From Biz2Biz NWA, March 2010
By Serenah McKay
Northwest Arkansas companies have seen a rocky couple of years, but one expert recently told the business community there is cause for optimism.
Economist Kathy Deck gave attendees of the 2010 Business Forecast luncheon, held Feb. 5 at the John Q. Hammons Center, an idea of what to expect as local, state and national economies pull out of the recession.
Deck, director of the University of Arkansas Center for Business and Economic Research, cautioned that people shouldn’t expect a return to the boom years seen in the middle of the decade. Instead, growth in jobs, home prices, construction and other economic indicators will be more moderate.
“Being ‘normal’ doesn’t mean exponential growth,” she said. “Being normal means steady, sustained growth.”
Deck’s presentation focused on employment trends in the state. Unemployment in the Fayetteville metropolitan area stood at 5.7 percent in December, the latest month for which figures are available, down from a peak of 6.2 percent in July. That compares to 7.7 percent statewide for December, and 9.7 percent nationally for January.
With manufacturing jobs, on which the state’s economy long depended, disappearing or moving overseas, Deck said the metropolitan areas will have to leverage their strengths for net economic growth in Arkansas.
Northwest Arkansas can look to three sectors to drive growth over the next few years – tourism, sustainability and green jobs, and business and professional services.
Tourism
“One of the real opportunities for this state is to develop a tourism infrastructure we’ve never had before,” Deck said. She cited Little Rock’s Clinton Presidential Center, Botanical Garden of the Ozarks, and Arvest Ballpark as examples of attractions for tourists.
But the real explosion in growth for the leisure and hospitality sector over the last decade has come from chain restaurants, she said. Among those that opened in Northwest Arkansas over the last 10 years are Outback Steakhouse, Bonefish Grill, Ruth’s Chris Steak House and P.F. Chang’s.
This is a huge area of opportunity for future jobs, Deck said.
The Crystal Bridges Museum of American Art, currently under construction in Bentonville, also is expected to draw visitors who will bring additional business to area restaurants and hotels.
This sector has weathered the recession relatively well, Deck said, and remains poised to do well as the economy strengthens.
Sustainability
The region is working desperately hard to take advantage of green initiatives with Wal-Mart Stores Inc. and the University of Arkansas leading the way. Sustainable employment, or green jobs, will continue to be a place to look for growth.
Wal-Mart’s sustainability goals, listed on its website, are to be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain people and the environment.
The university’s sustainability efforts include two largely financed by Wal-Mart.
The Applied Sustainability Center, based at the Sam M. Walton College of Business, was established in July 2007 with a $1.5 million grant from the Wal-Mart Foundation Inc. The center’s sponsors also include Tyson Foods Inc., Cargill Inc., General Mills Inc., Unilever, Dairy Management Inc., Tetra Pak, Monsanto Co. and Café Born Dia.
The center leads organizations in the retail and consumer goods industries toward sustainable practices, according to the center’s website, www.asc.uark.edu.This is accomplished by solving complex problems, providing expert guidance, brokering problems and solutions, and sponsoring research.
The Sustainability Consortium, which UA administers along with Arizona State University, also received initial funding from Wal-Mart. Formed last year, the consortium will be able to track how corporate sustainability initiatives are affecting environmental and social impacts and driving innovation and green jobs.
Business and professional services
“Northwest Arkansas will continue to be a hub for business and professional services,” Deck said. “We have the capacity and we have the labor force.” This sector includes lawyers, accountants and other professional and business people who make good salaries and whose salaries then get turned into an economic multiplier when they go out and buy goods and services in the economy.
This sector did well in the past decade, particularly in Northwest Arkansas. And though it has felt the pain of the recession, it is expected to rebound as the economy improves.
“This is a high-knowledge, high-growth area capable of offering the what is needed to compete in the coming decades,” Deck said. “We’re going to have to invest in our strengths, and we have many of them.”
Serenah McKay is a freelance writer who lives in Rogers. Contact her at serenahmckay@hotmail.com.
Back to Biz2Biz Tip: Building Your Business
Discussion
No comments yet.