Arizona Centennial — Forward thinking: Algae, solar, personalized medicine or none of the above? Some of Arizona’s greatest minds look ahead at the state’s next century
A century ago, Arizonans with an entrepreneurial spirit ventured deep into the deserts and mountains in search of gold and copper. Today, as Arizona celebrates its 100th birthday, their counterparts are exploring the unknown frontiers of biotechnology and renewable energy.
“Imagine the technologies of 100 years ago,” says Steven Zylstra, president and CEO of the Arizona Technology Council. “Now, think about how far we have come. Only a very few science fiction writers even envisioned the technologies that are now a part of our everyday lives. It is very likely that (100 years from now), the mix of industries and companies will be very different. There will be subsectors that don’t even exist yet. One thing is sure, there will be more technology than ever to drive our economy and improve our quality of life.”
So with 100 years in the history books, what’s in store for Arizona’s next century? One expert says algae will be Arizona’s 21st-century gold rush. Will Arizona’s yet-to-be-written history prove him to be right?
As part of the Arizona Centennial Series, Arizona Business Magazine asks some of the state’s greatest minds how they see Arizona taking shape over the next decade and beyond.
Economy
Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business at Arizona State University
The next 5 years will be a period of agonizingly slow recovery from the Great Recession. Arizona employment will return to post-recession levels within two to three years, but new, more frugal spending habits will put a damper on growth. The next 25 years has the potential to be a period of strong growth. Under historical growth assumptions, Arizona’s population will almost double within 25 years, as the state grows to more than 10 million residents. Phoenix will have a population between 7 and 8 million, larger than the entire state today. Immigration will exceed 125,000 every year by 2030. Over the next 25 years, to accommodate growth, more than 1 million single-family homes will be needed, a seemingly impossible pace of building compared to conditions today.In the next 100 years, the gap between those with education, training and skills and those without will grow even greater as technology will benefit those who develop, control and use it.
Lee Vikre, senior vice president, organizational development and consulting, BestCompaniesAZ, LLC
In the next 10 years, the Arizona workforce will be more diverse than ever before, with wide spans in age ranges of workers and greater cultural diversity. White males may become the minority. Entrepreneurship will be ingrained in workers of all ages who were affected by the recession. This entrepreneurial, independent atmosphere will continue to define Arizona. Homegrown, innovative businesses in the fields of technology, manufacturing, healthcare, and sustainable energy will prosper. The movement towards creating great workplaces will move from a novelty to mainstream as both workers and management discover the competitive advantage of a culture of trust.
Patricia Ternes, financial advisor, RBC Wealth Management, Scottsdale
For the next 100 years, we need to address the concept that the world is flat. Right now, we have multiple currencies and multiple stock markets. The financial services industry needs to better integrate the products and services we offer our clients worldwide. In 100 years, there will probably be huge, world-wide investment markets that are available to everyone 24/7. This will increase the complexity of planning one’s financial future.
Technology
Steven Zylstra, president and CEO, Arizona Technology Council
In the next 10 years, the biosciences and renewable energy (and even the broader clean tech) sectors will become significant components of our economy. Aerospace and defense, semiconductor and electronics, ITC, and optics will continue to grow. The technology sector will be an ever-increasing component of our economic landscape, leading to more diversity.
Mark Edwards, PhD., vice president of corporate development and marketing, Algae Biosciences, Inc., Scottsdale
Arizona has the critical elements for algae production including lots of sunshine, waste and brine water for nutrients, CO2, and cheap land. The state has a competitive advantage for algae production and will become the algae capital world. Arizona will go from two firms producing algae in 2011 to 200 algae firms in 2020. Arizona producers will cultivate algae for food, feed, fertilizers, pharmaceuticals, cosmeceuticals, nutraceuticals, functional foods, medicines and advance compounds. In the next 100 years, Algae will become the leading industry in Arizona, eclipsing tourism; more than 80 percent of all medicines, vaccines and pharmaceuticals will be made predominately from advanced compounds derived from algae; our fossil-based transportation system will transform to a sustainable algae-based transportation system.
Steve Sanghi, president and CEO, Microchip Technology Inc., Chandler
Given this expansion and the number of semiconductor players that have operations in Arizona, the semiconductor industry is likely to have a significant impact in this state over the next 10 years. This expansion will lead to a sharp increase in the growth of well-paying, high-tech jobs in our state. Take the case of medical advancements. Over the next 10 years, we will see a significant expansion in the use of semiconductors for surgical and analysis equipment; in portable, wearable and implantable medical devices; and in the cost-cutting use of remote medicine, where patients will be monitored by medical professionals in lower-cost regions.
I will, however, add one cautionary note to the optimistic picture I have just painted. The formation of new start-up companies is driven by the availability of venture-capital funding. Arizona continues to be plagued by a scarcity of risk capital, as most venture-capital firms are located in California, Texas and Massachusetts. The result is that those states continue to attract the bulk of VC-backed startups. While Arizona has been a technology hotbed in recent years, we must fix this problem if we are to remain the “Silicon Desert.”
Environment
Diane Brossart, president, Valley Forward Association
In the next 10 years, Arizona will diversify its economy through green jobs and technology. Renewable energy sectors will proliferate with solar leading the way. In the next 100 years, we will become the solar capitol of the world. Light rail connects Valley cities. Commuter rail takes us across the nation. Arizona is a burgeoning hub of economic activity. Parks and open space dot the landscape. Innovation and technology abound. Our legislature is enlightened and the green revolution leads to new water sources in our vibrant desert oasis, now free of particulate pollution.
Kelly Mott Lacroix, graduate research associate, Water Resources Research Center, Tucson
Over the next 100 years, our water management will need to be flexible and progressive enough to allow us to prosper in the face of supply uncertainty from changes in climate and the continuing growth of our economy. Arizonans will have to make decisions about what we value most about this state and those decisions will dictate how the water issue changes Arizona.
Larry Howell, CEO and president of KEBAWK Response Technologies, a Scottsdale-based engineering company that responds immediately to hazardous or catastrophic disasters
Environmentally-conscious companies like KEBAWK are going to continue to grow and have a much more pivotal role in growing the economy in the next 10 years as businesses strive to be as sustainable as possible. What was once a trendy, cottage industry is now a must for businesses.
Health
Dr. Grace Caputo, director, Phoenix Children’s Hospital/Maricopa Medical Center Pediatric Residency
I see medical education as a dominant force in Arizona, especially with the growth of the University of Arizona campus downtown. Innovative pediatric care will continue to be a highlight at Phoenix Children’s Hospital, but healthcare overall will continue to improve our community as birth to age 5 is the fastest growing population in Arizona.
Catherine Niemiec, president, Phoenix Institute of Herbal Medicine & Acupuncture, College & Clinic
In the future, acupuncture and oriental medicine (AOM) will fill the gaps created by high insurance rates, fewer primary care physicians, and seemingly incurable or chronic conditions. Acupuncture can be available for the same cost as a co-payment, supporting the need of those who have no insurance or who need to seek different care beyond what their insurance will cover. A report on “Complementary and Alternative Medicine in the United States” cites widespread use of CAM, with more future visits to CAM providers than to primary care physicians (with most of these visits paid out-of-pocket).
Kenneth J. Biehl, M.D., radiation oncologist, Arizona Oncology
Long-term changes for the use of radiation in cancer care will involve a combination of treatment directed at the molecular level and immense precision with external radiation. Targeting cancer with radiation at the molecular level has been developed for only a handful of cancers to date. The struggle to find and develop cures at the molecular level will be one of the determining factors in how the people of Arizona will receive cancer treatment for the next hundred years.
Mahesh Seetharam, M.D., medical oncologist and hematologist, Arizona Oncology
In the next decade, electronic medical records will continue to evolve to help coordinate care between the various providers to optimize outcomes. It is very difficult to predict given the current labile healthcare environment. The concept of universal healthcare is very possible, but with that comes the need for additional providers and resources to provide the necessary care. Personalized medicine could be a reality in the next decade or two, and this will certainly improve outcomes.
Banking
Lynn Crane, executive vice president, bank operations and services, Mutual of Omaha Bank in Arizona
Mobile devices will replace plastic cards. This will completely change the “check out” experience at retailers. Arizona shoppers will be able to scan merchandise as they pick it up off the shelf and make payment without stopping at a checkout counter when they leave the store. On the negative side, this transition to non-traditional delivery channels will make bank branches less relevant. Online financial consultants will replace branch employees and a trip to the bank will become a thing of the past for Arizonans. Some branches will close and the industry will require a smaller workforce. The future value of currency will not rely on paper, but on digital data, so heightened security concerns and demand for data protection will prevail. As a trusted source of security, banks will play a much larger role in helping Arizonans secure their valuables and their future.
Craig Doyle, Arizona market president, Comerica Bank
Some of the industry segments critical to our future are aerospace and defense, semi-conductor manufacturing, business services technology, health care and renewable energy. Effectively supporting their growth requires a deep understanding of supply chains and related capital markets. It will take time, but the Arizona banking industry should help facilitate the appropriate capital markets so that Arizona is competitive with other major economic regions in helping companies, form, grow and mature.
Education
Michael M. Crow, president, Arizona State University
Within 10 years, ASU will be America’s finest example of a widely accessible research intensive public university and in this mode it will be capable of operating at a very rapid and large scale for educational competitiveness for Arizona. In this mode, the university will have deployed its assets to maximize the competitive position of Arizona through its role as a comprehensive knowledge enterprise producing fantastic graduates, ideas and new technologies. ASU will be a critical asset for Arizona going forward over the next 100 years as the knowledge based economy or at least knowledge driven adaptation and innovation to the uncertainties and the complexities that lie ahead in the areas of global finance, economic competitiveness, environmental sustainability and so forth will be such that what universities like ASU do will be more important than ever. This is true specifically for ASU in the context of Arizona as Arizona in the next 100 years grows and matures into America’s preeminent example of a free enterprise driven innovation catalyzed state.
Bill Hubert, president and founder of Scottsdale-based Cology, Inc., which helps lenders enter the student loan market
At some point, the cost of education is going to have to “normalize” within the overall economy. For decades, cost of attendance, whether private or public, traditional or trade-based, has increased at much higher than normal rate. Our business of providing financial services that connect students and families with a broad spectrum of relationship based funding sources will certainly help increase access and drive down overall costs – of program administration, funding sources, and even institutional administrative costs.
Deanna Salazar, senior vice president and general counsel of Blue Cross Blue Shield of Arizona
I believe that by supporting community outreach efforts similar to the Green Schoolhouse Series, which makes schools healthy and green “inside and out” through the development of an integrated health and wellness curriculum and green gardens to promote nutrition and wellness in disadvantaged schools, BCBSAZ will continue to be positioned as a leader who is genuinely taking care of the health of Arizonans, in both traditional and non-traditional ways that create a better future for all. For years to come, it’s BCBSAZ’s hope for the green gardens to teach children about healthy eating and physical activity by allowing them to use and maintain the garden.
Marketing
Kristin Bloomquist, executive vice president, general manager, Cramer-Krasselt
As I look into a crystal ball, the marketing world as we know it will change dramatically in the next 100 years. It will be forever changed even in the next 10 years. However, brands will not go away. In fact, they will be even more valuable both in the next decade and in the next century if they can evolve as we evolve, as our technology evolves. Those brands that increase in value over time will have very different ways of communicating with consumers. Everything will be personalized. Everything will happen in real time. There’s a good chance that 100 years from now, as far as commercial messaging and targeting goes, “Minority Report” will be seen as an amazingly accurate forward-looking documentary rather than a work of fiction.
Rob Davidson, co-owner of Phoenix-based Advertising firm Davidson & Belluso
Think of how social media has drastically impacted communications with customers and prospects in recent years. Marketing and advertising will keep changing at an even faster rate as new technology becomes available. Smart phones and tablets have already become standard channels of any marketing plan. Companies who stay on top of the latest marketing tools and learn about their customers changing behaviors are the ones who will be successful in reaching their target markets.
Energy
Mark Bonsall, general manager and CEO, SRP
In the next decade, the growth in wind and solar will continue to be strong, but will still provide a relatively small portion of the needed energy just because the scale of what is needed is so large. It is likely most of the new baseload resources will be fueled by natural gas. New drilling and recovery technology is providing access to vast quantities of natural gas within the U.S. at relatively low costs, at least so far. This provides a good bridge to develop systems that can improve the efficiency of solar systems, address the intermittent nature of most renewable resources, find safe and more cost-effective ways to deploy nuclear power, and provide the time for innovative new ideas we aren’t even aware of now.
John Lefebvre, president, Suntech America
With supportive policies, the solar industry will continue to grow and flourish, creating a major employment sector for the state. Additionally, every year the cost of solar is driven down, getting closer and closer to achieving grid parity in the U.S. As solar becomes a market-driven industry, Arizona is poised to be a major global solar industry hub, particularly with the continued development of large-scale solar projects. Ultimately, I hope to see energy generated from solar grow to a significant percent of the U.S. energy supply portfolio and eliminate our dependence on foreign oil, providing a low-cost solution to power our homes and cars. With solar, the sky’s the limit.
Housing
Rachel Lang and Marcy Briggs, loan officers for the Briggs-Lang team of Cobalt Mortgage
The rental market will continue to strengthen with long-term renters. We also see a stabilization within the Arizona real estate market due to the mortgage underwriting guidelines remaining more conservative than they were five years ago, and slightly less conservative five years from now.
Alan Boughton, director of commercial operations, W.J. Maloney Plumbing
As the population in the West increases and the demand for water intensifies by a seemingly unpredictable water supply and snow pack, innovation in low-flow plumbing fixtures could be our industry’s greatest impact on Arizona as more people are forced to live with less water.
CR Herro, vice president, environmental affairs, Meritage Homes
Homes will be built to work better, use fewer resources, be healthier, and adjust to the needs of owners. On the fringe of the market today are homes that can adjust the transparency of windows, extend and retract solar shades, turn on lights, change thermostat settings over a smart phone, and achieve net-zero energy demand. These changes allow homes to adapt to the unique needs of its occupants, offer more control, and waste less energy and resources (money) in their operation.
Transportation
Danny Murphy, Airport director, Sky Harbor International Airport
The biggest evolution our industry will experience is a transformation of the entire national air transportation system to avoid gridlock in air travel, called “NextGen.” This means moving from ground-based technologies to a new and more dynamic satellite-based technology. While airport delays are minimal in Arizona, our passengers are impacted most when traveling to and from other locations and this technology will greatly improve that. Over the next 100 years, continental investment and enhancements to the state’s main airports will be critical to serve the needs of Arizona’s growing population.
Entertainment
Brad Casper, president, Phoenix Suns
In continuing to operate at the forefront of innovation, the Suns will offer fans the most technologically advanced atmosphere in professional sports, while emerging as the most winning franchise in NBA history. Through strategic partnerships, the Suns will act as a catalyst towards creating a sustainable entertainment and business environment, unmatched by any NBA/WNBA organization.
Catherine Anaya, chief journalist, KPHO CBS 5 News
I think in the next 100 years the marriage between television and computers will be such that we will be doing everything we do on a computer. There will still be a place for television news. However, I don’t think we’ll see it in the studio format we’ve been accustomed to seeing. I think we’ll end up shooting and broadcasting our news via our smart phones or whatever those evolve into in time. As a result, I think it will create more intimacy and interaction among Arizonans. That may or may not be a good thing as familiarity lines will get blurred.
Teri Agosta, general manager, Pointe Hilton Squaw Peak Resort
The hospitality industry will continue to drive revenue into the Arizona market through increased travelers, due to the aging demographic, who will have more leisure time and money to spend. Also business travel will continue to grow as corporations realize people need direct contact with team members and clients to build a successful business, and webinars and teleconferencing do not meet these needs. Also, our consistent weather will become more valuable to travelers, who will scrutinize their travel spending even more.
Melody Hudson, public relations manager, Gila River Gaming Enterprises
The opportunity for new job creation will become more prevalent than ever before with potential capital expansion opportunities which could result in not only new construction positions, but new positions within the Enterprises’ casinos as well. This potential growth could also result in an increase of revenues for both local and national businesses that supply goods and services to the Enterprise. Additionally, potential growth from not only Gila River Gaming Enterprises, but the gaming industry in general in Arizona, would result in larger amounts of funding going to the state for education, tourism, wildlife conservation and emergency services.
Carey Pena, co-anchor, 3TV News at 10 p.m.
There is a generally accepted theory of human knowledge that says: today, we know 5 percent of what we will know in 50 years. In other words, in 50 years, 95 percent of what we will know will have been discovered in the past 50 years. That makes it hard to imagine what 100 years will look like.
Arizona Business Magazine January/February 2012
