Northwest Arkansas is running with a new crowd, and initial results show the region performing well.
When the Northwest Arkansas Council developed a new strategic plan for the region this past year, its executives decided it was time to compare northwest Arkansas with a higher-level of competition.
Out were cities such as Omaha, Nebraska, and Huntsville, Alabama, and Lexington, Kentucky. In were cities (or areas) such as Austin, Texas, and Madison, Wisconsin, and the North Carolina area that includes Durham, Raleigh and Chapel Hill.
The fifth annual State of Northwest Arkansas Region Report showed that northwest Arkansas is competitive in key metrics such as employment, job growth and gross domestic product. The report is a collaboration between the council and the Center for Business and Economic Development at the Walton College of Business at the University of Arkansas in Fayetteville.
Mike Malone, the CEO of the council, and COO Mike Harvey decided that the region needed to start comparing itself to best economic areas in the nation. Malone and Harvey joked that a consultant thought they were crazy, especially when you consider Austin has a population of nearly 2 million while northwest Arkansas recently surpassed 500,000.
"We ain’t scared," Harvey said. "We’re punching above our weight. We are in the challenge business at the council."
Kathy Deck, the director of the center, said the comparison models were the “best of the best,” and northwest Arkansas did well.
For example, in GDP, northwest Arkansas’ 4.6 percent growth from 2013 to 2014 was higher than Madison, Durham-Chapel Hill and even with Raleigh and Des Moines. Its unemployment rate of 4.6 percent in 2014 and its employment growth rate of 4.1 percent from 2013 to 2104 also compared favorably, and in some cases, beat the other markets.
"We don’t want to be winning the NIT," said Deck, referring to the postseason collegiate basketball tournament that is filled with teams that don’t make the NCAA Tournament. "We knock their socks off … in so many different places. Northwest Arkansas should be started to be talked about in the same breath as Raleigh and started to be talked about in the same breath as Austin."
But things were not all positive. Deck said northwest Arkansas still trails significantly in areas such as education, as measured by the percentage of the population with bachelor’s degrees, and the number of business establishments created.
Deck said the area saw no growth in the number of businesses created, meaning that job growth is pretty confined to existing companies. Northwest Arkansas is consistently creating 5,000 to 10,000 jobs a year, with this year being closer to 5,000; Deck said it would be better if there were more new companies contributing to that effect.
"Existing companies are doing a good job of creating new jobs," said Deck, who acknowledged the report was being released the same day Wal-Mart Stores Inc. of Bentonville announced it was laying off 450 employees. "We don’t want to have to depend on our existing businesses. None of us want to rest on our laurels. This is what we need to have our eyes most closely on."
Malone, in his opening remarks, said if he had his choice, he would have not have scheduled the report’s release to coincide with Wal-Mart’s announcement. Wal-Mart’s layoffs were known to be in the works for months — "the area’s worst-kept secret," Harvey said — but neither the council executives nor Deck thought the layoffs would have a significant long-term effect on the area’s economy.
"When we talk about the economic potential of northwest Arkansas, Wal-Mart’s restructuring does absolutely nothing to affect the northwest Arkansas job creation machine," Deck said.