In 1912 after many long years of work the U.S. Congress passed the second organic act that established Alaska as a U.S. territory with a home rule legislature.
The Act struggled for passage because of the opposing views of Alaska’s future. Some felt that Alaska should not have home-rule and that the development of local control and infrastructure would be too costly or try to control the companies that came to develop the resources.
Others felt that those living in Alaska and making it their home should have more local control of how development would occur and a direct vote for their representatives, rather than by appointment. While the act did pass, the struggle over the state’s economic future continued into the statehood debate, and it affects our state today.
What’s next, Alaska? Will our state continue to focus its efforts on being a profitable place for extraction and ignore the changing world around us, or will we finally accept that more models and balancing demonstrations on stage do not change the fact that our economic model has run its course and cannot sustain our civic needs or address the challenges of our urban and rural communities?
Economies have life cycles as do most companies and people. Life cycles show us repeatedly that what was young and vital at one time, matures and is eventually replaced by something new that builds on the past and surpasses what came before.
Alaska can be thought of as having a successful and long lived subsistence economy that has matured, perhaps declined in its viability, but that nonetheless remains an important part of our past, current rural livelihood and state culture.
Then in the mid 18th century with the arrival of an organized Russian fur trade, Alaska’s next economy, extraction, began. Over time this extraction economy included many “rounds” of extracted resources including: round fur pelts, round whole fish, round bags of unprocessed copper ore, round logs, round barrels of oil, and even, round rolls of tourist’s film.
In each case our second economy has offered opportunities for Alaskans to support and participate in this extraction, but generally not to own or fully profit from the extraction and later processing. The Alaska Native corporations and the Permanent Fund — notable improvements to the traditional economic model — are capturing more value for Alaskans.
Today, the extraction industry remains vital to our state’s economy and many of our better paying jobs but its support of the civic costs of our state have reached a tipping point in the last five years such that its is no longer a sustainable economic model that balances the needs of the civic and market economics that are dependent on each other. Whether it will be more cuts, more taxes or more support from our Lower 48 relatives sending their tax revenue north, it's time to ask the question: What’s next, Alaska? What will our next economy look like? What is the Alaska you want to build?
Some of the answers to those questions are found in the UA Center for Economic Development reports on the Alaskan innovation ecosystem and startup community in which they show that for years, we have been creating more jobs through entrepreneurship and startups, including the outdoor products industry, than we’ve lost as the extraction economy contracted.
Some of the answer is found in the national movement lead by The Kauffman Foundation and their “America’s New Business Plan” and the work of Mariana Mazzucato in her book “The Entrepreneurial State: Debunking Public vs. Private Sector Myths that highlights the importance of civic economy support for private innovation such as the federal investments in many of our Alaskan innovation and infrastructure programs.
More of the answer can be found by looking at the COVID-19 impacts on our nation’s economy by McKinsey & Company and their suggestions on how to “jump-start resilient and reimagined operations” with its vision of investing in a new-normal, rather than subscribing to the CARES act model of holding our breath long enough to not catch the bug and get back to an old normal.
Finally, some of the answer is already here in the work of many including the Launch Alaska energy-focused business accelerator; the UA Upstart Alpha startup accelerator; the UA Center for Innovation, Commercialization and Entrepreneurship; and the Anchorage Chamber of Commerce, Anchorage Gig Economy Network or developing opportunities for gig or remote workers who value Alaska for is globally competitive location and quality of life.
Alaska’s future economy is dependent on the same underlying question that Alaskan pioneers struggled with over 100 years ago: will we block progress to the future to protect current interests, or embrace the future and a uniquely Alaskan destiny?
Rather than home-rule, the question today takes a new form, asking whether we will invest in efforts to support innovation, entrepreneurship and digital transformation in our current extraction economy in order to help it remain competitive and sustainable while we also invest in new value added and post extraction opportunities?
What our economy looks like in the future could be based on ideas we are working on now or new opportunities we cannot even imagine yet. Economically they will all have impacts that either reduces the flow of money out of our economy, increases the velocity of activity inside the state, or increases the value of exports and flow of money into the state. Some ideas include:
Reduced imports and outsourced contracting,
Alaskan owned infrastructure and value-added operations,
Project based innovation,
Alaskan owned tourism, outdoor and arctic adventure enterprises,
Sustainable blue and green technologies that increase extracted resource value and reduce the costs and carbon footprint of living in urban and rural Alaska,
Research and entrepreneurship leading to exporting Alaska solutions to our energy and climate change challenges to the rest of the world,
Gig or remote work and business operations based in Alaska that create value from our unique time zone location that eliminates distance as a barrier to Alaska being a vital part of the global economy.
The future economy of Alaska has already started to grow, but it could accelerate and help in our recovery from the pandemic and fiscal crisis with more active investment in brain power, quality places, innovation and creating a new narrative about our future Next Alaska economy and pursuing the opportunities ahead of us.
This week you can find many examples of what Alaska’s future economy could look like by participating in one of more than thirty virtual events offered by the Alaska Startup Week - https://alaska.startupweek.co/. Please join the startup community at an event this week and join a discussion about the Next Alaska 3.0 economy at http://kyholland.com/2020/11/09/nextalaska30/ #BuildTheAlaskaYouWant
H. “Ky” Holland III is based in Anchorage and is taking a self-imposed sabbatical to work on what is Next! [email protected]