State positions itself well for becoming a major center in the new economy.
Part 1 in a series
Arizona’s newly approved Competitive Package that uses tax incentives to encourage business growth in the state is a good step forward to creating attractive jobs in the new economy.
We at the Commercial Real Estate Group of Tucson believe the package will increase business by encouraging companies to start up or relocate to the state. We think that activity will spur more business establishment to provide support to those companies and their workers.
From our perspective, all that activity can only be healthy for creating employment. For our industry of commercial real estate, the package will generate a need for manufacturing space, office space, warehouses, retail space and other commercial real estate uses in Tucson and throughout Arizona. That could help not only by filling vacant buildings, but boosting commercial construction, too.
And the site selectors for new and incoming businesses will need experts to help with their office leasing, subleasing and purchasing activities. That helps the bottom line of our tenant representation services and other area business.
The Arizona Competitive Package reduces corporate taxes, maintains a job-training program and provides tax incentives for companies creating high-paying jobs in Arizona. The Arizona Technology Council says the plan “embraces high technology industries as the engine that will drive our state for the next 30 years.”
Arizona and the New Economy
Passage of the initiative came just as we’ve been digesting a recent report on how states and the country fair in developing the new economy that the package hopes to establish.
The 2010 State New Economy Index: Benchmarking Economic Transformation in the States shows how states are doing in attracting business activity that will sustain economies into the future. The most successful states in this regard attract and support such future industries as
- clean energy
- information technology
- advanced manufacturing.
These states foster innovation and entrepreneurship.
Arizona ranks 20th overall in the report by The Information Technology & Innovation Foundation. After a slide in the rankings since it occupied the 10th spot in 1999, in this report it moved up from 22nd in 2007, the foundation’s last report.
The state’s highest ranking came in the category of Economic Dynamism, where it was listed 7th best at fostering fast-growing entrepreneurial companies. It came in second among states in the indicator that measures the number of entrepreneurs starting new businesses.
Arizona fared worst in the Globalization category, ranking 37th. In the indicators for this category, the state is average in producing goods and services for export, but 40th in the number of workers employed by foreign-owned companies.
Arizona’s Other Rankings
Here are some other points we found interesting:
Knowledge Jobs: 27th
In this measurement on the skill and education levels of the workforce, Arizona’s ranking was boosted by its 3rd place in producing products and services that are valued higher than the costs for production. “Arizona scores well due its strong defense and aerospace industries,” the report says.
Conversely, the state ranked 49th in the educational level of migrants to the state from abroad. “Generally,” the report says, “states with migrants predominately from Latin American countries, who, on average, have fewer years of education than European or Asian migrants, tend to do worse.”
Digital Economy: 25th
Arizona ranked above 20th in about half the indicators, but placed 41st in the use the internet to send prescriptions to pharmacies and 47th in online use by agriculture.
The state is considered among the top five movers in its population’s internet use. That means it had one of best upward movement in ranking between the 2007 and 2010 reports.
Innovative Capacity: 18th
Arizona is considered among the top movers in industry investment for R&D. Of the indicators for this category, Arizona scored its lowest at 29th on the indicator of non-industry investment in R&D.
We can see the Arizona Competitive Package helping to improve the state’s rankings in many of these indicators. We feel that Arizona is on its way to becoming a major player in the new economy. And that will mean more prosperity for all of its residents.
Part 2: More on the New Economy report.
Commercial Real Estate Group of Tucsonspecializes in representing tenants and corporate users across the United States, Latin America, Europe and Asia as a member of ITRA. For more information call 520-299-3400.