On January 31, Nirav Desai, PNWER Innovation Working Group co-chair, and Steve Myers, PNWER Senior Program Manager, had the opportunity to testify during the Alaska Senate Labor and Commerce Committee hearing in Juneau. During their testimony, Mr. Desai and Mr. Myers highlighted the options in Alaska for economic diversification and development. Watch the Senate Labor and Commerce Committee hearing HERE.
Alaska has similar challenges as other cities, states, and provinces that are dependent on one sector of the economy. Automation and globalization have increased over time, and jobs in traditional sectors have been eliminated or outsourced. Economies that are primarily resource-based are particularly impacted by swings in prices because of the cost to commit to development as well as getting products to market. It is often difficult to justify investment in development and an increase in production if the price of resources is down. Additionally, as calls for new transportation options like pipelines and increased rail capacity are being scrutinized, the cost of getting products to market increases. This has an adverse effect on jobs and revenue for resource-based economies.
Mr. Desai pointed out that some regions have had success attracting technology-based industries in an effort to diversify the local economy and enhance its incumbent industries. For example, over the past 20+ years, Austin and Houston, traditionally resource-based economies, have encouraged technology firms to open engineering offices in Texas, selling the low cost of living, educated talent, and low taxes. It has taken several years and courting by economic development leaders, but when a community lays out a strategy and sticks to it, there is opportunity for growth. This strategy is opposite to the traditional method of targeting corporations for complete relocation. The traditional relocation process can be challenging and harmful as states and provinces undermine each other to get the best deal by offering the most incentives – essentially a race to the bottom marked by tax breaks and incentives that may surpass the growth in municipal revenue.
Cities like Austin, Texas; Raleigh, North Carolina; and Pittsburgh, Pennsylvania, have embraced the innovation economy and sought ways to connect their educational institutions with technology platforms to foster the growth of engineering offices and a start-up ecosystem. States and provinces can foster an innovation ecosystem that creates jobs and revenue by enticing firms to work in their community. States and provinces need to remember to focus on their strengths and get buy-in from stakeholders. States and provinces like Alaska could take on the strategy of attracting satellite offices using its uniqueness to test products and support incumbent industries.
Learn how workforce development and talent can foster an innovation ecosystem in a future post.
Check out our 2019 PNWER Annual Summit in Saskatoon, Saskatchewan, July 21-25, 2019!
Future posts in this blog series will showcase the working groups that will hold sessions at our Annual Summit including workforce, transportation, economic development, and more. Stay tuned!