The new director of the Arkansas Economic Development Commission, Mike Preston, is 32 years old. He looks even younger. Preston, who is coming to Arkansas from Florida's economic development agency, stood there smiling last Thursday morning as Gov. Asa Hutchinson announced his appointment. Standing next to him during the announcement was his wife of only three months, Anne Imanuel, a television reporter in the Tampa area.
Preston said all the right things. Preston noted that Arkansas is "not just competing with Nashville, Memphis, Louisiana and Texas, but we're competing with Florida, Illinois and California. We're also competing with China, with South America and Central America. It's global competition, and there's no reason that Arkansas can't be No. 1 in businesses' minds when they're thinking about a place to come, work, do business, live, play, everything else."
The reality that Preston will face when he arrives in Arkansas is that some who work in state government and many who serve in the Legislature are stuck in an antiquated mode of economic development. During this year's legislative session, we've heard a lot of talk about things such as "industrial development" and "work-force training." It's as if we're back in the 1960s. In his inaugural address in January, Hutchinson mentioned work-force education and two-year colleges but made no mention of the critical need to produce more Arkansans with bachelor's and advanced degrees. In the 2010 census, Arkansas ranked ahead of only West Virginia in the percentage of adult residents with a bachelor's degree or higher. That's a recipe for economic failure in the knowledge-based economy of the 21st Century.
Economic development is no longer just about attracting a manufacturing plant. It centers instead on growing and attracting talent. When I was one of the two presidential appointees to the Delta Regional Authority, we hired an economic development expert from Austin, Texas, named Jon Roberts to develop a strategic plan for the region. Roberts convinced us that economic development has changed. As the economy has grown more dynamic and global, it has become increasingly difficult for rural Southern communities to attract private investment. These communities can no longer rely on the promise of low wages and reduced operating costs, the recipe they had used during the 1950s and 1960s.
In essence, the pitch in those days consisted of going to the Northeast and the upper Midwest with this message: "We don't have unions so your cost of doing business will be lower. But we do have hardworking people so your profits will increase." Shoe manufacturers, shirt factories and other cut-and-sew operations responded to that call. Since then, such jobs have left for Mexico, Central America, China and Southeast Asia.
I grew up hearing the term "a strong back and weak mind." Well, now we need strong minds more than ever. The best and the brightest move to places that have inviting lifestyles. Transforming places such as downtown Little Rock and Hot Springs into talent magnets is more important in this century than building industrial parks on the edges of town.
"Across the country, cities both small and large have rediscovered the importance of their downtowns, and examples of revitalized city centers are abundant," Roberts wrote. "Americans' renewed interest in downtowns was rooted in the historic preservation movement of the 1970s."
Arkansas must rethink its definition of economic development. It must determine how to better train native Arkansans for the kinds of jobs that pay well in the knowledge-based economy. It also must learn to attract and keep more talented young people. Too often, we go in the opposite direction. In recent days, for example, the Legislature has set aside $20 million for a constitutionally suspect slush fund known as the General Improvement Fund. That could have doubled the amount of general revenue that goes into the Arkansas Academic Challenge scholarship program for the state's best high school students.
Granted, the calendar does a new governor no favors. The winner of a governor's race in November must go through a rapid transition in which there are only two months before the inauguration to put a staff in place and make needed changes at the department level. Then, the next three months are spent dealing with the Legislature.
With the legislative session coming to a close, Hutchinson will now have time to take a deep breath and begin charting a course that can move the state forward. One of the toughest things to swallow for the new Republican governor is going to be the realization that the biggest impediments to economic progress are ideologues within his own party. The previous Republican governor, Mike Huckabee, came to such a realization. At one point, Huckabee accused a group of Republican legislators who wanted to discriminate against Hispanic immigrants of "drinking a different kind of Jesus juice than me." Hutchinson must be willing to call out those in his party who are drinking too much of the Tea Party juice.
A 21st Century economic development plan must be focused on talent, innovation and place. As a talented young man from a progressive state, Mike Preston already knows that. The hope is that he can convince mossback legislators and recalcitrant bureaucrats of the need for a 21st Century approach to education and economic development.
------------v------------
Freelance columnist Rex Nelson is the president of Arkansas' Independent Colleges and Universities. He's also the author of the Southern Fried blog at rexnelsonsouthernfried.com.
Editorial on 04/01/2015