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AN OUTSIDERS VIEW OF ARCO’S ECONOMIC OPPORTUNITIES

Dr. Wayne MillerTyler Knapp

Community and Economic DevelopmentUniversity of Arkansas System

2019 Breakthrough Solutions Pre-Conference Workshop

June 25, 2019

Future Directions?

More of the Same

Improve Standard of Living & Quality of Life

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ARCO Region Employment by Sector

0%

5%

10%

15%

20%

25%

30%

1969 1995 2010 2017

Source: Employment by Sector, 2019 Arkansas State Profile, Woods & Poole.

Employment by Sector 2017 (ARCO – State – US)

0% 5% 10% 15% 20% 25% 30%

Mining

Construction

Manufacturing

Transportation & Public Utilities

Finance, Insurance & Real Estate

Professional Services

Other Services

Government

Farm & Forestry

Trade ARCO

State

United States

Source: Employment by Sector, 2019 Arkansas State Profile, Woods & Poole.

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ARCO Region Total & Manufacturing Employment,

1969 to 2017

0

5,000

10,000

15,000

20,000

25,0001969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total Employment

Manufacturing

Source: Total Full-Time and Part-time Employment by Industry, Bureau of Economic Analysis.

Manufacturing Employment Index (1969=100)

0

20

40

60

80

100

120

140

160

180

State United States ARCO

Source: Emplolyment by Sector, 2019 Arkansas State Profile, Woods & Poole.

4

Total Employment Change, 2000 to 2010

Source: Total Full-Time and Part-Time Employment, Bureau of Economic Analysis.

Total Employment Change 2010 to 2017

Source: Total Full-Time and Part-Time Employment, Bureau of Economic Analysis.

5

Population Change, 2010 to 2018

Source: Population Estimates, U.S. Census Bureau.

Travel & Tourism Visitors Index (1990=100)

y = 1.0932x - 2082.2

0

25

50

75

100

125

150

175

200

1990 1995 2000 2005 2010 2015 2020 2025

ARCO State

ARCO Projection State Projection

Source: Annual Reports, 1990-2017, Arkansas Department of Parks & Tourism.

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Travel & Tourism Spending Index (1990=100)

y = 1.3018x - 2491.8

0

25

50

75

100

125

150

175

200

1990 1995 2000 2005 2010 2015 2020 2025

ARCO State

ARCO Projection State Projection

Source: Annual Reports, 1990-2017, Arkansas Department of Parks & Tourism.

Spending Per Visitor in ARCO Region

$260

$262

$264

$266

$268

$270

$272

$274

$276

$278

$280

CO

NS

TA

NT

20

17

$

ARCO Linear (ARCO)

Source: Annual Reports, 1990-2017, Arkansas Department of Parks & Tourism.

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Population 65 Yearsand Older

Source: Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties and Puerto Rico Commonwealth and Municipios: April 1, 2010 to July 1, 2018, U.S. Census Bureau, Population Division Release Date: June 2019

Change in Population of People 65 Years of Age and Older, 2010 to 2018

Source: Computed from Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties and Puerto Rico Commonwealth and Municipios: April 1, 2010 to July 1, 2018 , U.S. Census Bureau, Population Division Release Date: June 2019

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Net Migration of People Ages 60+, ARCO Region

2,121

-44

784

994

14

-500

0

500

1,000

1,500

2,000

2,500

1970 to

1980

1980 to

1990

1990 to

2000

2000 to

2010

2010 to

2017

Source: Computed from Annual Estimates of the Resident Population for Selected Age Groups for Counties, U.S. Census Bureauand Death Rates by Single Year Age, Center for Disease Control.

ARCO

Economic Development Strategies

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Build On Strengths

Natural resources

Economic diversity within region

Rich Mountain Community College

Airport

Volunteer Spirit

Growing regional identity & commitment to collaborate across region

Industry Clusters Across A Regional Economy

Economic development efforts generate greater results when community and business leaders build on existing strengths and focus on growing industry clusters across a regional economy

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Industry Clusters with Growth Potential

Agriculture (Production & Manufacturing)

Forestry (Wood Products)

Fabricated & Primary Metal, Equipment & Transportation

Tourism / Retirees

AR

CO

Size, Wages & Projected Growth of ARCO Region Manufacturing Clusters

Apparel

Food

Wood Products

Transportation

Equipment

Nonmetallic Minerals

Computer & Electronics

Fabricated Metals

Electrical Equipment & …Textile Product Mills

PaperPrimary Metals

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

25,000 37,500 50,000 62,500 75,000

Pro

jecte

d P

erc

en

t C

ha

ng

e i

n E

mp

loy

me

nt,

20

16

-20

26

Average Annual Wages in 2016

Source: Arkansas Department of Workforce Services Employment Projections; Annual Wages, Bureau of Labor Statistics

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Agriculture Development Strategies

Increase productivity

Encourage farmers to increase productivity of land by pasture improvement, optimizing inputs for land existing land use, improved genetics of livestock, etc.

Increase production of high value and organic crops for direct marketing to schools, hospitals and restaurants.

Produce specialty meat products for direct marketing to high-end restaurants

Forestry Development Strategies

Promote use of best forest management practices and stewardship

Develop unique value added wood products for niche markets

Market the region’s value-added products through joint ventures, collaboration, branding, etc.

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Develop an inventory of tourism attractions in the region.

Develop additional tourism opportunities, biking, hiking, water sports, etc. to make the region a tourist destination.

Brand the region’s tourism industry

Create a tourism website of organic products and artisans with maps, hours and weekend trip itineraries aimed at nearby metropolitan areas

Expand commercial & retail businesses to capture more local dollars from tourists

Tourism Strategies

Tourism Value Chain

Tourism Value Chain

Supply Demand

Lodging Marketing Outdoor Recreation

River kayaking, canoeing, camping

Retail Lake boating, fishing, skiing

Mountains hunting, hiking, mountain biking, ATV

Artisans

Tourism

Food

Arts, Crafts, Festivals

Tour Organizors, Operators

Outdoor Supplies Rentals Camps, Reunions

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Strengthen Industry Clusters

Encourage/support expansion of industry clusters vertically and horizontally

Help integrate value chains focusing on existing clusters

Provide industry-specific workforce development

Attract high-tech investment related to industry clusters

Support entrepreneurs and joint ventures to create new economy spin-offs (back office operations, call centers, etc.) to support industry clusters

Create a supportive entrepreneurial environment

Incorporate ways to practice entrepreneurial skills in schools

Recognize entrepreneurial activity (no matter how small)

Create collaborative local teams to provide industry-specific assistance to promising entrepreneurs in existing industry clusters

Create a community-wide commitment to entrepreneurial growth

Recruit entrepreneurs (e.g., young “retirees” who have valuable skills and are tired of corporate life who want a new challenge)

Entrepreneurial Support

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Development Capacity

CFED development capacity model assesses:

Human resources

Financial resources

Infrastructure resources

Amenity resources

Innovation assets

Invest in people

Improve formal education at all levels

Develop effective school-business relationships

Create a local culture of learning

Regular recognition of academic achievement

Total involvement of community in education

Access to opportunities for life-long learning

Community-wide expectation of excellence in teaching and learning

Strengthen Capacity

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Support Innovation

Telecommunications

Improve access/quality

Ensure citizens of all ages and incomes know how to use tools effectively

Develop effective education-industry relationships

Strengthen Capacity

Amenities

Access/quality health care

Affordable housing

Recreational & cultural opportunities

Traditional Infrastructure

Roads - airport

Rural transportation

Broadband Internet access

Finance

Equity investors for all stages of entrepreneurial development

Access to loans for small business development

Strengthen Capacity

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Increase Labor Productivity

Encourage improved value chain management

Reduce the costs of inputs by developing local suppliers

Increase collaboration/joint ventures

Share real-time information with suppliers

Support investment in labor-saving technology to manage information and production processes

Support industry-specific worker training to improve skills/efficiency

Increase the local supply of well-prepared workers through improved education at all levels

Encourage high-achieving students to obtain degrees needed by local businesses (e.g., scholarships)

Provide incentives for local high-achieving college students to return home (e.g., internships/externships/co-ops)

Education of Population 25 & Older - 2016

0%

5%

10%

15%

20%

25%

30%

35%

40%

Non HSGraduate

High schoolgraduate(includes

equivalency)

Some college,no degree

Associate'sdegree

Bachelor'sdegree

Graduate orprofessional

degree

ARCO Arkansas United States

Source: Educational Attainment, 2012-2016 American Community Survey 5-Year Estimates (S1501), U.S. Census Bureau.

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Health servicesHome health care

Assisted living facilities

Physicians & hospitals

Professional & business servicesMgmt, scientific & technical consulting

Restaurants

Projected Fast Growth Industries

Summary

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Basic Building Blocks

Strategic, inclusive & ongoing planning

Tending to the basics

Infrastructure

Developing human capital & workforce development

Possibilities

Build Capacity Increase labor & resource productivity

Invest in people

Build on existing industry clustersProduce inputs locally

Integrate value chains

Create environment for entrepreneurship

Add value - Grow your own entrepreneurs & industries

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Improve Standard of Living

Produce Products instead of

Commodities

Add Value to Products

Increase Productivity

“Strength does not come from physical capacity. It comes from an indomitable will.”

Mahatma Gandhi