If Chris Camacho was Wall Street, he would be a constant bull market. During his tenure as the president and CEO of the Greater Phoenix Economic Council (GPEC), the economic development association has led the attraction of more than 414 companies creating more than 74,000 jobs and $11 billion in capital investment. Some of the more notable projects include Apple, Deloitte, Infosys, Creighton Medical School, Silicon Valley Bank, Zenefits, GoDaddy, Yelp, Amazon, Garmin, General Motors and Microsoft.
But, like every business leader, Camacho and GPEC faced challenges in 2020 and the COVID-19 pandemic created many unanswered questions, particularly in the business world.
Az Business talked with Camacho about how the pandemic impacted economic development efforts and what we can expect from GPEC in 2021.
Az Business: How did the pandemic impact economic development efforts for GPEC?
Chris Camacho: First and foremost, I would say that in the second quarter of 2020, GPEC, just like everyone across the country, took a deep breath with the uncertainty that the second quarter provided. But as we sit here today in early December, we’re 15 percent over last year in terms of net new deal activity, evaluating the market. So COVID naturally led to some very scary healthcare concerns and outcomes, but for our world on the economic front, our cities are actually doing very well financially. And our interest activity in Greater Phoenix is very strong.
That’s on the positive side. There’s still work we have to do. Small businesses took the brunt of the negative economic impact with the pandemic and most of these small businesses have limited cash reserves. We tried to steward all the resources we could during the Paycheck Protection Program and work with our communities, our chambers, a lot of our peer organizations, to ensure that we were really focused on our small and medium-sized enterprises’ survival.
All in all, I would say we’re in a really unique time. I’m hoping our businesses can continue to weather the storm. I just encourage everyone, as best they can, to spend locally here in Arizona.
AB: You mentioned GPEC is 15 percent over its previous year’s performance. Did you have to modify your approach during the pandemic to reach that success?
CC: Certainly. What I would say is this is the era of going digital, and the irony is we were working with Zoom about this time last year, not knowing Zoom was going to become a household name, during their project expansion into Arizona. In our world, where you are constantly on the road, you’re at conferences, you’re at trade shows, you’re on sales missions pitching companies: we’re not doing any of that.
What’s changed is the digital side. I can only think of the analogy of going analog to digital. With all the digital tools we have today, you can do so much more. You can be so much more productive by doing half hour interval Zoom meetings versus an all-day’s worth of traveling for sales missions.
So we’re accomplishing, or covering, a lot more ground. You’d be shocked, but in this quarter, we’re hitting tens of thousands of companies in California. The California blitz is something that we probably wouldn’t have done without the pandemic.
AB: What are some of the economic development wins GPEC has had in the last year?
CC: We strive to become a global hub for semiconductor leadership, which has been anchored by Intel since 1979 and Motorola before that. Many leading companies in the U.S. performing research and development on chips — a lot of that’s being done here. With the latest announcement that Taiwan Semiconductor Manufacturing Company (TSMC) selected Arizona for its new U.S. advanced semiconductor factory, that further crystallizes our position as a leading semiconductor manufacturing hub. And that’s a huge deal.
You’ve got politics, you’ve got geopolitics, and you had concerns over healthcare. Yet, our projects continue to move forward. We had companies like Bright Health decide to put a healthcare technology operation here. You had others like PennyMac Mortgage put 400 people more in the market. We still have some really positive corporate decisions that came in 2020, but unfortunately a lot of that was overshadowed by the healthcare concerns that a lot of people have.
AB: A lot of economists think that Arizona is going to rebound faster than other states. Do you agree?
CC: With markets, there’s three things that happen in markets. First of all, I do agree, but three things have happened. Markets have momentum, markets are flat, or markets are contracting. And I do expect the calendar year 2021 — from a Gross Domestic Product perspective — we should be one of the leading markets in the United States in GDP growth and GDP recovery. A lot of things that will contribute to that, including the fact that a lot of companies will continue to move here. We’re going to continue to grow our base of companies, but also, people from around the country are continuing to relocate here in big waves, consistent with what we saw pre-recession.
AB: How does GPEC plan to aid the state as we do recover?
CC: We’re going to continue to work with our communities on how we’re utilizing the CARES Act dollars. The feds provided money for specific purposes, in terms of helping small business. We’ll continue to support those efforts. In addition, we’re going to continue to put Greater Phoenix on the map in many global markets, including California and New York, and in many other global locations, because that will obviously induce economic activity.
I think the third thing that’s really important is we’ve got strong regional continuity with the cities, and the county. We’re all in it together and we have a “rising tide lifts all boats” mentality and are really ready to address major issues that are forthcoming, in things like transportation investments, infrastructure, education, and equity. These are the big things that we’re tackling, but we’re doing it together. I think COVID has, I won’t say forced, but definitely encouraged, unity for the entire region to work together.
AB: One other thing COVID has done is sending people home to work. Post-pandemic, do you think that we’re still going to have a large portion of our Phoenix population working remotely?
CC: I think there’s going to be a blend. I think there’s going to be a new return-to-office model, and I would expect that there’ll be more flexibility in terms of working from home and working from the office. There’ll probably be more of a blend of that because we’ve seen productivity gains in this kind of format as we’ve been forced to move to digital and how we communicate and how we reconcile the fact that we can’t be in an office environment.
AB: Are you surprised by the productivity upturn?
CC: I definitely was one that was. Maybe I’m old school, but, I like the face-to-face because I like the interaction. I like the creativity exchange. I was probably one in the camp that I couldn’t wait to get back into the office. Bu because this has persisted so long, instead of it being a three-week pandemic, it’s a more like a nine-month or longer pandemic, I think, work styles will change, but I’m still optimistic about the long-term on office use. I’m not a believer that we’re going to be working from home forever. I think there’ll be just more flexibility in this new model of working, probably some days at home and some days in the office.
AB: Will the pandemic create any other long-term changes in the workplace?
CC: I would say in addition to a hybrid return, there’s a big onus now placed on workforce culture. There was some of that before, but I think every company is going through that now. How can corporations, tech firms, and even small business, induce productivity, but also have better workplace outcomes for their employees? So, I think the employee-centric focus coming out of this is going to be something where we’re all learning about together. I think more placement will be emphasized there, in terms of “how do we ensure employee wellness coming out of this?”
AB: How could this shift to remote work bode for Greater Phoenix and the efforts of GPEC to attract new business?
CC: You’ve probably seen a little bit of media coverage on these kind of tech teams. I call them engineering pods, or maybe tech teams out of Silicon Valley or New York or elsewhere, that are able to be mobile now, and they’re choosing places like Phoenix to hub up with other entrepreneurs and other tech minds.
What that’s going to breed, I believe, in the longer term, is you might have a tech company that’s homegrown in San Francisco, or San Jose, but their teams, their elite design teams, development teams, IT teams, they may be building products from a location in Scottsdale, or a location in Goodyear. I think that’s going to be more of a common theme — a decentralized approach to the workplace — and I think it’s going to open up the door for remote hiring in a big way.
So instead of defaulting to my in-person, in-body interview process, I may be going out nationally to find the best programmer. That programmer could live in Austin, Texas, or could live in Bulgaria. But I think there’s going to be a much different philosophy going forward of remote working, which I do think will play to Arizona’s benefit, largely because we have very affordable housing, high quality of life, and great recreational amenities. And that’s what a lot of these people want, is more of that freedom to not be burdened by taxes, and death, and have that freedom.
AB: Can you talk a little bit about nerve centers, what they are and how they impact economic development in Phoenix?
CC: We just produced this nerve center report, which is really about 30 years worth of reviews of the corporate services evolution of Greater Phoenix, from call center hub of the 1980s to now, truly a nerve center hub of today.
Nerve centers, by our definition, are these mission critical functions to corporate America. They might be a major business unit in cybersecurity, or in computing or data storage. What we’re finding is a lot of corporate America has multiple levels of these units. While we might not have the headquarters of the company — the headquarters may be in New York or Chicago or San Francisco — we have a lot of the nerve center. The old model was having a headquarters in New York with 10,000 people, but today’s model is going to be more like your headquarters might be in New York with 1,000 people, but 9,000 people are going to be somewhere else, like in Phoenix, and they’re going to be building products, or projecting products.
We believe the future is going to be about scalable optimized hubs, and we have a lot of those here. We want to study top-down, looking at JP Morgan Chase, Charles Schwab, Discover Card, to understand how the evolution of call centers has now become this massive, high-end, back office hub of really interesting business units housed here.
AB: You’ve helped the region become a hub of innovation and technology. How do you maintain that momentum and growth in attracting businesses?
CC: From a leadership perspective, we must remain relentless, and not become complacent because when you look at markets, most of them rise and most of them fall. We’re going through a rising moment in our history right now. But if you look at places across the country that have risen, like St. Louis, which was larger than Chicago in the early 1900s, what I think about from a legacy standpoint is that 25 years from now, Phoenix is going to be the place that continues this trajectory because we’re building the foundation today.
As I work with the mayors, Gov. Doug Ducey, the Arizona Commerce Authority, and all of these partners we work with, our goal is to position the region to become a Top 10 college hub. We’re going to need continued investment from the Arizona State Legislature and extreme innovation coming from our universities. Coupled with that, we need to focus on equity — jobs equity and education equity — so we’re ensuring that there’s prosperity for all Arizona citizens. And those are things that, again, we are looking at with our short-term transactional work with all the companies, but we’re also looking at establishing that long-term vision so that the market is sustainable and that it creates this dynamism that doesn’t exist anywhere else. We have that chance to harness this unique opportunity, and that’s what we’re lucky enough to do every day.
AB: What is the focus of GPEC in 2021?
CC: We want to continue to be the public/private leadership voice on the economy. What I love about this organization is we’re relentless, we’re fearless, and we’re optimistic about the future of the region. While we’re continuing to do the base things, like putting Greater Phoenix on the map of global markets and tell the story, we want to make sure there’s the right strategic investments in the areas that will enable us to produce skilled labor, build the necessary infrastructure, and create world-class communities and world-class innovation assets. If we do those things, this place is unstoppable. That’s what we’re going to continue to focus on.
