NW Arkansas economy rated tops

BY CHRISTOPHER LEONARD ARKANSAS DEMOCRAT-GAZETTE

The Milken Institute doesn't always have great things to say about Arkansas, but its latest pronouncement says Northwest Arkansas is the strongest regional economy in the nation. The think tank, based in Santa Monica, Calif., ranked the nation's metropolitan areas for the best overall economy. At the top of the list stood the Fayetteville-Springdale-Rogers Metropolitan Statistical Area, which includes Bentonville. The area ranked 23rd last year. "I'm elated. That can do nothing but help the entire state of Arkansas," said Jim Pickens, director of the Arkansas Department of Economic Development. Arkansas might not pop into everyone's mind as an economic powerhouse ' the region's top spot even shocked the author of the Milken report. "I was [surprised] when I first saw the numbers, and I made the staff check it again and again and again ' and it was true," said Ross DeVol, director of regional economics for Milken Institute. "It's very exciting," said Jeff Collins, director of the Center for Business and Economic Research at the University of Arkansas, Fayetteville. "We get beaten up so much by bad news, being told that things are going right is very heartening for people that are trying to fight the battle and are working hard to build the state's economy," Collins said. The Fayetteville area ranked strongly in all the indexes measured by the institute. It ranked first in job growth in the nation. The region ranked ninth in wages and salaries. But its hightech sector grew faster than any other area. That doesn't mean it's the technology Mecca ' it ranked 127th in terms of its total concentration of high-tech firms. The report didn't take into account "quality of life" issues like the crime rate or housing prices on the assumption that those factors already figure into an area's ability to attract workers. Not surprisingly, the report points to the presence of Wal-Mart Stores Inc. in Bentonville as a major factor in the area's growth. DeVol said the lagging national economy actually helped push Northwest Arkansas to the top because it benefited Wal-Mart. "The recession pushed people from purchasing at upscale retailers to discounters such as Wal-Mart," DeVol noted. The region also benefited from Wal-Mart's desire for its vendor companies to locate in the area, said DeVol, who cowrote the report with Milken researcher Frank Fogelbach. The report also pointed to the presence of the University of Arkansas and companies like Lowell-based J.B. Hunt Transport Services Inc. and Springdale's Tyson Foods Inc. as stabilizing employment forces. The Little Rock-North Little Rock area ranked 111th out of 296 metropolitan areas nationwide, according to the Milken Institute. The Fort Smith area ranked 167 th, and the Memphis area, including parts of Arkansas, Tennessee and Mississippi ranked 159 th. The Milken Institute was founded in 1991 with the goal of creating jobs and helping entrepreneurs. It has a team of economists who conduct studies toward that end by providing their findings to businesses and policy-makers. Arkansas economic developers might know the institute best for the tough news it provides every year when it ranks the states best suited for the new "knowledge-based" economy. For years Arkansas has ranked among the worst states in that report. Many consider that a wake-up call for the state to focus on creating new jobs and industries that don't revolve around manufacturing or agriculture. Ironically, it was the poor fortunes of such high-tech firms that pushed many Silicon Valley cities down on the list and thus helped Northwest Arkansas reach the top, according to the report. Pickens agreed with that assessment. He noted that Arkansas has relied on less volatile industries. "We've had our share of layoffs and downturns, but our unemployment rate has