Magazine September 2018

Mission Critical: State Chamber Boss Talks Straight About Issues Facing Business

by Dwain Hebda | Photography by Jamison Mosley

There’s no quicker route to the truth than through Randy Zook’s office at the Arkansas State Chamber of Commerce.

As President and CEO of the organization, he’s a wellhead of information and anecdotes about what’s going on in the state’s business community from one end to the other. Not only that, he’s committed to the cause of economic progress in the Natural State, enough to call things like he sees them.

“We are doing some very good things [but] facts can be brutal,” he says, flatly. “You have to start with the facts, and the facts are that we have enormous room to improve.”

Zook is no mere curmudgeon; he’s quick to point out that Arkansas’ economy is enjoying a spate of prosperity and optimism it hasn’t seen in a while. He readily hands out credit to the governor and state legislators who have helped make this happen. He shares at will the numerous individual success stories of companies statewide doing interesting, innovative things.

But all that doesn’t undo the systemic issues rotting the state’s current and future workforce from within and fundamentally crippling Arkansas’ ability to attract people from elsewhere. As much as lower taxes or access to capital, education is what will determine whether Arkansas business realizes its potential, says Zook.

“The fundamental, significant improvement we need is better performance by the public school system, the K-12 system,” Zook says. “The K-12 system in many parts of Arkansas is simply not doing an adequate job of educating our children. This is widespread across the state.

“There are many really fine, excellent, high-performing school districts,” he adds. “But there are way too many — I hate to use the word failing, but it’s hard not to — low-performing, inadequate results being achieved in many school districts. That needs to change and change quickly.”

The Arkansas Department of Education reports the state’s high school graduation rate for 2017 was just under 88 percent, but an alarming number of districts ranked in the 70th percentile or lower. Notable in this group are Pine Bluff School District (66 percent), Hot Springs School District (68 percent), North Little Rock School District (73 percent) and Pulaski County Special School District (78 percent). The state’s largest school district, Little Rock, graduated slightly more than 80 percent of its high school students last year, according to the report card.

U.S. News and World Report’s most recent rankings also reinforce Zook’s argument. The survey ranked Arkansas 42nd overall on education and worse on individual measurements, including K-12 math scores (44th), K-12 reading scores (45th), college readiness (47th) and attainment (47th). And despite having some of the more affordable tuition in the nation (16th), Arkansas ranks a dismal 49th in educational attainment among 25-year-olds and older.

All of this negatively impacts the ability of employers to secure quality workers to support their growth and spur innovation, Zook says.

“We have way too many kids graduating high school who really are not prepared,” Zook says. “They can’t read at a ninth-grade or tenth-grade level. They can’t do reasonable levels of math, which is vital in a business setting to understanding anything, being able to measure things, being able to understand the relationships of things. Those are critical thinking skills that are absolutely required in today’s work world.”

Individuals who do get to the post-secondary level face additional challenges, Zook adds, especially in the kind of skilled training so desperately needed throughout the state’s manufacturing and construction sectors.

“These are jobs that have in-demand skills that pay well; it’s everything from diesel mechanics to CNC machine operators to computer programmers and systems analysts and all those kinds of high-tech positions, to say nothing of the whole health-care world. That’s where we’re just exploding in demand,” Zook says. “We’re behind the curve on every one of these fields, and we need to accelerate the pace of improvement and change.

“When you go through a diesel technology course at a [post-secondary] institution, you should expect to be trained on current-generation equipment, not stuff that’s 20 or 30 years old and completely out of date and a waste of time,” he adds. “If you’re going through a nursing program, you should expect adequate instruction in current-generation technology. If you’re learning how to run a CNC machine tooling operation, then you ought to be operating on current-generation equipment.”

The educational deficiencies in Arkansas are a substantial drag on a business climate that’s ripe for acceleration. Even in areas of high opportunity — such as the entrepreneurial community — optimism is being tempered by lack of workforce.

“A lot of young people want to be their own bosses; that’s good,” Zook says. “That’s exactly what we want young people doing, is taking chances and understanding reasonable risk and being willing to sail into that and start and grow businesses. That’s what drives the economy: the desire to create something and run your own business.

“So those are very good things and we’ve got all the right conditions in Arkansas and those conditions are getting better,” he adds. “We’ve had corporate tax reform on a national level. We’ve had reasonable regulation improvement and regulatory improvement at a national level as well as the state level. Everything’s green lights and opportunity is abundant.

“That’s why the K-12 school system is so fundamental to everything we do. In a given community, that’s where it starts and frankly, that’s where it ends.”

Legislative measures also tie into this picture, Zook says, and the next session will see several issues that impact both the state’s ability to prepare the citizenry for success and the funding required to pay for it.

“The first [issue] is going to be the governor’s commitment to continuing to reduce income taxes, both individual as well as corporate,” he says. “We’re a high-tax state, and that’s the tension. We do need revenue to support all these things we provide, especially K-12 education, higher ed, job training, all those kinds of things.

“That’s pretty costly and it makes it even more imperative that the institutions be up-to-date and accountable to providing the absolute best results possible with the current resources.”

At this, a cock-eyed grin springs up one side of Zook’s face.

“It’s a chicken-and-egg thing. If you develop the talent, the businesses will gravitate toward the talent,” he says. “I heard an interesting thing on a trip to Virginia looking at similar subjects. At a conference there, one of their community leaders said, ‘Gosh, if we train and educate these kids on all these sophisticated skills and everything, a bunch of them are going to move off and what will we have done? Just spent a lot of money.’

“It was kind of quiet for a minute and finally one other fella spoke up and said, ‘Well, what if we don’t train them and they stay?’”

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