Arkansas can implement a range of strategies in six key areas to guide itself out of the economic harm caused by the COVID-19 pandemic, according to a report written by think tank Heartland Forward of Bentonville and the governor's Economic Recovery Task Force, led by Steuart Walton.
The report, issued Wednesday, is billed as "a comprehensive economic recovery plan for Arkansas" and touches on everything from workforce development, entrepreneurship and health care to logistics and broadband internet.
It recommends that Arkansas pursue more public-private partnerships and comprehensive strategies to get things done and invest even more in broadband deployment. It also recommends making funding for the Arkansas Economic Development Commission permanent rather than appropriated on an annual basis, possibly by using some of Arkansas' near $1 billion budget surplus.
More: Read the complete 77-page report.
"A plan is only as good as its implementation," Ross DeVol, President and CEO of Heartland Forward and an author of the report, told Arkansas Business late last week. "So you don't want this to sit on the shelf. ... You don't want to base [action] upon tomorrow's weather forecast. You want to try and change the climate."
DeVol said what needs to happen next is for stakeholders to convene and assign responsibilities. The governor's office and state agencies should play a big role in that and work with regional entities, he added.
"We tried to make the point that this isn't meant to replace existing economic development plans, but to build upon them, understanding what changed during COVID-19 and what the post-COVID-19 environment will look like," he said.
The report examines how Arkansas is faring in six areas:
- talent and workforce;
- innovation and research;
- entrepreneurship and small businesses;
- health care;
- supply chains and logistics;
- and high-speed internet.
Talent, Workforce
Of talent and workforce, the report says Arkansas "has made improvements in creating talent, but woefully lags other states in its commitment and execution of new training paradigms." It suggests:
- Arkansas develop a talent creation, attraction and retention strategy focused on growing "knowledge-based sectors such as data sciences, supply chain management, business services, health care, education and research and development."
- Arkansas increase apprenticeship programs for adults and teens as well as building upon northwest Arkansas' Life Works Here remote incentive program, which offers cash to individuals with certain in-demand skills who relocate to the region.
- Arkansas should double its engineering grads within 10 years and do even better than that with its data science grads as well.
- The state should implement a statewide initiative to provide women entrepreneurs with mentorship, technical assistance and capital. It said public-private partnerships should provide child care for women who are training or wanting to switch careers or enter the workforce.
That's because Arkansas ranks 44th in women's labor force participation rate, which at 69.6% is eight percentage points below men's.
Innovation, Research
The report notes that the state was dead last in the country in capturing federal science and engineering funding in 2019. It said:
- Arkansas should provide matching funds for Small Business Technology Transfer (STTR) grants, use State Small Business Credit Initiative (SSBCI) funds of up to $56 million to make additional early-stage risk capital available and provide more money to the Arkansas Research Alliance (ARA).
- The state must encourage innovation activity on regional college campuses.
- Northwest Arkansas should begin developing a plan for why it should be chosen as one of the 20 regional technology hubs contained in the U.S. Innovation and Competition Act legislation.
Entrepreneurship
On entrepreneurship and small businesses, the report notes that firms less than 6 years old are responsible for 10% of private-sector firm employment in Arkansas, while the national figure is 10.8%.
It said Arkansas attracts little venture capital or angel investment and is 43rd in the U.S. in its proportion of eligible individuals that are accredited investors. Recommendations include:
- Redirecting state incentives for industry to these younger businesses.
- Providing more funding to entrepreneurial support organizations.
Health Care
The report said Arkansas' obesity rate of 37.4% is the third highest in the nation, that low-income families in Arkansas have limited access to health care, and that the state is 47th in employer-provided insurance coverage of its population.
Recommendations include:
- Educating the public about chronic disease and mental health.
- Providing more funding for the Arkansas Center for Health Improvement.
- Approving and implementing Arkansas' version of Medicaid expansion, now called "Arkansas Health & Opportunity for Me," or ArHOME, to provide health coverage to an estimated 300,000 people.
- Increase health care access through telemedicine.
Supply Chain Strength
The report said that one of the state's strengths is in supply chain and logistics, a strength it can capitalize on as e-commerce sales continue to grow post-pandemic.
Arkansas has the third highest share of transportation industry employment in the nation — almost double the U.S. average.
The state should embrace this "new type of blue-collar work" and focus on growing more small- and medium-sized logistics, supply chain and transportation firms, the report states.
Gov. Asa Hutchinson appointed the task force in April 2020 to help shape strategies for reopening the state's economy amid the pandemic. Members include Walton, the grandson of Walmart Inc.'s late founder, Sam M. Walton; Mike Preston, secretary of the state Department of Commerce; Randy Zook, CEO of the Arkansas State Chamber of Commerce; various other state department secretaries; business association leaders; company executives; and more.
