Opportunities for the Eastern Oklahoma County Corridor

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Opportunities for the Eastern Oklahoma County Corridor

Bart Binning, Ed.D.

 

In this post-election time, we should consider re-evaluating state goals and how state resources are dedicated to achieving those goals.  It is suggested that we not just throw money at problems (as we did earlier this year), but that we systematically think about where we want to be in the future, and how we get there.  While the Oklahoma economy has been diversifying away from the oil industry for years, it has not done as well a job at diversification as surrounding states.  It is arguable that of the reasons for our lack of diversification, one can identify at least three major reasons:

 

1. Labor – according to a recent Bureau of Labor Statistics report, there are currently 400,000 open manufacturing positions in the country. While Oklahoma’s low unemployment makes it difficult to fill open jobs, our education system’s lack of ability to produce students with the skills needed by the business sector makes the job even more difficult. When a company is looking to open or relocate a new facility, they need to know that the positions can be filled. To the extent that education levels drives productivity and growth, Oklahoma lags in this area with only 25.2% of our adult population having a bachelor’s degree or higher (national average is 32.6%.)  This is especially true with manufacturing, one of the low hanging fruits in Oklahoma’s attempt to diversify its economy.   Yet, the new manufacturing paradigm is tech oriented, and these new manufacturing jobs should be of interest to millennials, our most technology savvy generation.

 

2. Technology – ranging from artificial intelligence to robotics and 3-D printing, does not seem to be a focus of either education or business in this state. It is estimated that about 80% of businesses processes, including formerly labor-intensive manufacturing, will have significant technology advancement in the next few years. Oklahoma lags behind in:

  • R&D spending – about 0.7% of the state’s GDB is spent on R&D compared to a national average of 2.9%.
  • Technology Transfer – the ability to convert research into intellectual property; none of Oklahoma’s research universities rank in the top 100 for technology transfer.
  • Venture Capital – spending and other early-state financing is essential to maintaining a high-tech ecosystem, which is a key to prosperity – we have seen our venture capital market almost disappear, shrinking from 10% per year ($6.1 million in 1995) to just $600,000 in 2017
  • High Speed Internet Access – about 10% of our population, particularly in the western part of the state, lack high speed access, compared to a 3.4% national average.

Those businesses not using technology to their advantage will inevitably fall behind.  The urban rural technology divide (ex., lack of high-speed internet in many rural areas of the state) make it unclear wither we are matriculating our children with the technology skills to survive in tomorrow’s world. One reason this is important: 3-D printing (making a solid object from a digital file) is a form of robotics that is poised to be the next disruptor in the economy; a digital blueprint can be created anywhere in the world and sent to a 3-D printing manufacturing facility close to its ultimate destination, disrupting both manufacturing and logistics, and adding a technology component to the most menial jobs.

 

3. Infrastructure – On the consumer side, e-commerce has transformed logistics and distribution as they promise next-day deliveries to consumers. Amazon is helping disrupt this segment of the industry by building regional distribution buildings and fulfillment centers to replace traditional warehouses.  A problem we have with attracting large employers to the metro is that we have very few large shovel ready sites in the 100 to 2,000-acre range.  Aside from Oklahoma City’s Airport Trust, where Amazon is currently constructing their fulfillment center, it appears we have only one or two parcels in the 80-acre range, and virtually no areas that would be classified as an industrial park.  Companies tend to prefer shovel ready sites for construction of large projects to avoid the issues with assembling, rezoning, and infrastructure development, which may take several years to accomplish.  These companies, once a decision to build is made, would prefer to be under construction in a few months rather than the several years that would be required without appropriate shovel ready sites.

 

It is arguable that the result of these three (and other) deficiencies is that Oklahoma lacks high paying jobs.  In terms of productivity, that national per job GDP average in large metro areas was $145,000, with the average Tulsa/OKC average being $125,000.  Additionally, our average job growth is about 30% less than the national average.

 

So, what can we do about the situation?

 

It would appear that a once in a lifetime opportunity presents itself with the construction of the Eastern Oklahoma County Corridor.  Currently under construction, the Corridor ( https://www.drivingforwardok.com/northeast-ok-county-loop ) is a 21 mile turnpike connecting I44 and I40, roughly paralleling Luther Road, expected to be completed by 2020.   The Corridor passes through Luther and Harrah, along with portions of Oklahoma County in the center of the turnpike and Oklahoma City at the intersections with the other interstates.  The largest single landowner in the area is the Oklahoma School Land Trust along I40.

The Corridor travels through one of the least densely populated sections of the county, and its construction provides a unique opportunity for an industrial park development in the metro.  Because population density is so low in this area, the “not in my backyard” syndrome will be less of a deterrent to creating large industrial parks, like what already exist at the Ardmore Airpark, Port of Catosa, or the Perry Industrial Parks.

 

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