Mike Preston joked that he was nervous about his first meeting as co-chairman of Arkansas Gov. Asa Hutchinson’s blue ribbon commission on computer science and data analytics.
Hutchinson named Preston, the executive director of the Arkansas Economic Development Commission, to the 19-member commission in mid-March. The other 18 members, including co-chairman and former Acxiom Corp. CEO Charles Morgan, are some of the top business executives and academic leaders in the state.
“Trust me, those are heavy hitters,” 33-year-old Preston said. “I’m having trouble sleeping at night worried about leading a meeting with these guys.”
The commission’s first meeting was scheduled for last Friday in Little Rock. Jokes aside, though, Preston said the panel’s prestigious membership is a reflection of how important the governor and the men and women on the commission view the initiative.
Ask experts around the state to name the next Arkansas company to break out financially, and you’re liable to get a nonanswer — “Boy, if I could see it I would be investing in it,” said Kathy Deck, an economist with the University of Arkansas at Fayetteville — but the experts do predict one thing: The next Big Thing in Arkansas will come in the digital field.
“The question is, ‘What’s next?’ The future is digital,” said John James of Hayseed Ventures, the co-founder of the former online sensation Acumen Brands. “I hope e-commerce and digital are the next big things in Arkansas, because if it’s not we’re going to get disrupted and lose three of our Fortune 500 companies.”
James was referring to how Amazon’s e-commerce prowess and last-mile delivery system were challenging three of the crown jewels of Arkansas entrepreneurship in the 20th century: Wal-Mart Stores Inc. of Bentonville, J.B. Hunt Transport Services Inc. of Lowell and Dillard’s Inc. of Little Rock.
“The blue ribbon commission is something that is unique that other states aren’t doing,” Preston said. “This is something that can set us apart. What the commission is looking to do is, ‘How do we as a state use data analytics to drive industry?’ Industry is constantly changing. Anything in business now circles around data analytics.” (For more on this topic, see The New C-Level: UA-Little Rock Producing Chief Data Officers.)
Expanding the Base
Preston said Arkansas’ existing businesses and industries could be an advantage to the new focus on concepts such as e-commerce and data analytics. There are also opportunities for new businesses to find their places in the new age.
“I think the pillars will remain strong,” Preston said. “I don’t see a lot of change in the overall makeup of our industry. What I do see is new companies that are disrupters coming in.”
Companies like Lauren James Co. of Fayetteville, an online clothing company, and Collective Bias of Bentonville, an online advertising and marketing firm, have found success in the digital world. Lauren James was founded by Lauren Stokes in 2013 and quickly blossomed into a multimillion-dollar business with more than 50 employees.
Collective Bias has repeatedly made Inc. magazine’s list of the 5,000 fastest-growing companies. Collective Bias reported 2015 revenue of almost $34 million, a three-year increase of 409 percent, before it was acquired last year by Inmar Inc. of Winston-Salem, North Carolina.
“We have a retail cluster here, which means we have a real high concentration of retail expertise, supply chain expertise, data analytics expertise, which feed each other,” Deck said. “It’s an opportunity for a small startup, entrepreneurial-minded folks to enter into an ecosystem where they have ready, willing customers.”
Will Collective Bias and Lauren James continue to thrive and become the next true superstars of the state?
It’s a question only time can answer. Remember Acumen Brands was once a business star in Arkansas before falling on hard times in the last year. Maybe the next star company hasn’t even been started.
“It’s difficult to call those kind of shots,” said Startup Junkie Consulting founder Jeff Amerine, who once worked hands-on with entrepreneur students as director of technology ventures at the University of Arkansas. “Craft beer is growing at 20 percent a year nationally, so you’re going to see a lot of growth in those sort of things.
“There is so much data being produced by large organizations across multiple sectors that data analytics and cybersecurity are two huge growth areas.”
Place Your Bet, Guv
The blue ribbon commission is one way for the governor to put his chips in on what he thinks is the best growth area for the state.
Preston said that when he worked for the state of Florida, then-Gov. Jeb Bush made a similar bet on the biotech industry. He pledged hundreds of millions of dollars of tobacco lawsuit settlement money to lure Scripps Research Institute to Palm Beach in hopes of starting a biotech hub. Reviews on his success are mixed.
“That was really new thinking at the time for Florida,” Preston said. “That was the governor had a vision of this is where we want to go with Florida. We’ve been dependent on tourism, construction and retirees for so long.
“That’s similar to this governor saying we realize that digital, e-commerce, computer coding is the next big thing. As Arkansas, we are betting on that. We’re going to be leading the country in that change.”
Deck said it is a good idea in theory and, it’s hoped, in practice.
“Whatever is going to grow in Arkansas, and not just in Arkansas but everywhere, is going to be digital in nature,” said Deck, who is in her last month as the director at the Center for Business & Economic Research at the University of Arkansas. “That’s one of the reasons the governor has put so much focus on trying to provide our future workforce with the skills to participate in that.
“Looking at what our economic drivers are now, we know they won’t be the same. Making sure what currently is our bread and butter stays relevant clearly means that we need to be investing in digital infrastructure of all kinds, whether it is human capital or physical capital.”
The governor said his commission will help higher education address workforce needs by developing a skilled worker pipeline. The other result could well be more digitally minded students who decide that rather than going to work in a large company’s IT department, they would prefer to become entrepreneurs.
“There is probably a company out there that we don’t even know about that is being developed in some guy’s garage or his mom’s basement,” Preston said. “He’s working on some type of technology that’s going to be the next big thing that is going to disrupt the industry and be the new key driver for it. We want to make sure we have those minds that are staying in the state.”