Arkansas Economic Development Commission Executive Director Mike Preston said he will ask the state Legislature to at least double the commission’s annual marketing budget of $1.1 million. The commission has spent that much on marketing over each of the last 15 years.
The additional funding is needed, he said, to help spread the word about Arkansas as a destination for new and expanding businesses.
Under past directors, the commission was likely more reactive than proactive, Preston said in an interview days before he was to leave for a business scouting mission to Cuba. Preston said Gov. Asa Hutchinson and the rest of the delegation are the first state dignitaries from the U.S. to visit Cuba since the ban on exporting U.S. goods to the country was recently lifted.
Even under the limitations of the embargo to Cuba, U.S. businesses exported $273 million worth of goods to the country through the first 11 months of 2014 and shipped as much as $712 million in goods there (2008). Arkansas alone sent some $4.5 million in “miscellaneous chemical product” to Cuba last year, according to statistics provided by AEDC.
Arkansas sent no goods to Cuba in 2012 and 2013. The two previous years, all exports came from the meat sector, totaling more than $12.7 million.
Preston said the delegation will ascertain what it will take to begin trade with Cuba once relations have normalized.
“We want to learn more about their culture and what we need to be ready for,” agriculture products being the most likely export, he said.
As more opportunities arise, AEDC will need a bigger marketing budget to make the most of them.
Without being privy to the economic climate and mindset of those who previously held his position and the administrations that hired them, the economic chief vowed to increase the budget and expand the commission’s strategy.
“Frankly, maybe we were adequate in what we were doing. We were being more reactive on an economic development front and not proactive,” Preston said. “To be proactive you have to have more marketing funds. Maybe we didn’t have the means to do so.”
His next opportunity to get in front of the General Assembly will be the body’s fiscal session in April.
In addition to investing more in marketing, Preston is also in the process of filling a staff position, director of marketing and communications, that’s been vacant since Joe Holmes retired a couple of years ago. When Holmes left, the agency split the marketing and communications position and hired directors for each.
Preston and the AEDC leadership recently decided to again merge marketing and communications and hire someone to oversee both divisions and report directly to Preston. The $100,000-a-year job drew some 40 applicants from across the country, Preston said. He hopes to hire someone by the first of November. The directors of the communications and marketing divisions will remain in their jobs.
Little Rock advertising agency Stone Ward has had the AEDC’s business for the last 15 years.
The new $2.2 million figure for marketing is not set in concrete — Preston and his staff are still formulating its strategy — but doubling the current budget “would be a huge step,” he said. And the AEDC head has some ideas for what it will take to tout Arkansas to business prospects in other states and countries
Options include direct marketing to specific groups, including CEOs and other “C-suite”-level executives who steer companies in big decisions like relocation and expansion. The AEDC will also go after site selection consultants and attend more trade shows here and abroad, like the biennial International Paris Air Show he and Hutchinson attended in June. The event showcased about 2,200 exhibitors. Attendance was estimated at well over 140,000.
The aerospace sector was Arkansas’ largest export in 2014, with more than $1.6 billion in products exported, said AEDC Communications Director Scott Hardin.
Preston and Hutchinson also attended the International Metallurgical Trade Fair in Dusseldorf, Germany, where he met with companies with an interest in expanding into North America. Hardin said Mississippi County is the third-largest steel producing county in the nation, contributing to job growth in Arkansas’ steel sector by 39 percent since 2009.
Preston admitted that the trip to Paris entailed some modest one-on-one meetings with aerospace heavyweights, while other states were able to throw extravagant parties, including one at the Eiffel Tower.
“If we’re not there marketing ourselves, we’re going to get beat by these other states,” he added.
Preston and the governor will be among those making a business development trip to China and Japan later this year.
“Whenever the governor and I are going outside the borders of the state and talking about business and trying to recruit business, that’s marketing to me,” Preston said. “I’d really like to take it up to that next level.”
An anecdote Preston reuses on occasion: “If you’re not at the table, you’re on the menu.”