Mike Malone, partner at Shallotte, N.C.-based economic development firm Economic Leadership, said cities, counties, and states compete to retain and attract residents and businesses. The firm recently worked with the state chamber to help Arkansas become more competitive.
If the amenities, schools, utilities, or business climate aren’t what they want, those people and businesses can move away. The competition also includes attracting new residents and businesses. And new residents can help meet businesses’ workforce needs.
On Wednesday (Sept. 23), Malone, a Fayetteville resident and native, provided a framework for attracting and retaining residents and businesses during an economic briefing as part of Economic Development Week, hosted by Chamber Fayetteville in partnership with the city of Fayetteville and Startup Junkie. About 30 people, including economic development staff, bankers, and chamber members, attended the event at Olsson in Fayetteville.
Malone said Fayetteville competes with the region “a little bit, but really we’re competing with college towns in regions like Northwest Arkansas all over the country.” He said the assets and strengths of the region’s cities complement each other. “I will never say…one of these cities should go its own way and do their own thing. Regionalism is where it’s at.”
Late last year, the Arkansas State Chamber of Commerce hired Economic Leadership to build a playbook to keep Arkansas competitive, Malone said. The work led to the chamber’s release of Arkansas Advantage 2035.
“Arkansas is on a great run,” Malone said. “We’ve moved up in a lot of rankings. We’ve grown jobs faster than some other states. Our manufacturing jobs are doing better than many states, including southern states. Average wages are up across the state… Arkansas has become much more competitive over the last decade.”
Mike Malone, partner at Economic Leadership, provided a framework for attracting and retaining residents and businesses in an economic briefing on Wednesday (Sept. 23). (photo courtesy of Tatum McClure, Chamber Fayetteville)
He said Economic Leadership provided recommendations in four areas to help the state become even more competitive. The firm surveyed multiple employers, and key takeaways included that most see economic conditions in Arkansas as good or very good. They cited workforce as an ongoing challenge. They want the state to remain focused on infrastructure. More work is needed to simplify the state tax code. Reaching full employment is another issue.
Malone said Arkansas is about 3% below the national average for labor force participation, but it’s been improving over the past few years. He attributed this to several factors, such as childcare, transportation to get to work, lack of skills, and family, emotional, and substance abuse issues.
“Energy availability is probably the most important issue nationwide for economic development right now for attracting and expanding businesses,” he said. “If you don’t have power and can’t commit that you’ve got…transmission lines and capacity and the ability to connect the new employer to the grid fast, they’re going to go somewhere else.”
He said insurance rates are rising. He attributed the rise in home insurance rates to the size of the insurance pool and the risk of natural disasters. Arkansas is slightly higher than the U.S. average for car and health insurance, based on Affordable Care Act Silver Plans.
AI, POPULATION PROJECTIONS
Malone also cited a Microsoft report that shows Benton and Washington counties using artificial intelligence more than any other county in Arkansas. The AI user share was 45.2% in Washington County and 36.3% in Benton County. Rounding out the top five are Sebastian County at 30.1%, Faulkner County at 29.9% and Clark County at 28.8%.
He also provided data on the percent of total jobs in industries most impacted by AI and noted that impacted doesn’t mean jobs are going away. It could mean the jobs are easier or that people can do things more quickly because of AI. Finance and insurance is the most impacted industry and comprises 3.2% of jobs in Arkansas. The government sector comprises 15.7% of the state’s jobs but ranks midway among the most impacted industries. The healthcare and social assistance industry comprises 13.9% of the state’s jobs, while manufacturing comprises 11.6% and retail trade has 10.4% of the state’s jobs. All three industries will be less impacted than the government sector.
Other data comprised projections of population change of working-age adults, ages 25-64, by Arkansas county from 2024 to 2034. Malone said Economic Leadership predicts these changes based on past growth and trends, but that could change. Arkansas’ population is projected to grow by 5.3%. Most growing counties comprised those in the metro areas of Little Rock, Fort Smith, Jonesboro and Northwest Arkansas. There were other growing counties in north-central Arkansas, such as Marion, Baxter, Izard, Sharp and Jackson. Another fast-growing county was Lincoln in southeast Arkansas. Counties surrounding Lincoln County showed declining population. Most counties across southern and eastern Arkansas also showed population declines.
FRAMEWORK, DATA
Economic Leadership uses a framework of categories to assess what makes a place competitive or less so, such as business climate, taxes, regulations, political volatility, infrastructure, housing inventory, outdoor amenities, and the workforce.
“Workforce is about the people, how trained they are, what kinds of education systems you have, how nimble they are at responding to what industry may need,” he said. “We think it’d be real simple. You have some great educational providers; you have employers. They should tell each other, ‘OK, we need these skills, and we need this certification, and we need this number of people.’ But business is running so fast, and education is running on their own schedule, and there’s thousands of businesses and a bunch of different training institutions and high schools. So syncing those up in a way, a systemic way, to make sure that we’re delivering the trained workforce just in time for what it is that industry needs, and industry’s needs change.”
The framework also includes quality of life, and Malone said this is important because remote workers can choose where they want to live. Innovation investment is another important factor in the framework and includes how regions help startups grow.
He said Northwest Arkansas’ growth over the past 40 years is tied to three major employers, which have continued to grow and add jobs here.
“But we’ve got to diversify this,” Malone said. “We can’t forever as a region just be tethered to those three. I put the university in there too. So four major employers. We got to diversify it. And so we need our next J.B. Hunt… We need them to be our next $1 billion company.”
Malone said regions tend to focus on categories in the framework that they need to be better at to attract companies, “so that they pick you.”
As part of his presentation, he also provided U.S. economic data on consumer spending and saving, credit card delinquencies and inflation.
Malone said all the saving and spending related to the COVID-19 pandemic pushed inflation “off the chart. But since COVID, the kind of baseline has been higher than it was for 15 years.” The past two presidential administrations have “presided over a higher average inflation rate.” He attributed the high fuel prices to the continued inflation and a change in car-buying habits, with people looking at different-sized vehicles.
Since 2021, job creation has moderated, he said. Government jobs, including university and teaching jobs, and jobs in the financial sector have decreased.
DEVELOPMENT BACKGROUND
Malone has worked in economic development for about 25 years. Before joining Economic Leadership in 2025, he was vice chancellor for economic development at the University of Arkansas, vice president for corporate and community affairs at Runway Group, and president and CEO of the Northwest Arkansas Council. He previously worked in federal government in Washington, D.C., including roles at the White House, the Federal Emergency Management Agency, and Congress.
He earned a master’s degree in public policy from the University of Minnesota in 1999 and a bachelor’s degree in political science from Hendrix College in 1992. He was named to the Northwest Arkansas Business Journal’s Forty Under 40 class in 2007.
Malone said Economic Leadership works in 30 states, and in his role, he has learned a lot and has been able to think about things in new and different ways.
“What’s also great is people are dying to hear the Northwest Arkansas story,” he said. “They know us now, and they understand that there’s just business, economic transformation, quality of life’s come up, wages and earnings have come up and companies are just bursting at the seams here. We’ve put infrastructure in as fast as we can. And so my firm’s real happy that I’m able to go out and tell the Northwest Arkansas story too.”
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