What worries business leaders:
Leaders cite workers, schools as top issues
Valley business leaders are generally upbeat about the region’s economy but express concern over the quality and availability of local workers, along with education-system deficiencies.
Phoenix-area business leaders are generally upbeat about the region’s economy but express concern over the quality and availability of local workers, along with education-system deficiencies, according to a new study.
Workforce issues were cited as a top concern by 40 percent of the roughly 500 business leaders who participated in the online survey conducted for Alliance Bank of Arizona in December and January. That was slightly higher than the 38 percent who said they worry most about education and 34 percent citing rising health-care costs.
In a similar survey conducted one year earlier by Alliance Bank, 50 percent of respondents cited education as the top worry, followed by the quality/availability of workers (41 percent) and state-government finances (27 percent). Respondents were allowed to make more than one selection.
The quality of the education system and the availability of quality workers are interconnected issues, noted Kenneth Van Winkle, managing partner at law firm Lewis Roca Rothgerber Christie in Phoenix and a local business leader who participated in the study. The two issues weigh on executives when deciding whether to invest in or relocate operations to Arizona.
“Business leaders want to come to a jurisdiction where their children get the quality of education that they had,” he said. “It’s a cycle of utmost importance.”
Van Winkle also said he’s concerned about health-care coverage and costs, while recognizing that that is a national issue. He said local leaders have made progress in improving public transportation and revitalizing central Phoenix as a place to live and work. He also described Arizona as well situated geographically between Texas and key Midwestern states to the east and California to the west.
Many survey respondents said they felt it’s important to increase funding for public education from kindergarten through high school and on to community colleges, said Don Garner, Alliance Bank’s chief executive officer. “It also makes sense that health-care costs have moved up on the list of challenges as the country grapples with health-care policy at the national level,” he said.
Health issues could remain prominent as the nation continues to age, Garner added.
Despite these and other concerns, business leaders are generally optimistic for 2017, with 86 percent describing themselves as very or somewhat confi-
“Business leaders want to come to a jurisdiction where their children get the quality of education that they had. It’s a cycle of utmost importance.” KENNETH VAN WINKLE MANAGING PARTNER AT LAW FIRM LEWIS ROCA ROTHGERBER CHRISTIE
dent that their company revenue will increase over the next 12 months, similar to the 89 percent optimism level from last year’s survey. Also, 54 percent of respondents said they plan to hire more workers this year, near the 58 percent who said the same last year.
A majority of respondents, 61 percent, agreed that there are more growth opportunities for their companies today than three years ago, down from 73 percent who said the same in 2016.
Regarding the outcome of the recent presidential election, 54 percent of respondents said they expected it to have a positive impact on the business sector, compared with 30 percent who were negative and 16 percent who were neutral or not sure. That said, 56 percent said their companies face more threats to growth today than three years ago, up from 47 percent who said the same last year.
Arizona’s climate/weather, quality of life and low costs of doing business were cited as the three benefits for local companies.
Speaking this week with members of the Arizona Republic’s editorial staff, Chris Camacho of the Greater Phoenix Economic Council agreed that educational improvements are a priority for the metro area as it seeks to lure more businesses. “We’re an incredibly attractive market for (business) costs,” said Camacho, the group’s president and CEO. “We lose deals on talent,” or the lack thereof.
Camacho said metro Phoenix would benefit if it could attract more foreign investment but complained that many non-U.S. business leaders don’t have a good understanding of the area or its leading industries. The scarcity of international non-stop flights from Sky Harbor International Airport is another factor that discourages foreign investments here, he said.
GPEC has embarked on a new campaign designed to attract more innovative companies focused around the Internet of Things, wearable devices such as health sensors, driverless cars, smart buildings, cybersecurity and other technology applications. He noted that the Phoenix area has strengths in aerospace manufacturing and other advanced industries.
Still, greater Phoenix “has no real industry identity when we talk to national and global leaders,” Camacho said, adding that the new campaign seeks to change that.