Washington study: State's development picture looks bleak

Alaska is awarded Ds for performance, business vitality, development capacity

Posted: Wednesday, December 15, 2004

FAIRBANKS - Alaska's economic development prognosis is close to flunking, according to an annual report card produced by a Washington D.C.-based organization.

In its 2004 Development Report Card for the States, the nonprofit Center for Enterprise Development gave Alaska straight Ds and called the state's economic development picture a "mix of the superlative and the dismal."

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For more, go to www.cfed.org

It's the fourth straight year that Alaska has earned below-average marks on the survey produced by the organization, which describes itself as a group committed to expanding economic opportunity to all people. This year's Ds came in the overall categories of performance, business vitality and development capacity.

State economist Neal Fried, who was not familiar with the report card, said economic surveys of the states are common but that not all of them are useful in gauging Alaska's performance.

Surveys that compare or rank the states, which the CFED report does, can often be misleading for Alaska, given the state's geographic size and comparatively small population, he said.

"It all depends on what kind of weights they are using, what those ingredients are," said Fried.

Generally, reports that compare a single factor -such as job earnings - prove the most useful, he said.

The CFED report bases its grades on a host of factors separated into categories ranging from earnings and job quality to environmental and health areas.

"Our hope in providing this report card is really just to provide a starting point, get people talking about these issues," said Lillian Woo, a CFED senior program analyst.

Factors in which Alaska earned the poorest marks included federal Small Business Innovative Research grants, toxic releases, per capita energy consumption, cost of energy, electronic public services, job growth due to new business, unemployment rate, patents issued, recycling rate, industrial diversity, greenhouse gas emissions, mass layoffs and disparity between rural and urban areas.

While low marks in those categories don't bode well for Alaska's future, the state also shows plenty of positive signs, noted the report's authors.

"The study notes that the state's investment in human capital, including its public schools and universities, positions it well for the future," the group said.

Alaska led the nation in loans to small businesses, households with computers and low incidence of heart disease. Other positive marks came in high school completion rate, high school attainment, university research and development, vehicle miles traveled, voting rate, short-term employment growth, manufacturing investment, working poor, poverty rate and income distribution.

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