Gretchen Fauske

CED Series: Attracting economic growth

In 2011, Charlotte went bananas. City officials in North Carolina launched a marketing campaign to entice Chiquita Brands International (aka Chiquita Banana) to relocate from Cincinnati and make Charlotte their new headquarters. Amidst photos of bananas framing city signage, a #bananasforCLT hashtag on Twitter, and yellow bow ties, the government offered $22 million in incentives over a period of 10 years to seal the deal. Economic developers often use incentives and marketing tactics to encourage companies to relocate or expand to their communities, a practice both costly and competitive. A key tenement of economic development, it has recently evolved to include attracting and retaining workers. Charlotte was successful in their bid, anticipating 400 new jobs and $14 million of investment. Although the resulting jobs numbers weren’t quite as expected (134 local hires, 141 transfers from Cincinnati, and 28 recruitments from outside) city officials cited $11 million in construction, new residents buying homes and paying taxes, and charitable contributions as a worthwhile return on investment. Last year, Amazon made headlines as cities lined up for the opportunity to host HQ2, the company’s second North American headquarters. The expected antics ensued: Newark and New Jersey offered nearly $7 billion in tax incentives, Birmingham, Ala., constructed giant Amazon boxes around town, Phoenix did something with a cactus that didn’t really work out, and Mayor Sly James of Kansas City purchased 1,000 items from Amazon and used the reviews to promote his town. Even Anchorage got in on the action, citing easy outdoor access, university graduates, and lack of traffic in an online application. From the 238 proposals submitted, Amazon selected 20 cities for round two and is currently making the rounds to select the location for their expansion. Anchorage didn’t make the cut. The Ted Stevens Anchorage International Airport is the fifth largest cargo hub in the world. (Photo/Chris Arend Photography/Alaska Division of Economic Development) Economic developers in Alaska are generally skeptical of our ability to compete head-on with other states to attract Fortune 500 companies. When considering what might work in Alaska, Bill Popp, CEO of the Anchorage Economic Development Corp. says that his team is focusing on opportunities at the Ted Stevens Anchorage International Airport. “We’re looking at distribution facilities for pharmaceuticals, supply chain logistics, there’s potential in high-end electronics and aviation parts distribution,” he explains. “When you consider that Anchorage has the fifth-largest cargo airport on the planet with hundreds of wide body jets and the opportunity for foreign carriers to exchange cargo here, there are a lot of possibilities. The challenge is getting them past the cost of construction and the cost of labor.” If labor is expensive and in short supply, what can we do to attract more workers to Alaska? Economic developers have recognized a shift in who attracts whom: Instead of talent following companies, companies have started following talent. Back in 2005, author Thomas Friedman told us that “It’s a Flat World, After All” and since then, it’s flattened even further. We’re now competing on a global scale. As availability of qualified workforce continues to plague Alaska businesses, attracting talented new workers to our state, along with growing our own, is essential. People are more mobile than ever before, and can choose where to travel, work, and pursue an education. Attracting potential workers that would appreciate the Alaska lifestyle could help solve the labor shortage. There’s also the matter of “boomerangs”: young Alaskans who leave the state (often for education) and find themselves wanting to come home after graduation or launching their careers outside. Born and raised in Anchorage, Chase Christie moved to San Francisco shortly after graduating from the University of Oregon in 2004, and started a career working in solar energy. After 15 years in the Bay area, he was eager to return home but knew he needed to find the right opportunity. When an Anchorage-based solar company offered him a job, he jumped at the chance. He says the proximity to the outdoors is just as great as he remembers, but that the city has changed a lot, too. “Anchorage has evolved in so many great ways since I was a kid. There's a more developed art and music scene, there are great restaurants, things that I didn’t appreciate when I was younger that I do now make the city really special and so unique.” Christie is here to stay. “I have a friend from New Hampshire who moved here in 1999 and he says it best: ‘I’ll move somewhere else, just show me someplace better.’ And I couldn’t agree more.” Moira Gallagher manages Live. Work. Play, AEDC’s grassroots effort to make Anchorage the No. 1 city in America in which to live, work, and play by 2025. She frequently considers how to attract more people to our state, and laughingly says, “I’ve actually thought about putting signs in sweaty subways during the summer — something along the lines of ‘Guess what? In Alaska it’s 68 degrees and sunny in the middle of the summer’ — an appeal of Alaska being it never gets too hot!” There are opportunities aplenty to continue developing a lively and vibrant downtown core in Anchorage. (Photo/Ken Graham Photography/Alaska Division of Economic Development) Despite our advantages, she says that there are two challenges to attracting new workers to Anchorage: lack of affordable, high-quality housing and lack of a dynamic urban core. “When people live downtown they bring vibrancy which is great for existing businesses and attracts new businesses,” she said. “People want entertainment, restaurants, music, public art. The greatest cities in the world have walkable, lively, happening downtowns.” That said, Anchorage offers an appealing combination of city and wilderness. “Our outdoor recreation is second to none. We have more acres of parkland than any other city in America,” she said. “You can get on your bike and be in the Chugach foothills 10 minutes later. In the winter, you can ski Kincaid Park on the lighted trail, or go to the downtown tree-lighting ceremony. In the summer, visit your favorite fishing hole at Ship Creek or ride miles of bikes trails. And the people here are great.” Both Gallagher and Christie have significant others who relocated to Alaska. Gallagher says her husband is from New York and “loves that Anchorage feels like a small town, yet is large enough to support big-city amenities like the performing arts and multiple general hospitals,” while Christie says his Berkeley-born girlfriend “has a job that she absolutely loves, finds she’s inspired by the people she works with, and sees living in Alaska as a long term opportunity.” Speaking of relationships, are you wondering how things turned out between Charlotte and Chiquita? Chiquita was purchased by a Brazilian company in 2015 and shortly after, packed their bags and departed Charlotte… even after the yellow bow ties, clever hashtags, and $22 million in tax incentives (some of which will be refunded, but still!). Now that’s bananas. Gretchen Fauske is marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. As the associate director for the University of Alaska Center for Economic Development she is responsible for leading the entrepreneurship, marketing, and outreach efforts of CED as well as providing strategic leadership for both CED and the UAA Business Enterprise Institute.

Workforce development: Career readiness and the evolving world of work

Katrina Chertkow graduated from the University of Alaska Anchorage earlier this month with a bachelor’s degree in sociology. A member of the Honors College, she graduated summa cum laude, and is pursuing a master’s degree in integrated marketing and communications at Northwestern University in the fall. Chertkow is a high achiever by any definition. And yet, her career path is uncertain. “I’m not sure what my career options are after grad school, which avenues to take,” she said. “Should I work for a marketing agency, start my own business, or freelance?” Cherkow’s uncertainty isn’t surprising. Students graduating this spring have watched as the number of people spending their career with one employer rapidly shrinks, and an increasing number of individuals have multiple careers in their lifetime. The Freelancers Union says that 34 percent of the U.S. workforce — 53 million Americans — are working as freelancers. With the rise of the “gig economy” short-term employment contracts will become more common. Workforce development serves both individuals and businesses with the objectives of: Preparing the workforce with the skills necessary to meet current and anticipated labor needs Supporting job retention and career advancement Connecting workers and employers in the labor market — International Economic Development Council For those in workforce development, this raises an interesting question: How can we prepare Alaskans for an ever-evolving world of work? Christi Bell, executive director for the UAA Business Enterprise Institute, says that higher education is already transforming to meet workforce and employer needs: “Some universities are focusing more on certificates and very targeted proofs of learning, and others are moving toward a ‘2+2+2’ model, which essentially means that students will come to university throughout their lifetime for ‘just in time learning’ — education that provides them with the knowledge, skills, and abilities needed for the exact point they are at in their careers.” For example, students could earn an electrician certificate, return in a few years to complete a bachelor degree in electrical engineering, and later enroll in a masters program for project management or sign up for specialized arctic engineering classes. Although this may seem to be a novel approach to career readiness and education, consultant and business advisor David Eisenberg says history is repeating itself: “Prior to the divestiture of AT&T (mandated in 1982), for example, workforce development provided by the Bell System was second-to-none in the technology sector. There was a highly-structured educational system within the Bell companies which coupled all manner of training — technical, supervisory, cultural, etc. — with specific experiential tracks to build the employee bench and future leadership. “It was well accepted that individuals with this sort of Bell System training were as well prepared for workplace advancement as university graduates at the time.” Preparedness for the workplace is a growing challenge for universities. “Hiring decisions are still made based on a degree, but we’re simultaneously hearing employers from all sectors tell us that they see a lack of ‘career-spanning’ skills from university graduates,” says Bell. Bill Popp, president and CEO of the Anchorage Economic Development Corp., agrees, noting that he often hears complaints from businesses regarding the lack of available qualified workforce. “It’s one of the biggest barriers cited in our business confidence survey,” he said. “Employers aren’t finding the skilled and professional workforce they want to hire. Quality of entry level workforce is also an issue.” Of survey respondents, 59 percent said that the availability of professional and technical workforce was a barrier to business growth Skill gaps include a combination of critical thinking, critical communication, problem identification and problem solving, and increasingly a range of interpersonal skills, sometimes called “soft skills.” This spans leadership, teamwork, and networking as well as timeliness, engaging with customers, and performing to one’s highest ability.  Bell says that although universities can encourage soft skills through class presentations, internships, and work preparedness seminars, the best way for students to obtain them is through applied work environments. She sees an opportunity for economic developers to bridge between universities and employers, explaining, “Universities are going to need to incorporate more interdisciplinary and experiential learning experiences into the traditional academic curriculum.” Economic developers are already making progress in this direction. In Anchorage, AEDC recently released the Internship Playbook to help companies establish and enhance internship programs through sharing best practices, foundational information, program structures, policies and procedures. Popp explains, “Internships can be an amazing asset for any size company, as well as any job seeker looking to get an edge in their search for employment. Done right, internship programs can be a great source of new talent both for the company and the community.” Students can also look to professional associations to grow their networks and their skills. The Alaska chapters of both the American Marketing Association and the Public Relations Society of America offer low cost student memberships and deeply discounted training opportunities, and the Anchorage Chamber of Commerce’s Young Professionals Group provides leadership and networking opportunities for Alaskans ages 21 to 39. Further, a group of professionals is exploring the launch of a Code School to train Alaskans in the basics of computer science, an increasingly sought-after area of knowledge. Internships and other training opportunities outside the classroom not only build critical skills, they also distinguish applicants during the hiring process. “I used to scan resumes looking for the ‘black sheep’ — someone with unique training and experience that stands out from the rest of the flock,” says Eisenberg. “My most valuable employees were those who had a variety of unusual experiences or interests or had taken what seemed to be a somewhat eccentric career path. They tended to demonstrate — through action — a willingness to take risks, make mid-course corrections (if necessary), and satisfy a thirst for continuous learning and self-development.” For qualified job seekers, there’s no shortage of job opportunities. According to AEDC, there were 31,000 jobs posted, representing more than 700 occupations at 4,800 employers during 2017 in Anchorage alone. Chertkow says that a combination of academic and service industry experience make her feel well-prepared for both graduate school and her future career. “My undergraduate research projects taught me project management, follow through, and team-collaboration while my jobs in retail and food service taught me customer service skills.” Gretchen Fauske is marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. As the associate director for the University of Alaska Center for Economic Development she is responsible for leading the entrepreneurship, marketing, and outreach efforts of CED as well as providing strategic leadership for both CED and the UAA Business Enterprise Institute.

Economic development in Alaska: taking stock of our opportunities

Jeff Stepp thinks Alaska is at an inflection point: “It’s a pivotal time in Alaska’s history and economy because of the confluence of the loss of federal earmarks and the decline of the price of oil, which contributed greatly to our economy during the last 40 or 50 years.” Stepp, the Economic Development Coordinator for the Fairbanks North Star Borough, doesn’t like seeing empty buildings in his community. He’s not alone; with “pivotal times” comes a hefty dose of discomfort… and opportunity. Amidst Alaska’s recession, economic developers across the state are working to course correct from a reliance on the aforementioned federal earmarks and oil revenues to a more balanced, resilient economy. Taking advantage of our unique geography, human capital, and the transformation of our existing industries just might propel us into an economically vibrant future. A transformation of this depth and breadth won’t be easy; along with a stubborn hope that climbing oil prices will solve our state budget woes, many are quick to bemoan challenges of doing business in Alaska. Economic developers often site the high costs of energy, real estate, and labor; limited infrastructure; a small population; and distance from markets as barriers. But after acknowledging our limitations, the conversation turns from challenges to opportunities, and that’s when it gets interesting. Brigadier General Billy Mitchell once remarked that “Alaska is the most strategic place on earth.” Britteny Cioni-Haywood, director of the State of Alaska Division of Economic Development, notes that “our geographical location is becoming more and more of an advantage as we move into a global economy.” Boasting the fifth largest cargo airport in the world and already an important stop for intercontinental shipping, the emerging Northern Sea Route and the Northwest Passage will make Alaska an even more valuable player in the transportation of goods. Economic development is a program, group of policies, or activity that seeks to improve the economic wellbeing and quality of life for a community, by creating and/or retaining jobs that facilitate growth and provide a stable tax base. — International Economic Development Council Two squadrons of the fifth-generation fighter jet F-35 will be arriving at Eielson Air Force Base in 2020. (AP Photo/U.S. Air Force, Senior Airman Julianne Showalter) Alaska’s location also makes it a critical component in the United States’ global defense framework. In a recent issue of Military Review, U.S. Army Colonel Michael J. Forsyth wrote that Alaska “is singularly closer to many national capitals in the hemisphere than most points in the lower forty-eight states. This makes Alaska the perfect power projection platform for the United States from a military standpoint.” Alaskans have seen increased military investment in our state during the last few years, most recently from the 2018 appropriation of $168.9 million for construction projects at Eielson Air Force Base in preparation for two squadrons of F-35 Lightning II aircraft arriving in 2020. Military investment can reach further than the infusion of cash into the state; with increasing engagement in the innovation economy, Stepp says that there is “tremendous potential for vibrant partnership between the military, municipalities, universities, and businesses.” He points to the Wright-Patterson Air Force Base in Ohio as an leader in using research and development to leverage innovation; events like Dayton’s “Commercialization Catalyst” feature presentations about Air Force Research Laboratory technologies that are candidates for entrepreneurs to bring to commercial markets. Following this model, or one like it, would accelerate the creation of scalable startups in state. Alaska's human capital is an important part of the state's economic future. (Photo/University of Alaska Center for Economic Development) Alaska is ripe for this type of strategic approach; an often overlooked “natural resource” is our people. Nolan Klouda, Executive Director for the University of Alaska Center for Economic Development, is the lead author of the Emerging Sector Series, which assesses and defines the growth potential of economic sectors. He sees an overlooked knowledge economy in Alaska: “We’re home to a sizable professional services workforce. These are the engineers, consultants, and other specialists who possess rare knowledge in fields like renewable energy or aviation. But we have relatively few companies working on a new product or piece of software that could scale. If that valuable knowledge could be funneled in an entrepreneurial direction, we could see a new generation of high growth companies.” Klouda thinks this could mean new industries in the state that would hire Alaskans. Our knowledge workers largely came into existence performing services for the resource sector and, just as they are poised to innovate, so too are the industries they hail from. Alaskan companies can be leaders in identifying or improving upon new technologies, markets, partnerships, and ways of doing business. “Alaska’s traditional industries require smart, skilled people in order to function. And that skillset will help propel us into the global knowledge economy,” says Klouda. As we capitalize on new opportunities, we must also strengthen our existing visitor industry and support responsible development of our natural resources. This will lead to economic growth and new state revenues. Cioni-Haywood points out that to maximize our resource wealth we need to transition from predominantly extraction to value-added resource development. This means activities like refining more of our own fuel or processing salmon into high-value products rather than shipping whole. Back to Stepp, and those empty buildings: “I also see an opportunity for a new business, a new entrepreneur, a new idea to fill that space. We have to be sure that we are using all of the available economic development tools – from education and workforce development to best practices to investment and incentives – to transition to a prosperous future for the next generation of Alaskans.” During this pivotal time “as a state, as a community, we need to be more scrappy and resourceful to keep our economy afloat.” It’s time to get scrappy, Alaska. Our future depends on it, and opportunity awaits. Gretchen Fauske is marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. As the associate director for the University of Alaska Center for Economic Development she is responsible for leading the entrepreneurship, marketing, and outreach efforts of CED as well as providing strategic leadership for both CED and the UAA Business Enterprise Institute.
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