Alabama continued a record-setting pace in economic development in 2019, but both the governor and the head of the Department of Commerce said 2020 is a new decade with new and lingering issues.
With the introduction in 2012 of the state’s first strategic plan for economic development, Accelerate Alabama, the state has seen more than $40 billion in capital investment and the creation of more than 130,000 jobs.
“A strategy is only as good as your execution,” said Alabama Commerce Secretary Greg Canfield. “We have proof that Accelerate Alabama works.”
Canfield said it works because the plan focuses on the state facilitating work being done at the local and regional levels to recruit and retain industry. Canfield spoke to economic development professionals across the state at the Economic Development Association of Alabama’s 2020 winter conference in Montgomery this week.
Canfield said while the state is enjoying success, it can’t afford to rest on its laurels. In fact, it is now a victim of its own success.
“Our big challenge is going to be workforce,” Canfield said.
The governor’s Success First initiative aims to have 500,000 more Alabamians with a degree, certificate or credential to participate in the workforce of the future.
When Gov. Kay Ivey delivered her keynote to the conference on Tuesday, she noted the state’s record unemployment and employment rates.
“As we begin this new decade and this new year, our economic engines are firing on all cylinders and they’re running at breakneck speed,” Ivey said. “We are blessed to have the lowest unemployment rate in our state’s history at 2.7%.”
But she, too, quickly turned to look ahead.
“We must keep this economic prosperity going, and the way to do that is to be certain that all of our children have a strong start on the education ladder to success,” she said. “And they also must have a strong finish, which is a sound education leading to a job in Alabama.”
Ivey said her State of the State address on Feb. 4 will include some challenges to address needs like prison reform and education.
“I plan to applaud the many things that are going well within the administration and within the state,” Ivey said. “But at the same time, I’ll be sending a challenge in the areas where we need to improve. So, you will have to stay tuned in to get the details. But the topics that I will be bringing forward and talking about will be of no surprise to you. The upcoming Census, prison reform, rural health care, mental health care, education reform.”
Canfield echoed the need to look ahead.
“Our task now is we’ve got to be future-focused in Alabama,” Canfield said. “This is a new decade and we might as well look at this as an opportunity for a fresh start.”
That will include a new strategic plan designed for the future economy.
Accelerate Alabama 1.0 was different in that it got large-scale input from stakeholders around the state because it was the first statewide strategic plan for economic development. Accelerate Alabama 2.0 was more of a refinement of 1.0 to better reflect the economic development focus for the past four years.
The third iteration will likely take much of this year to create, Canfield said, because of a tech-based focus and desire for a stronger presence in areas like research and development.
“I really think Accelerate Alabama 3.0 is going to be a different process altogether because we’re talking about being focused in some areas that are going to be requiring expertise in certain areas like technology and innovation and how we commercialize R&D as well as manufacturing 4.0,” he said. “Because, you know, we’re in a future now where the future is here – artificial intelligence, the internet of things, the whole digitization of manufacturing – is all beginning to take place. It’s not fully in place yet, so this is the right time for us to develop a strategy that embraces that. I think we’re talking about a highly collaborative process that may take a little bit longer. In fact, it may take six to nine months to do this. But we’re working on what that needs to look like to get the process flowing to develop Accelerate Alabama 3.0.”
That doesn’t mean industries like automotive and aerospace won’t continue to be leading drivers of the state’s economic development.
Canfield said once Mazda Toyota Manufacturing reaches full production with its plant under construction in Huntsville, Alabama will likely become second only to Michigan in the number of vehicles and engines produced in a state. Alabama is currently fifth in production.
Canfield said the push will be to create auto supplier clusters to maximize the industry within the state.
Alabama is already multi-faceted in everything from space to defense to commercial aircraft and maintenance and overhaul, he said. And it’s growing across all levels.
“Aerospace continues to take off,” Canfield said. “Sorry for the pun, but it’s just amazing to see what Boeing and ULA (United Launch Alliance) are doing in north Alabama as we prepare to have manned missions into space again and beyond Earth’s orbit – going back to the moon, going to Mars. But also to see what’s taking place in the defense world with Aerojet Rocketdyne locating a headquarters here for defense purposes as well as having the Lockheed-Martin announcement about hypersonics and the development of hypersonics and the research that comes with it – we’re talking about missiles that are traveling at five times faster than the speed of sound, if that technology can be developed and be made practical. And I think it can happen right here in Alabama. And, interestingly, that’s taking place in rural Alabama in the little town of Courtland.
“I can’t say anything about what’s happening in aerospace and aviation without talking about what’s happening with Airbus,” he continued. “At Airbus, we’re talking about what has been a great story … the A320 family’s rate of production is going to be accelerated to seven aircraft a month plus, the A220, which is newly introduced into Mobile … We’ve got it covered in Alabama on the aerospace side. Missiles, rockets, rocket engines, commercial aircraft, maintenance and overhaul.”
Canfield said the pipeline for projects in 2020 may not include as many large-scale projects but will be full of medium and small economic development projects across the entire state.
“I think there still is some uncertainty in the marketplace, so I still don’t think we’re going to see as many high capital investment projects being made,” he said.
Another focus is on legislation that builds on past successes like the Alabama Jobs Act, which is set to end this year.
“Our big thing for this particular legislative session is going to be focused on the Alabama Jobs Act,” Canfield said. “We’ve proven that it’s successful, so let’s get another four years of a proven incentives plan that is pay as you go and very sustainable.”
Another goal is to pass a research and development bill that will foster more R&D activities across a broad range of industries in the state.
“They’re already building great products here,” Canfield said. “We want them to do the R&D and the product development and design here, too.”
But, once again, Canfield said the state’s future plans hinge on workforce. Alabama is in a position where it has to actively recruit skilled workers to relocate into the state to take the jobs that are being created, he said.
For a more long-term fix, Ivey said education must be fixed.
“In my time in office I’ve also put improving education as a top priority,” she said. “Unfortunately, y’all, Alabama is at the bottom, flat bottom of every ranking in education that you can find. Too many of our third-graders cannot read. Too many of our high school graduates are not prepared for careers or college. Y’all, it’s time to get serious about this. We’ve gotten too accustomed and too lackadaisical about accepting our scores that are at rock bottom.”
Canfield and Ivey emphasized the need for maximum participation in the 2020 Census. Not only does the state stand to lose at least one congressional seat, but low population numbers could cost federal funds, including those needed for education and workforce development.
“Be sure you hear me clearly: 2020 is a make or break year for our state and its future regarding the Census,” Ivey said. “We absolutely must have at least an 80% participation rate. I can’t emphasize enough the importance of the Census numbers affecting our state and our people. The numbers in the Census have a direct impact on the number of representation in Congress from Alabama as well as billions, billions of federal dollars coming in to fund health care, education, community programs and job opportunities.”