Northwest Arkansas has an enviable history of entrepreneurial success, but the region will have to embrace changes for continued long-term growth.
Greg Pogue gave a presentation at the State of the Northwest Arkansas Region luncheon on Tuesday. Pogue is the deputy executive director for the IC2 Institute in Austin, Texas, a think tank that researches economic development, innovation and entrepreneurship.
Over the past year, Pogue and his team visited northwest Arkansas numerous times and conducted interviews with leaders and residents. The Economic Development: Generating Entrepreneurs (EDGE) study was funded by the Walton Family Foundation.
"In this region, you start with an extraordinary strong foundation," Pogue said.
The success of Walmart Inc. of Bentonville, Tyson Foods Inc. of Springdale and J.B. Hunt Transport Services Inc. of Lowell are well known, and the University of Arkansas in Fayetteville adds a Tier 1 research university to the area's strengths. But those aren't enough, Pogue said, because the comfort and stability brought by past successes can prevent an ambitious, risky future.
Pogue said northwest Arkansas leaders should coordinate a region-wide strategy of "Innovate Again, Innovate Here."
"You are going to have to disrupt because ultimately entrepreneurship is chaotic, it's risky and it's unpredictable," Pogue said. "That is not the same as a corporate environment."
Pogue said the study found that the area has become siloed — many residents don't want to go more than seven minutes away from home — and that prevents regional collaboration. Complacency and comfort are not the allies of innovation.
"This region has improved but continues to struggles with innovation," Pogue said. "Companies don't invent here; they invent at other places at innovation centers. The University of Arkansas has a modest history of innovation in terms of patents. There has also been a decline in startup activity as well as a decline in funding."
Pogue said he was encouraged that Tyson and J.B. Hunt are focusing on innovation centers in northwest Arkansas and the University of Arkansas will launch a Data Science degree next year. The area has great assets and could make strong moves in industries such as retail and logistics and food and technology.
"In our opinion, you need to focus on things you can win at," Pogue said. "One thing that has not been solved in America is dinner. One thing you can win that Amazon can't win is brick and mortar for locality and freshness."
Pogue said northwest Arkansas could link its food industry with the university's science and agriculture schools to make real inroads in the sector. The key is to have all the players work together, creating density.