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Arkansas appears poised to make the second major step in a long-term effort to boost the high-tech segment of its economy: injecting $30 million to $50 million into university research.

But some questions remain despite Gov. Mike Beebe's and members of the state legislature's support.

"The current thinking is it's still not a done deal," said Leslie Lane, senior vice president of Arkansas Economic Acceleration Foundation. "The legislative session's not completed, but that ($30 million to $50 million) seems to be the general consensus."

State lawmakers have been sympathetic and supportive up to this point, Lane said, but there are a lot of people requesting resources for a variety of things.

"Basically the governor supports it because it's a good opportunity for public, private and educational groups to work together to help Arkansas' economy make big strides forward," said Matt DeCample, a spokesman for Beebe.

Lane said if the state commits to that level of funding, Accelerate Arkansas, a group of businesspeople and university researchers, would then go to the private sector to try to raise some matching funds.

Those monies would be used to enhance the broad categories identified to help raise the state's per capita income, Lane said.

Investing in research and development programs is part of Accelerate Arkansas' goal of adding 27,000 high-tech and knowledge-based industry jobs. Those jobs would generate 19,000 jobs in the wholesale, retail and manufacturing sectors.
In total, the new jobs would generate an estimated $12.7 billion in personal income and $2.4 billion in tax money.

Although Accelerate Arkansas has discussed the idea of private industry matching the public funds, the group does not have any commitments as yet, Lane said.
"It's new territory for everybody. Nobody's raised this amount of money for this category in the state's history," Lane said, "so there's really no precedent."
Arkansas ranked 49th in a 2004 Milken Institute study of the nation's technology and science index, and the state fared particularly poorly in research and development. The study, done for Accelerate Arkansas, shows that improving the state's knowledge-based economy, which includes industries such as Internet service providers, data processing, and architecture and engineering , could create higher paying jobs for residents.

The same study showed Arkansas residents earn just 74.2 percent of the national average, and by 2020 per capita income is expected to slip to 68.3 percent of the national average.

If Arkansas' state government can come up with the research money, the funds will be overseen by the Arkansas Science & Technology Authority, an existing state agency, Lane said.

Accelerate Arkansas is also proposing that the state create an Arkansas Research Alliance modeled on the Georgia Research Alliance, Lane said. In Georgia, the alliance acts as a conduit, getting the public, private and academic sectors to sit and the same table to discuss where the research needs are and what would have the most impact.

The Arkansas Research Alliance would be affiliated with several of the state's economic development agencies, Lane said. Those agencies all have existing programs in place, so the dollars available could go to those existing programs.
The economic development agencies and the private and academic sectors would all have a say in where and how the money is spent, Lane said.

Securing state funding would add to the momentum Accelerate Arkansas and the state have built up during the process, Lane added. The first step was developing a vision of the things that could be done to raise the state's per capita income.

Two years ago, the state overhauled its economic development programs to include new incentives for entrepreneurial companies.

This session, efforts have been focused on securing additional resources for research, Lane noted.


May 2007

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