Greater Northwest Arkansas Development Strategy

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TARGETINGTRANSFORMATIONALINNOVATION

GreaterNorthwestArkansas

DevelopmentStrategy

The2018Blueprint

July10,2018

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TABLEOFCONTENTS

ExecutiveSummary............................................................................................3

CurrentStateoftheRegion................................................................................6

EnvisioningtheNext25Years.............................................................................8

2018StrategicActionAgenda...........................................................................13

Appendix..........................................................................................................23

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EXECUTIVESUMMARYKeyOpportunitiesandChallengesNorthwestArkansashasmadesignificantprogresssincetheNorthwestArkansasCouncilwasestablished,andtheregionisoftenlistedasoneofthebestplacesinthenationtoliveandwork.Theregionhasseenmanynotableimprovements,andthereismuchtocelebrate:thefastestjobgrowthin25years,greatlyexpandedworkforcetrainingprograms,newrecreationalandculturalopportunities,expandedinfrastructure,andrevitalizeddowntowns.Thefutureappearsbright,butincrementalprogressisinsufficientgiventherapidchangesinbusinessandsociety.

Tosuccessfullycompeteinthefuture,thisnewblueprintencouragestheregiontoreachevenhigher,totaketransformationalstepstobe,andbethoughtofas,oneofthebestregionsintheworld.And,theblueprintfocusesheavilyonimprovementsneededfortheregiontodevelop,attractandretaintoptalent,generatepioneeringideasandgrowtomorrow’sgreatcompanies.

Byanalyzingstrengthsandweaknessescomparedtohigh-performingregions,bylookingatbusinesscompetitivenesstrends,andbydrawingontheexpertiseofCouncilmembersandpartners,it’sclearthatNorthwestArkansasneedstoimproveitstechnologicalcapacityandentrepreneurialecosystem,continuetobuilditsmiddle-skillsworkforce,andcontinuetobuildrobustphysicalandsocialinfrastructuretosupporteconomicgrowth.TheregionmustensurethatagreatqualityoflifeisavailableforeveryonewhochoosestoliveinNorthwestArkansas.

Regionsthatarestronginscience,technologyandentrepreneurshipwillbestcompeteinthefuture.InNorthwestArkansas,theseeffortswillsupportthecontinuedexcellenceofenterprisecompanies,buttheyalsowillhelpgrownewcompaniesanddiversifytheregionaleconomy.NorthwestArkansashasaddedbuildingblocksoverthelasttwodecades,butitlacksthescaleandthesystemsrequiredtocompeteatthehighestlevels.Tomakeprogresstowardthisgoal,theNorthwestArkansasCouncilshould:

• SupporteffortstoincreaseresearchexpendituresattheUniversityofArkansastosupportmorelearning,jobs,andstartups.

• SupporttheUniversityofArkansas’effortstoenhancetechnologytransferandcommercializationtoincreasestart-upactivityandgrowthinSTEM-relatedemploymentintheregion.

• Regionalizeafracturedentrepreneurialsupportsystemtobuildmorecriticalmassinindustryclusters,talentandcapital.

• Buildbetterconnectivityamongregionalemployers,theUniversityofArkansas,andentrepreneurialsupportorganizationstocapitalizeontheorganicgrowthpotentialoftheregion’sthreeFortune500companiesandaClassICarnegieresearchinstitution.

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EXECUTIVESUMMARY,CONTINUED

Sustainingarobustmiddleclassinthefaceoftechnologicalchangeandautomationrequiresanimble,flexibleeducationandtrainingsystem.TheinabilitytomeetemployerdemandforSTEMandmiddle-skilledjobopportunitieswilljeopardizelong-termgrowth.NorthwestArkansasismakingstridesintherightdirection,butuntilitbuildsaworld-classtrainingsystem,fullpotentialcannotberealized.Tomakeprogress,theNorthwestArkansasCouncilshould:

• Buildmoreemployer/educationpartnershipstosupportprogramalignment,awareness,curriculum,andexperientiallearning.

• Establishadditionaldegreeprograms,facultypositions,enrollments,andgraduatesininformationtechnologyandengineering.

• Coordinateandsupportadditionalcapacityandstreamlineddeliverysystemsformiddle-skillstraining,especiallyatNorthwestTechnicalInstitute.

• Enhancecareercoachinginfrastructureinsecondaryandpost-secondarysystemstoprovidebetterguidanceforthefutureworkforce.

Accesstopeople,places,products,andservicesfosterseconomicandsocialmobility.NorthwestArkansasrisksfallingbehindifitisunabletoprovideaninfrastructurethatsupportseconomic,professional,andpersonalgrowth.Tomakeprogresstowardthisgoal,theNorthwestArkansasCouncilshould:

• Helpattractdailylow-fareairservicethatwillsaveNorthwestArkansansmillionsinannualtravelcosts.

• Supportinvestmentsforcriticalhighwayandroadprojectstoaccommodategrowthandcontinuebuildingconnectivitybetweentheregion’smunicipalities.

• Coordinatepublictransitopportunitieswithlargeemployers,andexplorewaystoexpandon-demand,point-to-pointservicetoeasethecostburdenandprovidemobilityoptionstoresidentswithlimitedaccesstoreliabletransportation.

• AdvanceappropriaterecommendationsidentifiedintheRegionalAffordableHousingAssessmenttoprovideadditionalhousingoptionsfortheregion’slow-andmoderate-incomeworkers.

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EXECUTIVESUMMARY,CONTINUED

Expandingeconomic,educational,civic,andculturalopportunitieswillhelpretainlocaltalentandattracttalentfromacrosstheglobetoNorthwestArkansas.Tomakeprogresstowardthisgoalandtoensurethattheseopportunitiesarewellknownandavailabletoallregionalresidents,theNorthwestArkansasCouncilshould:

• ImplementanewdiversityandinclusionstrategythroughEngageNWAtoensurethatallresidentshaveaccesstoeverythingNorthwestArkansashastooffer.

• Supportregionaleffortstoexpandearlychildhoodeducationtoclosetheachievementgapandcreatebetterlearners.

• Createaregionalartsservicesorganizationtosupportandpromotetheartsandsupportlocalartists.

• Supportnextstepstoadvancedowntowndevelopment,trails,andotherquality-of-lifeenhancements.

• Establishnewprogramstoensurethatregionalleadersandresidentscontinuetounderstandthevalueofaregionalapproachtosolvingproblemsandworktogethertowardcommongoals.

• CreateandimplementaregionalbrandingstrategytotelltheNorthwestArkansasstorytoglobalaudiences.

Toexcelinthischangingworld,NorthwestArkansasmustembracetransformationalchangesthatbuildontheregion’sstrengths.Moreimportantly,thosetransformativeprojectsmustaddresstheregion’sweaknessesinworkforceatalllevels,expandthepoolofscienceandtechnologytalentinNorthwestArkansas,andcontinuetobuildtheregion’sphysicalandsocialinfrastructure.NorthwestArkansasmustcontinuetoworktowardregionalcohesionandcollaboration.TheCouncil’sfoundersunderstoodtheimportanceofregionalapproaches,andtheCouncilshouldredoublethoseefforts.

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CURRENTSTATEOFTHEREGIONStrongeconomicperformanceinNorthwestArkansasisthenorm.FromMarch2013toMarch2018,regionalemploymentgrewby45,822jobs,analmost21percentincrease.Theregionaddsover30newpeopletoitspopulationeveryday,drawntoeconomicopportunitiesandhighqualityoflife.

Inthe2015blueprint,NorthwestArkansasbegantobenchmarkitselfagainstothercontemporary,high-performingregions:Austin,DesMoines,Madison,Durham-ChapelHillandRaleigh.The2017StateoftheNorthwestArkansasRegionReportfoundthatNorthwestArkansas’grossmetropolitanproductwasgrowingatmorethantwicetherateoftheU.S.andaboutthesameasthepeerregions.Employmentgrowthwasfasterthanthecountry’sandeverypeerregionexceptAustin.Thelowunemploymentrate,lowhomeownershipcosts,andshortcommutingtimeweresuperiortoallotherpeerregions.

Theareaisnotwithoutchallenges.Annualwagesarehigherinallpeerregions,andmedianhouseholdincomeremainsbelowthenationalaverageandatonly78percentofthepeerregions.NewbusinessestablishmentgrowthishigherthanArkansasorthenation,butsignificantlylowerthanpeermetros.NorthwestArkansas’educationalattainmentlagsitspeerregions.In2016,30.9percentoftheregion’sadultsage25andoverheldabachelor’sdegreeorhigher.Whilethatwasabovethe22percentforArkansas,itwaswellbehindtheselectedpeers.Infourofthefivepeerregions,attainmentexceed42percent.TheNorthwestArkansasaveragecostofdomesticairfareisalsothehighestamongthepeergroup.

Acustomizedmultifactorrankinganalysiswascreatedforthe2015peergroupandthe2011peergroupplantobettergaugeNorthwestArkansas’comparativestrengthinsixindexes:BusinessClimate,Infrastructure,Talent,InnovationandEntrepreneurship,OverallEconomicStrength,andInertiafortheFutureGrowth.Inall,67metricswereused.AcompletelistofthefactorsandsourcesisincludedinAppendix1.Inthe2011plan,previouspeermetroswereKansasCity,Omaha,Knoxville,TulsaandHuntsville.

220,497266,319

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300,000

2013 2018

NorthwestArkansasNon-FarmEmployment(BureauofLaborStatistics,May2018)

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CURRENTSTATEOFTHEREGION,CONTINUED

ThedatashowsNorthwestArkansasisoutperformingthe2011peercommunitiesandrankseitherbestorsecondbestineachindividualindex.Forthe2015peers,whichwereselectedspecificallybecausetheywouldbesteepcompetitionforNorthwestArkansas,AustinandRaleighstandoutasthestrongestregions.AustinranksthebestinEconomicStrength,Talent,InnovationandEntrepreneurship,andInertiaforFutureGrowth,butrankslowinInfrastructureandBusinessClimate.RaleighhasthebestBusinessClimateanddoesnotranklowinanycategory.WeaddedProvo,Utahtothecomparatorgroupidentifiedin2015becauseofitssuccessinscience,technologyandinnovation.

NorthwestArkansasranksbestamongthe2015peersforInfrastructure,andthirdbestforBusinessClimate,EconomicStrengthandFutureInertia,buthaslowerscoresforTalent,Innovation,andEntrepreneurship,suggestingthatincreasedeffortinthoseareasarewarranted.

TheInfrastructureIndexincludeshousingasinfrastructure.NorthwestArkansas’relativehousingaffordabilitycombinedwithlowenergycostsandstrongstateinvestmentinroadscounteredtheregion’spoorrankingsinairservicecostandbroadbandavailability,resultinginatopranking.HousingaffordabilityisarisingconcerninNorthwestArkansasasitisineachoftheotherpeerregionsandcouldbelostasacompetitiveadvantageifitisn’taddressed.

EconomicStrength

FutureInertia Talent

BusinessClimate

Infra-structure

Innovation&Entrepreneurship

OVERALLRANK

CURRENTPEERREGIONSRaleigh,NC 2 4 2 1T 3 3 1Austin,TX 1 2 1 6 4 2 2Provo,UT 6 1 3 1T 5 1 3NorthwestArkansas 3 3 5 3 1 5 4DesMoines,IA 4 5 6 4 2 6 5Madison,WI 5 6 4 5 6 4 6

2011PEERREGIONSNorthwestArkansas 1 1 1 3 2 2 1KansasCity,MO 3 2 2 6 6 1 2Omaha,NE 2 3 3 5 3 5 3Knoxville,TN 5 5T 5 1 4 4 4Tulsa,OK 6 4 6 2 1 6 5THuntsville,AL 4 5T 4 4 5 3 5T

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ENVISIONINGTHENEXT25YEARSOnSept.8,1990,NorthwestArkansasCouncilmembersSamWalton,DonTyson,JimBlair,AliceWaltonandJ.B.HunttoldtheU.S.HousePublicWorksandTransportationCommitteethattherewerespecificinfrastructureneedscriticaltotheregion’sfuture.TheNorthwestArkansasCouncilwasformed,gottoworkontheseimportantprojects,anditchangedtheregionforever.

Thecriticalchallengesforgrowtharedifferenttoday,buttheroleoftheCouncilisthesame-toidentifychallengesandchampionsolutionstoenhancetheprosperityofitsresidents.Sowiththisinmind,theCouncilwentthroughaprocesstogatherinputfromitsmembershipandadiversegroupofstakeholderstoidentifychallengesandpotentialsolutions.

MemberandStakeholderInputAswasthecaseinthe2015Blueprint,thereweremanysuggestionsfornewpriorities,andalsoaclarioncallthattheCouncilshouldfocusonfewerpriorities.

Councilmembersfelttheorganizationshouldcontinueitsworkinareassuchastransportation,infrastructure,workforce,andeconomicdevelopment.Theyalsofelttheorganizationshouldbefuture-focused,identifyingandadvocatinginvestmentsandideasthatwillhelptheregionmeetthechallengesofimprovingitscompetitivenessintheever-changingevolutionoftheeconomy.

TherewasgeneralagreementamongfocusgroupsthattheCouncilshouldcontinuetofocusonitstraditionalareasofworkaswell,buteffortsinentrepreneurialecosystem,leadershipdevelopment,anddiversityshouldbeelevatedandbecomeadditionalCouncilpriorities.

TherewasastrongconsensusthattheCouncil’smostvaluablequalityisitsuniquecapacitytoserveasregionalconnector,convener,andinfluenceaggregator.Allagreedthateventhoughitwon’tappearinanyplan,thisintangiblequalityistheCouncil’sbiggeststrength.

Insummary,theinputfrommembersandstakeholdersmadeclearthatthefundamentalworkoftheNorthwestArkansasCouncilshouldremain,butenhancingtheregion’scompetitiveedgetoreachfuturepotentialwillrequirechanges.Thisstrategyshouldrecommendamixofthefundamentalandambitiousgoals,objectives,andactionitemstohelptheregionrealizethatvision.

Thenatureofcreatingastrategyismakinghardchoices.Threegeneralthemesemergedfromthediscussionthough,andthosethemesformthebasisfortheCouncil’sgoalareasforregionalprioritizationin2018.Thosethreeareasare:

1. DiversifyingtheRegionalEconomy

2. ExpandingandEnhancingtheSupplyofRegionalTalent

3. ImprovingandSustainingtheRegion’sPhysicalandSocialInfrastructure

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ENVISIONINGTHENEXT25YEARS,CONTINUED

DiversifyingtheRegionalEconomyInnovationandentrepreneurshiparefoundationsoftheNorthwestArkansasregion’scurrentsuccess.ThecombinationofthreeFortune500companiesandtheUniversityofArkansashavefueledeconomicgrowthandstabilityoverthepast25years.

Despitethis,NorthwestArkansaslagsbehindthemostinnovativeregionsintermsofeducation,researchcapacity,commercialization,andsupportforstartups.ThesearecleardeficitsfacingtheregionwhenlookingattheannualStateoftheNorthwestArkansasRegionReport.Inaddition,thelatestPOLICOMEconomicStrengthRankingsandMilkenInstitute’sBest-PerformingCitiesrankingsshowAustinandRaleighintheTop10.Sincethelastplanwasdeveloped,NorthwestArkansashasmovedfrom58thto35thinPOLICOM’srankingsandisnowNo.25inMilken’sranking.

Tomakedramaticimprovementsineconomicandwagegrowth,itiscriticalfortheregiontoaddresstheseweaknesses,andstrengthenitsinnovationeconomy.Thatcanbeaccomplishedbyincreasingthetalentpoolinthescienceandengineeringdisciplines;expandingresearchandcommercializationattheUniversityofArkansas;creatingacultureofcollaborationamongestablishedbusinesses,researchers,andentrepreneurs;andstrengtheningsupportstructuresforlocalentrepreneurs.Thesearekeyfeaturesofthenation’shighest-performingregions,andtheyareareasofweaknessinNorthwestArkansas.Thisisanachievablegoal,eveninasmaller,ruralstate.Utahprovidesagoodexampleonhowatransformationcanhappen:

UTAH–ACASEFORTRANSFORMATIVECHANGE

In2001,Utahmadeadecisiontoexpanditscapacityinscienceandtechnology.Thiswasdonetoenhanceeconomicdevelopmentinachangingeconomiclandscape.LedbyGovernorMikeLeavitt,UtahpassedSenateBill61forthepurposeofincreasingthenumberofengineeringandcomputersciencegraduatestoadvancethe“well-beingofthestateanditscitizens.”Thelegislaturemadeacommitmenttoinvestinengineeringeducation,increasedstudents,increasedfaculty,increasedfederalresearchforthepurposeofeconomicdevelopment.ItcreatedtheUSTARprogram,acollaborativeeffortbetweenthestate,thechamberofcommerceandotherpartnerstofocuseconomicdevelopmenteffortsaroundtechnologyandthestateresearchuniversities’capacities.

Theresultisremarkable.Utah,astateofjustover3millionpeople,iscurrentlyratedashavingtheNo.1economicoutlookinthenationandit’sthenation’sfastest-growingtechstate.Thestatebuiltitsecosystemforeconomicgrowtharoundscienceandtechnology,builtabusiness-friendlyclimate,investedinitsresearchuniversities,investedininfrastructure,focusedonqualityoflifeanddevelopeditsworkforce.Theseeffortsledtothecreationofover6,500techcompaniesandfourunicorns(privatelyheldcompanieswithanestimatedvalueofover$1billion).Theresearchactivitiesofthestate’suniversitiesandtheresultingspin-offcompanieshaveledtotheemploymentofover28,000individualsandcontributedover$129millioninstatetaxesin2010,whichwasthelastcomprehensivestudy.ThestateGrossDomesticProduct(GDP)hasnearlydoubled,andUtahisNo.2nationallyintermsofpersonalincomegrowth.Itallbeganwithaconcertedeffortbystateandbusinessleaderstoinvestinscienceandtechnologysurroundingresearchuniversities.

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ENVISIONINGTHENEXT25YEARS,CONTINUED

ExpandingandEnhancingtheSupplyofRegionalTalentNorthwestArkansasisfortunatetohavequalityK-12,post-secondarytraining,andhighereducationinstitutions,andrecentinvestmentshaveimprovedtheirabilitytoproduceaqualityworkforce.Goingforward,theregionmustensurethatitcaneducateandattractworld-classtalent.Whilethefoundationissolid,anhonestassessmentsuggestsimprovementsareneeded.

Theregion’sgrowth,workerattrition,andawaveofretireeswillcreateaneedthatdictatesavigorous,proactiveapproach.Regionalemployershiringmiddle-skilledworkerswillneedtomakeover11,500hiresayearforthenext10years.Regionalemployershiringhigh-skilledworkerswillneedtomakeover6,000hireseachyearduringthatsamedecade.Theserobustnumberscouldconsumemanylocalgraduatesorcompletersandstillleavedeficitsintradeoccupationssuchasprecisionproduction,maintenance,construction,andtransportation;andwhite-collaroccupationssuchasinformationtechnology,lifescience,healthcare,andmarketing.

NorthwestArkansasmustcontinuebuildingabest-in-classworkforcesystemtoaccommodatefuturegrowth,butaglaringdeficiencyexistsinthecapacitytotrainmoremiddle-skilledworkers.Capacityanddeliveryofpost-secondarytechnicaltrainingwillrequireasystemicoverhaultofulfilltheregion’sneeds.

BecauseofthenatureofInformationTechnologywork,whichoftencanbedonefromanylocationaroundtheworld,NorthwestArkansas’abilitytotrainandattracttechtalentwilldeterminewhetheritkeepsmovingupthelistsorfindsitselfslidingdowntherankingsalongwithitsstandardofliving.Theregionwillsignificantlylimititsfutureifitcannottransformitselfintoa“placeofchoice”fortechtalentintheHeartland.

ImprovingandSustainingtheRegion’sPhysicalandSocialInfrastructureFast-growingNorthwestArkansas’thirstforbetterinfrastructureoncewentunquenched,buttheNorthwestArkansasCouncil’sleadershipinthe1990sandbeyondplayedasignificantroleintheregion’sworkwithfederalfunders,stateleadersandlocaldecision-makersinaddressingmanyofthetopinfrastructureprioritiesatthetime.Yet,infrastructureworkisnevercompleteinaregiongrowingatthepaceofNorthwestArkansas.

Asithassinceitsfounding,theCouncilmustbetheorganizationleadingconversationsaboutinfrastructurewhilealsoworkingwithpartnerstoidentifybothuniqueandtraditionalwaystopayforthehighestpriorityprojects.Theregion,itscompanies,anditsresidentsneed(1)betterhighwaystocommutetoworkandshipgoods,(2)investmentsinpublictransportationandtheNorthwestArkansasRegionalAirporttoassurelong-termtransportationoptions,and(3)collaborativeapproachestoaddressingwaterquality,recyclingandwastedisposal.

NoorganizationisbetterpositionedthantheNorthwestArkansasCounciltobethebridgethatensuresregionalcollaborationasawaytomoreeffectivelypursuebig-ticket,infrastructuregoals.

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ENVISIONINGTHENEXT25YEARS,CONTINUED

Justasimportantasphysicalinfrastructure,NorthwestArkansasmustcontinuetobuilditssocialinfrastructuretoattractandretainkeyknowledgeworkerswithanentrepreneurialmindset.Theseeffortswillinvolvegrowingtheregion’sinnovationecosystembydevelopinganopen-innovation,collaborativebusinessculture;establishingeffectivepartnershipsamongenterprisebusinessesandsavvystart-upentrepreneursworkingtoco-createreal-worldsolutions;anddevelopingacognitive-diverse,inclusive,“cool”businessenvironmentthatattractsandretainsinnovatorsandtechtalenttothecommunity.

Effortsinthisspacewillcontinuetodevelopqualityoflifeandreputationsurroundingoutdooractivities,arts,culinaryandculturalactivities.Theregionmustcontinuetodevelopanopen,inclusiveenvironmenttoensurethatanyone,regardlessofbackgroundorbelief,cangrowandthrive.Thesesocialinfrastructureeffortsarekeystoensuringqualityoflifeforregionalresidentsandakeyenablerofeconomicprosperity.

NorthwestArkansasisroutinelylistedasoneofthebestplacesinthenationtoliveandwork,andthefutureappearsbright.However,ongoingincrementalprogressisariskystrategygiventherapidchangesinbusinessandsociety.

Toexcelinthischangingworld,thisstrategymustembracetransformationalchangesthatbuildontheregion’sstrengths,andmoreimportantly,addresstheregion’sweaknesses.

TalentCreationandCultivation

Infrastructure

EconomicDevelopment

InnovationEcosystem

RegionalStewardship

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GreaterNorthwestArkansas

DevelopmentStrategy

2018StrategicActionAgenda

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TARGETINGTRANSFORMATIONALINNOVATION:BLUEPRINT2018The2018blueprintbuildsfromthesuccessoftwopreviousefforts:

1. The2011GreaterNorthwestArkansasDevelopmentStrategy,withits56specificactions,establishedfoundationalbuildingblocksforphysicalinfrastructure,communityvitality,workforceskillsandaregional,morecollaborativeapproachtoeconomicdevelopment.

2. The2015BuildingonSuccessblueprintnarrowedthefocusto15actionitems.Thoseeffortsincludedtakingstepstoimproveregionalworkforceandinfrastructure,supportingbusinessretentionandexpansionasthepriorityforeconomicdevelopmentandexpandingtheNorthwestArkansasCouncil’sroleasregionalstewards,placemakingchampionsandthenexusforregionalinformationandcollaborativeefforts.

The2018TargetingTransformationalInnovationblueprintenvisionsnewcommitmentstoaworld-classinnovationecosystem.Itcallsforstrengtheningresearchcapacity,buildingarobustcultureofinnovationandcollaboration,expandingtalentcreationandcultivationefforts,toincludeestablishingaworld-classyouthleadershipinstituteandanew,best-in-classcampusformiddle-skillstraining.ItalsosuggestsnewfoundationsforfuturesuccessthroughanexpandedrolefortheNorthwestArkansasCouncilasregionalstewards,arolethatissomewhatnewtotheCouncil,butgaininginimportancetoregionalpartners.

Thepotentialprioritieslistislong,andthereisanunderstandingthatresourcelimitationsandtargetedfundingforspecificprogramswillgoverntheCouncil’sworkplaninthefuture.Nevertheless,ifthegoalsprovidedinthisblueprintaremet,theycouldbeacatalystfortransformationalchangethatrivaltheregion’sbiggestachievementsoverthepast50years.

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INNOVATIONECOSYSTEM NorthwestArkansaswillgrowitsinnovationecosystembydevelopinganopen-innovation,collaborativebusinessculture,establishingeffectivepartnershipsamongenterprisebusinessesandsavvystartupentrepreneursworkingtocreatereal-worldsolutions.

GOAL:Beacatalystforimprovementstotheregion’sInnovationEcosystembysupportingincreasedbusinessandresearchcollaborationsanddevelopprogramstohelpattractstudents,facultyandentrepreneurstotheregion.

OBJECTIVESANDACTIONITEMS

HelpimprovetheUniversityofArkansas’researchenterpriseandcommercializationcapacity.

§ TechnologyTransfer&Commercialization:SubstantiallyimprovetheUniversityofArkansas’positionontheMilkenUniversityTechnologyTransferandCommercializationindexbyincreasingthetechnologytransfercapacity,expandingservicesavailableforUAstudentsandfacultytopromoteandsupportresearchcommercialization,andensuringthatUAintellectualpropertypolicesalignwithbestpracticesacrosstheU.S.

§ ResearchFunding:Workwithregionalbusiness,governmentanduniversityleaderstodoubletheR&DexpendituresbytheUniversityofArkansasbyincreasingfederal,stateandindustry-sponsoredresearch.

§ FederalGrants:Supporteffortstosignificantlyincreasetheregion’suseofexistingfederalinnovationgrantprogramssuchasSmallBusinessInnovationResearch(SBIR)programandtheSmallBusinessTechnologyTransfer(STTR)program.

Fostercollaborationamongacademic,industry,andotherentrepreneurialsupportorganizationswithintheNorthwestArkansasentrepreneurialecosystem.

§ University-BasedEconomicDevelopment:HelptheeconomicdevelopmentteamattheUniversityofArkansasestablishaminingandmatchingprogramtomarketsponsoredresearchandcollaborationopportunitiestopotentialpartners.UtilizetheprogramtoreachouttonewandexistingindustrypartnerstogaugetheirinterestinNorthwestArkansasasapotentialbusinesslocation.

§ LifeScience:Enhancelifescience-relatedresearchthroughincreasedcollaborationwiththeUniversityofArkansasforMedicalSciences(UAMS)andtheUniversityofArkansaseitherdirectlyorbycreatinganindependentresearchconsortium.

§ Healthcare:Studyimpactofincreasedmedicalserviceofferingsandhealthscienceresearchcollaborations,includingthepotentialimpactofestablishingamedicalschoolinNorthwestArkansas.

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OBJECTIVESANDACTIONITEMS,CONTINUED:INNOVATIONECOSYSTEM

Enhancetheregion’sentrepreneurialsupportecosystems.

§ EntrepreneurshipPrograms:Supportexistingprogramsanddevelopnewprogramsforregionalbusinesstosupportlocalentrepreneursthroughincreasedmentorshipandcollaborationandestablish,aswarranted,businesspartnershipswithinvitedstartupleadersthatincentivizethemandtheircompaniestojointheinnovationecosystem.

§ SeedFunding:Supporttheavailabilityofaccessforearlystage,high-riskcapitalfundsforregionalentrepreneurs,toincludesupportforprogramsdesignedtoassistinaccessingstateandfederalfundingprograms.

§ BusinessAccelerators:Supporteffortstofosterindustrycollaborationandregionalbusinessgrowththroughtheestablishmentofbusinessacceleratorstoinvitecompaniesreadytoscaleinforshort-termcollaborativesprintstopitchproof-of-conceptsolutionsforregionalenterprisebusinesses.

§ Scale-Up:Supporttherecruitmentandestablishmentoforganizationstoprovideadditionalmentorshipandmarketaccesssupportforregionalentrepreneursreadytoscaleoperations.

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TALENTDEVELOPMENTANDATTRACTIONTheavailabilityofskilledtalentisthetopfactorforbusinessestodayastheydeterminewheretoinvest.Withnationalandregionalunemploymentratesatorapproachingrecordlows,theabilityofaregiontotrainorattractnewworkersiscriticaltosuccess.Developingtalentbeginsyoungandinvolvesparents,educators,businesses,communityandstateleaders.TheCouncilhelpedlayanimpressivefoundationandremainedaninstigatorofchangeoverthepastfewyears.NorthwestArkansasalsomustbuildamoreresilientworkforcebecauseoftherapidpaceoftechnologicalchangeandautomation.

GOAL:Developandattractthetalentneededtobuildandsustainworld-classemployersinNorthwestArkansas.

OBJECTIVESANDACTIONITEMS

Continuetransformingtheregion’sworkforcesystemintoabest-of-class,demand-drivenworkforcemodeltoincreasethesupplyofappropriatelyskilledlabor.

§ Research:Utilizestateoftheartanalytics,secondary,andprimarydatatoalignlocalsecondaryandpost-secondaryeducationandtrainingprogramswithemployerdemand.

§ EarlyChildhood:SupportregionaleffortstoexpandearlychildhooddevelopmentopportunitiestoNorthwestArkansasresidentsofallsocioeconomicbackgrounds.

§ CareerEducation:Workwithschooldistrictstoprovideeverylearnerwithrigorous,uniform,careercoachingopportunitiesinyears10,11,and12.Supportanddeveloplocalschools’effortstomarketnewprogramstolearners,parents,andeducatorstoincreaseenrollments,completions,andcertifications.

§ SecondaryTraining:Buildonsuccessfulcapacitybuildingeffortsofthepreviousthreeyearsbysupportingtheadditionofnewandexpandedprogramswhereneeded.

§ Post-SecondaryTraining:SupporteffortstotransformNorthwestTechnicalInstituteintoaworld-classtraininginstitutiontoincreaseenrollmentsandproducemoregraduateswithrelevant,in-demandcertifications.Helpinformprogramminginnon-creditworkforcetrainingattheNorthwestArkansasCommunityCollegeandtheUniversityofArkansasGlobalCampus.

§ EmployerPartnerships:Identifyandconnectindustrypartnerswitheducationandtrainingprogramstosupportcurriculumdevelopment,createawareness,andprovidework-basedlearningopportunities.

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OBJECTIVESANDACTIONITEMS,CONTINUED:TALENTDEVELOPMENTANDATTRACTIONIncreasethescientificandtechnicalcapacityintheregiontosupportlocalindustryandexpandinnovationecosystem.

§ EngineeringandTechnologyTalent:ExpandandenhancetheUniversityofArkansas’informationtechnologyandengineeringprogramsbysupportingincreasedenrollmentandretentionthroughsupportforendowedchairs,studentscholarshipsandbusinesspartnershipstoretaintalenttosupportgrowthinemergingtechnologiesinecommerce,datascience,artificialintelligence,androbotics.

§ TalentRetention:Establisharevolvinginternshipprogramforlocalcorporationstoincreaseattractivenessoflocaluniversitiesandincreasepost-graduateretentionintheregion.

Attracttalenttomeetemployerneedsformoreimmediate,specialized,ortenuredpositions,andhelpretainneworincumbentworkerstoreduceemployeronboardingcosts.

§ RegionalBrand:Developandimplementalong-termbrandingstrategyfortheregion,withafocusonshapingpublicperceptionbybuildinganidentityandtellingNorthwestArkansasstoriesaboutsignatureexperiences,culturalamenities,andleadingonsocialissuestotheworld.

§ DestinationEvents:Buildonhigh-profileconferencessuchastheNorthwestArkansasTechSummittocreatedestinationeventsthatattracttalentfromoutsidetheregion,similartoSXSWinAustinTexas,C2MTLinMontrealCanada,ortheSummitSeriesinPowderMountain,Utah.

§ TalentRecruitment:Enhancetalentrecruitmentandretentionresourcestoincludefreshregionalpromotions,testimonials,data,socialfeeds,andengagementportals.

§ RegionalMarketing:Disseminateresourcesandcontenttohumanresourceteams,associations,andviaatargeted,nationwidesocialmediacampaignandoffsiterecruitingevents.

§ HigherEdRetention:IdentifyandconnectindustrypartnerswithUA,JBU,NWACCandNWTIplacementoffices,collegedeans,programdirectors,andkeyfacultytofosterhigherregionalretentionratesfromthoseinstitutions.Expandinternshipprogramwithafocusondiversityandinclusion.

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INFRASTRUCTURETherootsoftheCouncillayinitsworktoaligngoalsandinfluencetobuildtheinfrastructureneededtosupportbusinessgrowth.With28yearsofsuccesscomestheimperativetoaddressthechallengesofgrowth.HighwaysandairserviceremainCouncilpriorities.Providingthecollaborativecapacityforvariousplayersintheregiontoaddressrecycling,watersupply,waterqualityandmobilityoptionstoaligntheirworkandlookforefficienciesremainsaneed.Andtheavailabilityofappropriatelypricedworkforcehousingisgrowingconcern.

GOAL:Advanceinfrastructureprioritiestosupporttheeconomiccompetitiveness,development,andpopulationgrowthofNorthwestArkansas.

OBJECTIVESANDACTIONITEMS

EnsurethatNorthwestArkansashastheinfrastructuretomeettheneedsofthecommunity.

§ Highways:WorkcloselywiththeArkansasDepartmentofTransportation,theNorthwestArkansasRegionalPlanningCommissionandothergovernmententitiestoensurethathighwayprojectsprovidingthemostlong-term,regionalbenefitareprioritizedandfunded.

§ Recycling:WorkwiththeBostonMountainSolidWasteDistrictandtheBentonCountySolidWasteDistricttobringincreasedconsistencyinrecyclingandusepartnershipstocreatecost-efficient,wastereductionprogramsacrossNorthwestArkansas.

§ Water:EnsurethatNorthwestArkansasCouncilmembers,companies,andstateandlocalgovernmentsworkinconcertwhenpossibletoaddressthemostsignificantwaterissuesfacingBeaverLake,theIllinoisRiverandotherprioritywatershedsinNorthwestArkansas.

§ Workforcehousing:WorkwithpartnerstoidentifytheappropriateaffordablehousingrecommendationstoadvancefromtheUACenterforBusinessandEconomicResearchregionalhousingassessment.

§ Airservice:WorkwiththeNorthwestArkansasRegionalAirporttoensurethattheairserviceneedsofNorthwestArkansasCouncilmembersarewellknowntoairlines.

§ Low-costcarrier:Pursuedailylow-costairservicetoincreasecompetitionanddrivedownairfaresattheNorthwestArkansasRegionalAirport.

§ Publictransportation:EnsurethattheservicesandfundingofRazorbackTransitandOzarkRegionalTransitkeepupwithrapidpopulationgrowthandthelong-termneedsofNorthwestArkansas.Thatincludesassistingbothsystemsastheyexplorewaystoprovidemoretripstokeyemploymentcenters.

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ECONOMICDEVELOPMENTTheCouncil’seconomicdevelopmentprioritiesincludeClusterCoordinatorandEntrepreneurialchampion.Cluster-focusedeconomicdevelopmentisabottom-upapproachandanintegratedmodelofcollaborationthatunifieseconomicdevelopmentpractitioners,policymakers,partners,academiciansandallies.Thisapproachmaximizescooperationandproductivity,leadingtoresourceefficiency,policyconsistency,operationalstability,andmeasurableresults.

GOAL:Leadtheregionaleconomicdevelopmenteffortstofosterthegrowthofinvestmentandjobopportunities.

OBJECTIVESANDACTIONITEMS

Developandimplementprogramstohelpcreate,expand,orattractnewbusinesses.

§ LocationAdvisorRelations:Continuetocultivaterelationshipswithnationalsitelocationadvisorsandrealestatebrokersthroughonsitevisitsandfamiliarizationtours,socialmedia,anddirectcommunication.

§ RegionalMarketing:Revisitandrefreshregionaltargets,developmarketingcontent,andinitiateasocialmediamarketingcampaigntogenerateawarenessandinterestinNorthwestArkansasasabusinesslocation.Usespecialopportunitiesandeventstopushpositivenewsabouttheregionouttonationalaudiences.

§ EntrepreneurialSupport:Developandexpandprogramsfocusedonsupportinghigh-impactentrepreneursresidinginandmovingtoNorthwestArkansas.ContinueworkwithentrepreneurialsupportorganizationstobuildonNorthwestArkansas’venturecapitalspectrum,bybuildingfundsand/orrecruitingthemtotheregion.

§ Policy:Workwithregionalstakeholderstoensurethatstateprogramsrelatedtobusinessclimateandentrepreneurialsupportareconsistentwithbestpracticesfromacrossthenation.

§ EmployerOutreach:ConductbiennialEmployerRetentionandExpansionsurveystoinformspecificworkforceandbusinessclimateactions.

§ RealEstate:CoordinateanevaluationofaregionalcommerceparkatXNAasthepossiblesitefornewanchorbusinesses.

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REGIONALSTEWARDSHIPNorthwestArkansasmustcontinuetobuilditssocialinfrastructuretoattractandretainkeyknowledgeworkerswithentrepreneurialmindsets.Theseeffortswillinvolvedevelopingacognitive-diverse,inclusive,“cool”businessenvironmentthatattractsandretainscriticalinnovatorsandtechtalent.

GOAL:Championplacemakingandprovideleadership,collaborativecapacity,andresourcealignmenttoensuretheregionremainsawell-led,vibrant,attractiveanddiversecommunityforemployersandresidentsalike.

OBJECTIVESANDACTIONITEMS

Promotediversitybyleadingorsupportingprogramsthatcreateaninclusivesocialandeconomicenvironment.TheNorthwestArkansasCouncilisintegratingEngageNWA,theregion’sleadingdiversityandinclusionprogram,tofocusregionalgoalsofdiversityandinclusioninthefollowingareas:

§ EconomicDevelopment:harnessthefullpotentialofallresidentssothateveryonehastheskillsandassetstothrive,andeconomicdevelopmentsystemsarepreparedtoleveragenewandexistingtalent.

§ GovernmentLeadership&EquitableAccess:Localgovernmentiscommittedtobeinginclusiveandplaysacentralroleinbuildinglocalcapacitywhileadvancinginclusionofdiversecommunitieswithinitsownagenciesandbodies.Communitiesreducebarrierstoservicesandparticipationsothatopportunitiesofthecommunityareavailabletoallresidents.

§ CommunityCivicEngagement:ensurethatdiversepopulationsfullyparticipateinciviclife,includingincreasingaccesstoleadership,communityparticipationandcitizenship.

§ Safe&ConnectedCommunities:Buildrelationshipsamongpeopleofallbackgrounds,includingnewcomersandlong-termresidents.Theyfostertrustandbuildrelationshipsbetweencommunitymembers,locallawenforcementandothersafetyagencies.

§ Education:ensureeveryonehastheeducationthat’snecessarytosucceedinschoolandtheworkforce.

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OBJECTIVESANDACTIONITEMS,CONTINUED:REGIONALSTEWARDSHIPCultivatethenextgenerationofleaderswithworld-classleadershiptraining.

§ Training:Explorethepossibilityofdevelopinganationalworld-classyouthleadershipinstituteinNorthwestArkansas.

§ LeadershipRoles:Supporteffortstoplaceyouthleadersontheboardsofregionalinstitutions.

Organizethelegislativeagendatoadvancethebusinessandlivabilityinterestsoftheregion.

§ Advocacy:promotetheregionallegislativeagendatoelectedofficialsandregionalresidents.

§ Collaboration:MaintaintheCouncil’sleadershipinregionalstewardshipandplacemaking.

§ Metrics:MaintaintheCouncil’sroleastransparentscorekeeper.

§ PublicRelations:Continuetolookforopportunitiestoexpandtheregion’sbrandandsharepositiveattributesoftheregion.

Promotethehealthofregionbysupportingthegrowth,asnecessary,ofhealthcareaccessandqualityandregionalresidents.

§ HealthCareWorkforce:ContinuetoworkwithregionalstakeholderstoaddressneartermhealthcareworkforceshortagesinNWA.

§ RegionalHealthCareAssessment:Workwithregionalstakeholderstoidentifyanygapsinregionalhealthcaresupplyanddemandandworktodeterminetheeconomicimpactofincreasingthequantityandqualityofhealthcareavailableintheregion,toincludethecostsandbenefitsofincreasedmedicaleducationoptionsintheregion.

SupportthegrowingartsandcultureeconomybyworkingwiththeWaltonFamilyFoundationtoincubatearegionalarts-focusedorganization.

§ Assessments:Conductneedsassessmentsinarts,music,andotherculturalamenities.

§ ArtsOrganization:Hireadirectortostartorganizationandsecurelong-termsupport.

§ ArtsStrategy:Developandimplementaregionalartsandculturesupportstrategy.

Promotesuccessesintrails,culinary,anddowntowndevelopmentasapartoftheregionalbrandingstrategy,andchampionorganizationssupportingtheseprogramsandinitiativesthroughouttheregion.

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APPENDIX

GreaterNorthwestArkansas

DevelopmentStrategy

The2018Blueprint

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APPENDIXPartI:EnhancingtheRegion’sInnovationEcosystemDespitesignificanteffortsoverthelastseveralyears,Arkansasranksnearthebottominresearchandcommercialization.AccordingtotheStateTechnologyandScienceIndexReport,whichmeasuresthestateperformanceintheareasofresearchanddevelopment,riskcapital,entrepreneursupportandhumancapitalinvestment,Arkansasranked49thinthenationin2016.Additionally,NorthwestArkansas’educationalattainmentdoesnotkeeppacewithcomparatorregions.WhileNorthwestArkansascomparesfavorablytonationalaverages,itlagsbehindhigh-performingregions,andfundingforresearchactivitiesattheUniversityofArkansaslagsignificantlybehindresearchactivitiesinpeerregions.

Forthisregiontocontinuetothrive,itmustaddresstheseweaknessesbyexpandingresearchactivities,buildinginnovationsynergiesamongexistingbusinesses,anddevelopnewareasofeconomicactivity.Atthesametime,NorthwestArkansasmustdevelop,attractandretainworld-classtalent.Theseactivitiesarekeystotheregion’sfuture.

TheResearchUniversityasanEconomicDriverItiswidelyunderstoodthatresearchuniversitiesareaprimarydriverofinnovationandentrepreneurship.Researchuniversitiesarecrucialassetsinpromotingtechnology-basedandotherhigh-value-addedeconomicdevelopment.Giventhewayscienceandtechnologyarechangingbusiness,itisclearresearchuniversitieswillplayavitalroleinthefuture.

Leveragingresearchbyconvertingittoaprivate-sectorapplicationanddevelopingthetalentthatindustryrequiresaretwomainareaswhereresearchuniversitiesarekeycomponentsofathrivingeconomy.TheU.S.DepartmentofCommercehasstatedthat“U.S.universitiesandcollegeswillbethevanguardindiscoveringthatinnovationandinnurturingtheentrepreneursthatcancreateproducts,services,economicvalue,andhigh-qualityjobs.”

Aprimarydriveroftheeconomicimpactofresearchuniversitiesisthefederalgovernment,whichinvestsbillionsofdollarsannuallyintobasicresearchconductedthroughAmericanresearchuniversities.Theseresearchinvestmentscutacrossabroadrangeofpriorities,toincludecancerresearch,energyefficiency,agricultureandothers.Thismodeliseffectiveandcountlesstransformationaltechnologiesresultedfromthisresearch.Inaddition,theBayh-DoleActof1980changedfederallawtoincentivebasicresearchbyallowinguniversitiestoowntheintellectualpropertyoftheirworkandtherighttolicenseit.Thishasledtoagrowingfocusofresearchandcommercializationbymanyuniversitiesandhasincreasedincentivesforstudentsandfacultytobecomeentrepreneurs.AreasliketheSanFranciscoBayarea,Boston,Raleigh,andAustinusedsynergiesbetweenresearchuniversities,entrepreneursandthebusinesscommunitytobuilddynamic,knowledge-basedeconomies.

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TheResearchUniversityasanEconomicDriver,continuedInarecentreportbytheWaltonFamilyFoundationcalled“IncentiveEntrepreneurialBehaviorsatUniversities–EspeciallyintheHeartland,”WaltonFellowRossDeVolsuccinctlyoutlineswhyresearchcommercializationshouldbeakeycomponenttoeconomicgrowthintheHeartland.ByincreasingtheUniversityofArkansas’researchactivitiesandsupportingeffortstocommercializethisresearch,NorthwestArkansascancreatenewstartuptoadvancethestateandregionaleconomy.Studiesshowyoungfirmsdrivethemajorityofjobcreationwithnewfirms(0-5yearsold)accountingfornearlyallnetjobcreation.Assuch,itiscleartheregionneedstobuildonitsassetstodrivefurtherresearchcommercializationandindustrycollaborationtospurthecreationofnewfirmstoincreaseemploymentandwagegrowth.

TheUniversityofArkansasTheUniversityofArkansasisapublic,land-grant,four-yearinstitutionthatistheflagshipcampusoftheUniversityofArkansassystem.Theuniversityhasover27,500studentsenrolledinover200programs.Fortheyear2016,theuniversityfunded$145millioninresearchanddevelopment.R&Dfundingattheuniversityinthelast25yearshasseensteadygrowthwithanaverageannualincreaseof$5million.IntheyearsfollowingtheGreatRecession,R&Dfundingattheuniversitystagnated,buttherewasanuptickinthepasttwoyears.

TheNationalScienceFoundation(NSF)ranks900universitiesonannualtotalR&Dexpenditures.TheUniversityofArkansasranked130outof900universitiesin2016.Whencomparedwithotherflagship,land-grantuniversities,Arkansasrankednearthebottom.EvenatschoolsinstateswithsimilarorsmallerpopulationssuchastheUniversityofUtahandUniversityofKansasthere’shigherR&Dspending.

Source: NSF(2018)(Duke,theUniversityofNC,andNCStateUniversityareallintheRaleigh-Durhamregion.)

$1,157,680$1,055,778 $1,045,338

$621,692

$489,918 $473,362

$145,020

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

UniversityofWisconsin

DukeUniversity

UniversityofNC

UniversityofTexas

NCStateUniversity

UniversityofIowa

UniversityofArkansas

ResearchandDevelopmentExpenditures2016PeerRegionInstitutions(inthousands)

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TheUniversityofArkansas,continuedThedatashowsfederalfundingisamajorsourceofR&Dexpendituresattop-researchuniversities.ForthetoprankeduniversitiesforR&Dexpenditures,thefederalgovernmentisthelargestfundingsourceat17ofthetop20universities.TheprimarysourceofR&DfundingattheUniversityofArkansaswasfromstateandlocalgovernment(35percent).Federalgovernmentandinstitutionfundswerethenextmajorfunders,andprivateindustryaccountedfor7percent.

UniversityofArkansasR&DFundingBreakdown,2016(NSF,2017)

Intermsofindustry-fundedR&D,theuniversityranksinthemiddlewith150universitieshavingahigherindustryfundingpercentagethantheUniversityofArkansas.TheconcentrationofFortune500companiesinNorthwestArkansassuggeststheopportunityforahigherratioofindustry-backedresearch.

TechnologyTransferAcademicresearchisimportantfortheadvancementofknowledge,buttheabilitytocommercializeresearchthroughlicensing,patentsandtospinoffnewbusinessesfromR&Dconductedattheinstitutionisthekeycomponentforabroaderregionalimpact.Manyuniversitieshaveofficesdedicatedtotechnologytransferforpreciselythispurpose,andmanyhouseholdcompanies,includingGoogle,Facebook,andGenentech,werefoundedbyuniversity-basedentrepreneursandresearch.

TheAssociationofUniversityTechnologyManagers(AUTM)collectsdatafromover190technologytransferofficesinthecountry.AccordingtoAUTMdatafor2016,theUniversityofArkansaslicensedoroptioned40innovationsandbroughtin$1.1millioninlicensingrevenue.Universitymembersalsoappliedfor26patentsandfourstart-upswereformed.WhencomparingtheUniversityofArkansastootherresearch-mindedinstitutions,theuniversityhasmixedscores.Intermsoflicensesoroptionsexecutedandstart-upsformed,theuniversityranksinthetophalfofallinstitutions.Formetricssuchaslicensingincomeandnewpatentapplications,theuniversityscoresinthebottomhalfoftherankings.

Federalgovernment

28% Stateandlocalgovernment

35%

Institutionfunds27%

Business7%

Nonprofitorganizations2%

Allothersources1%

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TechnologyTransfer,continued

Thestudy“ConcepttoCommercialization”foundthatArkansas–alongwithmostuniversitiesinthemiddleofthecountry–ranklowwithrespecttocommercializationactivities.TechnologytransferandR&Disheavilyconcentratedatthetopfewuniversities.Thegraphbelowrevealshowdisparatetherevenuefromlicensingincomeisacrossthetop200universities.Atarankingof111th,theUniversityofArkansas’revenuefigureisnotevenvisibleonthegraphbelow.R&Dfunding,privateandpublic,isveryconcentrated.In2016,thetophalfofresearchuniversitiesaccountedfor$9ofevery$10inR&Dexpendituresaswellaslicensingincome.Academiaisanentrenchedmarket,andR&Dhastendedtobeconductedatthesametopinstitutionsyearafteryear.

DistributionofGrossLicensingIncomebyUniversityRanking,2016(AUTM2017)

Giventhechallengesinvolved,thiseffortwillrequirecollaborationandeffortateverylevelwithintheregionandthestate.Firstandforemost,theUniversityofArkansasmustimproveitsresearchandinnovationcapacity.And,itmustalignitsprioritiestowardexistingresearchstrengthandwithregionalbusinessneeds.

Theuniversitywillalsoneedtochangetheculturewithintheorganizationtorewardcommercializationtoincentivefacultyandstudentstoundertaketheseefforts.Theuniversitywillneedtostreamlineitspatentapplicationandlicensingprocessestoensurethatithasbestinthenationprocessandprocedures.TheuniversitywillneedtomakekeyinvestmentsintheOfficeofTechnologyTransfertoensureadequatestaffandexpertisetopromotecommercializationofuniversityresearch.

AcriticalcomponentofthiseffortwillbethehiringoftheViceProvostforResearchandInnovation,whowillneedtohaveresearchstatureandexperiencewithcollaborationandcommercialization.Atthesametime,theregionalbusinesscommunityshouldworkcloselywiththenewlyappointedViceProvostforResearchandDevelopmenttobuildsynergieswiththeuniversityandbusinesscommunitytomaximumregionalbenefit.

0

$ 50M

$ 100M

$ 150M

$ 200M

$ 250M

$ 300M

$ 350M

1 20 39 58 77 96 115 134 153 172

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TechnologyTransfer,continuedThebusinesscommunityandthestateshouldworkcloselywiththeuniversitytoformpartnershipsandcollaborationstowardstheseefforts.OneideathatshouldbevigorouslypursuedistheestablishmentofasupplychainacceleratorintheSamM.WaltonCollegeofBusiness,acenterthatwillbringtogetherpartnerstoexpandtheregion’sentrepreneurialecosystemanareawheretheregionisanationalleader.Anotherapproachwouldbetocreateaninnovationinstitutethatwouldincludeactivitiesofthesupplychainacceleratorcombinedwithothercorecompetencies.Itcouldhousefacultyresearchers,beacenterofcross-disciplinarycollaborationsandcross-regionalhubsupportingresearchfieldsandinnovationareaswhereitexcels,andcreatenewandstrongerpartnershipsbetweenUniversityofArkansasresearchersandbusinesses.Acriticalfocusofaninnovationinstitutionshouldbetoincreasetherateofstart-ups.

Similarly,theregionshouldpursueinitiativestobetterutilizetheArkansasResearchandTechnologyPark,ensurethatintellectualpropertybestpracticesarefollowed,andpromoteprogramstobuildacultureofinnovation.Thesestepsshouldincludeincentivizingcommercializationbyfacultyandstudentsandpromotingstudent-ledventurefundstobegintomovetheneedleintherightdirection.

IncreasingLifeScienceResearchinNorthwestArkansasOnereasontheUniversityofArkansasmaystruggletodramaticallyincreaseresearchexpendituresandcommercializationactivitiesisthelackofrobustlifesciencesresearchaffiliatedwiththeuniversity.UniversitieswithaffiliatedmedicalschoolsconsistentlyspendmoreonR&Dthanthosethatdonothaveamedicalschool.

Inthetop25rankedresearchuniversities,onlytwodonothaveamedicalschool,andthosetwoareheavilysupportedbyresearchrelatedtotheDepartmentofDefense.Thechartbelowshowsthedifferencesbetweentechnologytransfermetricsforuniversitieswithandwithoutmedschools.

TechnologyTransferMetricsBasedonPresenceofMedicalSchool,2016(AUTM2017)

SchoolType CountR&D

Expenditures(millions$)

TotalLicenses/OptionsExecuted

LicensingIncome

(millions$)

NewPatents

Start-Ups

MedSchools 95 $47,873 5,174 $1,817 10,282 736

Non-MedSchools 96 $17,998 2,470 $1,136 6,120 272

UniversitieswithmedicalschoolsaccountforhalfoftheschoolsthatreporttechnologytransfermetricstotheAssociationofUniversityTechnologyManagers(AUTM).However,theseuniversitiesaccountedforalmostthree-fourthsofalltheR&Dexpenditures,newpatentapplications,andstart-upsin2016.

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IncreasingLifeScienceResearchinNorthwestArkansas,continued

IftheUniversityofArkansaswantstobecomeatop50researchinstitution,itmustexpandlifescienceresearch.TherehasbeendiscussionabouttheestablishmentofamedicalschoolamongNorthwestArkansascommunityleadersformanyyears.Whileitisclearthattheestablishmentofamedicalschoolwouldbetransformative,thecost-benefitisnotwellunderstoodatthispoint.

Tobetterunderstandthehealthandeconomicimplicationsofthehealthcareeconomygoingforward,theNorthwestArkansasCouncilhascommissionedanindependentanalysistoprovidearegionalassessmentofthehealthcareindustryandthecostsandbenefitsonadditionalinvestmentsintothehealthcareecosystem.

WhileamedicalschoolinNorthwestArkansasmaynotbefeasibleinthenearfuture,theregionshoulddomoretoattractlifescienceresearch.Forexample,theUniversityofArkansasandtheUniversityofArkansasforMedicalSciences(UAMS)shouldbuildresearchpartnershipthatleveragestheexpertiseofbothinstitutionsinareassuchasbiomedicalengineering,healthcarelogistics,foodscience,andnursingthatcouldbenefitfromgreaterintegration.

UAMSNorthwestshouldalsoincreasecollaborationwiththeUniversityofArkansas.And,regionalpartnersshouldconsidertheestablishmentofaresearchinstitutethatwillleverageregionalstrengthssimilartotheArkansasChildren’sHospitalResearchCenterapprovedbytheUniversityofArkansasBoardofTrusteesintheearly1990s.Theseoptionsarenotmutuallyexclusiveandmorethanoneoptioncouldbepursuedsimultaneously.

MedSchools73%

Non-MedSchools27%

R&DExpenditures

MedSchools63%

Non-MedSchools

37%

Patents

MedSchools73%

Non-MedSchools27%

StartUps

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SupportingtheEntrepreneurialEcosystem

Fortheregiontocontinuetoadvance,regionalleadersshoulddomoretosupporttheentrepreneurialecosystem.Whileadvancementshavebeenmadeinrecentyears,toincludethegreatworkofStartupJunkie,GritStudiosandothers,muchmoreneedstobedonefortheregiontotakethenextstepindevelopingtheeconomyandestablishingNorthwestArkansasasamagnetfortalentedentrepreneurs.

WhiletheUniversityofArkansasisakeycomponentofthiseffort,additionalworkneedstobedonetoestablishacultureofcollaborationandcooperationwithrespecttolocalentrepreneursandtheexistingbusinesscommunity.Whilemuchworkgoesintoensuringthattheregionworkscollaboratively,ithasbeennotedbyoutsideexpertsthatthegeographicmakeupisafactorthatlimitsNorthwestArkansas’entrepreneurialecosystem.

ManyindividualslivemostoftheirlivesinoneNorthwestArkansascityandcollaborationisnotsufficientacrosstheregionduetothisfact.Innovationtakesplacewhentherearetherightrelationshipsbetweentherightpeopleattherighttime,andthiscanhappenwithinalargecompany,afast-growingstartup,ajointventurewithalargecorporation,alicenseagreementforintellectualpropertyoranonprofitfoundation.

Itisdifficultforentrepreneurs,potentialentrepreneurs,andmentorstogettogetherinroutinewaysacrossthedifferentcitiesintheregion.Whilethereareactivitiesineachcityandthereareregional-levelevents,morecollaborationandcooperationisnecessarytofacilitatearobustentrepreneurialecosystem.

NorthwestArkansasworld-classtalent,particularlyintheareasofglobalsupplychain,dataanalytics,consumertechnology,andecommerce.Totrulyunlocktheirpotential,wemustchallengethemfurther,creatingmorescenariosthatinvitethemtoinvesttheirliveshereinNWAratherthanstayingonlyforabriefseason.

Examplesmightincludeaddedimmersiveleadershipdevelopmentprograms,communityhackathons,enterprisesolutionseventsandintentionally-designedprofessionalnetworkingsessions,duringwhichthegoalistofast-trackmatchmakingforpartnershipsbeyondenjoyingatypicalsocialgathering.

NorthwestArkansasmustbetterleverageourexistingassetstoensurethatitcancapitalizeonthestrengthsinourregiontogether.ThebottomlineisNorthwestArkansasmustdoabetterjobpromotingaccessandconnectionstopeoplewithideas,talent,knowledge,capitalandopportunitiesbybreakingdowntraditionalhierarchiesandbyreachingacrosssocialboundaries.

Thisishowwewillsucceed.

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AccesstoFunding

Itisclearthattheregioncouldusebetteraccesstoearly-stagecapital.Therearenumerousexamplesofentrepreneursforcedtomoveoutoftheregionduetocapitalissues.Inmanyinstances,entrepreneursneedcapitaltotestbusinessideasortogettoapointwheretheyareearningrevenue.Early-stagecapitalisthehardesttoattractbecauseitoftencarriesthemostrisk.Theregioncoulduseincreasedaccesstothistypeoffundingfromtheprivatesector,butagoodfirststepwillbetomakebetteruseoffederalresourcesthatarecurrentlyavailable.

TheSmallBusinessInnovationResearch(SBIR)programisoperatedbytheSmallBusinessAdministration,butinnovationsarefundedthrough11federalagencies.AnothertypeoffundingassociatedwithSBIRistheSmallBusinessTechnologyTransfer(STTR)program.STTRfundscompaniesthatcollaboratewithauniversityorfederallaboratory.Currently,therearefiveagenciesthathelp theSTTRprogram.SincetheSBIRprogramwasenactedin1982,ithasresultedin70,000patents,700publiccompanies,and41venturecapitalinvestments.Theprogramhas$2.2billionallocatedannually.

SBIR&STTRAwardsGrantedPer100,000Residents,2012-2017

OnelocalorganizationisworkingtoidentifywaystosupportlocalentrepreneursastheyworkthroughtheSBIR/STTRprocessbyestablishingagrouptoassistentrepreneursingrantwriting,coaching,connectionstotheentrepreneurialecosystem,andsupportinobtainingprivateseedfunding.

Supportingideasthatencouragelocalstart-upsanduniversityresearcherstoapplyforSBIR/STTRfundingcouldstrengthenthelocalecosystemandhelpgetmorehome-grownventuresofftheground.Federalentrepreneurialfundingremainsacrucialpartofuniversity-ledinnovation,andboththestateofArkansasandtheregioncandomoretoaccessthisfunding.

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PartII:BuildingaRobustMiddleSkillsTrainingSystemNorthwestArkansasmustexpandandimprovetheregion’straininginfrastructurebybuildingnewstate-of-the-artfacilitiesandsimultaneouslyintegratebusinessparticipationandleadershipintothecurriculumdesign,programoperationsandevaluation,andinstitutionalgovernance.Aninitialstepwouldbetoevaluatethereturn-on-investmentofconstructinganewNWTIcampusthatreflectsthequalityoftheregiontoprospectivestudentsandisanationalbest-practiceforregionalbusinessengagement.

Nationallythelackofqualifiedlaborisarestrictivethrottletobusinessgrowth.Thebiggestproblemisthelackofavailableworkerswithcredentialedmiddleskills.Eight-twopercentofcompanyexecutivessaythattheskillsgapinAmericawillimpacttheirfirms’abilitytomeetcustomerdemand.ThisisacriticalissueforArkansaswheretheeducationattainmentofnearlyhalfoftheadultpopulation(976,000people)isahighschooldiplomaorless,andanother446,000adults(23percentofthepopulation)havesomecollege,butnodegree.Theskillsgapissignificantformiddle-skilloccupations,whichtheNationalSkillsCoalitionestimatesaccountfor58percentofalljobsinArkansas,butonly48percentoftheworkforcehasmiddle-levelskills.

WithboththeUnitedStatesandtheArkansasunemploymentratenowbelow4percent,everclosertofullemployment,thestruggletofindqualifiedtalenthasbroadenedandintensified.InNorthwestArkansas,theunemploymentrateisamongthenation’slowest,currentlybetween2and3percent.Anincreasingnumberofwell-payingjobs,especiallyinthemiddleskillandtradeoccupationsareunfilled.Productivityissufferingandtheabilityofregionalbusinessestogrowiscurtailed.Boththequantityofavailableworkersandthequality,ortheskillsmismatchbetweentheskillsavailableworkershave,andtheneedsofemployerscontributetotheproblem.Thesolutionistotrainmorelocalresidentsforthein-demandjobsandtoattractmoreskilledlabortotheregion.

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PartII:BuildingaRobustMiddleSkillsTrainingSystem,continued

Graduationrateshavesteadilyincreased,andmoreyoungpeopleareattendingandgraduatingfromcollegethaneverbefore,butNorthwestArkansas’talentdevelopmentoutcomeshavenotkeptupwiththeadvancedskillsneededinmanufacturing,healthcareandotherless-than-four-yeardegreeoccupations.Althoughsomeprogresshasbeenmadeinthepastfewyearsintheregion’shighschools,interestfromstudentsismutedduetoalackofunderstandingofin-demandcareerpathwayscoupledwithapersistentbeliefthatadegreefromauniversityisthesoletracktomeaningfulworkandalivablewage.

Theimageofmiddleskilljobsaslessdesirableandmorethreatenedbyautomationandroboticscontributestothelackofasufficientsupplypipeline.Butanhonestassessmentofregionalfacilities,specificallytheNorthwestTechnicalInstitute,showsthatdespiteanearnesteffortandsolidgraduationrates,thecapacityhasnotkeptupwithemployerdemand.Theregionbenefitsgreatlyfromthe“Big3”Fortune500companiesWal-Mart,TysonFoods,andJ.B.HuntTransport.Theregionalsohasstronglocationquotients,ameasureofconcentrationcomparedtonationallevels,forthetransportationandwarehousingandmanufacturingsectors,and,asoneofthenation’sfastestexpandingeconomies,generatesthousandsofjobseachyear.

AcrossArkansasandtheregionfrustrationexistsfrommanystakeholders.ThepercentageoftheadultpopulationworkinglagsthenationalaveragewhileNorthwestArkansasemployerspostponegrowthormovejobsoutsidethestate.Identifyingnewstrategiestoclosetheskillsmismatchisatoppriority.TheLegislativeTaskForceonWorkforceEducationExcellencerecentlypublishedtheresultsofits2017study.Itshowsthattheissuesdonotstemfromalackofprograms.Theseven-pagesummaryconcludesthatover100,000studentsingrades9-12areenrolledinCareerandTechnicalEducationprogramseachyear,that89programsprovideeducationandstructured,on-the-jobtrainingtoalmost4,000apprentices,andthatthousandsofArkansansareservedthroughtheWorkforceInnovationandOpportunityAct,TradeAdjustmentAct,TransitionEmploymentAssistanceanddozensofotherprograms.

TheNorthwestArkansasCouncil,inconcertwithitsregionalpartners,iscommittedtobeanationalleaderinbusinessengagementtoimproveworkforcedevelopmentoutcomes.Nationalbestpracticesarefocusingonexpandingindustrysectorstrategiesandmiddleskillscareerawareness.Industrysectorstrategies,alsocalledsectorpartnerships,aredefinedbytheNationalSkillsCoalition(NSC)asactivitiesthat“bringtogethermultipleemployerswithinanindustrytocollaboratewithcolleges,schools,labor,workforceagencies,communityorganizationsandothercommunitystakeholderstoaligntrainingwiththeskillsneededforthatindustrytogrowandcompete.”ThenationalWorkforceInnovationandOpportunityAct(WIOA)requiressectorstrategiesasalocalactivitytobesupportedatthestatelevel.

2017NWTIGraduationNumbersAmmoniaRefrigeration 13AutomotiveServiceTechnology 17BusinessOfficeAssistance 10DieselandTruckTechnology 19ElectronicsTechnology 17IndustrialMaintenanceTechnology 13ComputerInformationSystems 22PracticalNursing 54SurgicalTechnology 15WeldingTechnology 10TotalGraduates 190GraduationRate 87%

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PartII:BuildingaRobustMiddleSkillsTrainingSystem,continued

Interestintechnicalcareers,includingmanufacturing,amongstudentshaswanedovertheyears,andawarenessofcareeropportunitiesinthesefieldsislowamongparents,teachers,andschoolcounselors.SurveysbyDeloitteandtheManufacturingInstituterevealedonly37percentofparentswouldencouragetheirchildrentopursueamanufacturingcareer,andGenerationYrespondentsrankeditlastasacareeroption.

Anumberofstudiescallonindustrytocommunicatethepossibilitiesforinteresting,well-payingtechnicalcareers,withworkatmospheresthatareusuallyfarfromthedirty,unpleasantstereotype.Studentsandparentsneedusefuldataonin-demandjobsandwages,aswellastheskillsandtrainingneeded.Teachersandcounselorsneedexposuretotheworldoftechnicalandmanufacturingworkandsimplewaystobringthisknowledgealiveforstudents.

Inadditiontoobviouscapacitylimitations,thelookandfeelatNorthwestTechnicalInstitutedoesnotpositivelyreflecttheworkandworkingconditionsofmiddleincomejobs.Italsodoesnotreflecttheworld-classimagetheregionwishestoproject.ToreachtheultimategoalofbeingaHeartlandleaderformiddleskillstechnicaltraining,aplacewherestudentsareattractedfromamulti-stateareaduetothequalityofthetraining,modern,best-in-class,facilitiesareneeded.

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PartIII:RecyclingandWasteDisposalNorthwestArkansasfacesachallengethat’snotuniquetosuchafast-growingregion.It’saddingtoitspopulationatarapidrateandbusinessesareexpanding,andit’snaturalforthosetoincreasewasteproduction.Yet,theregionneedstoreducehowmuchwasteitcreatesbecausepreservingitislimitedlandfillcapacityforaslongaspossibleiscriticaltotheregion’sfuture.

WhilemanyNorthwestArkansascommunitiesareadvancingrecyclingasawaytoprotecttheenvironmentandreducewaste,it’snecessarytobemoreaggressiveonbothfronts.WorkingwiththeBostonMountainSolidWasteDistrictandtheBentonCountySolidWasteDistrict,theNorthwestArkansasCouncilcanbeapartnerinbringingmoreconsistencyinrecyclinganduseitsrelationshipstocreatecost-efficient,wastereductionprogramsacrossNorthwestArkansas.

RegionalWasteDisposalWasteManagement,theowneroftheEco-VistaLandfillnearTontitown,indicatedatapublicmeetingonApril18thatitburied526,000tonsofwasteinthelandfillin2017.Onlyfouryearsearly,theannualburiedwastewas428,000tons.ThewastecomesprimarilyfromfiveArkansascounties.

Additionally,researchbytheNorthwestArkansasCouncilin2016estimated300,000tonsofwasteproducedinNorthwestArkansasisbeingtakentomoredistantlandfills,primarilytheCherokeeNationLandfillinStilwell,Okla.SomeBentonCountytrashistruckedtoMissourilandfills,too,soit’scleartheregion’sproductionofwastefarexceedswhat’sburiedatEco-Vista.

WasteManagementindicatedatthepublicmeetingthattheClass1landfillhasabout5.5yearsofcapacityleft,andthecompanywantstoexpandinthreephases.TwophaseswouldbefortheprimaryClass1landfillthatreceivesmunicipalwaste;thethirdphasewouldbea12-acreexpansiontotheconstructionanddemolitiondebris(Class4)landfill.

WasteManagementthisyearrequestedpermissionfromtheArkansasDepartmentofEnvironmentalQualitytomakethoseexpansions.It’salreadyreceivedacertificateofneedfromtheBostonMountainSolidWasteDistrictforPhase1oftheClass1andClass4landfills,butitstillneedsthestate’sapprovaltoexpand.

It’swidelybelievedthattheEco-VistaLandfillistheregion’slastacceptablesiteforlong-termwastedisposal,andit’sbeneficialtoextendthelandfill’slifeasmuchaspossible.Byreducingtheamountofwastegoingin,thelandfill’slifewouldbeextended.

That’saprimaryreasonwhyitmakessensefortheNorthwestArkansasCounciltoworkwithpartnerstopursuegoalscenteredonmoresuccessfulrecycling.

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PartIII:RecyclingandWasteDisposal,continued

RecyclingtoMatchPublicInterestFeedbackreceivedfromindividualswhoparticipatedinfocusgroupmeetingsinthespringtoguidetheCouncil’screationofitsnewstrategicplanshowedpeoplewantmoreopportunitiestorecycle.Moreover,theywantrecyclingprogramstobesimpleandconsistent.Theyviewrecyclingprogramsasoneofacommunity’scorefunctionsratherthanan“extra”providedonlybythemostconscientiouscitiesandprivatetrashhaulers.Additionally,theyfeltcommunitiesshouldcollectthesamerecycledproducts,andtheysuggestedthereisvalueinhavingeverycommunitycollecttheexactsameitems.ThatconsistencyinNorthwestArkansasdoesn’texist.

ThereareopportunitiestoexplorehowfarrecyclingcanbeadvancedinNorthwestArkansas,anditmakessensefortheNorthwestArkansasCounciltobeasignificantpartofthatdiscussion.Oneofthisorganization’sleadingmembers—Walmart—isrecognizednationallyasacompanyrecyclingmoreandeffectivelydivertingwastefromlandfills.ItmakessenseforWalmart’shomeregiontobeoutstandingatrecyclingandwastereduction.

RegionalPartnershipWorthyofExplorationTherearealreadysignificantdiscussionsaboutwhat’spossiblewhenitcomestowastereductionandrecycling.Fayettevillestudiedandhasexpressedaninterestinthepastinworkingwithothercitiestodeveloparegionalrecyclingfacility.

What’schallengingisthatFayettevilleonitsowndoesnotproduceenoughrecyclablematerialtojustifyaregionalmaterialsrecoveryfacility(MRF);thecityneedsmultiplepartnerstomakesuchan$18millionfacilitypossible.Ifthatregionalfacilityweretobecomeviable,theNorthwestArkansasCouncilcouldplayaroleinbringingprivateindustryandothercitiestothediscussions.It’sworthexploringwhethertheNorthwestArkansasbusinesscommunitycouldbenefitfrombeinginvolvedwithregionalrecyclingandwastereductionprograms.

TheextensiveresearchalreadyconductedbythecityofFayettevilleonrecyclingcollectionsystemsandwastecharacterizationisbeneficialtoothermunicipalitiesinterestedinunderstandinghowtheirownresidentsarelikelytobenefitfromaregionalmixedrecyclingfacility.Fayetteville’sresearch,forexample,showedthatalmost35percentofthewasteproducedinthecityiscomprisedofcompostableitemsandconstructionanddemolitiondebristhatcouldberecycled.Fromanoverallperspective,Fayetteville’sresearchdemonstratedthatalargerregionalfacilitywouldbesuccessfulinreducingtheoverallcostofrecycling,inexpandingthevarietyofitemsincludedinrecyclingprogramsandinreducingtheamountofwastethat’sburied.

Finally,aregionalapproachmakessenseasoperationalefficienciescouldbeachievedbyagroupofpartnersthatcan’tbefoundindividually.Aregionalapproachalignswiththelong-termgoalsoftheNorthwestArkansasCouncilandwiththeregion’smostprominentpastsuccesses.ThosepastpartnershipsthatcontinuetothisdayincludetworegionaldrinkingwatersuppliersutilizingBeaverLake,aregionalairport,aregionaltourismassociationandregionalsolidwastedistricts.Eachofthoseiswidelyacceptedasanexcellentexampleofhowtobestaddresssharedneeds.

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PartIV:MultifactorMetroIndicesRankingFactors

METRIC DataLevel SourceEconomicStrengthRealGDPPerCapita(2016) METRO BureauofEconomicAnalysis(BEA)PersonalIncomePerCapita(2015) METRO BureauofEconomicAnalysis(BEA)Ranking-CurrentGDP(2016) METRO BureauofEconomicAnalysis(BEA)PolicomEconomicStrengthRankings(2018) METRO PolicomCorporationAverageWeeklyWage-AllOccupations(2016) METRO BureauofLaborStatistics(BLS)Ranking-MilkenOverallBestPerformingCities(2017) METRO MilkenInstituteProjectedJobGrowth(2017) METRO USConferenceofMayorsUnemploymentRate(2017) METRO BureauofLaborStatistics(BLS)SmallBusinessChurn-Average(2010-2014) METRO USCensusBureauChangeinRealMedianHouseholdIncome(2011-2016) STATE USCensusBureauNewEconomyIndexScore(2017) STATE InformationTechnology&InnovationFoundation

FutureInertiaTotalEmploymentGrowthRate(2006-2016) METRO BureauofLaborStatistics(BLS)TotalEmploymentGrowthRate(2006-2016) METRO BureauofLaborStatistics(BLS)ProjectedAnnualAverageGDPGrowthRate(2015-2021) METRO USConferenceofMayorsPopulationChange(2012-2017) METRO USCensusBureauLaborForceParticipationRateChange(2011-2016) METRO USCensusBureauExpectedITEmploymentChange(2018-2023) STATE EconomicModelingSpecialistsInternational(EMSI)PercentChangeinSTEMEducationProgramCompletions(2011-2016) STATE EconomicModelingSpecialistsInternational(EMSI)PercentChangeinStateSpendingPerStudentforHigherEducation,InflatedAdjusted,(2008-2017) STATE CenteronBudgetandPolicyPrioritiesChangeinEnplanements(2011-2016) STATE FederalAviationAdministrationCapitalInfrastructureSpendingChange(2002-2014) STATE CenteronBudgetandPolicyPrioritiesPercentChangeofEmploymentofU.S.Affiliates(2015-2017) STATE BureauofEconomicAnalysis(BEA)

TalentLaborForceParticipationRate(2016)B23025 METRO USCensusBureauProjectedPopulationGrowth(2016-2046) METRO USConferenceofMayorsPercentofPopulationThatWasBorninDifferentState(2016) METRO USCensusBureauPercentofPopulationThatWasForeignBorn(2016) METRO USCensusBureauMillennialPopulationPercentage(2016) METRO USCensusBureauMillennialsChangeinShareofTotalPopulation(2010-2016) METRO USCensusBureauNetMigrationRate(2010-2017) METRO USCensusBureauCostofLivingIndex(2017) METRO CouncilforCommunity&EconomicResearchPercentofPopulationwithoutHealthInsuranceCoverage(2016) METRO USCensusBureauPopulationOverAge25WithAA,BAorhigher(2016) METRO USCensusBureauPercentageofPeopleWorkingFromHome(2016) METRO USCensusBureauShareofTotalStateSpendingonEducation(2016) STATE USCensusBureauCompletedSTEMEducationPrograms(2016) STATE EconomicModelingSpecialistsInternational(EMSI)

BusinessClimateMedianSalesPriceofExistingHome(Q1,2018) METRO NationalAssociationofRealtors;ZillowSquareFootCost40Ksfofficebuildingconstruction(2018) METRO BuildingJournal.comCost-of-LivingAdjustedHourlyWageForPrivateSectorJobs(2016) METRO BureauofLaborStatistics(BLS)ViolentCrimeper100,000population(2016) METRO FederalBureauofInvestigationState&LocalDebtPerCapita(2015) STATE USCensusBureauRegulatoryPolicyFreedomRanking(2014) STATE CATOInstituteLegalClimateRankings(2017) STATE InstituteForLegalReformStateandLocalTaxesPerCapita(2015) STATE USCensusBureauCorporateTaxRankings(2018) STATE TaxFoundation

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PartIV:MultifactorMetroIndicesRankingFactors,continued

METRIC DataLevel SourceInfrastructureNonstopPassengerFlights-TypicalweekdayMarch2018 METRO RDUAirportAuthority;XNAAirportMedianRent(March2018) METRO ZillowPercentageofRentersPayingMoreThan35%ofIncomeTowardsRent(2016) METRO USCensusBureauMeanTravelTimetoWork(2016) METRO USCensusBureauMedianSalesPriceofExistingHome(Q1,2018) METRO NationalAssociationofRealtors;ZillowHouseholdsWithBroadbandInternet(2015) METRO USCensusBureauRenewableEnergyProductionPerCapita(2015) STATE EnergyInformationAdministration(EIA)AverageRetailElectricityPriceforIndustrialCustomers,CentsPerKwH(Nov2017YTD) STATE EnergyInformationAdministration(EIA)AverageRetailElectricityPriceforCommercialCustomers,CentsPerKwH(Nov2017YTD) STATE EnergyInformationAdministration(EIA)PercentageofRoadsinPoorCondition(2016) STATE FederalHighwayAdministartionTotalStateSpendingonHighwaysPerCapita(2016) STATE USCensusBureauEnplanementsPer1,000People(2016) STATE FederalAviationAdministration%ofBridgesDeemedStructurallyDeficient(2017) STATE FederalHighwayAdministartion

Innovation&EntrepreneurshipPatentsIssued(2015) METRO USPatent&TrademarkOfficePatentsIssued5-YearGrowthRate(2010-2015) METRO USPatent&TrademarkOfficeRanking-MilkenHighTechGDPGrowth(2015-2016) METRO MilkenInstituteAdvancedIndustryEmploymentAnnualGrowth(2015-2017) METRO EconomicModelingSpecialistsInternational(EMSI)NumberofVentureCapitalDeals(2016) METRO NationalVentureCapitalAssociationPercentChangeinProfess&BusinessServicesJobs(2006-2016) METRO BureauofLaborStatistics(BLS)PercentChangeinEducation&HealthJobs(2006-2016) METRO BureauofLaborStatistics(BLS)ITJobGrowth(2012-2017) STATE EconomicModelingSpecialistsInternational(EMSI)Start-UpsFromUniversities(2016) STATE AssociationofUniversityTechnologyManagers(AUTM)SBIRandSTTRAwards(2011-2016) STATE SmallBusinessInnovationResearch(SBIR)