Winston Churchill once referred to the resource-intensive land of India as "the jewel in the crown of the British Empire." Today, I propose that Alaska -- with its vast wealth of natural resources -- is the crown jewel of America, standing ready to take its place as a primary driver of economic growth in the Arctic region. This prosperous vision for Alaska can only happen if the state fosters an environment conducive to growth, including the advancement of home-grown research and development activities.
As a recent visitor to and fond admirer of the great state of Alaska, I write this column to encourage support for House Bill 118, which provides tax credits for qualified R&D projects in the state. The legislation is part of a series of initiatives proposed by Gov. Sean Parnell to help boost economic development in the state. Expanding Alaska's R&D capabilities is an important step toward increasing private-sector investment, economic diversification and entrepreneurial innovation.
Earlier this month, I had the honor of speaking to the Alaska World Affairs Council in Anchorage and I talked at length about the wealth of resources and investment opportunities in the state. However, what really seemed to resonate with the audience was a frank discussion of Alaska's deficiencies in R&D, patent awards and science/engineering education.
R&D spending as a percent of the state's total economic output is almost zero – 0.7 percent compared to an average of 2.6 percent for the U.S. overall. The number of patents awarded per 1,000 individuals is about 10 percent of the overall U.S. average. And the percent of graduate students preparing for science and engineering careers (per 1,000 individuals) is similarly far smaller than the rest of the United States.
These are critical issues that must be addressed as Alaska's economy evolves from a dependence on natural resource extraction to a more dynamic, faster-growing base of industries, including technology, health care and transportation.
Throughout its storied history, Alaska has benefited greatly from its natural resources. Now is the time to encourage, develop and invest in the state's human capital by fostering private-sector R&D -- establishing the technical expertise and manpower that will be crucial to the state's economic future.
You may recall the Guggenheim family also has a storied history in Alaska, building the Kennecott Copper Mine and the trans-Alaska railway, as well as other major infrastructure projects. The Guggenheims helped to build a foundation for the state to grow. You should expect, encourage and incentivize the same approach from private companies doing business in Alaska today.
I urge the people of Alaska and the leaders of the state legislature to support the passage of House Bill 118.
Scott Minerd is the Chief Investment Officer and a Managing Partner of Guggenheim Partners, LLC, a privately held global financial services firm with more than $125 billion of assets under management.
The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch. Alaska Dispatch welcomes a broad range of viewpoints. To submit a piece for consideration, e-mail commentary(at)alaskadispatch.com.