The Valley’s unemployment rate bounces between 8 percent and 9 percent more than two years after the recession officially ended, but it’s not because we lack an economic development strategy.
In the Valley, every city has its own economic plan.
So does every city’s chamber of commerce.
And the same goes for the county, the state and other business associations.
All those plans have prompted the business, governmental and educational leaders to band together for the first time and craft a single Valleywide strategy with assistance from the Brookings Institution.
The Valley is one of just six places in the nation where the public policy institute is working on strategies that have the best odds of creating growth.
The institute agreed to work on the Valley plan because the area has a good mix of industries and leaders, said Amy Liu, co-founder of the Brookings Metropolitan Policy Program. They just need to come together, she said.
“We understand that there are many existing strategies under way, but the problem is many of the strategies aren’t connected or aren’t coordinated,” Liu said.
Brookings met with local officials this week to start a yearlong process of crafting the plan. Already, Brookings has identified potential growth areas that involve the green economy and exporting. Those initial ideas will be refined in the next year.
Brookings favors exports because the worst-performing metro areas in recent years have been in the U.S., while Asian and Latin American cities have been the strongest. But only 2 percent of U.S. companies export products or services. Liu said the U.S. economy is likely to grow slowly for four to five years, which means short-term growth is tied to trade.
“The recession has really changed the rules of economic development and where growth is going to occur,” Liu said.
The initial ideas suggest the East Valley will loom large in the strategy. Some key existing organizations include Arizona State University’s main and Polytechnic campuses, First Solar’s headquarters in Tempe and manufacturing plant in Mesa, along with numerous aerospace firms scattered in every community. And the Phoenix-Mesa Gateway Airport would likely help with exporting plans.
“There’s no doubt that the East Valley plays a prominent role because we have significant assets,” Mesa Mayor Scott Smith said.
Smith has been a liaison to Brookings and said the institute agreed to work with the Valley after conversations he had with the organization. The time seemed right for Brookings’ help because the Maricopa Association of Governments had just formed an economic development committee. That was a new focus for an organization that had previously worked on regional transportation and air quality issues.
Valley cities have wasted economic development efforts for years by fighting each other for shopping malls, auto dealers and employers, Tempe Mayor Hugh Hallman said.
“To most people, the boundaries don’t matter,” Hallman said. “What they want to see is economic growth.”
He calls for better business networks and databases so small-business operators have access to information about trends or perhaps to discover local suppliers they hadn’t heard of. Hallman sees more potential for business expansion than luring outside businesses.
The plan represents a way to reduce the Valley’s reliance on homebuilding and tourism, said Todd Hardy, associate vice president of economic affairs at Arizona State University. Those volatile industries were hit especially hard in the recession.
“That’s the silver lining in all the pain we’re going through,” Hardy said. “We realize as a region we need to do a very special thing. We need to diversify our economy.”
Whatever the plan calls for, Hardy said, will include having more high-wage jobs. Also, he said it should focus on industries like solar because the desert climate makes it easier for the Valley to be a leader in that field.
Liu said the strategy requires an understanding of global trends, like demand for solar products. Even with the ongoing scandal involving a solar manufacturer going bankrupt after getting more than a half-billion in federal loans, she notes that 75 nations have some kind of renewable energy standards.
“Despite all the focus on Solyndra, the reality is that clean-economy products and services are in demand globally,” Liu said.
The strategy should be formed by next October. Liu said the plan isn’t like the public policy organization’s other work.
“This is not another Brookings report,” Liu said. “This is an action agenda written, developed, owned, implemented by leaders in the Phoenix area. We will not write a single letter, a single word. And that is really important.”
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