AMPed Up

Entrepreneurs: Lifting the Natural State

April/May 2016 Issue

Made up of an elite class of volunteers,
Accelerate Arkansas strives to raise
the state’s per capita income by supporting
entrepreneurship and innovation.

Accelerate Arkansas’ mission is focused but its members — and its reach — are widespread.

The organization’s goal is to raise the per capita income in Arkansas to that of the national average, in turn increasing the state’s tax revenue by about $2.4 billion each year.

“When we started out in 2003 that was at about 75 percent of the national average and now we’re at 82 percent,” said James Hendren, a founding member of Accelerate Arkansas. “We obviously nowhere near did all of that but we think we had a significant impact.”

Accelerate Arkansas’ members and board, most of them from technology or financial fields, meet regularly as a committee and as subcommittees to brainstorm about initiatives, resources and possible legislation to move the state closer to the goal — and they expand upon those with their own activities, too.

History of Accelerate Arkansas

History of Accelerate Arkansas (click to enlarge)

High-Profile Volunteers

“When you’ve got a gathering, a collection of like-minded people, working on things, it’s almost like starting a campfire in the morning when you’ve got some coals left from the night before,” said John Ahlen, the retired president of the former Arkansas Science and Technology Authority and a founding member of Accelerate Arkansas.

For example, Hendren, a consultant who was chairman and chief executive officer of early high-technology firm Arkansas Systems Inc., now Euronet, is also chairman of the board at the Venture Center, borne of Accelerate Arkansas’ aim to facilitate entrepreneurialism.

Jerry Adams, who serves on Accelerate Arkansas’ executive committee, is also president and chief executive officer of Arkansas Research Alliance, a spinoff of Accelerate Arkansas with the goal of uniting university research and economic development. Ed Drilling, president of AT&T Arkansas, is on the membership roster at Accelerate Arkansas and is also a board member at Arkansas Research Alliance.

There are several Accelerate Arkansas members on the Computer Science Task Force that is hashing out the details related to offering computer science courses to all high school students in the state, and there are several members who serve on the Arkansas STEM Coalition, also created by Accelerate Arkansas, to support science, technology, engineering and mathematics education in the state.

Another Accelerate Arkansas member, Tom Dalton, is director of Innovate Arkansas, which Accelerate Arkansas crafted and pushed legislation to establish. A.C.A. 19-5-1237, the Innovate Arkansas Fund, allows for the creation of a fund to be used by the Arkansas Economic Development Commission to pay for a contract with an entity “for the support and assistance for development and growth of knowledge-based and technology-based companies” in the state.

Members are volunteers and, in fact, pay $500 in dues per year to cover the organization’s operational costs and the salary of one paid staff member — Mary Lewis, Accelerate Arkansas’ executive director.

“Mary has no office,” said Gary Campbell, Accelerate Arkansas’ chairman, who is also retired from IBM and is an executive planning and business-continuity planning consultant. “She works mostly out of her car. The only time we used the office we had until a few years ago was for meetings and there are plenty of other places we can meet. We don’t need to be paying rent for something we don’t use. We’re pretty frugal.”

Even before Accelerate Arkansas formed, the people who would make it up realized that the manufacturing jobs state leaders strove to bring to the state would not offer the kind of growth needed to raise the per capita income.

“Our argument for attracting manufacturing was that we were the lowest wage-paying state, or almost the lowest. We were way down towards the bottom. And, we said well that’s not going to get us there because we’re creating jobs that are lower than the national average,” said Hendren. “People were thinking of recruiting companies with these high paying jobs and we realized you have to build them.”

Innovative entrepreneurs and high-tech startups were needed to boost the state’s economy so Accelerate Arkansas set out to analyze — and replicate — the ecosystems in which they seemed to incubate.

“There were people interested in things that they could draw upon in that location where they started. There very often was some level of funding available to them. Many of them had relationships with universities nearby — a lot of the ideas, in fact, came out of universities,” Hendren said. “But what it looked like was the only time you could recruit one of these companies is if they needed something that you had more than they needed of all that other stuff in their ecosystem.”

Arkansas’ talent base wasn’t at the level necessary to lure those kinds of companies. And while investors might be able to convince one of the desired companies to locate in Arkansas, that seemed doubtful because the most likely candidates specialized in food processing and transportation, areas that didn’t lend themselves well to new technology.

“Our conclusion was that we couldn’t do a very good job of recruiting these companies but we could perhaps help develop the ecosystem and begin to grow our own,” Hendren said. “That was kind of a breakthrough thought at that time.”

They identified areas like Conway, Fayetteville and Little Rock as places where entrepreneurship might thrive, although there was little sign of it at the time. They set out to spark a change by creating the kinds of ecosystems where they saw the desired types of companies growing in other states in the Natural State.

Spearheading Legislation

Since its inception, Accelerate Arkansas has helped pass various pieces of legislation, including those to fund supplemental grants for certified math, science, engineering and math teachers, partly in an attempt to make up for the difference in income those professionals make as educators and what they could make in private industry; to offer incentives to companies that add and retain a certain number of new high-paying positions; and to establish the Arkansas Acceleration Fund and a committee within the Division of Science and Technology at the Arkansas Economic Development Commission (formerly the Arkansas Science and Technology Authority) to make recommendations on how to allocate money from that fund to speed up the growth of high-technology jobs.

According to a study done by Battelle Technology Partnership Practice in 2012, initiatives supported by Accelerate Arkansas had thus far led to the creation of at least 1,259 jobs with annual salaries of $70,000 or more. More recent figures are difficult to nail down.

“My estimate is that now we’ve probably created 1,500 jobs with annual salaries of $70,000 but that’s just a shot in the dark. It’s one of those things you can’t get your arms around,” said Campbell.

Adams said there is clearly much work to be done, and there are barriers to overcome.

“It’s a matter of how much fuel you have in your tank. We have a very compelling request but we haven’t gotten strategic funding. We’ve gotten funding from the state, but not strategic funding,” he said.

“This is a marathon. This is kind of like growing up. There’s no date to cash in — this is an aggressive competition between us and neighboring states, the rest of the United States and really the world. We have the capability of competing. The challenge is that we’re a low-resource state and we have to make sure that our resources are allowing for maximum impact. What makes us valuable is what is unique.”

Adams said that while there are resources available for entrepreneurial startups, more work needs to be done to support the growth of companies that have gotten up and running.

“Where Accelerate Arkansas has to be given credit is really trying to stay on message early on because we could have written a report and gone away. We’ve really dug in and tried to start a couple of nonprofits and look at some policies and look at these organizations,” Adams said. “Arkansas just is not a highly resourced state, so the fact that these kind of determined folks have stayed aggressive on these core areas is really their gift to the states.”

Leave a Comment