Slow but Steady: Business in Arizona’s Post-Recession Economy, Part Three

Continued from Part 2

Arizona’s post-recession economy has yet to kick into full gear. But there are hopeful signs. There are also some concrete steps the state can take to help things move along.

Education

When it comes to the economic future of Arizona, there is perhaps no greater factor than education. An educated workforce is an absolute necessity in a global economy. In order to remain competitive, children must have the necessary resources. But investments in education can’t stop at school — workers must keep their skills up to date and marketable through ongoing educational efforts. Those out of work must have the ability to update their skill set, or transition into a new field entirely. Arizona has begun taking steps in this direction. After several years of discontinuing funding, state of Arizona recently made a significant financial investment in adult education, and will qualify for $11 million in additional federal matching funds next year.

Transportation

To remain competitive, states have to invest in infrastructure. And with an economic powerhouse like Texas nearby — a powerhouse that has actively tried to lure out-of-state businesses — a state like Arizona needs to make sure it remains an attractive home for business. Investing in transportation is one way to do so. Roads and highways aren’t just vital lanes of commerce, they connect business hubs and economic centers. Mass transit options, like the light rail system in Phoenix, serve a number of economic functions. They take people to work to earn money. They take people to stores and entertainment centers to spend that money. They also make cities more liveable and attractive to people looking to move.

Quality of life

If you want to drive economic growth, you need a hospitable business climate and a strong corporate base. In order to get these things, you need a pool of skilled workers. A talented worker pool improves efficiency, productivity and performance. But luring skilled workers is no easy task — the competition for the best of the best is fierce. Things like well-run mass transit, arts and entertainment districts, a thriving cultural scene and recreational opportunities help draw the kind of workers companies require to remain competitive.

The future

Over the last few years, Arizona’s economy has continued to rebound from the damage incurred by a severe recession and an overheated housing market. While things are on an upward trend, and the growth has been consistent, the overall rate has failed to keep pace with growth seen in the recent past. A dramatic shift probably isn’t in the cards, as projections for next year call for more of the same. A weak job market and slow population growth will likely keep the economy in check. And that’s going to be a tough cycle to break, as the two are so closely tied — population growth is down because of a weak job market and the job market is weak in part because population growth is down.

But aside from that economic chicken and egg scenario, Arizona’s long-range prospects look favorable. One key reason for optimism is the housing market. The housing market has shown signs of life — signs that it could be the engine that helps get the state economy back on track. A healthy construction industry is not only a major job creator, it creates the kind of well-paying jobs skilled workers will seek out. Arizona’s post-recession improvement in this area has been far ahead of the national average. Massive improvements in the retail economy — as evidenced by the recent spike in automotive sales — are another crucial indicator that economic growth may outpace projections.

With this gradual improvement in construction and other important sectors, plus added investment in areas such as transportation and education, Arizona will be in good position to improve its economic fortunes over the next few years. With more jobs and a better business climate the state may reclaim its mantle as a top destination for new workers and new businesses.

By Jason Hope

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Jason Hope

Entrepreneur

Jason Hope is a entrepreneur, futurist, philanthropist, and investor located in Scottsdale, Arizona with a passion for technology and giving back to his community. As an Arizona native, Jason grew up in Tempe and received a degree in finance from Arizona State University, and an MBA from ASU’s W.P. Carey School of Business. Along with his philanthropic and business initiatives, Jason has a dedicated interest in politics as related to business throughout the state of Arizona as well as nationally.