Paradise Lost
I’m usually not a fan of economic forecasts, because I get invited
to an awful lot of them and I already know what the general trends
are anyway. After all these years in business, I feel them in my
bones like the weather. But the latest Phoenix Business Journal
Economic Forecast really rocked (for a business breakfast).
Why? Because only one out of three speakers used Powerpoint slides.
And because even he, the real estate development guy, didn’t offer up the usual charts and graphs and percentages that come with those kind of events: percentage of jobs gained, jobs lost, yada.
Instead, three very smart people got the attention of a business
community that thought it was going to snooze through a high-carb
breakfast of French Toast and potatoes and made it do something quite unusual — THINK.
Everyone knows I’m a fan of Michael Crow, or rather, that I’m a
supporter of any change agent that isn’t Hannibal Lechter. But I
think Dr. Crow has now been in our community long enough to add real
perspective to the view of the locals, and to have credibility in
doing so. After all, he has raised about $130 million (that I can
count) so far for ASU since he has been here.
This morning he told us some things that applied first to Arizona,
but I think apply more generally to almost all of the United States.
And they have macro implications, one of them being the way the rest
of the world perceives us, and another of them the way we will
maintain (or not) our economic hegemony in the future.
Dr. Crow said Arizona’s economy is too narrow, with insufficient
diversity of drivers. When you consider the fact that we have lost
many of our manufacturing jobs and even some of our information
technology jobs, I believe he’s correct, but too narrow himself.
Arizona is no worse off than Michigan or Illinois in this respect: we were fat and happy until the jobless recovery jolted us into
considering where the drivers of an economy really come from.
He also said our focus was too American, ignoring such powerful influences on our future as China, which is opening over a hundred new software universities this year alone. Related to that is the fact that our high tech manufacturing successes are built on a platform that will shortly be replaced, rendering many of the current facilities obsolete. At that juncture, it�s just as easy to build a new plant somewhere else as to stay here.
And then there�s the fact that the average personal income in Arizona is � in his own words � �acceptably� mid-range. The key word is the one in the quotation marks; we�re apparently unconcerned that people get paid less in Arizona for the same jobs. In fact, we�re fond of pointing to the climate tradeoff. But not every first-rate scientist or professional will make the sacrifice of a good salary to live in the desert.
Our education system, he pointed out, is underperforming. This is shown in our work force, which is composed of only 8% college graduates, as opposed to other states� 23-25%. Tied to the education system is something Dr. Crow calls the creativity index: the ability to make something from nothing. That, he says, is too low in Arizona.
The whipped cream on this lethal sundae is that we don�t pay sufficient attention to our natural capital, and we will likely put an end to our land price escalation by polluting the environment. And the cherry on top of our state�s bloated, unhealthy future? Insufficient competitive will. We don�t care enough to win. And we don�t realize that the competition is global.
Crow made one further damning point: our economic future and our social future are entwined. Poorly educated people, with no possibility of decent jobs, eventually create social unrest. All we need to do is look at the middle East to see how this plays out. We may not have a nation of martyrs if we don�t take care of our economy, but we may have a nation of marauders.
Michael Crow seems to be the Vince Lombardi of economic development. Winning, for him, is everything. Thank God the keynote speaker, Daniel Burrus, told us how to win. But if you missed it, you won’t find out from me. I’m keeping it as a trade secret.
