by Mark Carter
Posted 11/27/2012 01:20 pm
Updated 1 year ago
A new study says Arkansas is poised to increase its knowledge-based economy and create more high-paying jobs.
Arkansas has seen 135 companies with more than 1,200 employees created in "knowledge economy" industries since 2008, according to a Battelle Institute study commissioned by the Arkansas Research Alliance with other state agencies and released Tuesday.
The entire economic development report is available here for download (PDF).
The report, unveiled by Gov. Mike Beebe and state officials from his conference room at the state Capitol, aims to gauge the progress made in Arkansas since the 2009 launch of a long-term, statewide plan to develop "knowledge-based" jobs.
Arkansas has made progress since then, the report says, and now is "well positioned" to boost its university research output, widen paths to commercialization and create more knowledge-based, high-paying jobs.
But more "consistent, predictable funding" will be required to do that, the report said.
Jeff Gardner, CEO of Windstream Corp. of Little Rock and ARA board chairman, said the Battelle study showed Arkansas was making progress but demonstrated strategic funding was necessary to continue that progress.
ARA director Jerry Adams said a "palpable excitement" surrounds the state's startup ecosystem and cited the inaugural edition of the ARK Challenge startup incubator in northwest Arkansas and the success of the statewide Gone in 60 Seconds elevator pitch competitions.
But in the end, a good motor can't go anywhere without fuel, he said.
"So far, we've had just temporary, tactical funding," Adams said. "We need more permanent, strategic funding."
Adams said it's critical to grow the state's early-stage startups, with three to five employees, to middle-stage ventures with 25 to 50 employees. Before joining ARA, Adams worked for publicly traded data services firm Acxiom Corp. of Little Rock for 34 years. He noted that when he joined the company that now employs thousands, it employed about 25.
The state needs to nurture its future Acxioms, he said.
The state-funded ARA received $3 million in general surplus money to try and do that over the last four years. The Battelle study recommended $25 million in future annual funding from the state to maintain forward momentum, and identified the following focus areas to receive the funding:
- Research — $10 million in annual funding. Arkansas needs to attain a higher level of per capita university research funding, it found. In 2010, the level was $87, well below the national level of $189.
- Commercialization — $7 million. The state needs to accelerate the formation of knowledge-based companies and "position them for success."
- Investment — $7 million. Invest in emerging companies and grow the number of home-grown, knowledge-based startups to 5,000 over the next five years.
- Retain top talent — $1 million. Battelle said the state needs to "harness the education, skills and adaptability of a talented workforce" and put it to work in the state.
Beebe all but promised more permanent funding from sources he wasn't ready to reveal, and said $1 million toward research has been proposed for the upcoming legislative session in ongoing general revenue.
Mitch Horowitz, Battelle's vice president and managing director of its Technology Partnership Practice, likened the report's findings in relation to the state's knowledge-based economic development to a good kickoff return giving Arkansas good field position at midfield.
But he noted there's a long way to go before Arkansas punches it in for a score.
"The state has put in place a well functioning ecosystem, but the public has to ensure the resources are there to carry it out," he said.
Arkansas has done a great job on the angel investment side but needs "formal capital to really take off," he said.
Jim Rankin, vice provost for research and economic development for the University of Arkansas, said the state needs to do a better job of creating the kinds of jobs that will keep its top talent at home.
"We've got to have jobs waiting for these students," he said.
Rankin said more "commercializable" research -- and, of course, money -- can help create those kinds of high-paying jobs.
Battelle is a nonprofit research and development organization based in Columbus, Ohio. The Arkansas Research Alliance is a nonprofit group comprised of chancellors from the state's research universities and CEOs of state businesses dedicated to promoting university research and innovation.
The study was released in partnership with the Arkansas Economic Development Commission, Arkansas Science & Technology Authority, Arkansas State Chamber of Commerce and Accelerate Arkansas.
In addition to the number of knowledge-based companies and jobs, the report found that those knowledge-based workers earned an average of more than $70,000 annually, more than double the $34,000 average annual wage of private sector workers in Arkansas.
The report also found:
- Research initiatives in Arkansas received $61.2 million in state funding from 2008 through 2011 with an additional $191.8 million in outside funding.
- High-wage, knowledge-based jobs are growing in Arkansas. Since 2008, roughly 11,800 jobs related to knowledge-intensive industries have been created.
- The growth in per capita income in Arkansas is on the rise. From 2001 to 2011, it outpaced the U.S. average by roughly 9 percent -- 42.5 percent to 33.7 percent. Since 2007, the per capita income in Arkansas risen 8.5 percent compared to 5.5 percent nationally.