This piece from TWW’s Jaime Molera first ran in the Arizona Capitol Times on November 29, 2023 and can be accessed here.
Arizona’s pro-business climate is a magnet for clean energy investment, but won’t last without skilled workers
Jaime A. Molera
Arizona has a strong track record of attracting new business investment and job creation across a host of economic sectors, including aerospace, bioscience, financial services and technology. Moreover, the state’s commitment to low taxes, reasonable limits on business regulation and an affordable cost of living is also a magnet for investment dollars from another industry – clean energy.
But this will only last if Arizona can maintain the skilled workforce needed to translate investment dollars into actual working businesses.
To better understand this trend, The Western Way commissioned an economic analysis on 11 different manufacturing and facility expansion projects in the clean energy sector in various stages of development across the state of Arizona.
While not an exhaustive study the analysis demonstrates that Arizona is already a major destination for clean energy investment. Not only that, but these investments strengthen our economy through job creation and income growth.
During the construction phase, those clean energy investments are expected to create 87,000 jobs in the building industry. With average salaries of around $55,000 per year, those construction jobs will add more than $4.8 billion in labor income to the state economy annually.
During the operations phase, more than 22,000 jobs are expected to be created with average salaries of $60,000 per year – adding more than $1.3 billion in labor income to Arizona’s economy.
These figures aren’t just good news for our state. They also reflect a rising trend following the Covid pandemic: U.S. businesses and consumers are seriously rethinking the reliability of overseas supply chains and showing a strong preference towards products made here in the United States.
“Covid highlighted how shipping costs and shipping availability can shift tremendously depending on what’s happening on the global stage,” Peter Gibson, VP of Sales and Marketing, LG Energy Solution Vertech, said during the summer. “We genuinely believe the North American market, especially the U.S. market, to be the world’s largest and fastest-growing market for grid-scale batteries.”
The energy sector is part of this economy-wide trend, and the push to build more batteries, solar panels and other energy technologies domestically is clearly a major economic opportunity for Arizona. But to fully capitalize on this trend, Arizona leaders in business and government need to make sure that we have workers with the skills to actually perform these jobs.
Last year, a coalition of business groups – the Greater Phoenix Chamber, the Arizona Chamber of Commerce and Industry, the Northern Arizona Leadership Alliance and the Southern Arizona Leadership Council – predicted a shortfall of more than 26,000 bachelor’s degrees between now and 2030, meaning that number of jobs “will not develop or go unfilled.”
“Arizona has an opportunity to become a national hub of technology, research and innovation,” the coalition said in its report. “However, unless our state meets the workforce challenges inherent in these growing industries, Arizona’s potential will be severely constrained by labor shortages.”
To prevent such a shortage, leaders in the private and public sectors should work together to expand programs like ElevateEDAZ, a program of the Greater Phoenix Chamber Foundation (where I serve as Chairman).
ElevateEDAZ partners with K-12 schools and school districts to build pathways for students to jobs in high-demand industries through career and technical training programs. Many different strategies are used, including career-focused training courses, internships, job shadows and real-time industry feedback to ensure that the skills being taught are keeping up with workforce trends.
Jobs in the technology sector are a major focus, but so are other high demand careers in other sectors, such as healthcare, construction, education and public safety.
“If the supply of skilled workers is not maintained, the state and region will continue to grow, but with lower quality jobs,” the Greater Phoenix Chamber cautioned earlier this year. “The remaining question is whether or not leaders will continue to aggressively advance the economy with an emphasis on workforce development.”
This is clearly the top priority of forward-thinking Arizona business leaders. It’s time that state and local business leaders showed the same resolve.
Jaime A. Molera is former Arizona state school superintendent, partner of Molera Alvarez, and the Arizona director for The Western Way, a nonprofit organization that builds support for market-driven solutions to environmental challenges.