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Stability, economic development help Alaska's future look bright

  • Author:
  • Updated: June 25, 2016
  • Published May 10, 2016

Despite the sobering reality of our state's current fiscal situation, Alaska has the potential for a strong and sustainable future. By committing as a state to economic development, we can put Alaska on a growth trajectory and increase the resiliency of our state.

We have to start by diversifying our economy -- Alaska has depended on one industry to support our state for too long. This will require well-managed economic development programs at both the local and state level that partner with the private sector. Retaining and attracting investment requires a healthy business climate and tools for accelerated and sustainable growth for both established and emerging industries. Finally, we must focus on international trade to position ourselves in the global economy.

The Department of Commerce, Community and Economic Development (DCCED) works closely with the statewide business community to identify policy improvements that remove barriers to growth. Our business retention and expansion program, in partnership with regional economic development organizations and local governments, helps analyze key drivers in local economies and implement strategies to grow and expand existing local business and industry.

On a broader scale, DCCED is enhancing the development and growth of industries by establishing a statewide economic roadmap. The comprehensive economic development strategy will integrate broad-based and diverse public and private sector input to identify a shared vision and outline measurable objectives. By empowering and leveraging local planning efforts, the comprehensive strategy will provide criteria to evaluate economic opportunities and flexibility to adapt to global economic conditions while maximizing Alaska's unique advantages.

Gov. Bill Walker is leading the discussion of how we can increase our tax base without harming our business climate. His proposed income tax would keep Alaska as the state with the second-lowest personal tax in the nation and protect the Permanent Fund dividend. Enacting his fiscal plan will help create a more stable, reliable economy and allow for investment in infrastructure and capital projects necessary for growth.

It is important that we support the development and growth of new and emerging industries. A combination of research, business assistance, and promotional activities can accelerate and sustain industry growth. This approach has already helped strengthen the visitor and seafood industries in Alaska, and we are using limited economic development dollars to deploy these tools to more sectors of our economy.

Between 60 to 80 percent of new jobs are generated from the creation of small business and the expansion of existing businesses. If as a state we choose to permit modern financing instruments such as small securities offerings, commonly known as crowdfunding, Alaska can support new, emerging and expanding businesses. These tools will offer Alaskans another way to participate in the diversification and growth of our economy — Alaskans will be able to invest in Alaska entrepreneurs.

Between our strategic location, geographical advantages and strong brand, Alaska is positioned to be an emerging force in the global economy. Experts estimate that 86 percent of future economic growth will occur in foreign markets. Alaska is at the crossroads of the Pacific Rim and Arctic marine trade routes and is located 9.5 hours by air from 90 percent of the industrialized world, including some of the largest and fastest-growing international economies. Already home to the nation's second-largest hub for air cargo commerce and international trade between the U.S. and Asia, and the fifth-largest airport in the world in terms of cargo throughput, the Alaska International Airport System is working to aggressively increase investments from in-state, national and international aviation and air cargo-based industries.

With worldwide attention focused on the Arctic, potential to develop infrastructure to serve ships traveling through the newly accessible Northwest Passage or the Northern Sea Route will continue to grow. Forecasters estimate that cargo may increase from 40,000 tons in 2015 to 65 million tons by 2020. Visitors to the Arctic will also increase. This summer, Crystal Serenity will treat over 1,000 cruise passengers to a monthlong journey through the Northwest Passage, stopping in Seward, Kodiak, Dutch Harbor and Nome before crossing the Arctic Ocean into Canada.

Along with increasing opportunity for cargo commerce and the visitor industry, we're also working to increase exports of value-added products. Although Alaska's manufacturing sector is small, our brand is strong due in large part to the good work of the Alaska Seafood Marketing Institute and state's tourism-marketing program, which will ease our way into new markets. By partnering with the federal government and working closely with industry, we are able to help companies become export ready.

The challenges we face today should be used as a catalyst for focusing on development of new and existing industries in our statewide economy. We must commit to securing Alaska's healthy business climate, providing existing and emerging industries with tools for growth, and increasing our role in the global economy. I look forward to working with Alaskans to develop a statewide economic development plan that will help guide us toward a stronger future.

Chris Hladick is commissioner of the Alaska Department of Commerce, Community and Economic Development. He invites readers to join him in celebrating Economic Development Week from now until May 14, and to visit commerce.alaska.gov/web/DED for more information.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.

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