States depend on multiple industries for economic prosperity. But not all states have the natural resources locally to cultivate those industries. Arkansas does. In addition, it has the location, infrastructure and workforce to support existing and emerging sectors alike. This is particularly important in challenging economic times, in the context of the recent pandemic and in other circumstances when economic diversity ensured continued economic growth statewide. Olivia Womack, project manager for the Arkansas Economic Development Commission, explains:
How is the diversity of Arkansas’ economy different or unique compared to surrounding states?
Womack: Arkansas is fortunate to be strong in multiple sectors and is not reliant on a handful of industries. Several factors play into the state’s economic diversity, including abundant natural resources and a business-friendly environment.
“The Natural State is home to a range of resources, including timber, fertile farmland, inexpensive water, a desirable geographic location, oil and gas, favorable topography and more.”
— Olivia Womack, project manager for the Arkansas Economic Development Commission
The Natural State is home to a range of resources, including timber, fertile farmland, inexpensive water, a desirable geographic location, oil and gas, favorable topography and more. These factors are all directly correlated with the success of various sectors, such as agriculture, food and beverage production, steel production, aerospace & defense, distribution and logistics, and tourism.
Arkansas’ business climate and entrepreneurial spirit have helped foster the growth of five Fortune 500 companies, including Walmart and Tyson Foods, one of the largest food companies in the world. In 2022, companies from a wide range of industries announced expansions in Arkansas, including steel, food and beverage, retail distribution, medical technology, education, timber and forest products, agriculture, cybersecurity and others.
Which sectors are emerging as the main contributors to the state’s economy compared to 10 years ago?
Womack: Three sectors that have emerged as major contributors to the state’s economy are the steel industry, timber and forest products and the food and beverage industry. The steel industry has transformed Arkansas, which now includes one of the largest steel producing counties in the United States (Mississippi County) and has created 2,059 jobs as a result of projects since 2015. More than 1,700 new jobs have been created in the timber and forest products industry since 2015. The food and beverage industry has also grown in Arkansas as a recession-resistant economic engine, creating 5,458 new jobs over the past decade.
Is Arkansas home to “sleeper sectors,” or those that are in place but are poised for significant growth in the future?
Womack: Arkansas is well positioned to be a leader in the future mobility sector, with multiple mobility companies investing and operating in the state. This sector has already seen momentum with companies like Walmart being among the first to operate fully autonomous box trucks.
The financial technology (fintech) industry is well established in Arkansas. The Venture Center, based in Little Rock, operates an industry leading accelerator that draws applicants from around the world: the FIS Fintech Accelerator. In partnership with AEDC and FIS, the world’s largest global provider dedicated to banking and payments technologies, this program helps propel fintech companies that go on to impact the economy in Arkansas and around the world.
How does economic diversity help the state in challenging times?
Womack: Arkansas’ economic diversity and decision to allow all businesses to remain open during the pandemic resulted in Arkansas being one of the top 10 states to recover jobs lost as a result of the COVID-19 pandemic. The state also was recently ranked by WalletHub as the number two state with the most pandemic-proof small businesses in the nation.
The obvious advantage of a diverse economy is that when one industry struggles, there are other industries to keep the economy growing. For example, during the housing market crash of 2008-09, the timber industry was hit hard, but the natural gas industry in Arkansas was booming. As a result, Arkansas was one of a handful of states that maintained a balanced budget during this time.
More recently, the tourism industry was halted during the pandemic, but this was offset by the growth of food and beverage production, retail distribution, and distribution-related manufacturing sectors. Jonesboro-based manufacturing company Hytrol Conveyor Company saw multiple expansions during the pandemic, as a result of increased demand for its conveyor systems.
