PUBLISHED: 5:18 PM on Wednesday, April 6, 2005
Southeast towns in transition
Towns and rural areas across Western United States are changing. The industries that had once fueled their economies - logging, mining, farming, and ranching - are playing an increasingly smaller role in providing jobs and income than they had in the past. In fact, according to the Sonoran Institute, an organization based in Tucson that has studied economies in transition, these industries have not been a significant source of new jobs or personal income in America's west in the last three decades. Yet many towns in the west are booming. What has caused their great prosperity and can we replicate their success in Southeast Alaska?

"Most new jobs and income created in the western U.S. are not traditional resource industry jobs," says Ben Alexander, an associate director of the Socioeconomics program at the Sonoran Institute. "Whether you see this shift as good or bad is perhaps less important than the fact that it has happened."

According to the Institute, the reasons many western communities are doing so well are complex, but key among them are: First, communities must diversify beyond too great a reliance on primary industries. Productivity in these industries (mining, timber, agriculture) grows faster than demand causing both the price and the number of jobs needed to produce a unit of product to decline over time. They also tend to be vulnerable to global competition. Second, true wealth in today's society is in human capital: our knowledge and creativity. Finally, in our wired and FedEx-ed world people with high human capital have more freedom to live where they want and they are frequently drawn to locations rich in quality - bringing their jobs with them.

"Being the best place to live is proving to be a highly successful approach to creating opportunity and prosperity," says Alexander.

A community's economic development is now likely to be driven by the qualities that the community has to offer. Qualities such as good schools, a university, vibrant culture, safe streets, tolerance, clean environment, and recreational opportunities. Because clean water, clean air, and recreational opportunities are important to so many people, National Parks, wilderness areas, and other protected lands contribute tremendously to the development of the surrounding communities.

Many of the towns in Southeast Alaska are in the midst of the same transition that towns in the rural west have already made. Logging, mining, and to a lesser extent fishing, are becoming a smaller part of the economy. How to successfully transition to a more diverse economy, one that will provide jobs and stable growth, is a burning issue for many community leaders and city planners.

Given the experience of western communities, it is clear that an important strategy for future growth is to ensure that Juneau and other towns in Southeast have qualities that attract and retain talented business people.

"Southeast Alaska has many of the amenities and skills to prosper in coming years. The challenge is to determine how best to benefit from your competitive advantage as a region."

Editor's Note: Ben Alexander will be speaking at the Baranof Hotel, at 7 pm on Thursday, April 7, in the Treadwell Room. The title of his presentation is "Prosperity in 21st Century Coastal Alaska: Benefiting from the Economic Transition." The event is free and open to the public.