years to come, but the cash flow to property owners and the state will be much slower than expected.

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As oil prices soared, the potential for wind energy and the biofuels industry became the rage. T. Boone Pickens, the oil-to-wind ringleader, has punted for now. These are industries that still have merit but will be slow to develop.

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Landing a new auto plant in Marion was supposed to be a matter of “when, not if.” With the federal government managing General Motors and dozens of idled auto plants and large trained work forces, it’s hard to imagine we’ll be in the hunt.

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Competition for manufacturing plants with hundreds of jobs will be incredibly fierce. Central Arkansas, Fort Smith, Hot Springs and Jonesboro will have to fight hard to land new ones against competitive cities but will continue to have some successes. Our smaller cities have an enormous uphill climb.

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Several of the efforts I referenced were considered safe, sure bets for the state. What we know now is there’s no magic bullet for guaranteed jobs.

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Right now, it’s even more important that we give existing Arkansas companies — big and small — the tools and incentives they need to succeed and grow. Proven, established firms run by people we know give us our best hope for a stronger recovery. Arkansas’ financial stability might enable the state to be more aggressive than others with economic incentives.

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I have been asked multiple times during recent Rotary Club speeches what the “next big company” in Arkansas will be. In other words, who’s the next Wal-Mart, Tyson Foods, J.B. Hunt or Alltel? We have many entrepreneurs doing creative work and hiring more people, but I haven’t found a new giant on the horizon.

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Instead, I continue to worry about major employers that are struggling in this economy — Dillard’s and Acxiom. We need them to bounce back.

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We also have to re-evaluate our measures of success in economic development. It’s the big announcements of hundreds of jobs that garner the headlines (thanks to the media, including us) and that we glorify at chamber of commerce annual meetings throughout Arkansas every year. The saving of jobs, assistance to business startups insurance news, support of existing business and industry, and efforts to make our communities better places to work deserve equal accolades as well.

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How’s this for a token lottery reference this week: Let’s seek out and be excited about the scratch-off game victories that are more numerous, and recognize we can still enjoy nice winnings without hitting the jackpot.

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The Arkansas State Fair is accepting proposals for a new location. Here we go.

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I refer you to my previous column on this subject, in which I make my case against the organization’s move, which would cost somewhere between $100 million and $150 million.

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Supporters of a move chastised me for being the “well-heeled publisher” dissing the event even though I clearly stated that I’m an annual attendee and customer. Perhaps I’ll wear a nice suit to the fair next year to match the label.

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I’m willing to support some level of investment in the current State Fair location, but not now in these economic conditions. With pressing infrastructure needs like jail space and roads, we don’t have a level of government – city, county or state – that can afford this kind of spending.

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(Jeff Hankins can be reached via e-mail at [email protected] or followed on Twitter @JeffHankins.)

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