Think tank leader says Arkansas should commit to ‘transformational’ economic development
Ross DeVol, president and CEO of Heartland Forward, a Bentonville-based think tank, told Arkansas trucking executives that his research indicates Arkansas should commit to transformational economic development and new strategic directions in the post-pandemic period.
Speaking at the Arkansas Trucking Association annual conference in Little Rock on Tuesday (May 16), DeVol said Arkansas trails the national average of adults age 25 and over with a bachelor’s degree, with 24% reaching that education level here compared to 37% nationwide in 2020. Arkansas ranks 48th in the country. Meanwhile, the state ranks second in the country in terms of its share of the workforce in skilled trades.
He said if a community can add one point to that 37%, over the course of a decade, its employment growth would be one percentage point higher than it would be otherwise. A five-point growth would increase job growth by 45% over a decade. A 10-point increase would double job growth over 10 years.
He said human capital is the most important intellectual property of a state’s or region’s economy. Talent, he said, “is the defining, important ingredient for success in the knowledge-based economy. Without talent, you can’t recruit and grow businesses, and capital follows talent today, rather than just talent following where businesses are located.”
DeVol said Arkansas should invest more in research and development. Heartland Forward found last year that the University of Arkansas ranks 69th among 166 research universities in transferring research to the private sector to create an economic return on investment, while UAMS was 87th. He said the state provides a cash grant for the Small Business Innovation Research Awards Program but does not do so for the Small Business Technology Transfer Program.
He noted that China last year probably invested more as a percentage of its gross domestic product in research and development than the United States has ever done.
DeVol said Arkansas should focus more efforts on supporting young firms that are five years old or younger. In 2020, startups created 2.6 million jobs in the U.S. economy, while older firms lost 270,000 jobs. But over the past few decades, the share of employment at young firms fell from 16%-17% to about 10.5%-11% in 2019. Arkansas is below the average at 10%.
DeVol said the COVID pandemic has led to a shift to remote work. Prior to the pandemic, only 5% of workers were remote. Those numbers have risen since then. Rising housing prices on the coasts have led young people, in particular, to re-evaluate where they choose to work versus where they choose to live. California lost 500,000 residents in 2022, with many of them coming to the heartland.
“As this new landscape emerges across the country and across the world, talent is going to flow to where it wants to be, not just where companies desire to be,” he said.
DeVol praised Gov. Sarah Sanders for her recent performance before the Milken Institute Global Conference, saying she did a good job of advocating for the state and describing the LEARNS Act, her signature education reform legislation.
He generally praised the legislation. He would have focused more on rewarding proficient teachers rather than giving a raise to all teachers. However, he said public schools haven’t reformed themselves unless they’ve had competition, which the LEARNS Act will accomplish through its “education freedom accounts,” allowing families to use state dollars for non-public school options.
“It is a large experiment that’s underway, but if you haven’t gotten to a kid by the third grade and that they can’t read, you have lost them. … We can’t allow so many young people never to learn to read at a proficient level. Something had to be done,” he said.