Guest Column: Mike Preston
Updated: Jun 26, 2019
THE GOOD NEWS ABOUT ARKANSAS
Is it time to dust off that old “Land of Opportunity” slogan?
Arkansas Economic Development Commission
OVER THE LAST few issues of this newsletter, you’ve seen various Arkansas business leaders come forth with calls to action about the dire need for increased tech talent in our state, as well as with suggestions for how to achieve that goal. As co-chairman of the board of the Arkansas Center for Data Sciences (ACDS), I applaud these voices—we do have challenges in this area, and we know we all need to work together to meet and surmount them.
But I’m not here to focus on gloom and doom. In my role as our state’s chief economic developer, I’m the lucky guy who gets to spend my days talking about the good news here in Arkansas, and there’s plenty of good news to talk about. So in this column I want to approach the subject of Arkansas tech talent from a different perspective—from the point of view of all the great jobs we’re creating for our present and future tech grads.
Every company is a tech company today. When you buy something at Walmart, you may think of it as purely a retailer. But in fact Walmart is a technology company—any company that is trying to compete and survive in today’s world has got to be a technology company. That’s why Walmart, to its credit, has invested much of its capital of late emphasizing the online side of retailing, such as by acquiring the ecommerce company Jet.com. Any company that wants to keep up with the Amazons of the world has got to refine its tech game. And it’s not good enough just stay on top of that game—the key today is to stay ahead of it. What was great five years ago is already behind the times, and what’s great today will not be ahead of the game five years from now. That’s the defining axiom of today’s business world.
And that’s why technology, along with manufacturing, cuts across every industry these days. We just recruited a Czech company that manufactures firearms. It’s called CZ-USA, which is a sister to Czech Armory, and Little Rock will be its North American headquarters. They’ll be bringing in 600 jobs and making almost a $100 million investment in our state. While CZ-USA is classified as a “manufacturing” company, this won’t be anything like the old days of people working on a production line. High-tech machines will help craftsmen produce beautiful, top-quality handguns that can be used for recreation and defense.
CZ-USA is just one example of the kinds of companies in different industries we’re bringing to Arkansas. In the past four years we’ve won more than 400 competitive projects representing some 17,000 jobs and bringing about $8 billion in investment into the state.
Another category I’m really proud of is the work that we’ve done in aero defense. Take a company like Aerojet Rocketdyne. You’ve seen them grow from about 400 or 500 employees to over 800 employees in the last couple of years. They’ve got a footprint all over the country. Every project that we do with them, we’re competing with Alabama and with California. In fact, they recently moved a lot of jobs to Arkansas from Sacramento. This company is kind of a hidden gem. In the Arkansas facility, they make guidance systems for missiles and rocket motors—the very rockets and missiles that are protecting our country and that protect South Korea from North Korea. So not only is it cutting-edge technology, but it feels good to land this company because we’re playing a part in protecting America.
At the same time, we now have eight Chinese companies in Arkansas, as compared to zero just four years ago. The Sun Paper deal in Arkadelphia is one that’s still coming together, and it is a $1.8 billion deal that will initially create 350 jobs. Another Chinese company, Hefei Risever, will open its facility in Jonesboro this summer to make very heavy machinery equipment to supply companies like Caterpillar and Volvo. This company looked at states all over the southeast and chose to invest $20.5M and create 130 new jobs in Arkansas.
Yet another Chinese company that we’re working with had actually moved into the Memphis area and started doing some small operations but then decided they wanted to venture into the timber industry. Turns out the old Chicago Mill in Helena-West Helena was perfectly situated for Dragon Woodland Sawmill’s needs. In its heyday, the mill employed 1,500 people and was especially known for producing wooden ammunition boxes used in World War II. There they were right on the Mississippi River, so they could load those boxes on barges to take them down to New Orleans and, from there, all over the world.
Dragon Woodland purchased the lot in 2018, along with a logging and trucking company, and is investing $10 million and creating 70 jobs to reopen the mill. But beyond the jobs at the mill, which will be a big boon to West Helena, logging is a huge multiplier. You have the guys who are driving the trucks out to the woods where another crew is cutting the timber to be loaded on the trucks and brought back to mill. Then someone else must come in and either ship that lumber down the river or over the road to wherever it might be going. Every forestry job creates 1.4 additional jobs, and forestry contributes 5.1 percent of the state’s economy. And you can bet that these jobs at the mill—in fact, all the way through the process—will be much more high tech than when the mill was operating in the old days, making it much more efficient and doubling its original output.
WHILE MY JOB is called “economic development,” I never forget the people aspect of what my team and I do. All these human lives are being affected, and not just the 17,000 people who hold the jobs we’ve brought in. Those jobs pay good wages, and that money gets spread around in the various communities, improving the lot for everyone.
For the purposes of ACDS, however, I’m especially proud of the work we’re doing to create well paying, 21st-century jobs in our state. This is one-half of the alignment equation that all of us should be keeping in mind: Today, the Arkansas Economic Development Commission is especially focused on companies with a strong IT leaning. Building on Arkansas’ history of tech excellence—think Acxiom, Systematics, FIS, and now First Orion—we are increasingly armed with a powerful message about our state as a growing technology hub. Governor Asa Hutchinson and I often travel together to visit companies we’re interested in recruiting, and we find that our pitch resonates with company leaders eager to relocate their operations to a place with a high quality of life and a low cost of living.
Gas Pos is a great example of that. The company, originally headquartered in Alabama, participated last year in The Venture Center Fintech Accelerator, which we support along with FIS. Its focus is on finding cutting-edge solutions for banks and consumers. Gas Pos created a digital platform that solved a problem for at-the-pump transactions in the trucking industry, and used their experience with the accelerator to scale-up their business plan. They also chose to move their headquarters to Central Arkansas as a result.
Transplace, a leading provider in transportation management and logistics technology, recently held a groundbreaking on a new $45M operations center in Rogers to support its growth and technology investment to meet the supply chain needs of its growing customer base. The state-of-the-art facility will house more than 1,000 employees with high-paying jobs in a high-tech space designed with employees and customers in mind, which will reflect the company’s culture of innovation and collaboration.
But that is only part of the pitch, and not even the most important part. The key element is the other side of that alignment equation I mentioned earlier—the availability of topnotch tech talent in Arkansas to fill the tech jobs we’re bringing in. We’re able to talk about the governor’s focus on computer science and coding in K-12 and how our state’s businesses and educational institutions have come together with ACDS to ensure that we’re educating the next generation of tech workers to fill those jobs. So when our team goes out and recruits companies, especially in the tech industry, they recognize, “Yeah, Arkansas is a great place for us to find tech talent.”
At AEDC, we regularly research and promote impressive statistics about our tech readiness. In our most recent Tech Industry Report, for example, we stated that in a national school system in which only 13.2 percent of schools teach computer science at all, Arkansas was the first of only 12 states to mandate coding education courses in all K-12 schools. We also reported that Computer Science majors in Arkansas can expect to earn an average of 75 percent more than the average state salary.
But to me, when I’m talking with prospective businesses to recruit, the most impressive statistic is the whopping 400 percent more of our high school students who’re now taking Computer Science courses as a result of the governor’s “Learn to Code Initiative.” To me that’s an important indicator, our going from not even having a program to that many students being interested in taking it.
On the other side of the ledger, the number that really stands out for me economic development-wise is the $8.5 billion that businesses have invested in our state in the last four years. When companies make that kind of investment, it shows that they’re voting with their bottom line in mind. They’re voting for Arkansas, and they’re giving us that nod of confidence that they believe Arkansas is heading in the right direction.
Technology is the key to Arkansas’ economic future. Our job as leaders in this state is to make sure that we’re set up in a way that allows us to be nimble enough to constantly adjust to the shifting needs of industry, as dictated by developments in technology. We have to do that if we want to continue to compete for the new jobs that are coming. And we have to do that because the workforce is changing. Today it’s more about Millennials and Generation Z than it is about Gen X or the Baby Boomers. The workforce of today and tomorrow has a different mentality: The new generations want to go somewhere where they have a quality of life and all those key things that make them happy. Then they’re going to get a job surrounding that.
I think it’s important for the ACDS board and staff to focus on how we capture that talent, and apprenticeship programs are a great beginning, just like the one that Charles Morgan pioneered at First Orion, and which are now going statewide through ACDS. Increasingly, the message that comes through is, You can live in Arkansas and have a great quality of life and a low cost of doing business, but at the same time you’re working at this cutting-edge, tech startup that’s global.
The more that students see that opportunity and realize they don’t have to go to Denver or Boston or Seattle or Austin, the better off we’ll be. They can stay right here and be close to their families, all while making an incredible living that will go a lot further than it would in Silicon Valley. A $100,000 salary out there gets you a 400-square-foot apartment that you’re probably going to share with somebody. That’s not the ideal world, but we—in Arkansas—could be. If we can give our students the opportunity to realize, “I don’t have to leave this state to do this,” and we can keep that talent right here, we’re going to be fine. And I’ll get to continue traveling the world sharing our state’s good news.