Building Arizona’s Future: Jobs, Innovation and Competitiveness

This past April I attended the 96th Arizona Town Hall in Tucson Arizona.  The New Economy: A Guide For Arizona serves as background information on the event.  The result of the Town Hall was a set of recommendations (pdf).  Recently at Mesa Community College I was asked to speak about the experience and highlight my recommendations.  Below is my summary.

The Process

The process was good discussion, but it often felt that things were watered down quite a bit by the time they got recorded.  However, at the final session I saw the passion come back out and some good middle ground was found on a number of difficult issues.  If only our legislatures could come to agreement in this fashion.

Economic Development

Economic Development has changed.  It used to be about material resources and manufacturing infrastructure.  That is changing and now creative people are the most valuable resource.  Good companies move to where good people.  We must invest in human and social capital to be a player in the future.

Based on that I believe the following recommendations should have priority and we should concentrate on making them a reality.

Slide Rock

8. Preserve Quality of Life

We need to attract good people in the short term to fill the needs of growing companies emerging in the new economy.  Also, we need to retain the quality creators that are already here.  We can do this by preserving the quality of life.

a. Cultivate the arts, sports and other recreational amenities.

We need creatives to get involved with their local art scene.  Bring relevant programming to the great Performing Arts Centers many cities have.  Support existing programming and work to create new and diverse programs.  We need to convert empty buildings into Art galleries, centers for creation and music.

b. Preserve our natural and cultural resources.

We need to get the state legislature to restore funding to our State Park system and find ways to make sure it stays healthy.

c. Develop strong sense of place in our communities.

We need to encourage density and support third places that build a sense of place.

1. Education

We must start building our future now.  Our future lies in our youth.  We need to radically transform education to be a leader in how we restore creativity to schools.

a. Improve funding and rigorous statewide standards to meet workforce needs of business and industry.

It is time we get serious about funding schools and we restore learning to it’s roots and allow kids to explore and create.

7. Broadening the Tax Base

We need to have the proper way to pay for quality of life issues.  The best people want to live in a quality place.  We have to stop looking to be the Walmart of the world.  Low cost living, education and infrastructure attracts the people and employers that have bleak place in the future economy.

a. Implement a broad-based, diversified, and stable tax structure that does not rely disproportionately on sales tax.

We have to explore raising property taxes or finding other ways to balance providing necessary infrastructure.

11. Other Economic Development Actions

We need to grow businesses as much if not more than recruit them and then help them grow.  Jobs don’t create jobs.  Companies create jobs.  We need to focus on creating companies.

a. Fund business incubators, a competitive small grant program for start-ups and existing small businesses, and other small business assistance programs.

2. Strategic Planning

d. Address both recruitment of new businesses and retention of businesses and talent already present in Arizona.

4. Capital Formation

We need to have capital available for those companies as they grow.

d. Encourage AZ individuals, foundations, and industry to invest in an AZ “fund of funds” to provide venture captial for the early-stage development of new companies.

We need people to invest in seed funds to encourage creation of new businesses.

6. Infrastructure

We need a quality infrastructure to promote growth.

a. Create a networked business environment through advances in our transportation system and data connectivity.

12. Other Activities that Influence Economic Development

a. Pursue comprehensive, multimodal transportation planning and design programs.

Summary

Don’t wait on the state legislature, you can help do this RIGHT now.  Look to entrepreneurs to get the ball rolling.  Participate in your local government and start making a difference.  Simply voting can start to unlock necessary change.  Be active in our future!

Political Bites: Door to Door Solicitors

Should door-to-door solicitors be regulated more or less than they already are?

Do we really need more government regulation?  Is this really an issue that should be taking the time of Phoenix’s leadership during one of the worst recessions the city has ever faced?  Maybe if we took education, economic development and transportation in the last decade as seriously as we are taking solicitors today we wouldn’t be experiencing financial devastation.

Background: Phoenix is considering an ordinance that would do so; all other Southeast Valley cities already have an ordinance. http://www.azcentral.com/community/ahwatukee/articles/2010/06/10/20100610phoenix-peddlers-ordinance-apathy.html

The World is Changing and so is our Economy

We might be in the midst of a recession, but I don’t think we have seen anything yet.  Most of America is not willing to acknowledge a few key concepts.

1. Things won’t bounce back to where they were, expect recovery to be in decades not months.  A new normal has been set.

2. The old economy is dying.  The days of manufacturing things is now a commodity.  That other countries are able to much better and cheaper.

3. Our educational system is broken to prepare America’s youth for the new economy.

I understand that I sound like chicken little and at this point people are laughing at the mention of the sky falling.  I could point to statistics and reputable journalists, but perhaps the best thing to do is show you reality.  Let’s take a look at a great city that at one time was the “model city” for “industrial” America, Detroit.

It literally lays in ruins.  It looks vacant similar to Chernobyl after a nuclear meltdown.  Will all cities be in this position?  No.  Is there a little of Detroit coming to every city?  Yes.  We can no longer stand idle and watch as things decay.  It is time to step up and unite.  Tackle the tough problems we face in educating our youth and training a displaced workforce.  It is time to make creativity and innovation core to our culture and walk through to the other side prosperous and and top.   As you watch these samples of urban decay ask yourself what you can do to change your neighborhood, city and state.  How can you help be part of the solution?

Coworking is a commodity. It is a race to the bottom.

I read  “A case against ‘free trial coworking‘” by Alex Hillman from IndyHall and it reminded why I can’t relate to the coworking movement.  I purposefully use the word collaborative workspace when talking about Gangplank because implying that there is a coworking component is a misleading comparison.

Coworking claims to be trans-formative and future thinking.  Changing how people work and think about work, but in reality it is a lie.  It highlights independence of the worker, but still structures itself on old economy models of thinking.

Don’t believe me?  Let’s examine a single phrase from this article to highlight the point.

‘..it’s unwise in an early stage business to give ANYTHING away that you wouldn’t otherwise charge for..’

That is conventional wisdom.  That if you give something away it costs what you gave. The more you have the less I have.  The more I share the more I lose.  This is a dying model.  Repackaging it as a revolution by telling the participants they have ‘independence’ is disingenuous.

The truth is charging for space turns the relationship into a transaction and destroys the ability for real community to flourish.  Coworking is a commodity.  It is a race to the bottom.

At Gangplank we choose to give our space away for free.  All the time, not just on a trial basis. When you give something away, you benefit more than the recipient does.  The act of being generous makes you rich beyond measure, and as the goods or services spread through the community, everyone benefits.  Giving space as a gift with no reciprocity allows us to experiment and create.  We seek to help people be dangerous and challenge the status quo. It’s not for everyone, but it’s how we see the world and we hope to help the right people change their view of the world and how they contribute back to it.  We want to give them the gift of finding the creator within themselves.

Metro Phoenix has been hit harder than most during this recession.  We feel that giving to the community freely let’s us all prosper more quickly.  It increases the quality of bond between our members and ultimately strengthens our community.  It leaves an obligation for our members to help the next person.  The gift creates a surplus as it spreads and ultimately gives us joy.

The argument we always hear is ‘Some one has to pay for it.  You can’t run a space for free’.  The truth is if you were remarkable you would find a way to give it away for free.

The reason Gangplank is hard to quantify is because its worth something more than we could ever charge in rent.

Phoenix Urbanites Cry Sprawl Foul, but Remain Most Guilty

A few times recently I have seen/heard Phoenix Urbanites disparage outside cities in derogatory terms using “sprawl” as their verbal assault of choice.  Oddly the facts, don’t line up with their dogma.

Let’s look at total population, population density (people per sq mile), incorporation date and average household income.

City Population Density Incorporation Household Income
Portland 582k 4,288/sq mi 1845 $70,000
Chandler 274k 4,202/sq mi 1912 $69,278
Tempe 175k 4,067/sq mi 1894 $42,361
Mesa 463k 3,536/sq mi 1878 $42,817
Phoenix 1,567k 2,937/sq mi 1881 $50,140

It’s amazing that Chandler, AZ looks more like Portland, OR than Phoenix, AZ does by the numbers.

I suspect that Phoenix people harping on density and urban infill while casting stones at other communities would know that in fact the City of Phoenix has been the biggest culprit of unabated sprawl over the last 50 years.  Having by far the lowest population density track record.  It likes to claim superiority by being the capital and being here “first” and that these other cities popped up over night and ruined the world with “sprawl”, but in reality it is younger than Mesa and relatively close in age to the others.

I do believe that all these cities have a sprawl problem (which I am against).  I am just setting the record straight that Phoenix is the biggest violator.

I  lived in Phoenix (the city) for 24 years and have lived in the East Valley for the past 10 years.  I worked in downtown Phoenix for 8 years and downtown Tempe for 4 years.  Two of my children were born in downtown Phoenix and one in Chandler.  I love both the city and the metro, but it’s time that we start having real discussion and stop just regurgitating the rhetoric the uninformed feed us or we will be doomed to be in crisis for another decade or more.

Disclaimer: My goal is to position Chandler is the linchpin of the Sun Corridor by 2020.  Rising tides raise all ships and by definition this does not make me “against” Phoenix.

Do We Want It Badly Enough?

Richard Florida a leading economist talks answers the question “Will Phoenix rise from the ashes?“.

I am a firm believer that in fact we do need to build on our assets.  I say this every chance I get.  I often wonder if anyone is listening.

He lists some of our assets as follows:

  • We are big. [My assertion is that we need to focus on getting those here skilled]
  • Reasonable Universities. [My assertion is we need to add smaller private colleges to the mix see item above]
  • Technology to build on. [My assertion is we need to invest heavily in seed funding technology]
  • Has to want it. [ I can rant on this forever]

The last point is the one that imperative.  Do we want it badly enough?  If we do, we need to mobilize, unite and most of all raise the bar.  Mediocrity can no longer be accepted and a push for excellence needs to begin.  It’s time this city grew up and got real.  We need to look long and hard in that mirror and decide what we want to do to set ourselves up for a prosperous future.  It’s time to roll up our sleeves and get to work.

Phoenix City Council Still Spineless

I remained hopeful that perhaps Phoenix had finally hit bottom.  That it had sunk so low that it was willing to fight the stranglehold that land developers and the kookocracy had over it.  I was assuming that “Phoenix may get it right with a property tax hike“.

I was grossly mistaken.  The land consuming machine still reigns supreme here.  The City of Phoenix council showed itself spineless as it recoiled in fear and refused to do the responsible thing.  Instead they conveniently delayed the decision for two years.  It will delay $200 million in voter approved bond projects and reorganize debt instead.

We can talk about the Arizona We Want all day long.  We can even vote to fund the projects to build it.  The problem is that the Arizona We Want doesn’t align with the aspirations of budding politicians or growth starved land development megaliths.

Phoenix May Get It Right with Property Tax Hike

Today the City of Phoenix is considering raising property taxes.

No one really likes to talk about tax increases.  However, people love to talk about all the services they expect.  Health Care, Public Safety, Education, Parks and many more.  Someone has to pay for those services.  I believe a civilized society does provide those services and I am happy to pay into them.  Call me a Socialist.  I have been called much worse.

The truth is if we want to be competitive we have to offer the best and brightest an environment worth living in.  The land development baron’s here have stagnated us in more ways than unending sprawl.

The state/local tax burden ranking in Arizona has dropped 24 places from 17th highest in 1977 to 41st in 2008, and the residents here now pay the tenth-lowest tax burden. Most of the change came in the wake of a property tax limitation in 1980, and the state’s ranking has changed little since. Estimated now at 8.5% of income, Arizona’s state/local tax burden percentage is below the national average of 9.7%. Arizona taxpayers pay $3,244 per capita in state and local taxes.

The easiest way to right size this is to raise property taxes.  Now is the time to do this.  As property values have plummeted an increase in property tax will still probably show an overall lower tax bill than previous years.  This makes it nearly unnoticeable to most residents.  It will help control growth and help fund our future.  Kudos to Phoenix for finally considering this after 14 years of stagnation.  I wish other communities would do the same.

Disclosure: I am a property owner.

Make Up of a Arizona Town Hall Group

Someone asked me how groups were selected for Arizona Town Hall.  Frankly, I have no idea.  I am putting my group listing here so that people can get an idea of what the make of a group looks like diversity wise…

Jesus Bernal, Tucson – Wellness Consultant, Rio Rico Health & Wellness
Richard Bowen, Flagstaff – Assoc. VP for Economic Development and Sustainable Initiatives, Northern Arizona University
Alyce Brownridge, Mayer – Head of The Orme School of Arizona
Karen Caldwell, Scottsdale – Clint Unit Executive, IBM
Albert Celoza, Phoenix – Faculty, Political Science and Religious Studies, Phoenix College
Harold Dorenbecher, Phoenix – Senior VP, Northern Trust Bank of Arizona
Richard Ducote, Green Valley – Community Affairs Manager, Freeport-McMoRan Copper and Gold
Kevin Evans, Maricopa – City Manager, Maricopa
Jodie Filardo, Sedona – Economic Planner, City of Sedona
Jeff Hursh, Tucson – Attorney , Snell and Wilmer
Pat Jones, Tucson – Office of Technology, University of Arizona
Paul Loomis, Oro Valley – Mayor, Town of Oro Valley
Derek Neighbors, Chandler – Director, Gangplank Collective
Randy Nelson, Yuma – Director, Small Business Development Center
Lea Marquez Peterson, Tucson – CEO, Tucson Hispanic Chamber of Commerce
Nick Pierson, Tucson – CLU, Northwestern Mutual Retirement Planning Specialist
Barbi Reuter, Tucson – Principal, PICOR Commericial Real Estate Services
Hank Rogers, Eagar – Director Economic Development, Apache County
Mary Rowley, Tucson – President, Strongpoint PR
Emily Ryan, Phoenix – Lobbyist, Copperstate Consulting Group
Caryn Sanchez, Phoenix – Economic Development Project Manager, Salt River Project
Cynthia Spell-Tweh, Phoenix – Deputy Community and Economic Development Director, City of Phoenix
Brenda Sperduti, Phoenix – Director, Arizona Citizens/Action for the Arts
Mark Stegeman, Tucson – Professor at Eller School, University of Arizona
Aurora Vallejo, Tucson – Student, Pima Community College
David Welsh, Tucson – SVP, TREO

If you have questions for any of these folks let me know and I will see if I can get an answer from them for you.

Additionally, here are people not in my group I am hoping to meet and connect with for various reasons.

Harry George, Tucson – Managing Partner, Solstice Capital
Cathy McGonigle, Phoenix – Executive Vice President, Flinn Foundation
Larry Penley, Chandler – Senior Fellow, The Center for the Future of Arizona
Zoe Richmond, Gilbert – Director, Union Pacific Railroad <– TUC <-> PHX rail!
David Roderique, Phoenix – CEO, Downtown Phoenix Partnership
Joe Snell, Tucson – President, TREO
Janice Washington, Tempe – State Director for Arizona Small business Development Network <– met already :)
Sandra Watson, Phoenix – Assistant Deputy Director, Innovation and Global Business Development, Department of Commerce
Jennifer Whalley, Mesa – Director of Operations, East Valley Partnership
Russ Yelton, Flagstaff – CEO, Norther Arizona Center for Emerging Technologies

Arizona Town Hall Session I & II

Ran into @szylstra and @kimberlanning tonight at the Arizona Town Hall.  So here is the 10 second overview.  About 150 people are selected to participate in the Town Hall.  They are then broken in to groups by the organizers.  The key is diversity (political views, backgrounds, race, gender, physical location, etc)  Then for two days these groups sequester themselves into panels.  Each group is given the same list of things to discuss.  There is a recorder and chair to get final consensus for each  group.

At the end of everyday the recorders/chairs meet and merge all the recommendations of the groups together.  On the final day a merged document is presented to the entire Town Hall.  A plenary session is then done to reconcile anything the recorders got wrong.  This is then made into a final document.  One of the universities then make an official version that gets passed around the state as recommendation.

I feel that while I have my own strong opinions,  it is important to get as many people heard as possible at an event like this.  So  I will be posting the questions for discussion here in hope that you will respond back to them on your own blog and leave a comment pointing to it or comment directly here.  I will do my best to make sure your voice is heard even if it contradicts my own opinion on the subject.

Session I – Evaluating Arizona’s Current Economy

  1. What general factors have most significantly shaped Arizona’s current economy?  What are the greatest strengths of Arizona’s statewide economy?  How do these strengths differ among the various components of the economy, including rural, urban and tribal communities?
  2. What are the most significant weaknesses of Arizona’s economy?   What actions has Arizona taken to address these weaknesses and change the economy?  What actions have stakeholders in Arizona’s economy taken to grow, change, or sustain the state’s economy and to attract investment, jobs and business activity?
  3. To what extent is Arizona’s economy affected by national and international economic conditions?  What unique assets does Arizona have that may enhance its competitiveness in the global economy?  How does Arizona’s economy compare with other states, and with communities throughout the world, for investments, jobs and business activity?
  4. What specific factors present barriers to the optimal development and functioning of a vibrant and competitive economy for the entire state?  How do these factors vary by region of the state?  What strategies is Arizona currently using, statewide and locally, to retain, grow and attract businesses and jobs?

Session II – Developing a Vibrant, Innovative & Competitive Economy

  1. What guiding principles should shape efforts to grow, change or sustain Arizona’s economic activity?  What efforts and activities influence the future development and operation of Arizona’s economy?  What factors should be considered in connection with such efforts and activities? Consider: global competitiveness; the interaction of various state and local economic systems and how they enhance or compete with each other; diversification and quality of jobs; factors unique to Arizona such as its environment, weather, population demographics, and the large proportion of federal, tribal and state land trusts.
  2. In what ways do stakeholders work together to influence Arizona’s economic development and to grow, change or sustain economic activity within Arizona?  Consider governing bodies (federal, state, tribal, regional, county and local), private industry, nonprofits, chambers of commerce, economic development organizations, universities and private think tanks, workforce development groups, and the general public.  What would optimize the cooperation of these groups?
  3. How do market forces and government interact to affect Arizona’s economy?  How are the fiscal challenges of national, state and local governments affecting the development of Arizona’s economy?
  4. Considering the factors identified in your response to the previous question, what strategies should be implemented to best meet Arizona’s economic goals?  Which of these strategies do not require additional funding and how viable are they?

If they get me back the data on the consolidated answers to these every night I will transcribe and post them here.  I urge you to please participate.  If for no other reason than to start thinking about these issues. :)