New economic-development authority to prioritize bio, other “high growth clusters”

July 2, 2010

By hammersmith

By virtue of a June 29 executive order, Gov. Jan Brewer has established the Arizona Commerce Authority, a new entity intended to transform the state’s commerce department and support development of “high growth clusters,” especially industries like aerospace, the biosciences, solar energy, and defense. The governor also allocated $10 million in federal stimulus funding for the Commerce Authority to begin its work.

The governor cast the new initiative as a means to help the state emerge from one of its sharpest economic downturns ever. Although the biosciences has been able to increase employment in the midst of the recession, almost all other industries have not; as a whole the state has lost nearly 300,000 jobs since December, 2007.

In various addresses in recent months, the governor has described working to build on Arizona’s historical economic drivers, the “five Cs”—citrus, copper, cattle, cotton, and climate—with a new economy built on the “abcde” industries–aerospace, biotech, computer chips, development and (solar) energy.

“Arizona is serious about business,” Gov. Brewer said in the Arizona Republic. “Arizona is going to be even more aggressive and even more competitive.”

One of the authority’s first tasks will be conducting a national search for a CEO to lead the state’s economic-development efforts. Directing that search and overseeing the authority more generally is a board largely made up of private-sector executives, including several with direct ties to the biosciences. Among them are William Harris, president and CEO of Science Foundation Arizona; Linda Hunt, president of Catholic Healthcare West Arizona; and Patrick Soon-Shiong, founder and chairman of Abraxis BioScience Inc, with additional board members possibly added in the future.

Gov. Brewer will chair the authority board, with Jerry Colangelo, president of JDM Partners and chairman of USA Basketball, serving as vice-chair. Colangelo led the governor’s Commerce Advisory Council, which produced the recommendations underlying the authority’s creation.

Colangelo said that the business community is pleased that a mechanism like the board exists to ensure the authority’s responsiveness.

“These people want to hear that the state is on the right track and that the state is going forward. We’re really trying to lift the bar,” he said in the Republic.

“I’ll use whatever means I can to sell our state and attract businesses and new companies,” Colangelo added in the Arizona Capitol Times. “And I want a toolbox of all kinds of initiatives, tax breaks, whatever it takes.”

Gov. Brewer’s action to establish the Commerce Authority followed her call in April for state lawmakers to enact legislation to create the authority and pare back some of the current responsibilities of the Arizona Department of Commerce. Accomplishing the latter will still require the legislature’s involvement.

Don Cardon, director of the Department of Commerce, said in the Capitol Times that his department currently has 58 statutory responsibilities. As envisioned, the streamlined department will have two charges: attracting, expanding, and retaining businesses in the state, and “integration of our energy pursuits.”

With some of the legislative mandates shifted away from the commerce department to other units of government, the authority would be able to function in a more strategic role. A statement from the governor’s office said that the authority would “coordinate and integrate the efforts of key partners like Science Foundation Arizona, the universities, regional economic development groups, and the member communities of Arizona’s Councils of Governments–all working together to secure success for the State of Arizona.”

Some bioscience advocates have envisioned a central role in the authority for Science Foundation Arizona (SFAz), which in its first three years of operation has demonstrated significant success matching scientists at research-performing institutions with private sector partners in the biosciences, information and communications technology, and sustainable systems, including solar energy. A recent study found that each dollar invested by the State of Arizona via SFAz grants returned three dollars in external funding.

“We have created a model that works,” Dr. Harris said in the Republic. “If you are really going to diversify the economy, you have to have a tool that can do that.”

Arizona House Speaker Kirk Adams signaled his general support for the authority in a news release following the governor’s announcement. Adams had worked in the most recent legislative session on what was described as a major jobs bill.

“It is a much needed first step in the broader economic-development strategy sorely needed by Arizonans to restore job growth,” Speaker Adams said. “Arizona is a decade behind other states in offering limited, self-financed and very targeted economic-development tools designed to have an immediate influence on business decisions,” he added.

Governor Brewer creates Commerce Authority,” Arizona Republic, 06/30/2010

Speaker Adams Responds to Governor Brewer’s Executive Order Regarding Commerce Department & Economic Development,” Office of the Speaker of the House news release, 06/29/2010

Brewer creates AZ Commerce Authority – but no authority yet,” Arizona Capitol Times, 06/29/2010

Governor Jan Brewer Establishes New Arizona Commerce Authority,” Office of the Governor news release, 06/29/2010

Report touts contribution of Science Foundation,” Arizona Republic, 06/29/2010