Prominent Valley business and education leaders said that some positive changes have come out of COVID-19 that should help Arizona’s economy recover.
The state also is better positioned to rebound than other states because of its emphasis on attracting industry and graduating large numbers of highly trained students, they said during a webinar event Wednesday hosted by the PHX East Valley Partnership.
“The good news is that our region has learned a lot since the Great Recession and the events surrounding 9/11,” said Denny Barney, president and CEO of the group. “We have diversified our economy, and our value proposition is as strong as ever.”
Among some of the big wins that have bolstered the East Valley since the recession are corporate relocations, the expansion of global companies like Deloitte and Northrop-Grumman, and the groundbreaking of a world-class hub for digital education at ASU’s new campus in downtown Mesa, Barney said.
Arizona better prepared for future than other states
Understanding the effects of the pandemic and what the future holds was the topic of the event, entitled: “Preparing for the Future Post-COVID-19.”
Featured speakers were Arizona State University (ASU) President Dr. Michael Crow; Greater Phoenix Economic Council (GPEC) President Chris Camacho; and longtime ASU economist and director of the L. William Seidman Research Institute at the W.P. Carey School of Business, Dennis Hoffman.
President Crow talked about the university’s ability to adapt quickly to make a massive shift from an on-campus model to a blended education model. The university also pushed forward research, innovation and humane efforts to combat the pandemic.
Now, it just enrolled its largest summer session ever with 60,000 students.
“We have to realize the old economy is gone,” said Crow. He said institutions will have to be highly adaptable to face down the challenge and be on the “front wave” of a new economy.
“If you want to win economically. If you want to be competitive moving forward, your agility is going to be very important. The agility of your workforce. The ability to be resilient.”
Silver linings and challenges ahead
Camacho of GPEC said the most daunting challenges for the state will be centered around sectors hardest hit like the restaurant and hospitality industries.
Groups like GPEC, chambers of commerce, and cities have worked “intensely” to reach out to small businesses. Their efforts combined with the federal Paycheck Protection Program (PPP) are mitigating the damage.
Other sectors, meanwhile, have remained strong including the industrial sector. Some industries such as advanced manufacturing and financial and professional services will likely see faster recovery times than sectors like air travel.
Some interesting twists could occur in the office market. Office space could shrink if companies transform into blended work places with more remote workers, or expand if corporations need more room to allow for social distancing.
Challenges ahead? The need to continue to invest in infrastructure and education, Camacho said.
Silver linings? The Phoenix region has earned “tier one” brand recognition with Fortune 500 and global corporations, he said.
Revered corporations like Apple, Microsoft and Tesla are coming here to take advantage of the universities graduating engineers and other students who are ready to meet industry needs.
“That has become the X factor for our ability to compete in this global age of competition for advanced industries,” Camacho said.
As anti-globalization efforts continue, Arizona is in a good place to attract new industry. Housing prices, modern infrastructure and a skilled labor force will continue to act as a lure.
Longtime economist predicts 24-month recovery
ASU economist Hoffman also expects the recovery to be much smoother this time around.
He credits the state’s pro-business stance combined with universities focused on economic development.
A decade-long effort to educate and graduate more students is filling local and state coffers as they move into careers.
One benefit of COVID-19 could be that Arizona will be able to keep more graduates here as remote working becomes the new norm.
“You can live in the East Valley and work for Silicon Valley,” Hoffman said.