< Previous8 AR K AN S AS : TH E S T A TE TH A T R U N S LI K E A B U S I N E S Sby RON STARNERBU S INE S S M O ME N T U MFavorable rankings are just part of the story. Biggest factor? Global businesses like the state.Arkansas Gov. Asa Hutchinson is a big believer in the adage that “success breeds success.” ere’s no better example than the state of Arkansas itself, where business momentum is improving yearly as corporate investors vote in favor of the state’s pro-business environment with their checkbooks.Bolstered by six homegrown Fortune fi rms and the world’s largest retailer, Walmart, Arkansas shows no sign of slowing anytime soon.Case in point: Calstrip Industries Inc., which on May announced a $-million capital investment creating jobs near Blytheville in Mississippi County, Arkansas. Initial construction will be ,-plus square feet, with two planned expansions that will bring the plant to more than , square feet on the campus of Nucor Steel.Mississippi County is the largest steel-producing county in Arkansas and one of the top in the nation.Arkansas is getting used to high rankings. Fayetteville has been ranked No. by US News & World Report in the top Best Places to Live three years in a row. With a cost of living that is . percent lower than the national average and Fortune fi rms doing business in Arkansas, it’s easy to see why momentum is positive. e six that are Photo: Getty Images10 AR K AN S AS : TH E S T A TE TH A T R U N S LI K E A B U S I N E S Sbased in Arkansas are Dillard’s, J.B. Hunt, Walmart, Murphy USA, Tyson Foods and Windstream.A Walmart spokesperson says that “as our home state, Arkansas has been crucial to the company’s growth. In 1962, Sam Walton opened Walton’s 5&10 on the downtown Bentonville square. The Waltons chose Bentonville because Helen wanted small-town living and Sam could take advantage of the different hunting seasons that living at the corner of four states had to offer.”Walton went on to open his first Walmart store in 1962 at the age of 44 in Rogers, Arkansas. More than a half-century later, Walmart, with worldwide revenues of more than $500 billion this year, employs 52,367 workers across the state, according to the company.Momentum remains in Walmart’s favor today. In September 2017, the company announced it would build a new home office on 350 acres in Bentonville. The company spokesperson notes that the new space “will help accelerate change, accommodate a more digitally native workforce and encourage more collaboration and speed. The combined changes will help the company get the most out of its existing teams and help attract the next generation of talent needed to compete.”In many ways, Walmart’s growth epitomizes what’s happening in the Arkansas economy. International firms are gaining a foothold in the state, and that’s encouraging more global businesses to follow.Recent large-scale investments by global firms are a big reason why Arkansas has the second-highest “As our home state, Arkansas has been crucial to the company’s growth.”— Walmart spokespersonpercentage of manufacturing employment in the South, even as it maintains the lowest cost of doing business nationwide, according to CNBC. Since January 2015, FDI projects have accounted for more than $6.8 billion in investment and 11,200 new jobs statewide.A right-to-work state, the union membership rate in Arkansas is just 5.1 percent — tenth lowest in the country. And logistically, an Arkansas business location makes sense. About 40 percent of the U.S. population is reachable within a day’s drive of the state. With 100 public airports, 1,683 miles of Class 1 Railroad and 1,000 miles of navigable waterways, Arkansas makes moving goods easy for manufacturers and logistics operators.Principal industries in the state include manufacturing, transportation logistics, agriculture, forestry, business services and tourism. Arkansas is the No. 1 producer of rice and the No. 2 producer of poultry. And with a growing population of more than 3 million people, momentum is solidly in the state’s favor. The Natural State’s high quality of life drives momentum.Photo courtesy of Arkansas Department of Parks and Tourism12 A R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S Sn day one in office, Arkansas Gov. Asa Hutchinson began making phone calls to CEOs of businesses to convince them that Arkansas is the best place to call home.He has not stopped making those calls since.By doing so, Hutchinson elevated the profile of Arkansas as a destination for business. But he did more than that. He made it clear that his top priority is creating greater opportunities for Arkansans by generating more and higher-paying jobs throughout the state.In the following interview, the governor lays out his economic development philosophy, priorities and approach.Gov. Asa Hutchinson, the Chief Economic Officer, wasted little time in setting the tone at the top.by RO N STA R N E ROThe CEO Who Runs Arkansas Like a BusinessI N T E R V I E W W I T H G O V E R N O R A S A H U T C H I N S O NGov. Hutchinson at the Governor’s Arts Awards Luncheon and Ceremony in March.All photos courtesy of The Governor’s OfficeA R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S S 13Since your first day in office, you have been known as a governor who regularly reaches out to CEOs and makes business development and recruitment calls. Why is economic development so high on your agenda?GOV. ASA HUTCHINSON: A healthy economy is essential to the well-being of citizens. For more than half a century, Arkansas’ economy was based on manufacturing. Before that, it was agriculture. But agriculture and manufacturing jobs began to disappear and were being replaced by advanced manufacturing and tech jobs. Everything is symbiotic: we need to invest in education and economic development so that we can increase the per-capita personal income and GDP by state which will, in turn, create more educational and economic opportunities. We don’t want just any jobs coming to Arkansas — we want jobs that pay higher-than-average wages. To become more efficient and attract those higher-paying jobs, we removed administrative and regulatory obstacles for our business leaders. In addition, we have implemented tax reductions for lower- and middle-class Arkansans and improved workforce training that meets specific identified needs of our state’s businesses.How have you been able to refashion the Arkansas business climate into one that is more conducive to the needs of industry?HUTCHINSON: We talk to our state’s business and industry leaders to learn what their needs are, and then we do whatever we can to meet those needs. We have established a single point of contact through the Arkansas Economic Development Commission that works with a statewide network of partners and targeted tax incentive programs. AEDC works with communities to make them stronger and more desirable for businesses, with existing business and industry to meet workforce needs through education and training programs, and with prospective businesses looking to relocate or expand. Arkansas’ approach is to operate leaner, faster and more focused — just like a CEO operates a business. “We don’t want just any jobs coming to Arkansas – we want jobs that pay higher-than-average wages. To become more efficient and attract those higher-paying jobs, we removed administrative and regulatory obstacles for our business leaders.” — Gov. Asa Hutchinson14 A R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S SChinese companies have been moving to Arkansas and investing in job-creating projects in your state at an accelerated pace in recent years. Why is that the case?HUTCHINSON: I think that Chinese companies are coming to Arkansas for the same reasons as other companies — our low costs of doing business and our talented, skilled workforce. Right now, China has the money and is looking for ways to invest it. They are looking to expand the Chinese middle class and increase urbanization. And, Chinese companies have been warmly welcomed in Arkansas. Our office in Shanghai has identified targeted industries, created promotional materials, presented at conferences, identified and visited with potential sister provinces, established relationships, arranged press briefings, and helped identify and qualify potential investment opportunities.You have made entrepreneurship and innovation top priorities for your state. What successes has Arkansas accomplished in this area?HUTCHINSON: Arkansas is creating an environment of opportunity for entrepreneurs and innovators. We have increased our incentives, programs, and services designed to help innovative entrepreneurs build and grow their own high-tech companies. We recently added two new incentives, the SBIR Matching Grant Program and the Arkansas Business and Technology Accelerator Grant Program. Both programs provide grant funds to help high-tech start-ups get off the ground. Arkansas has active programs focused on increasing commercialization of university technology. We provide a wide-range of demand-based services for technology and knowledge-based start-ups that are both pre-and post-revenue. Moreover, we are meeting the needs of start-ups that have grown here and are ready to scale by building a high-level, industry-based, mentor network and adding programs that invest in our entrepreneurs’ professional development. Arkansas has a well-rounded innovation ecosystem. Our tech-based startups have created more than 750 new jobs with average annual salaries of $65,000. They have generated more than $330 million in revenue with total investment reaching $325 million. How is the Computer Science Initiative in the schools working?HUTCHINSON: The program continues to expand. Arkansas was the first state to require all public high schools to “Arkansas’ approach is to operate leaner, faster and more focused – just like a CEO operates a business.” — Gov. Asa HutchinsonA R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S S 15teach computer science. In the 2017-2018 academic year, more than 6,000 public high school students completed computer science courses. I recently added an additional $300,000 to the initial $500,000 allocated last year to train elementary and middle school teachers to become Computer Science Lead teachers because there was such high interest and demand for CS teachers in our K-8 schools.Most people know about Walmart’s rise in your state, but few know about the rise of FinTech in Arkansas. What’s happening in that field now?HUTCHINSON: FinTech has been a critical core industry for central Arkansas going back the Great Depression. Stephens Inc. traces its roots back to the middle of the Great Depression when in 1933 Witt Stephens established the firm to trade Arkansas Highway bonds. Stephens Inc. is now one of the largest privately owned investment banks in the country with 31 offices worldwide and more than 1,200 employees. Little Rock has also served as the launching pad of global players in FinTech and Big Data. The list of companies founded in central Arkansas includes well-known names like Acxiom, ABC Financial, Arkansas Systems (now Euronet Worldwide), Mainstream Technologies, Systematics (now FIS) and others.Film production is gaining ground in Arkansas. How have you been able to create a climate that attracts these operations?Gov. Hutchinson receives the Rural Advocate of the Year award at the Rural Development Luncheon.16 A R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S SHUTCHINSON: This is a true testament of our ability to facilitate meaningful public/private partnerships throughout the state. We have a core foundation of industry driven curriculum within our two-year colleges and university systems that produces an extremely knowledgeable and capable workforce. We are also blessed to have private investment in infrastructure such as state-of-the-art equipment and brick-and-mortar facilities. Next, add in the breathtaking beauty of our diverse topography and top it off with our unheralded hands-on customer service approach to all facets of production detail, and studios have discovered that Arkansas has created an ideal business climate for film production.What is your message to corporate executives in the logistics sector, particularly as it applies to your state’s attractiveness in that sector?HUTCHINSON: If you want to get your product to market as quickly and cost-efficiently as possible, come to Arkansas. We are in the center of the U.S., with access to 100 million customers (about 40 percent of the U.S. population) within a 550-mile radius. The Arkansas trucking industry provides jobs to more than 85,000 Arkansans. We are home to the headquarters of two transportation companies on the Fortune 1,000 (J.B. Hunt and ArcBest). Logistics companies making recent investments include J.B. Hunt, Walmart, ABF Freight and FedEx Ground. Gov. Hutchinson shakes hands with a runner at the Little Rock Marathon, March 2018.A R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S S17ike Preston is no stranger to success. Before joining the Arkansas Economic Development Commission as its executive director in March , he spent six and a half years helping Enterprise Florida rake in , new jobs and more than $ billion in capital investment.In three years, international projects in the state have announced new and expanded projects with , proposed jobs and $. billion in investment.In this interview, Preston discusses the importance of foreign direct investment and his commitment to making Arkansas a leading competitor for jobs and industry on the global stage.AEDC Director explains how Arkansas is influencing the world.by RON STARNERMS T A T E L E A D E R IN T E R V IE W : MIK E P R E S T O NFlexing its Flexing its Flexing Global MusclePhoto: Getty ImagesNext >