2017 DEMA PREPAREDNESS SYMPOSIUM

ECONOMIC RECOVERYHow can we recover our economic base following a crisis and how can you support the community?

DISCUSSION LEADERS

Alan MaguirePresidentThe Maguire Company• Chief Deputy, Office of the State Treasurer• Economic Advisor to the Arizona State Senate

• President, Arizona Economic Forum• Board of Directors, Greater Phoenix Chamber of Commerce

Ken BurnsChief Financial OfficerArizona Commerce Authority

Jim RoundsPresidentRounds Consulting Group• Senior Economist & Budget Analyst, Arizona State Joint Legislative Budget Committee• Senior Vice President, Elliott D. Pollack & Company

• Board of Directors, Arizona Association of Economic Developers

Agenda

• What Makes an Economy Tick?• What are the risks in Arizona?• DISCUSSION

• Risks, Recovery, Preparedness, and Resources• Summarize & Feedback• Adjourn

What Makes an Economy Tick?a.k.a. Where is the Risk?

Fundamentals:

• What makes the economy tick?• Thus, what can be damaged?

ROUNDS CONSULTING GROUP

How a Dollar Moves:

• Value is added through the production process.

• A dollar is imported through outside sales activity. LT

• The dollar is spent within the local economy. ST

• Eventually leakage stops the process.

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The health of an economy is a function of its export, or

“base” industries.Long Term Damage Issue

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Without base industries, there is no means of supporting the

local market employees.

Short Term Damage Issue

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Base Industries:

• Manufacturing• Tourism• Advanced Business Services• Federal Government• Retirement• Others

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Why do ghost towns exist?

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Base industries also tend to be more capital intensive and utilize more skilled labor (&

distribution).

(exceptions exist – tourism)

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In general, the larger urban communities will produce greater multipliers than the smaller rural areas.

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Example:

Within Arizona, the employment multiplier for truck

transportation activities is 2.2 in Maricopa County but is only 1.7 in Apache County. Why? Risk?

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Average Annual Wages v. Multiplier Effects

Industry

Average Annual Wages

Job Multiplier

Base IndustriesComputer & other electronic equipment $111,524 3.2Chemical manufacturing $105,340 4.7Federal government $78,820 1.6Machinery manufacturing $69,197 2.7Advanced business services $69,539 2.1

Local IndustriesEducational services $33,643 1.4Health care $33,491 1.4Retail sales stores $29,381 1.4Real estate $26,451 1.8

Source: Implan 2009ROUNDS CONSULTING GROUP

What inputs drive the economy and can be damaged?

www.roundsconsulting.comROUNDS CONSULTING GROUP

Businesses Need Stuff…

• Quality workforce,• Quality roads,• Competitive costs,• Consistent government,• etc. etc. etc.

www.roundsconsulting.comROUNDS CONSULTING GROUP

People need stuff…

• Jobs,• Amenities,• Affordable housing,• Available financing,• Better balance sheets,• etc. etc. etc.

ROUNDS CONSULTING GROUP www.roundsconsulting.com

• Tax Rates?• Econ Development Programs?• Workforce (quality/avail/cost)?• Transportation Infrastructure?• Balanced Budget?• Marketing?• Other Things?

www.roundsconsulting.com

What Matters? Interrelated…

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Again:Why do ghost towns

exist?

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What are the risks in Arizona?

Natural Disasters

• Damaging Winds – Haboobs• Micro-Boost• Extreme Heat• Floods and Flash Floods• Lightning Storms• Wildfires• Earthquakes

Man-Made Disasters

• Nuclear Power Plant• Airplane Crash• Explosions• Power Outage• Terrorist Attack• Civil Unrest• Cyber Attack

DISCUSSIONRisks, Recovery, Preparedness, and Resources

Discussion Overview• What are the top five essentials for your Business’ Continuity?• How are each of these essentials effected by different emergencies / crisis?• Who / what can you rely on to supply (backup) each of your top essentials

for Business Continuity?• What physical alternatives do you have, if your operation’s location is

unreachable or completely inoperative?• What are the impacts of your business not operating?• How can your business assist other businesses in the area to continue to

operate / recover? Individuals?• What resources are you aware of to assist your business following a crisis /

disaster?

What are the top five essentials for your Business’ Continuity?

What can you absolutely NOT operate without?

Are there things you can do without for 1 day, 3 days, 1 week, 2 weeks?, but not longer?

How are each of these essentials affected by different emergencies / crisis?

Consider fire, flood, wind damage, cyber attack, other.Consider urban, suburban or rural locations.

Who / what can you rely on to supply (backup) each of your top essentials for Business Continuity?

Which essentials can / have you prepared for in advance?

Which essentials do you have an alternative source? If so, what is the source?

What physical alternatives do you have, if your operation’s location is unreachable or completely inoperative?

Can your business operate remotely? For ALL functions? Some functions? Not at all?

Consider access to Suppliers, Customers, Employees.

What are the impacts of your business not operating?

Consider Customers, Suppliers, Employees, Others.

How can your business assist other businesses in the area to continue to operate / recover? Individuals?

What resources are you aware of to assist your business following a crisis / disaster?

Consider Local, State, Federal, Public and Private.

Resources for Developing Recovery Strategies

https://www.ready.gov/business/implementation/continuity

https://www.ready.gov/business-continuity-planning-suite

https://www.drii.org/educationProfessional Practices for Business Continuity ProfessionalsDRI International (non-profit business continuity education and certification body)

Summarize & Feedback

Thank You!Alan Maguire

The Maguire Companywww.AEMaguire.com

Jim RoundsRounds Consulting Group

www.roundsconsulting.com

Ken BurnsArizona Commerce Authority

www.azcommerce.com