Addressing the Growth Paradox

Arizona competitiveness policies over the past decade have built a more diversified, prosperous, and resilient economy and led to income growth faster than the national average and better than 41 other states. An intentional focus has been placed by Arizona’s business, legislative, and education leaders, on championing policies that drive investments into high-tech manufacturing and other high-wage industries. Workers are trained based on the demands of industries and the community has supported small business recovery and growth.  

Greater Phoenix was one of the hardest hit regions in the nation following the long recession of 2009. It became clear that the community needed to draft and activate a new strategy. Arizona passed tax cuts to strengthen businesses and invested $11.8 billion in education beginning in 2015 — enabling community colleges to develop workforce accelerators like Drive48, an industry-led training center responsible for meeting the rising demand for manufacturing workforce.   

Arizona became a hotbed for emerging technologies by allowing companies to market test autonomous vehicles and financial technology products. Expanded broadband coverage in rural and underserved communities enhanced competitiveness across the state. These and other policies created powerful economic momentum and diversified the state’s industrial base — attracting trained workers from across the country to Arizona. With growth outpacing most other states, Arizona was among the fastest to recover from COVID-19 job loss. Only two years after March 2020, nonfarm payroll employment reached pre-pandemic levels. The Office of Economic Opportunity projects 700,000 more jobs in Arizona over the next decade.   

Even as the market celebrates achievements of the past decade, it must respond to challenges on the horizon — using past success as a guide for progress. Arizona is facing a growth paradox: The unintended consequences of the rapid growth are obstacles for future growth. Arizona’s competitiveness depends on maintaining growth while reducing stress on water, energy, transportation, education, housing infrastructure, and the environment.   

  

Without adequate water supply, reliable clean energy, attainable housing, world-class K-20 education, physical and digital infrastructure, we cannot achieve the kind of development that ensures Arizonans have equitable access to opportunity. The intersecting and interdependent issues of sustainable growth require an enhanced competitiveness agenda. This agenda must be bold. Leaders across industry, education, community, and legislative bodies must collaborate to forge a path and create incentives to entice long-term investments from the private sector.  

To address the growth paradox, Arizona needs to become an innovation leader capable of developing technologies that solve complex issues from environmental sustainability to healthcare. This means unlocking innovation through industry-university collaborations, enabling blended capital through public-private partnerships to create quality communities for Arizonans, securing Arizona’s energy and water future while channeling investments to startups with novel solutions, expanding access to economic opportunity through skill development and quality job creation, and leveraging federal programs including the Inflation Reduction Act to elevate Arizona as a national leader in energy transformation. A new strategy for growth includes incentives to mitigate risks and uncertainty. These components will build confidence among investors for realizing long-term returns. Arizona must embrace experimentation and rapidly scale its successful policies and programs.  

Overcoming the growth paradox in Arizona is a collective enterprise. All stakeholders must act in concert, with a clear roadmap and measurable goals that maintain accountability. Leading and creating a profitable market means that national and global businesses engage more deeply on issues involving sustainability, education, and innovation alongside local leaders. Reciprocally, elected officials must not lose touch with market trends and implement policies that secure Arizona’s position within transformative sectors that drive wealth generation. Civic leaders need to be empowered to co-design a sustainable growth agenda that benefits a younger generation of workers and entrepreneurs, thereby securing a continued commitment to Arizona.  

Progress in Arizona has been driven by pro-growth, pro-business, and pro-community policies. These issues are urgent. It is widely accepted that a culture of innovation unlocks a more secure and sustainable future for residents in a market. A collective vision and strategies for solutions and coordinated action will continue to drive betterment of this state. 

Chris Camacho
President & CEO
Greater Phoenix Economic Council
 

Kathleen Lee
Senior Vice President, Regional Initiatives
Greater Phoenix Economic Council