In the not-so-distant past, Arizona’s economy was driven by growth – population growth and the construction industry that served it.
Arizona’s economy is still driven by growth, but in 2021, growth is defined differently. Growth means semiconductors. It means electric and automated vehicles. It means advanced manufacturing. Artificial intelligence. Quantum computing. Cybersecurity. Aerospace and defense. Photonics. Biopharma, MedTech and other advanced industries.
The state is outperforming the country when it comes to workforce, employment, manufacturing jobs, population growth and wage growth. It’s a Top 10 state for economic momentum, tech jobs added in the past year, and jobs recovered during the pandemic.
Arizona’s tech manufacturing posted the third-fastest growth rate in the nation in 2020. CompTIA’s Cyberstates 2021 projects 20 percent growth in Arizona tech jobs through 2030. Total manufacturing exports grew by $2.1 billion to a record high $24.7 billion in 2019.
“Today, our economy is diversified across high-tech industries, with more jobs in manufacturing than construction,” says Sandra Watson, president and CEO of the Arizona Commerce Authority (ACA). “Our start-up ecosystem is attracting global attention. And our state is not only competing at the highest level for economic development projects – and we’re seeing continued success.”
For instance, Taiwan Semiconductor Manufacturing Company (TSMC) is building a $12 billion fab in Phoenix that will use the company’s advanced 5-nanometer production technology to produce up to 20,000 semiconductors a month. TSMC’s new facility will create 1,600 permanent high-tech jobs, while supporting thousands of additional indirect jobs.
Arizona is also home to Intel’s largest manufacturing site. In March 2021, the company announced it would invest an additional $20 billion into the state with two new semiconductor fabs, adding 3,000 new high-tech jobs and bringing Intel’s total Arizona employees to 16,000.
“We are setting a course for a new era of innovation and product leadership at Intel,” CEO Pat Gelsinger said in announcing the Arizona expansion. These historic announcements, along with Arizona’s already sizeable semiconductor industry, prompted Forbes to dub Arizona “U.S. Semiconductor Central,” highlighting the state’s position as the epicenter of national efforts to expand chip manufacturing capacity. But it’s not just Intel and TSMC. Microchip, ON Semiconductor, NXP, Qualcomm, Broadcom Benchmark Electronics also contribute to the state’s semiconductor industry, which currently employs more than 22,000 people in Arizona, ranked Top 5 in the country.
“Arizona has proven to be an excellent location for Benchmark to grow and thrive,” Benchmark CEO Jeff Benck said after the company moved its headquarters from Angleton, Texas to Tempe in 2017, and built a new advanced manufacturing facility there. The move added another chapter to Arizona’s long history of semiconductor production, which began in the 1950s at Motorola’s research and development lab in Phoenix. The accumulated expertise in industries like semiconductors and aerospace and defense have spawned newer advanced industries, like electric vehicle manufacturing. Already, Arizona is being hailed as “a modern-day salon of EV innovators.”
ElectraMeccanica, a Canadian company, is the newest member of Arizona’s EV ecosystem. The state emerged as the top choice in a comprehensive national search for sites that matched the electric-vehicle maker’s technical and workforce criteria. CEO Paul Rivera said Arizona had the “best overall comprehensive proposal – land, building, workforce and incentives.”
“This decision is monumental for our business and will be transformative for our host city and state,” Rivera said when announcing the U.S.-based operations. The $33 million plant will be designed to produce up to 20,000 units annually of the company’s flagship three-wheel, single-occupant SOLO EV.
Other large-scale EV projects include:
- Lucid Motors’ 1 million-square-foot plant in Casa Grande, which is the first factory in the U.S. built from the ground up for the purpose of making electric vehicles;
- Nikola’s manufacturing facility near Coolidge, where it will manufacture hydrogen- and electric-powered semi-trucks;
- And Mesa-based start-up Altis Motor Vehicles’ development of an EV pickup that features a 500-mile range and a battery that recharges in less than 15 minutes.
Advanced suppliers such as UACJ Whitehall, and EV auto parts makers, and Li-Cycle, a lithium battery recycler, have also made their way to the Grand Canyon state, with more expected to seek out Arizona’s strategic geographic location adjacent to some of the world’s largest economies and customer bases in the West, along with Mexico’s auto sector to the south.
As one of the youngest and fastest-growing states in the nation, Arizona’s innovative mindset underscores its reputation as a hub for tech-enabled transformations. For example, Microsoft in June 2021 completed its newest, world-class sustainable data center region called West US 3. Located in the West Valley region of Greater Phoenix, the three campus locations now run the company’s Azure applications, serving the growing demand for cloud services across Arizona and the Western United States. Arizona’s abundant solar energy, highly skilled workforce, proximity to customers and availability of land were referenced by the global tech giant as top reasons why the state is a premier location for data center operations.
Each announcement is an affirmation that Arizona is getting it right – and the world is noticing its presence as a tech and advanced manufacturing hub. It’s why Moov Technologies, the first real-time interactive platform for buying and selling manufacturing equipment, left its San Francisco birthplace for Arizona. Moov CEO Steven Zhou chose Arizona for its “proximity to manufacturing growth” over California’s “historical resonance.”
Many of these recent business announcements carry a common theme: This state is a great place to do business.
Company principals mention the innovative thinking and willingness to embrace new ideas exhibited by Gov. Doug Ducey, the ACA and local leaders, the availability of talent, reasonable land prices, and the state’s high quality of life. The ACA, in addition to leading recruitment efforts, has an extensive toolbox to support entrepreneurs and startups. “This is a state where we have an ‘open for business’ sign,” Ducey says.
Executives welcome being part of a supportive business ecosystem where entrepreneurs and leaders of large companies mix easily and find ready support from colleagues.
Arizona’s modern infrastructure is another selling point. Electricity is reliable and affordable. Proximity to Mexico shortens supply chains. And natural disasters? The risk is incredibly low.
Talent is plentiful: Arizona State University, the University of Arizona and Northern Arizona University are leading research institutions that produce STEM graduates ready to step into high-level jobs.
In addition, the Arizona Commerce Authority partners with community colleges, universities, industry leaders, nonprofit organizations and more to create a robust pipeline of skilled talent. For instance, the ACA, Intel and Maricopa County Community Colleges collaborated to create the nation’s first artificial intelligence and machine learning associate degree.
Other examples of how Arizona prepares a workforce for the jobs of the future include:
- The Arizona Advanced Technology Network represents a unified, industry-recognized curriculum taught throughout the state to prepare students for high-tech jobs.
- Drive48, a state-of-the-art advanced manufacturing training facility in Coolidge, prepares students for work in advanced fields such as automotive, advanced manufacturing, heavy equipment and general industry.
- A public-private foundation, Science Foundation Arizona, seeks to diversify Arizona’s economy by linking industry needs with university research to ensure the education system creates a 21st century workforce.
Indeed, Arizona is celebrating growth across a diverse ecosystem of high-tech industries. And as an example of how much the state has transformed in recent years, today, Arizona has more jobs in manufacturing than construction. With opportunities abounding, Arizona’s future is truly brighter than ever.
