Education attainment and university research funding were the weak areas in a Northwest Arkansas economy that continues to perform well despite state and national economic conditions, according to a new report released Tuesday.
The “State of the Northwest Arkansas Region” report was prepared by the Center for Business and Economic Research (CBER) in the Sam M. Walton College of Business at the University of Arkansas in conjunction with the Northwest Arkansas Council. The Northwest Arkansas Council is a private, nonprofit organization formed to improve quality of life, education, water quality, transportation and economic opportunity in the region.
The report compares economic and social factors in Northwest Arkansas with those in similar U.S. regions, according to Kathy Deck, director of the Center for Business and Economic Research.
Also attending the formal release event were UA Chancellor G. David Gearhart, chairman of the Northwest Arkansas Council; Mike Malone, the council’s president; Mike Harvey, the council’s chief operating officer; Walton College Dean Dan Worrell.
“The State of the Northwest Arkansas Region Report is designed to highlight both the region’s strengths and put a focus on areas where our competitiveness lags our peers,” Deck said in a statement. “This report demonstrates how employment opportunities and establishment growth in the region surpassed our benchmark group over the last decade, but also how our educational attainment and research expenditures were limiting factors. These findings have clear messages for the region’s leaders.”
In terms of regional weaknesses, the report mirrors a September 2004 report published by the Milken Institute that attempted to measure Arkansas’ position in the knowledge-based economy. The Milken report, funding by the Winthrop Rockefeller Foundation and supported by Jeff Collins, then the CBER director, found that education attainment and a lack of funding for research were Arkansas’ critical weaknesses in keeping pace with emerging economies.
“You are hearing some of the same things in this (State of the Region) report,” Collins said Tuesday. “What we said then was, ‘Hey, we don’t have enough educated people in the state of Arkansas. … We need more funding for that (R&D).’”
The 2004 Milken report contained numerous policy strategies to address the perceived deficiencies. Those included:
• Increase the percentage of population with a bachelor’s degree;
• Better coordinate state agency initiatives;
• Develop a coordinated risk-capital policy;
• Upgrade infrastructure, to include broadband and broadband access; and,
• Better utilize public and private resources to boost research and science.
“We have known for a long time what the region and the state needs to do to improve economic outcomes,” Collins said. “What remains difficult is this question: ‘How?’ … What remains elusive are effective policies for actually influencing those goals.”
Northwest Arkansas’ socio-economic conditions – Benton, Madison and Washington counties in Arkansas and McDonald County in Missouri – were compared to conditions in similar areas around Lexington, Ky.; Gainesville, Fla., and Huntsville, Ala. It also compares conditions with Austin, Texas, as well as Arkansas and the United States.
Annual report updates are planned as a way to track relative improvements and declines in the regional economy.
Key findings from the report include:
• During the decade from 2000 to 2010, employment in Northwest Arkansas grew at 23.7%, a rate that outperformed the peer regions, the state of Arkansas and the nation as a whole.
• Compared to the peer regions, Northwest Arkansas experienced the smallest jump in the unemployment rate over the past decade and during the recession from 2008 to 2010.
• From 2001 to 2007, the growth rate in business establishments averaged 5.5%, but from 2007 to 2010, there was an average annual decline of 0.7% in the number of businesses in the region. The growth during the pre-recession years and the decline during the recession and post-recession years outpaced the peer regions.
• Research expenditures increased by 31.3% from 2001 to 2008, the slowest among the major research institutions in the peer regions.
• Fewer than 25% of adults in Northwest Arkansas have attained a bachelor’s degree or higher, ranking the region last among peer regions, but better than the Arkansas average.
Harvey said the initial report will serve as an important marker as the communities in the region work to improve regional conditions.
“This ‘state of the region’ baseline shows where we stand today, and it’s the first step toward measuring how Northwest Arkansas changes over time,” Harvey said. “Future reports will reveal trends. We’ll know whether college and high school graduation rates are improving, whether high-quality jobs are being created and whether Northwest Arkansas is becoming a better place to live and work.”
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Michael Tilley is the author of this report. He can be reached by e-mail at email@example.com.