For two decades, per capita income in Arkansas has languished at three-fourths of the national average. True, our cost of living tends to be less. But it’s generally accepted that, as economies go, bigger is better.
More people, more money, more taxpayers, more commerce, more expensive real estate producing greater equity — that’s considered the higher quality of life, notwithstanding the annoyances of the hustle and bustle.
There’s this group called Accelerate Arkansas. It’s made up of prominent, forward-thinking business people, including some with expertise in the new economy, sometimes called high-tech and sometimes called knowledge-based. It grew out of the state’s Task Force for the Creation of Knowledge-based Jobs. Jerry Adams of Conway, with Acxiom Corp., is chairman.
The group prepared a report in 2004 in partnership with the Milken Institute. It said our state’s stagnant ranking at three-fourths of the national income average was soon to change, and, failing decisive action, do so for the worse.
It said we’re at a pivotal point: Places with higher incomes tend to have the knowledge-based industries that will grow and spawn new ones, spurring further growth. Meantime, places without the new knowledge-based jobs, such as Arkansas, can expect to lose ground to the national average. It’s a familiar cycle: Rich get richer, poor get poorer.
Then, the report said, a poor state’s efforts to educate its people will bear no fruit. Its people will take their better schooling to places where the new economy holds a place for it. Milken called it a “death spiral.”
Accelerate Arkansas says continuing to do business as usual would be tragic. It wants to set a Kennedyesque to-the-moon goal of reaching the national income average by 2020. Its idea is for state government to become an active investor. It takes money to make money, as we know.
The state has a surplus of $843 million. We were prepared to use a hundred million dollars of it to lure Toyota (and borrow another $100 million through bonds backed by future general revenue). But Toyota isn’t coming.
Accelerate Arkansas, saying it’s now or never, thinks we ought to take ... well, all of that hundred million, and more, ideally. But these are reasonable people.
They want a significant fraction obligated to jump-start and sustain homegrown businesses in the knowledge-based economy. They say that once a guy with a good idea gets up and running, investors are easy to find. But getting up and running is the problem. The idea, then, is for the state to fill the ground-level gap, to “help at the garage level,” as one would-be accelerator put it last week.
This money would go for research grants, seed capital and risk capital matching. It would set up a state program to do market research, raise funds and otherwise help knowledge-based industries get started. It would set up a pot of money to pay extra for teachers, instructors and professors in science, technology, engineering and math — thus the name, STEM.
The push will begin this week, and there is wide support. Gov. Mike Beebe has given his blessing and charged Accelerate Arkansas to get out there in the Capitol corridors and get all it can. The group has done well with its sponsor, landing Sen. Bob Johnson of Bigelow to handle four main appropriations bills.
Johnson is the new leader of the Senate, soon to be elected pro tem. He seems to want to rehabilitate himself with something more noble than jeopardizing Little Rock’s water supply or defending payday lenders.
Our state’s need for new-economy jobs is dire. The concept of using state resources for seeding and sustaining those jobs is valid. State government has no clearer purpose than to invest in its people.
There’s no better time than the present. Beebe has cut the grocery tax and budgeted all the expected growth. So there won’t be a big surplus, or one at all, next time.
Any problem? Only potentially, in the execution. The state could underwrite some doozies of boondoggles with this kind of operation. Responsible stewardship is key. Not trying for fear of error would be cowardice.