With Southern Arizona’s economy forecasted for a strong and quick recovery post-pandemic, business leaders have created a plan to capitalize on that recovery. 

Sun Corridor, a coalition of the region’s leaders in the private, nonprofit, government and academic sectors, last week announced the Pivot Playbook, a formal action plan assembled by the COVID-19 Recovery & Response Steering Committee to identify strategies and address five focus areas that would make those forecasts come true. 

“While we were getting all those great rankings and experts were telling us that Southern Arizona was poised for a strong recovery, no one here thought that it would just happen on its own,” said Chair of Sun Corridor and TMC Healthcare CEO Judy Rich. “We knew that we had an opportunity in front of us, that a lot of other communities didn’t have. It was up to us to get ourselves ready and give our attention to all the things that we were hearing were going to be important for a strong recovery.”

Rich said they reached out to business leaders in Sun Corridor to prepare for the future, after Moody’s Analytics released a report last May, ranking Tucson among the top 10 best cities poised for a strong post-coronavirus recovery. 

“The study said that regions like ours are going to be attractive in the emerging economy, because of our wide open spaces, and our low population density. The analysts say that people are going to want to spread out, because of the COVID virus and Southern Arizona is a perfect place to do that,” said Rich. 

She also noted the Site Selectors Guild, a group who finds the best locations for businesses to move or expand to, predicted their clients are looking for midsize cities, like Tucson for the same reasons provided by Moody’s. 

Prior to the pandemic, especially since 2016, Tucson had seen a plethora of companies moving or expanding into the area, but everything changed with the pandemic, said CEO of Sun Corridor Joe Snell. 

“When the pandemic hit, we saw an overnight change. We needed to adjust to, not only the new reality the pandemic created, but look at the future and hopefully make some major adjustments,” said Snell. 

As the pandemic began to affect the economy, Snell said Sun Corridor spent a lot of time understanding what site selection looked like for influencers or site selectors. 

“What’s their new reality?” asked Snell. “We spent a lot of time really looking at those new drivers and sitting back and determining whether we can meet those demands.”

Their early investments in virtual capabilities, like drone footage, their quick and aggressive response in their sales and marketing, and the recovery plan put them in a good spot, said Snell.  

The “Pivot Playbook” 

In order to make the plan a success, the Steering Committee, chaired by Steve Eggen and made up of a group of business leaders, identified five focus areas: company recruitment, talent recruitment and retention, workforce development and training, shovel-ready and real estate offerings, and tourism recovery. 

For Snell, the ability to recruit companies is a reflection of market competitiveness, making it an important area of focus. 

“If we’re proficient recruiting companies, it means the entire business community is competitive with other markets,” said Snell. “I like to look at it as an analogy of playing hockey, through this process we want to make sure that we’re not just hitting where the hockey puck is, but we’re skating to where we anticipate it will be.”

Two-thirds of site selectors surveyed by Sun Corridor, said COVID-19 considerations like population density, the community’s pandemic response, the workforce’s digital and technical skills, remote work incentives and access to a community affect their decision to locate. 

According to Snell, one of Southern Arizona’s biggest strengths is its ability to address the international supply chain changes brought on by the pandemic as companies faced problems in the supply chain with China slowed down. He said Southern Arizona is geographically in a good spot where goods and services move through the area and could capture distribution and logistics jobs. Further, the region has a “talent pipeline” with nationally recognized universities like the University of Arizona and Arizona State University, as well as a strong community college system. 

However, the region faces challenges with the perception of the region’s business climate, as site selectors surveyed provided moderate ratings and indicated lack of knowledge of the region, recognizing Phoenix, but not Tucson. 

In order to address these challenges, Snell said they reevaluated the targeted industries previously identified 15 years ago. Travel and hospitality took a toll due to the pandemic and sectors like transportation and logistics, and bioscience innovation experienced growth. 

Further, the plan stated a need to prioritize roads and infrastructure, as site selectors frequently cite it as a critical area of focus. According to the Playbook, good road conditions means having the infrastructure to handle demand and improving its people-moving capability,  but also aesthetically enhancing the roads to add more appeal to Tucson. 

“We’ve got to come together and make that a high priority because these logistics companies, they need healthy roads to move product and people,” said Snell. 

Over the last couple of years, Arizona has done well, said Snell, but now “we’ve been a victim of our own success.” 

The demand for industrial space continues despite the pandemic, with Sun Corridor reporting an increase in new project leads. According to the plan, industrial facilities make up 82% of new project real estate requirements in the inquiries Sun Corridor received. However, Arizona faces a shortage of buildings 100,000 square feet and above and the few industrial spaces 200,000 square feet still available have limitations, requiring significant development to meet potential user requirements. 

Snell suggests encouraging greater development in the community to invest in Tucson and build more spec buildings. The plan also suggests recruiting  private developers and investors to invest in properties in the same way companies are recruited to locate to the area. 

Due to the pandemic, companies should also adjust how they approach incentives to the new landscape. 

“We’ve been operating on a really old model for about 40 years of dealing with incentives for primary companies. We’ve got to take into account going forward the remote worker, the technical worker. Do they need daycare? So we need to really rehaul the whole system,” said Snell.  

Talent recruitment and workforce development crucial to future 

The Steering Committee also identified talent recruitment and retention as a critical area of focus for Southern Arizona. In the site selection process, having readily available talent, meaning and available workforce, is the number one factor, said Chief Human Resources Officer at TMC HealthCare Alex Horvath. 

The second factor is the ability for individuals to grow and provide talent, while third is ensuring that a pipeline of talent exists to create an abundance of people with the right skills and training into the future, said Horvath.

After a year of  Zoom calls and remote work, the workforce’s work considerations have changed. In their 2020 Talent Wars Report, Development Counsellors International (DCI), a place branding firm, found 75% of respondents surveyed said they would prefer to either work from home full-time or at least some of the time. They also reported 82% of workers said they would be willing to undergo additional training or education to shift career paths. Talent also seeks out companies and jobs that value inclusion and diversity, rating the importance of diversity policies in a company 7 out 10. 

“They will decide where they want to work, where they want to live, where they want to play and they’re able, then, to make that work for a community,” said Horvath. 

While Tucson and Southern Arizona are poised to make a post-pandemic recovery due to the region’s attributes, Horvath recommends promoting the wide open spaces, quality of life and relatively low cost of living that attract talent. As part of the plan, Sun Corridor created ThriveInTucson.com, a “one-stop shop” of Tucson’s resources and information to promote the region’s best attributes to talent. Horvath said they are also focusing on dual-career couples, because “it’s important for us when one individual has a role here, for the second to be able to also accomplish the same.”

Beyond recruiting talent, the Steering Committee highlighted the importance of workforce development and training, which was important pre-pandemic and even more so after. 

“What the pandemic has done is exacerbated and accelerated the need around workforce development,” said Pima Community College CEO Lee Lambert. “It’s really about equipping people with the right skills for the right opportunities that are out there in our community. So you have a lot of opportunities in the community, but we don’t have that strategic plan that starts to transition folks from an old world into the new world.”

Prior to the pandemic, governments and institutions explored the impact of industry 4.0, the current trend of automation through innovations in mobile technology, the cloud, artificial intelligence and the internet of things. Those technological changes are predicted to cause a displacement or disruption of workers. If automation adoption is rapid, about one-third of American workers may need to change occupations and acquire new skills by 2030, according to the Pivot Playbook. 

Research conducted by the University of Arizona reported that 42.5% of all jobs in Pima County are at risk for being disrupted or displaced by automation over the next decade. Further, the jobs most at risk of automation were the same jobs with a concentration of low-wage workers most impacted by the pandemic. 

Lambert said this trend is a driver for the need to address the skill gap through upskilling or reskilling. The community’s skill gap is a mismatch in the skills required by a job and the skills of the workforce, which could be addressed through upskilling, teaching new skills for the talent’s current position or reskilling, preparing workers for a new role. 

According to the National Skills Coalition Skills Mismatch Analysis, Arizona has more workers with a high-school equivalency alone at 22% than the 17% required in the labor market. In Arizona, almost half of Arizonans between the ages of 25 and 64 hold a postsecondary degree with disparities in education for Hispanics, Black/African Americans and Native Americans, according to Achieve60AZ. 

In order to address these challenges, the plan supports the establishment of a regional version of the Technology and Innovation Workforce Development Fund, recommended by the Arizona Reskilling and Recovery Network. They suggest the fund could be established through the county and municipality budgets, business and industry sponsorship or a combination of these and more. 

Lambert said providing and upscaling micro-pathways or stackable credentials is another key recommendation. 

“We’re all accustomed to thinking about going off to college and going on to get a degree, but when you start thinking about it from a workforce development perspective you realize it’s not just about getting a degree. It’s really about getting the skills,” said Lambert. 

He also suggests working with their K-12 partners to strengthen and expand on career technical education, especially in high schools, and increasing work-based learning and apprenticeship opportunities “so that you’re actually going from your theory to actually being able to apply that theory, you know, in a practical way.” 

Larger facilities needed 

Aside from workforce development, the region faces a challenge in providing facilities for new project leads. Manufacturing facilities make up 65% new project real estate requirements, but companies face barriers when moving into the region, because of statewide shortage of facilities with 200,000 or more square feet and limitations of existing facilities. 

When looking for locations for companies, Pima County Administrator Chuck Huckelberry said they first look at who owns the land and then identify constraints, like military protection zones, floodplains or areas where they would like to preserve and protect the environment. The plan highlights the need for more shovel-ready inventory of 50 acres or more in the market.  

“You have to have all the components of infrastructure to make a property really shovel ready, which means you can have a road to it, you can have a sewer to it, even have the electric utility, but if you don’t have the water, it’s not shovel ready,” said Huckelberry. “The companies that relocate here or expand here, really want to be in business no later than 18 to 24 months after they make a decision. So it’s really important that we have all of those components of infrastructure in, to make the land available for their purposes.”

After offering a good inventory of shovel-ready land for new or expanding companies, Huckelberry said the region needs to identify gaps that would prohibit the use of shovel-ready land, like access to transportation, and invest to fill those gaps. 

Once they have closed the gaps, Sun Corridor would then market the shovel-ready sites to new or existing companies. 

Finally, the Pivot Playbook plans to address tourism recovery after the pandemic devastated the region’s travel and tourism industry. 

Visit Tucson President Brent DeRaad reported about an 80% drop in overall tourism and travel, for the first few months, but it levelled off at around a 40% to 50% drop off. He said the drop amounts to a loss of about 3 million visitors overnight, with direct visitor spending down by about a billion dollars. 

At the heart of addressing these losses, DeRaad said, “How do we make a better Tucson, each and every day? I think that’s really the umbrella under which our recommendations fall.”

The goal is to return to 2019 figures, what DeRaad calls “the pinnacle of tourism in Tucson” at $2.6 billion in direct travel spending. 

DeRaad said reopening businesses and helping businesses reopen as the city and county have done by allocating federal funds is part of addressing the challenge of tourism recovery. Additionally as businesses reopen, he said they need to look at how to get employees to return and work with the community to address those issues. 

The plan recommends not only reopening businesses, but also the borders between Mexico and Canada to bring back visitors. 

“You’ve still been able to fly back and forth between the countries but it’s really just been kind of looked at as non essential travel,” said DeRaad. “Well for us it’s essential and we need to make sure that we get those leisure travelers coming back.”

In order to increase flights, DeRaad encouraged people in the community to fly out of Tucson International Airport, which lost about 95% of its commercial air service due to cancellations. In 2021, they report air service and passenger recovery levels at about 45% of 2019 levels, with around 3,600 travelers per day, as opposed to some days last year where passenger activity was fewer than 1,000 travelers per day.

He also suggests supporting travel and tourism marketing and the report recommends increased vaccinations to reach herd immunity by 2021 for the tourism industry’s recovery. 

The next steps from the strategic plan would be its implementation in order to address those areas of focus. 

“We have our work cut out for us, but we now have a plan,” said DeRaad. “We’re going to work together to do that as a community and as a region, and I think great days are ahead for Tucson.”

President of Raytheon Missiles and Defense Wesley Kremer said the region has an opportunity to make a great comeback.

“The pivot playbook is an unprecedented effort for an unprecedented time,” Kremer said. “The COVID-19 pandemic affected all of us. Lives were lost. Jobs were lost. Some families will never be the same. But with every difficult time comes opportunity and Southern Arizona has an opportunity that can change our community for the better, for years to come.”