Tag Archives: global marketplace

Chalkboard - Making the Grade for Growth

STEM Education – Making The Grade For Growth

Arizona Leaders know it’s a problem.

“When one of our top employers of scientists and engineers says that if he had the decision to make all over again, he would never bring his business and its thousands of high-wage jobs to Arizona because of the lack of commitment to education, that is a call to action,” says Phoenix Mayor Greg Stanton.

The top employer Stanton is talking about is Craig Barrett, former Intel CEO, who told state lawmakers in no uncertain terms that cuts in education are stifling Arizona’s economic development. But the financial aspect of education isn’t the only thing suppressing the state’s ability to prosper in the technology and bioscience industries. It’s the quality of Arizona education that’s killing us, according to another Valley tech leader.

“Our high schools are a mess,” says Steve Sanghi, CEO of Microchip in Chandler. “They are among the worst in country and that is a major problem that we need to address before the state can prosper.”

Sanghi sees many hopeful workers come into Microchip looking for a job, but are unable to pass a remedial math test that the company gives to all prospective employees. If they cannot pass, they cannot get hired, Sanghi says.

“STEM education — science, technology, engineering, math — is where we lack,” Sanghi points out. “That’s where the most competitive, high-paying jobs will be in the future. That’s where other countries are taking our jobs and taking our positions. That’s where we need to improve, but that’s a very tall order.”

It seems like a Herculean task. Arizona ranks 44th in the country in the Quality Counts report, compiled each year by Education Week in conjunction with the Education Research Center. That ranking represents a slight drop from the state’s standing in last year’s report.

“Today’s students have a lot of distractions,” Sanghi says. “We cannot compete with Hollywood stars or sports figures because they are bigger than life. It’s easy to get students to dribble a ball or go into music or arts. It’s crucial that we get them interested in science and technology before pop culture gets them. Once pop culture gets them, we can’t get them back.”

The only way to change the way students view education is through visionary leadership, says Pearl Chang Esau, president and CEO of Expect More Arizona, a statewide movement dedicated to making Arizona education the best in the nation.

“Our leaders need to start viewing education as an investment, not as an expense,” Esau says.

Many of Arizona’s leaders are taking the challenge to heart and introducing programs and legislation aimed at promoting and strengthening STEM education in the state:

  • Rep. Heather Carter, R-Cave Creek, has introduced a bill to make it easier for STEM professionals to become certified to teach and bring their expertise to the classroom.
  • Rep. Kimberly Yee, R-Phoenix, has introduced legislation to boost STEM education in poorly performing schools by calling for the State Board of Education to intervene when a school has earned a D or F for two consecutive years.
  • And Stanton, who campaigned on an education platform even though he was publicly criticized because school districts, not cities, have jurisdiction over education in Arizona, has created a Mayor’s Futures Forum on Education.

 

“The city of Phoenix is not as well-positioned as it should be to compete in the national economy,” Stanton says. “We need more of our kids graduating high school and studying in areas that will create the jobs of the future.”

Ironically, the man who has been the biggest critic of the state’s poor education record may be the man to help give it a much-needed spark. Retired Intel CEO Barrett has been named chairman of the Arizona Ready Education Council. He will be heading “Arizona Ready,” which is dedicated to helping Arizona students prepare to succeed in college and in careers that will boost the state’s economy. To improve education, Arizona Ready has established specific, measurable goals and accountability for everyone involved in educating our children.

“There is a lot of room for improvement in the K-12 education system in Arizona,” Barrett says. “I believe it is the responsibility of society to give the next generation the tools to be successful.”

Barrett insists that Arizona schools need to strive not just to be the best in the state, but they need to challenge themselves to be the best in the world so Arizona can compete in the global marketplace.

“It is not appropriate to just compare one local school district, or state, with another,” Barrett says. “You have to compare the accomplishments of your students with the best in the world.”

Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry, agrees with Barrett that raising the standards is imperative to improving education and creating a pipeline of future workers with the skills to succeed in tomorrow’s tech-heavy industries. To accomplish that, Arizona Ready is raising the standards and hopes to accomplish these goals by 2020:

  • Increase the percentage of third-graders meeting state reading standards to 94 percent. In 2010, 73 percent met the standard.
  • Raise the high school graduation rate to 93 percent.
  • Increase the percentage of eighth-graders performing at or above “basic” on the National Assessment of Education Programs (NAEP) to 85 percent. In 2010, the numbers were 67 percent in math and 68 percent in reading.

 

“Every kid has that dream of becoming a celebrity in Hollywood or becoming a sports star,” Sanghi says. “But the chances of the average high school student making it in Hollywood or in sports is 1 in 1,000 at best. But if we can get them interested in STEM and get them to dream about becoming a doctor or scientist or engineer, the chances of them achieving their dream is pretty high. Most will be able achieve that.”

Arizona Business Magazine March/April 2012

Grant Thornton Business Optimism Index

Grant Thornton Business Optimism Index Reports Growing Confidence In Economy

Each year, Grant Thornton works with business leaders nationwide to gauge their optimism in the U.S. economy. This project, titled the Grant Thornton Business Optimism Index, was started in 2002 with three key measures over time:

  • U.S. economy: Business leaders’ perceptions of whether the U.S. economy will improve, remain the same or deteriorate in the next six months.
  • Business growth: Business leaders’ perceptions about the growth of their own business over the next six months.
  • Hiring expectations: Whether business leaders expect the number of people their company employs to increase, remain the same or decrease in the next six months.

The most recent survey, available now, was conducted in late 2011 by an outside polling organization, with nearly 400 senior executives from various industries across the country responding.

And there is good news!

While in recent years the responses have been understandably tempered and/or negative, current data shows we may have finally gotten through the worst.

According to the Index, business leaders in the United States have a growing confidence in the economy. Specifically, one-third of all surveyed believe the domestic economy will improve in the next six months, compared with just 18 percent in the third quarter of 2011.

The Index itself rose 11.8 points to 57.9, reflecting increased optimism around key economic measures: the U.S. economy, business growth and hiring expectations.

Some specific data over time:

5/2010 8/2010 11/2010 2/2011  5/2011  8/2011  11/2011 
OVERALL Business Optimism Index* 67.6 58.4 63.0 69.7 62.6 46.1 57.9
Believe U.S. economy will improve 63% 34% 47% 64% 45% 18% 33%
Believe U.S. economy will get worse 6% 16% 10% 4% 12% 46% 20%

Growth, we found, is also top-of-mind among our nation’s leaders.

In fact, 75 percent are optimistic about their companies’ growth in the next six months, up from 60 percent in the third quarter of 2011. Hiring appears to be on the rise as well, with 37 percent of U.S. business leaders noting that they expect to increase staff levels in the next six months, up from 28 percent in the previous quarter.

However, the U.S. optimism is still very reliant on how struggles occurring in the global marketplace, including Europe and China, are being dealt with.

Additional data collected over the past two years:

5/2010 8/2010 11/2010 2/2011 5/2011 8/2011 11/2011
Very or somewhat optimistic about own business 87% 76% 79% 87% 79% 60% 75%
Very or somewhat pessimistic about own business 13% 24% 21% 13% 21% 40% 25%
Plan to increase staff 44% 38% 43% 49% 40% 28% 37%
Plan to decrease staff 12% 15% 15% 10% 12% 25% 14%

When asked what public policy initiative would make business leaders most optimistic about in the country’s future, a job creation program was rated highest, as in the prior quarter.

Please rank in order the public policy initiatives listed below that if adopted would make you most optimistic about our country’s future. Rank from 1 to 5, with 1 being most optimistic and 5 being least optimistic:

Public policy initiative Most Optimistic
Job creation 43%
Deficit reduction 31%
European plan to promote international economic security 17%
Reduction in effective corporate tax rate 7%
Regulatory adjustments to improve IPO market access 2%

While we still have a long way to go, this data represents improved optimism in our nation’s future success, growth over time and economic stability.

For more information or for the detailed white paper on the Grant Thornton Business Optimism Index, please visit gt.com.

arizona flag 2011

Legislation to help re-establish Arizona as an economic leader

Gov. Jan Brewer today called the Legislature into Special Session for the consideration of a comprehensive plan to put Arizona back to work. Known as the Arizona Competitiveness Package, the proposal includes a mix of targeted business incentives and broad tax reforms designed to rev the Arizona economy.

“The Competitiveness Package will make Arizona a magnet for business expansion, relocation, capital formation and investment,” Brewer said. “This is our roadmap for future economic growth.” Improving Arizona’s competitiveness in the global marketplace is the first of the governor’s Four Cornerstones of Reform that she unveiled earlier this year. The centerpiece of the plan is her creation of an Arizona Commerce Authority.

Replacing the Arizona Commerce Department and its hodge-podge of more than 50 mandates and responsibilities, the Commerce Authority will have a single focus: the retention and recruitment of quality jobs for Arizona. The Commerce Authority will be overseen by a public-private board comprised of Arizona leaders in business and policy.

Designed to be nimble and flexible in responding to economic opportunities, the board will be armed with a $25 million deal-closing fund to help land some of the nation’s most highly-sought corporations and business ventures for Arizona. No dollars will be awarded prior to performance, and “claw-back provisions” and an independent, 3rd-party economic analysis will ensure that companies awarded public funds meet their promised obligations.

“This package of tax reforms and targeted investments will give Arizona the tools it needs to compete for economic development on the global stage,” said Don Cardon, president and CEO of the Arizona Commerce Authority. “Arizona can’t afford to wait for economic growth. We’re going to aggressively pursue quality jobs and stable industries that will become the bedrock of this state’s economic future.”

The Arizona Competitiveness Package is focused on both urban and rural job creation, and is intended to make this state a destination for business growth and development. Specific aspects of the plan include:

• The creation of a Quality Jobs Program, with corporate tax credits of up to $9,000 for each qualifying new job. ($3,000 per job, per year, with a 400-job cap).

• An increase in the electable state corporate income-tax sales factor to 100 percent, up from the current 80 percent. This will encourage firms to establish headquarters and manufacturing centers in Arizona.

• Re-authorization of the Arizona Job Training Program, providing job-specific, reimbursable grants to train employees for new careers.

• A four-year, phased-in reduction of the state’s corporate income tax to 4.9 percent, beginning in January 2014. This will give Arizona the nation’s fifth most competitive corporate income-tax rate.

• A 10 percent increase in the state’s Research & Development tax credit, encouraging further collaboration between Arizona’s research universities and the private sector.

• A 5 percent acceleration of the depreciation schedule for business personal property, spurring purchases of new equipment and other capital investments.

The Arizona Competitiveness Package is consistent with Brewer’s long-held call for corporate tax relief that would be phased-in after Proposition 100 expires and the state’s budget is on firmer footing.

“The development of a stable and growing economy is the key to Arizona’s future,” she said. “It will provide good jobs for our citizens and revenue for the state programs and services everyone enjoys. I urge legislators to act quickly in enacting these reforms and furthering Arizona’s economic recovery.”