The state’s fiscal crisis is no tiny problem. Oil prices are volatile, reserves are depleting and the state is facing a financial deficit. At this year’s Innovation Summit, held in Juneau in early February, Governor Walker addressed more than two hundred of the state’s top entrepreneurs, politicians, investors and leaders. He discussed his budget plan and the need to diversify and shift the state away from a mono-focus on a non-renewable oil industry.
Tough budget cuts, Walker explained are inevitable. “Of course, you can’t make everybody happy,” Walker said. “But nobody is happy with this year’s budget proposal, not even my wife.” That being said, Walker stressed the importance of having a plan, no matter the difficulty and heartbreak involved with drafting that plan. That fiscal plan, he said, was written in pencil, not pen. Rebuilding a stronger Alaskan economy will require a collaborative effort that cuts across sectors. The governor looked across the audience, asking for input and calling upon the creativity and resourcefulness that comes naturally to Alaskans.
His plea was answered. Optimism for building a more diverse and robust economy was high throughout the Summit. Held annually by the Juneau Economic Development Council with the support of many statewide partners, the Innovation Summit brings together diverse perspectives from across Alaska and the nation. Those people collaborate and develop economic strategies, aiming to create positive change for our region and state. Keynote speakers present their global experiences, Alaskan entrepreneurs and innovators share their work, participants collaborate during breakout sessions and this year, four local startups competed for a cash prize while pitching their business concepts to a diverse audience over breakfast.
Speakers and activities were varied and diverse. However, a number of resounding themes were constant throughout. Rebuilding a more resilient Alaskan economy requires that we diversify, invest locally and collaborate in new ways.
The opening remarks of President Richard J. Peterson of Central Council Tlingit & Haida Tribes of Alaska responded to the fiscal crisis with a strong sense of opportunity. “This challenge is also an opportunity. It is forcing non-traditional partners to come together and collaborate,” he said. New partnerships are forming across the state as a means for sharing resources and perspectives to tackle common challenges.
The Southeast Cluster Initiative is one example of organized collaboration. The Juneau Economic Development Council (JEDC) supports “clusters,” which are essentially working groups whose members identify synergies and capitalize on ways to work together and facilitate growth in the areas of ocean products, visitor products, renewable energy, mining services and supply, research and development and arts and culture. This year at the Summit, Brian Holst, the Executive Director of the JEDC, encouraged cluster participants to amp up efforts to collaborate creatively across working groups.
During the Summit’s “Innovation Shorts,” representatives from a pioneering land management effort in the rural community of Hoonah presented on the power of their collaborative community approach. The Hoonah Native Forest Partnership is bringing together diverse partners, including the Hoonah Indian Association, Huna Totem, Sealaska, the City of Hoonah and the U.S. Forest Service, to combine forces and expertise to manage the landscape surrounding Hoonah for a diversity of land uses. From commercial berry harvesting to recreation, subsistence resources to a sustainable rotational timber industry, the team is managing for a long list of community-identified priorities. The project is directing a new collaborative community-based land management model for the region that maximizes long-term ecological, social and economic benefits for rural communities.
Michael Shuman is an economist, attorney, entrepreneur and author. During his engaging keynote, he vehemently argued against the mentality that strong state economies are built by attracting and retaining big outside industry. “The idea that if you support the globalized economy first, that the local economy will take care of itself is wrong. In fact, it is the exact opposite,” Shuman said. Investing locally and focusing on self reliance is not about ignoring or disengaging from the global economy, he added. “Self reliance is about approaching the global economy from a position of strength.”
Shuman showed how a dollar spent at a local business circulates within the community between two and four times more than a dollar spent at an outside business. This is in part because local businesses invest locally. They buy supplies locally and seek supporting services locally. Investing in locally owned and operated startups also keeps control and power in the hands of locals. Importantly, Shuman showed how these types of investments are not a high-risk leap of faith either. Entrepreneurs are equipped for the challenge and small business is playing a burgeoning, growing role in the global economy, with high profit margins and ample job growth. Local is competitive, Shuman stressed, and huge strides can be made if we shift our focus, efforts and funds from the failing “attract and retain” mentality to a structure that supports our local entrepreneurs.
This call to invest locally was backed by a suite of Alaskan entrepreneurs who made it clear that they are ready for the challenge. Some, like Ben and Nick Kellie of Kenai Alaska’s K2 Dronotics, are looking to new technologies like drones to build lucrative businesses while addressing challenges that are unique to Alaska. The brothers explained how drones are powerful tools for work that is dangerous, dirty, remote, and dull– situations that are ample in Alaska.
Others are adapting age-old “technologies” to solve Alaska’s contemporary issues. Bobbi Daniels, owner of The Sawmill Farm in Sitka, stole the show, winning the Pitch Breakfast and also receiving one of two annual Path to Prosperity sustainable business plan awards. Daniel’s short pitch of “turning trash into bacon” was a popular one. Sitka pays to barge thousands of pounds of food waste to a landfill in eastern Washington. Daniels saw this as a grand business opportunity for feeding and raising livestock in rural Alaska. “People approach me saying ‘what a great idea,’” Daniels said upon accepting her prize. “But more than being innovative, I’m just old,” she laughed. “I remember how we used to farm with zero waste.” The Sawmill Farm aims to feed Sitka while reducing the community’s carbon footprint, supporting a stronger local food economy and helping close a critical loop by decreasing meat barged in and waste barged out.
There was no shortage in the diversity of business concepts pitched during the summit. From pig farms, virtual reality tourism opportunities, distilleries and drones, Alaskans showed just how diverse their ideas and our state’s untapped resources can be. The 2016 Innovation Summit made clear, however, that bolstering the state’s economy requires more than a diversity in the types of startups. Speakers urged participants to think creatively and also diversify our approach to economic thinking.
For example, Matt Hirschfeld, the Medical Director of Alaska Native Medical Center, outlined the serious long-term economic impact that adverse childhood experiences, such as drug abuse and domestic abuse, have on the state. Victims of early age abuse cost the state billions of dollars in programming and medical costs. What if we invested more in preventative programming? We could not only boost the health, wellbeing and happiness of our population, but we could save more money in the process. Shuman pointed to the example of state medical expenditures and costs. Perhaps Alaska can’t localize the creation of pharmaceuticals or costly medical devices, but what if we invested in more preventative infrastructure? Again, we can build a healthier population while preventing more money from leaking out of our state’s economy.
The economic crisis is presenting the opportunity for Alaskans to restructure the state in a more resilient, sustainable and just way. “We think incorrectly that there is a tradeoff, that we can’t have it all when it comes to economics,” argued Michael Shuman. “When we actually can.” We can support an economic plan that boosts state happiness and health, while keeping more money circulating regionally. Participants of this year’s Innovation Summit showed how Alaskans are willing and able to answer the governor’s call to action by stepping up to build a more sustainable and robust economic future for the Last Frontier.