Expanding Economic Growth (J. French Hill Commentary)

As I began my career in the late 1970s, graduates faced rising unemployment and a significant global recession. There were pockets of hope in the U.S.: the oil patch in the American Southwest; Research Triangle, originally developed in the 1950s in North Carolina; and an emerging silicon chip industry in Austin, Texas.

In each instance, the advertised success and commercial development in these areas not only created jobs for local graduates, but they were magnets for college graduates across the country. In the face of difficult economic times, young graduates from all over the nation flocked to these growing areas.  

Arkansas is blessed with two population centers with significant academic research hubs of intellectual capital: northwest Arkansas and central Arkansas. Statewide, we are also blessed with an abundance of expertise in scientific knowledge in animal and row crop agriculture as well as other commodities such as timber and minerals.

When considering the high-paying, wealth-creating jobs of the future, Arkansas must focus its limited promotional and investment resources on our core competencies.

Anchored by Wal-Mart and the University of Arkansas at Fayetteville, northwest Arkansas will be a mecca for jobs in packaging, logistics, information technology and engineering. Central Arkansas, anchored by our extraordinary health care resources found at UAMS, Arkansas Children's Hospital Research Institute, Baptist Health, St. Vincent's and Arkansas Heart Hospital, has an established reputation for outstanding care and world-class medicine.

Accompanying this remarkable pool of international talent, expertise and reputation in medical science, central Arkansas also possesses the state's finest array of academic research and applied science and information technology at UALR's College of Engineering & Information Technology and Nanotechnology Center. We are witnessing successes in central and northwest Arkansas by way of the technology park and incubator in Fayetteville and commercial conversion of intellectual property at UAMS Bioventures. The planned technology park for Little Rock will further enhance our location as a nexus for research and technology.

Throughout Arkansas, we have centers of excellence in agricultural research, both in animal husbandry and in row crop studies. This will lead to scientific innovations in biomass, water conservation and genetic plant research.

The fruit of our investment will be growth in personal income and increasing job opportunities for all Arkansans. Especially given the nature of the evolving world economy, our policy makers and business leaders must work together to strengthen our profile and competiveness. We need to capture and further develop the research and technology innovations that are being created here.

When startup or established companies seek to commercialize this intellectual capital, it's important that Arkansas be prepared to compete for these projects. First, our tax structure should combine a broad base and low marginal rates, particularly on capital gains to spur private capital investment. Next, we must maintain our efforts at recruiting research dollars for our institutions of higher education from all sources, public and private. And we must brand our regions and promote and market these centers of excellence and competence in which we hold a key advantage.

We are competing not only in a global marketplace, but in a very competitive regional one, still pitting our best against the leaders named above and now new entrants such as Oregon, Maryland, Ohio and my recent favorite, Albany, N.Y.  

Albany is the new Austin. Last fall, IBM and Intel announced a $4.4 billion investment to create a research and development hub for nanotechnology in Albany. To support the project, the state of New York will make a $400 million investment in the State University of New York's College of Nanoscale Science & Engineering. Additional private manufacturers, including Global Foundries, Taiwan Semiconductor and Samsung, are investing in the project.

These enormous private and public investments spur innovation, which in turn spawns more private investment in the area. This fuels economic growth, higher wages and employment opportunities for not only our homegrown young people, but, more importantly, the best that we can "import" from around the nation and the world. Arkansas is at the genesis of a bold, new approach to business and education, and it will be up to all Arkansans to find that common ground upon which we can continue to build.

(J. French Hill is founder, chairman and CEO of Delta Trust, an Arkansas-based banking and wealth management company. He will be the 2013 chairman of the Little Rock Regional Chamber of Commerce.)