Capitalizing on the Economy (President’s Notes)

As the economy continues to pick up its pace, so will prospects for recruiting jobs to Arkansas.r

Are we prepared to capitalize?r

The last couple of years have been lean times for economic developers. Manufacturers have been consolidating operations across the country or, worse yet, moving them to Mexico. Increased productivity spurred by ever-improving technology has enabled companies to scale back on costly labor or delay costly expansions.r

About all developers could do was lay groundwork for the recovery and try to maintain the status quo. Keeping existing jobs was a degree of success.r

Little Rock is reeling a bit from the loss of the Southwest Airlines reservations center, which employs 700 people but will shut down Feb. 28. Concern abounds over the future of the former Alltel Information Services operation, now Fidelity Information Services, which is already moving a number of its 1,200 high-paying jobs to Fidelity’s Jacksonville, Fla., headquarters.r

But look at neighbors like Jackson, Miss., and Tulsa. They have suffered devastating losses resulting from downturns in the telecommunications and airline sectors. WorldCom delivered a triple whammy to Jackson — thousands of jobs lost directly, jobs cuts associated with serving World-Com and its well-paid employees, and the evaporation of wealth and retirement funds accumulated throughout the company’s buildup. Tulsa faces its biggest challenge since the oil bust of the ’80s.r

Those cities will intensify efforts to recruit companies. California will take steps to slow the exodus of companies fed up with extraordinarily high business costs related to taxation and regulations. Pick a major U.S. city, and you’ll find hungry economic development teams.r

That’s why it’s important that regions in Arkansas ramp up for the economic expansion.r

The Little Rock Regional Chamber of Commerce and Central Arkansas Economic Development Alliance last week launched a $1.6 million campaign to raise funds for economic development efforts. Central Arkansas communities will be working together like never before.r

Northwest Arkansas is several steps ahead in this regard, but with very low unemployment its economic development emphasis focuses on improving infrastructure to accommodate existing opportunities and continuing to raise the education level of its residents. Fort Smith will be looking to diversify its job mix after enjoying years of manufacturing success.r

Northeast Arkansas cities have a lot of optimism and momentum. Jonesboro can leverage the success of its recruitment of Nestlé, while the West Memphis and Marion areas appear ripe for an auto manufacturing facility. I hear Osceola is in the running for a steel plant, which could make Mississippi County the steel capital of the country.r

So what stands in our way for the expansion ramp-up? Education, of course, and it’s nothing we can turn around overnight. In a well-received presentation to the Downtown Little Rock Rotary Club recently, Arkansas State University history professor Michael Dougan noted that the state has lagged in education dating to the 1800s.r

You wouldn’t think any amount of local and state financial incentives or effort by economic developers could overcome the education shortcoming, but somehow we have for years in many respects. With new industry harder to come by and significantly greater demand for an educated work force, we’re pressing our luck to think we can get by with the status quo in the future.r

Until we manage significant gains in education, Arkansas can’t afford slip-ups anywhere else. That’s why for now we have to out-recruit others and showcase all our positives — quality of life, our location in mid-America, transportation access, productivity.r

We’ll find out soon how prepared or ill-prepared we really are for the next economic expansion. r