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ACCELERATE ARKANSAS

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ACCELERATE ARKANSAS ...

    EXECUTIVE SUMMARY

    April 2005

    Draft 2

    Accelerate Arkansas Executive Summary page 1 4.6.05

I. INTRODUCTION

Accelerate Arkansas is a statewide group of volunteers working under the 501C3 of Capital

    Resource Corporation, a member of the Arkansas Capital Corporation Group. Accelerate

    Arkansas emerged from efforts being made by the Arkansas Department of Economic

    Development’s Task Force for the Creation of Knowledge-Based Jobs and leadership of the

    Arkansas Venture Forum. Its membership has been expanded to include individuals from across

    Arkansas.

Accelerate Arkansas’ next initiative is to provide the leadership and the tool for Arkansas’ key

    stakeholders to build a statewide strategic economic development plan for how Arkansas can

    accelerate it’s competitiveness and preparedness to compete in today’s rapidly changing and highly competitive global economy. The cornerstones of the plan emphasize technology,

    knowledge and entrepreneurship.

Increasingly, technology and knowledge will drive the success of Arkansas’ industries. Technology

    and knowledge offer Arkansas’ industries and employers an opportunity to create sustainable

    competitive advantages.

High-tech and knowledge-based industries grow faster than most industries in the U.S. These

    industries are known for creating new and better jobs higher wage jobs. The greatest

    opportunity for Arkansas to move forward economically lies in our ability to accelerate the

    knowledge of our children, the performance / contribution of our knowledge-based institutions and

    the creation / growth of knowledge-based jobs. Over 75% of the changes in a state’s per capita income can be tied to this kind of strategic economic development.

It is true that Arkansas’ industries of the future will demand many more scientists and engineers as

    we better position ourselves to compete in the new economy. It is also important for our parents

    and children to recognize that even for those who do not become scientists and engineers,

    tomorrow’s best careers will require much greater understanding and comfort level with science, technology, engineering and math (STEM).

II. OUR VISION

To enjoy an economy accelerated by knowledge-based institutions, partnerships, industries and

    knowledge-workers.

III. OUR MISSION

To foster economic growth in Arkansas by using the essential building blocks of the knowledge-

    based economy knowledge creation through research and development, intellectual property

    development, commercialization of new technologies, growth of entrepreneurial knowledge-based

    firms, knowledge workforce and evolution of clusters of such firms (i.e., critical mass); to create an

    environment supporting entrepreneurship and continuous innovation.

    Accelerate Arkansas Executive Summary page 2 4.6.05

IV. OUR GOAL

To increase Arkansas’ per capita income to the U.S. average by 2020. If this were achieved today,

    the state of Arkansas would increase its state tax revenues by over $2 billion.

V. OUR VALUES

In everything we do, we will place the state of Arkansas first.

    While we must make decisions and recommend strategies that we feel are in the best interest of Arkansas, we will conduct ourselves in a highly collaborate manner and expect this collaboration of others.

We are a non-political organization and will conduct ourselves accordingly.

VI. RESEARCH

In September 2004, Accelerate Arkansas released its major study on

    Arkansas’ Position in the Knowledge-based Economy. The report, written

    in part by the well-known Milken Institute, clearly defines the choices

    Arkansas faces in the new economy.

The research report was made possibly from a $205K grant provided by

    the Winthrop Rockefeller Foundation. The Milken Institute and Arkansas’

    Center for Business and Economic Research examined the state’s current

    economic conditions, assessed the comparative positions of its industry

    structure and benchmarked Arkansas’ position in technology and science.

    The research report can be accessed at

    http://crc.arcapital.com/accelerate_arkansas.html.

VII. THE RISK OF INACTION

Projecting an economy based on traditional

    economic development activities and business as

    usual sees the state’s per capita income declining

    as manufacturing and other traditional

    employment erodes. In this projection, well-

    educated workers leave the state in search of

    employment elsewhere, causing a brain drain that

    Milken’s Ross DeVol calls a “death spiral.”

The other projection, based on adding increasing

    numbers of knowledge-based and high

    Accelerate Arkansas Executive Summary page 3 4.6.05

technology jobs, sees per capita income increasing toward the national average. The per capita

    income chart illustrates in a powerful fashion two economic futures two choices for Arkansas.

One can debate these projections but one cannot debate the risk of inaction vs. the opportunity

    with action.

Time is of the essence. Other states are investing heavily to prepare their economies to compete

    in today’s increasingly competitive global marketplace.

VIII. THE STRATEGIC PLAN FRAMEWORK

A. STAKEHOLDERS

    A strategic plan is only as good as the involvement of key stakeholders.

    Accelerate Arkansas seeks to work collaboratively with the following groups:

    State Government

     The Governor and the Arkansas General Assembly

     State Agencies

    The Academic Sector

     K thru 12

     Higher Education

    The Private Sector

     Large Corporations and their Leaders

     Investors

     Entrepreneurs and Knowledge-based / Technology Focused Companies

     Mentors

    Parents and Children / Groups that Support Parents and Children preparing our youth for

    better jobs in 2010 and 2015

    Foundations and Non-profit organizations

    Federal Government

     Arkansas’ elected delegation

     Federal research grant organizations

     Federal facilities / Labs engaged in research and development

    Accelerate Arkansas Executive Summary page 4 4.6.05

B. ACCELERATE ARKANSAS’ CORE STRATEGIES

     1. Support research and development that creates jobs.

     2. Develop risk capital available for all stages of the business cycle and especially in the

    funding gap.

     3. Encourage entrepreneurship and accelerated new enterprise development.

     4. Sustain Successful Existing Industry

     5. Increase the education of all Arkansans and especially the achievement in science,

    technology, engineering and mathematics (STEM) education.

Among other key strategic planning attributes, the statewide strategic plan is optimally executed by

    gaining the involvement of each of the above stakeholder groups working together to arrive at a set

    of specific action steps that each stakeholder can embark upon to advance one or more of the five

    core strategies.

IX. THE ENTERPRISE DEVELOPMENT BAR & ACCELERATE ARKANSAS’ 2005

    LEGISLATIVE INITIATIVES

ENTERPRISE DEVELOPMENT BAR

Please find below the enterprise development bar. It is important because, increasingly, economic

    development will come from a growing number of promising new companies starting and

    expanding each year. This is sometimes referred to as homegrown economic development.

    Intellectual properties, promising business models, entrepreneurs and capital for pre-seed, seed,

    start-up and early stage enterprise development will be essential.

It is apparent that in a global marketplace, in order to remain competitive, many of the U.S.’s large

    employers, even high-tech and knowledge-based companies, will be required to access the most

    efficient and economical labor markets anywhere in the world. This is better than, over time,

    loosing the whole company. This is also why it is important for Arkansas to create a climate and

    the infrastructure where new companies with promising business models are coming about all of

    the time.

Strategically positioning Arkansas to create a growing number of high-growth high-wage

    companies will be a strong measure of our success. It is the creation of a growth company or the

    recruiting of a company to Arkansas that creates new and better jobs which in turn enables our

    retail, service and real estate economies to expand.

ACCELERATE ARKANSAS’ INITIAL LEGISLATIVE INITIATIVES

Please find a description of Accelerate Arkansas’ 2005 legislative initiatives depicted in the boxes

    to follow, and how these initiatives fit along the enterprise development bar.

    Accelerate Arkansas Executive Summary page 5 4.6.05

    Accelerate Arkansas Economic Development Building Blocks and 2005 Legislative Initiatives

    #4: Eliminate two-year waiting period for angel investors to receive investor tax credits.

    #1: Increase funding for #3: Extend the carry forward seed capital period for research and and research development tax credits under matching. the Consolidated Incentives Act #8: Increase cap on from 3 to 9 years. technology development projects from $50,000 to $100,000. #7: Expand #2: Ease requirements for targeted Technical businesses to qualify for research Careers and development tax credits under Student Loan Forgiveness to the Consolidated Incentives Act. include graduate students.

    #5: Expand #6: Make it easier eligibility for bond for companies to guaranty participate in programs to employee Tuition include targeted imbursement Tax businesses under Credit program. the Consolidated Incentives Act.

    Pre-Seed Higher Ed M&A/MatuMature Expansion Seed Start-Up re

    Accelerate Arkansas Core Strategies

    Research Sustain successful existing companies.

    System developed by the Task Force for the Creation of Knowledge-based Jobs

    Higher Ed [Traditional] Economic Development Accelerate Arkansas Executive Summary page 6 4.6.05

    X. THE OPTIMAL COURSE COMBINING LEADERSHIP WITH RESEARCH

There are many reports and studies that inform us of the best courses of action for many areas of

    our society. We are grateful for the brilliance of these researchers and social scientists.

    Accelerate Arkansas was given the opportunity to retain some dynamic researchers providing us

    with a foundation of information for how to go forward.

We are now challenged with how to get people to come together and take action. Leadership, as

    defined by Mr. Jim Myers, is bringing out the best in others.

The challenge comes in how we get various stakeholders in the room with us and with others in an

    open, trusting and non-defensive environment so that we, together, can develop a dynamic set of

    action steps each best for Arkansas. Negativity, the scarcity mentality and protectionism will

    possibly come about as we involve others. Can Accelerate Arkansas offer a positive and trusting

    environment where stakeholders can come, think bigger and agree to a dynamic set of action

    steps where Arkansas moves boldly forward?

XI. MEMBERS OF ACCELERATE ARKANSAS

    Jerry Adams Scott Ferguson Les Lane Acxiom Corporation Radiologist Arkansas Science and Conway, AR West Memphis, AR Technology Authority

     Little Rock, AR John Ahlen Watt Gregory, III Arkansas Science and Kutak Rock LLP John Lewis Technology Authority Little Rock, AR Bank of Fayetteville Little Rock, AR Fayetteville, AR

    Charles E. Hathaway

    University of Arkansas at Uvalde Lindsey Susan Davis Allen

    Little Rock Northwest Arkansas Council Arkansas State University

    Little Rock, AR Fayetteville, AR Jonesboro, AR

    James Hendren Emon Mahony Jeff Collins

    Task Force for the Creation Mahony Corporation University of Arkansas

    of Knowledge-based Jobs Eldorado, AR Fayetteville, AR

    Little Rock, AR

     Chris Masingill Jerry Damerow

    Carmie Henry Arkansas Economic UAMS Arkansas

    Electric Cooperatives of Developers Association BioVentures

    Arkansas Pine Bluff, AR Little Rock, AR

    Little Rock, AR

     Mike Maulden Danny Ferguson

     Entergy Southwestern Entergy

     Little Rock, AR Forrest City, AR Fayetteville,

     AR

    Accelerate Arkansas Executive Summary page 7 4.6.05

    Tim McFarland Sam Walls D. FINANCE / FUND Grayrock Advisory Services Arkansas Capital RAISING COMMITTEE Arkansas Capital Corp. Corporation Group Fayetteville, AR Little Rock, AR John Lewis, Chair

     Jeff Collins Alan McVey Doyle Williams Scott Ferguson Arkansas Department of University of Arkansas Les Lane Economic Development Fayetteville, AR Emon Mahony Little Rock, AR

     E. Communications

    XII. COMMITTEES Elise Mitchell Committee Mitchell Communications Group, Inc. A. EXECUTIVE Stacy Sells Pittman

    Fayetteville, AR COMMITTEE Chair

     Elise Mitchell Ted Moskal Jerry Adams John Ahlen Lawrence County Chamber John Ahlen of Commerce James Hendren F. STRATEGIC PLAN Walnut Ridge, AR Uvalde Lindsey COMMITTEE

     Tim McFarland, Chair, Tim O’Brien Accelerate Arkansas Mark Saviers, Chair University of Arkansas for Bill Thomas Charles Hathaway Medical Sciences Emon Mahony Little Rock, AR B. GOVERNANCE Ted Moskal

     COMMITTEE Henry Torres Stacy Sells Pittman Sam Walls CJRW Watt Gregory, Chair Members of the Little Rock, AR Jerry Damerow Executive Committee

     Susan Allen

    Mark Saviers Alan McVey

    Saviers and Company Doyle Williams

    Little Rock, AR

     C. LEGISLATIVE

    Sam M. Sicard COMMITTEE

    First Bancorp

    Fort Smith, AR Danny Ferguson, Chair

     Carmie Henry

    Bill Thomas Uvalde Lindsey

    Cross County Economic Chris Masingill

    Development Corporation Mike Maulden

    Wynne, AR

Henry Torres

    Rural Sourcing, Inc.

    Jonesboro, AR

    Accelerate Arkansas Executive Summary page 8 4.6.05

XIII. OPERATING PLAN

    Accelerate Arkansas has acted as a volunteer group with no operating capital thus far. We plan to seek funding for the first stage of operations by submitting a grant to the Winthrop Rockefeller Foundation (“WRF”). The first draft of this grant will be completed on April 18 at which time Chairman McFarland will ask for the input of the executive committee and submit the final proposal to WRF by April 25. The plan calls for an executive director committing 25% of his / her time to Accelerate Arkansas, a part-time administrative assistant and minimal operating expenses.

    Accelerate Arkansas extends its gratitude to its volunteer membership, the Arkansas Capital Corporation Group, Arkansas Science and Technology Authority and Arkansas Department of Economic Development for your contributions of the past and hopefully the future. ACCG, ASTA and ADED have been essential to our ability to operate in this early stage of existence. We appreciate the ability to operate within the Capital Resource Corporation in the past and for the next operating period.

XIV. FINANCIAL PLAN

    Accelerate Arkansas has prepared a budget of activities for the next six months (copy included in member’s annual meeting binder) which will be expanded upon and become part of the grant to be submitted to WRF. The operating budget is estimated to be in the range of $150k per year before the costs associated with executing the statewide strategic plan. Until the strategic plan sub-committee arrives at the best manner in which Accelerate Arkansas and the defined stakeholders can build a statewide strategic plan, the financial requirements of these activities are unknown. One proposal has been obtained from Battelle Memorial Institute indicating a cost to assist with the statewide strategic plan at a cost of $225K. This draft proposal is included in member’s annual meeting binder.

    Accelerate Arkansas Executive Summary page 9 4.6.05

XV. 2005 KEY SUCCESS FACTORS

1. Submit grant proposal to WRF by April 25 and obtain grant approval by June 2005 (WRF

    Quarterly Board Meeting date). If not successful, create and implement plan b.

2. By June 30, Strategic Plan Sub-committee arrives at a clear plan for how to optimally execute

    statewide strategic plan including how to bring together the very best resources inside and

    outside of Arkansas.

3. Arrive at a timely method of both retaining resources to assist with statewide strategic plan and

    if required, obtaining timely funding to retain such resources.

4. Obtain the involvement of the best leaders from every stakeholder group to engage in the

    statewide strategic plan.

5. Establish optimal timeline to achieve all of the above, create the most dynamic strategic plan

    attainable and assure that the strategic plan can be adopted by Arkansas’ public policy

    leadership in 2007 General Assembly.

6. Expand membership of Accelerate Arkansas and / or continually recruit the participation of the

    best leaders from across Arkansas.

7. Engage with every gubernatorial candidate and work to assure that accelerating economic

    development through the knowledge economy is a major part of each candidate’s plan for

    Arkansas’ best future.

8. Arrive at best method to recruit / elect the optimal chairman for next phase of Accelerate

    Arkansas and retain the best executive director.

9. Continue to improve upon communication how we communicate a rather complicated subject

    in an uncomplicated, dynamic and realistic manner.

10. Continually improve upon data solid, conservative return-on-investment data primarily

    expressed in terms of return to the state of Arkansas in terms of revenues.

XVI. Example of Portions of the Strategic Planning Exercise

    Advancing each core strategy with action steps by each stakeholder

    Accelerate Arkansas Executive Summary page 10 4.6.05

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