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Walton College

The Sam M. Walton College of Business

Episode 96: Ross DeVol Explains the Nwa Economic Recovery Strategy and the Vision of Heartland Forward

November 04, 2020  |  By Matt Waller

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Ross DeVol is the CEO and president of Heartland ForwaRoss DeVol, a company with a goal of promoting regional innovation and entrepreneurial ecosystems that foster job creation, wage gains, and economic growth for the American Heartland. He is the former Chief Research Officer for the Milken Institute, an economic think tank headquartered in California. DeVol has been influential in authoring the Northwest Arkansas Economic Recovery Strategy, a report that will assist the region in recovery post-COVID-19. This 100-page report contains a detailed analysis of the NWA region’s strengths, challenges, and opportunities.

Download the NWA Economic Recovery Strategy report.

Episode Transcript


00:05 Matt Waller: Hi, I'm Matt Waller, Dean of the Sam M. Walton College of Business. Welcome to Be EPIC, the podcast where we explore excellence, professionalism, innovation and collegiality, and what those values mean in business education and your life today.

00:26 Matt Waller: I have with me today, Ross DeVol, President and CEO of Heartland ForwaRoss DeVol. He just put out a report that we're gonna be talking about that's really interesting and relevant to today. He was with the Milken Institute for about 20 years, he was the Chief Research Officer, and prior to that, he was Senior Vice President Regional Economics with the Wharton Econometric Forecasting Associates. And Ross, thank you so much for taking time to visit with me today about your report, the Northwest Arkansas Economic Recovery Strategy.

01:12 Ross DeVol: Well, Matt, I welcome the opportunity to join you and your listeners, and maybe we can even prod a few more listeners in the future.

01:21 Matt Waller: Absolutely, absolutely. Ross, this is a really comprehensive report, it's a 100-page report, and it's full of really interesting, what you call, big ideas, but for each big idea you've got strategies for actually bringing them to reality. And the authors of this... Of course, you're the author, but you've got some co-authors that are quite well-known, Rich Florida, who is the founder of Creative Class Group and a well-known author. But it looks to me like you have... A lot of people have their fingerprints on this.

02:08 Ross DeVol: Matt it's true, a lot of people do have their fingerprints on it. I think one thing that's really interesting is how it all came together. So this essentially resulted from Mike Malone and a few other people, Mike of Runway, former head of the Northwest Arkansas Council, asking me to convene a group of thought leaders in how COVID-19 changes urban, rural and in between America. What are the things that are gonna happen? And so I reached out to Rich Florida, and Joel Kotkin, and a few others. And it eventually evolved into, "Well, what can Northwest Arkansas do to improve its competitive position coming out of COVID-19?" And so that was kind of the background behind it, and it was kind of a serendipity in the sense that Rich Florida wrote the Creative Class, just probably, what? 17, 18 years ago now. And I, in my work was one of the three Ts, talent, technology and tolerance, and he largely based the technology off of some of the work that I had done in America's high-tech economy and high-tech cluster.

03:24 Ross DeVol: So, we'd engaged many times over the years, but this was the first time that we all came together to work on a project at the same time. So Rich and I had worked on projects previously together, Joel and I had, and Rich and Joel had, but all three of us had never worked on the same project at the same time, and then of course, we brought in some of our other collaborators on it. But what really makes this unique, in my opinion was, there is some very detailed research that underpins it, but the whole process was geared towaRoss DeVols, "What are broad strategies with actionable items that could be implemented to change things?" And so it really blends kind of all of our different creative abilities into one document.

04:13 Matt Waller: Well you know, the whole notion of coming up with a recovery strategy is, it's a great idea. I would think that most regions don't do that.

04:26 Ross DeVol: The only region that has published anything that would be close to what we've done is Joint Venture Silicon Valley, San Jose Silicon Valley. I used to be on their advisory council, and they came out with something about a month and a half ago, and it's a nice document, I knew of the people that put it together. It's glossy, but it's a lot of platitudes without specific action items. And that's what I really emphasized that we needed to come up with, not just the big strategies, but what are the action items and who's gonna take responsibility for implementing them?

05:00 Matt Waller: Yeah. Well, I noticed that when I read the document. Now, backing up a second, we're talking about Northwest Arkansas here as a part of the Heartland, kind of the center of the Heartland in some ways, but Northwest Arkansas has got a lot going for it, as you say in your report. We're fourth in population growth, we're thiRoss DeVol in job growth, and for those of you who are listening that aren't familiar with this, Northwest Arkansas basically goes from Fayetteville to Bentonville and some surrounding areas. Many people are familiar with Bentonville because of course it's the headquarters of Walmart, the largest company in the world, but also within Northwest Arkansas, we have not only Walmart, but we've got JB Hunt, Tyson Foods, and about 1500 consumer products companies have offices here as well. So Northwest Arkansas has a lot going for it. Having the strategy for recovery is a good idea, especially if you've got a lot going for you. But before we get into that, would you mind speaking to what is meant by the Heartland? What is the Heartland?

06:22 Ross DeVol: Yeah, so Matt, there's lots of different perspectives on what the Heartland really is, so not to get too down in the weeds, but it originally pertained to Central Asia in the use of it, it was a British geographer in 1903 that started using the term about the heartland of Central Europe, Western Asia, and... And then the term eventually found its way to the United States. The earliest I found it used was in 1942 in a book referring to the American Heartland, and then in the Chicago World's Fair, right after the war, "Come to the heartland." But the idea is it's kind of the center hub, it's an ancestral home, it means that kind of the hearth and the family. And so some people might define it differently, they might find a smaller geography. To us, the Heartland is really one of the center of the country. It comprises of four census regions that all have central in their title, but it runs basically from Michigan in the North, South to Alabama, West to Texas, and North to North Dakota. Some might refer to it as Flyover country, some might say that West Virginia should be included. But West Virginia, of course, was originally part of Virginia, one of the original 13 colonies, so you can't be in the Heartland if you were one of the original 13 colonies.

08:00 Ross DeVol: So that's the definition. But for the people that live here, we're proud to call ourselves the Heartland. People on the coast sometimes refer to it as a pejorative term, kinda the substitute for Flyover country, meaning those that are not as enlightened or as intelligent as us. Well you know that's not true. One of my former colleagues in the Milken Institute, Gary Becker, University of Chicago, Nobel prize winner in economics, once told me that, "You know Ross, intelligence is evenly distributed. It's not more concentrated on the coast. Any child growing up in the Heartland has an equal opportunity to advance as anybody growing up on the coast." Right? And Gary was kind of the father of human capital. So it's a broad heartland and we're trying to focus on improving the economic performance here in the center of the country.

08:53 Matt Waller: Well, your report has a seven-point plan for post-COVID-19 recovery that goes from: One, becoming the nation's leading small region for talent; two, be the world's best small place for Arts Culture and Recreation; three, grow the economy and jobs around big anchor companies; four, bolster the region's small business and startup ecosystem; five, make inclusion and diversity a regional priority; six, put health at the center of the agenda; and seven, re-brand the market and the region. And those are some pretty major tasks for sure, but we do have momentum in all of them right now, to some degree. How did you come up with that basic plan?

09:53 Ross DeVol: When you have people who bring different aspects of creativity to try and to analyze the situation, it many times will lead you, not where you thought you originally were headed. My background, I'm very quantitative, I look at the details of such things as how you define clusters and occupational groups and technology and innovation, and Rich thinks in a similar manner, but he thinks more about the creative spark in terms of talent, that you don't necessarily need a degree to be talented, which is very true, you're dishing out the cognitive functions. And then Joel's more of a... Brings a journalist's perspective. So when you blend those together, once again, it's kind of like, you don't wanna watch the sausage being made, but when it's all done it usually is pretty interesting. So we threw a lot of things on the wall. I had some of my initial ideas that I brought to it, having moved here in the last three years and followed the region from a distance for many more, and Rich and Joel have both been here and kind of visited the area, so they were very familiar with it, and they bring different perspectives to it.

11:05 Ross DeVol: And so we kicked around some ideas, there were big macro ideas, and then we had... I don't know, at one point we had like 60 different ideas that were listed, and then we looked at grouping them, is this a talent idea, or is this a university idea around entrepreneurship? And so we kind of categorized them. Heavy focus on the arts and entertainment culture, recreation, because it's increasingly evident that that is what attracts talent and retains it, that's kind of Rich Florida's Creative Class perspective, and I've talked about it too. But then we organized them and came up with... They were kind of around seven big ideas. There's some overlap, you'll see diversity, equity inclusion is embedded throughout the different areas, as well as the university because the University of Arkansas is gonna play a key role in virtually every one of these areas.

12:05 Matt Waller: So Ross, of course, the university plays a role in each of these areas, not the complete role but at least some role in each of these areas. You know the first one, become the nation's leading small region for talent, that's clearly an important one for the university to be thinking about. What is the key spirit behind that, Ross?

12:34 Ross DeVol: So one we proposed, Matt, a, what we call a talent Moonshot Initiative, which would look at bringing some of the best and brightest, so a kind of a MacArthur genius style awaRoss DeVol to Northwest Arkansas. Well, many of them would be researchers and academics who might not have thought about looking to the Heartland or the University of Arkansas in particular, but due to COVID-19, the challenges of density on the coast, high housing prices, that becomes an opportunity for us. So that was one of the ways that we suggested doing so. Maybe you can bring a top academic that also has a business background, but involved in commercialization entrepreneurship, the kind of a unique breed. So that's one area that we focused on. Another one was what we call kinda build up a greater critical mass of young singles. Essentially Northwest Arkansas is known to be very attractive to families and people who are thinking about having families, but the recreation, the talent, the nightlife, the things that are available here in terms of what's been communicated may not be, or young people may not be aware of it.

13:50 Ross DeVol: So, that was something else that we felt there needed to be a focus on was to retain more of the graduates that come to Northwest Arkansas from other states. To make people feel... Young people feel more welcome and available here. Another area that we discussed was creating a pipeline for local talent, not just at the large companies, but a unique role there. It's interesting because when you speak to human resource staff, there really isn't that much movement between the big three, in terms of professional staff and the job opportunities within an occupational category, and so we emphasize that for retention purposes, they all could benefit by sharing more information and being engaged. Well, that's somewhat controversial, right? As you can imagine. But instead of losing someone, let's say that's at Tyson, that might have been in their IT applications, but they may not have been aware of anything that might be available at Walmart or JB Hunt, so instead of losing them to San Francisco or Austin, by working together, you might lose someone right now, but maybe five to 10 years from then, they might be on a professional, occupational growth trajectory, that they could become a manager, a director, and you might be able to re-hire them. So that was what we were thinking in terms of talent.

15:26 Matt Waller: I think that's a great idea because for many reasons, and not just amongst, say Tyson, JB Hunt and Walmart, but even the supplier teams. So this is really an innovative idea, and I see your metaphor, your analogy with Silicon Valley because here in Northwest Arkansas, we have an unusual highly concentrated labor market that has expertise in retail, consumer products, e-commerce, supply chain management, logistics... There can't be any other place on earth with this kind of concentration.

16:09 Ross DeVol: Yeah, especially true in... As you well know Matt, the University of Arkansas was voted to have the top bachelor's program in supply chain, right? That'll teach you there's something to be very proud of, and when that woRoss DeVol gets out, I think that could be a talent attraction magnet as well, because people, companies wanna have a presence here to be able to tap into that local supply of high-quality talent. So the other major idea that we focused on was to create kind of a world-leading cluster called an Industrial Commons, if you will, in supply, delivery, and logistics. And this would involve the big three, many of the suppliers, the University of Arkansas teaming together to make sure that they share information in a public space where they're non-competitive. Obviously, at some point, it becomes proprietary, but be thinking about developing this as extending the cluster and making us all more competitive, and the big three companies need to play a more active role in engaging with the University of Arkansas.

17:26 Ross DeVol: And as you know, it's a lecture on my soapbox, I've tried to share that with them. And you can't complain that academics don't understand how to plug in to what we do, you have to educate them, you have to reach out, to acknowledge you wanna work and see this as a competitive advantage, because by working with the University of Arkansas, you gain access to the latest research and knowledge as it's created, that you can then plug in to your company.

17:56 Matt Waller: Wow, I realized the difference, 'cause when I was a new professor here in Supply Chain Management in the mid-90s, Hewlett-PackaRoss DeVol was collaborating with StanfoRoss DeVol on the rollout of their Pavilion PCs to the retail supply chain. And because my area of expertise was Retail Supply Chain Management, they reached out to me and I would spend the summers out there working with this joint project between StanfoRoss DeVol and Hewlett-PackaRoss DeVol, and I thought, "Wow, it's interesting, HP and Silicon Valley reached out, but the companies here didn't, you know?

18:36 Ross DeVol: Right, I know.

18:37 Matt Waller: And there's still... It's better than it was then, but it's still like that. So I think you're right, that's a huge opportunity.

18:47 Ross DeVol: It is a huge opportunity, of course, there's cultural barriers to doing that. And it goes both ways, the university wasn't always as open and plugged in, and its research profile wasn't at a level that others would find it as attractive. That's changed, but as you know Matt, perceptions lag reality, and you become embedded in the institutional cultures that don't permit knowledge exchange or recognize that it could happen. And so I admonish the companies here that it's their responsibility to reach out to the University of Arkansas and try and plug in. It's not just the university's responsibility to reach out.

19:29 Matt Waller: The basis of culture is shared beliefs. And I think the shared belief here is that there's value in collaborating between the academy and practice. And there's certainly lots of evidence of it in the world, tons of it, as you've pointed out many times, and some of your research has also illustrated over the years.

19:52 Ross DeVol: Yeah, now so you look at which Metropolitan areas around the country have been most successful, with the rare exception, there's been one or two major research universities that they're engaged in trying to apply their research, think of it as translational research. How can it be transferred, that intellectual property to existing firms or to startups or a professor that might take a leave of absence for a while to start a new company, maybe they choose to come back and hire a CEO full-time, but to stay at the leading edge of applying new knowledge, you need that symbiotic relationship between universities, StanfoRoss DeVol, MIT, UC San Diego in biotech, you think of the Research Triangle, UT Austin, Seattle University of Washington, I mean I can go on and on. So those places that have universities that recognize part of their mission is commercialization and engagement with the private sector to see that their research is translated and applied in the marketplace. That's the difference.

21:08 Matt Waller: So, of course, another one of your steps has to do with, be the world's best small place for Arts, Culture, and Recreation, and there's been a lot of effort to help the University grow their arts talent and expertise. A huge gift given from the Waltons, not too long ago, 120 million, to endow the School of Art.

21:37 Ross DeVol: One member of the family in particular, Alice Walton, starting Crystal Bridges, there have been some founding Arts and Recreation establishments here, and Crystal Bridges Museum of American Art is kind of a game-changer because whoever thought of Bentonville as an art center, but Crystal Bridges is considered one of the top two, three American museums of art in the country. That's a game-changer, because what you then hear are people from the coast that go, "Oh yeah, I heaRoss DeVol about Crystal Bridges and it's in Bentonville." And then they take the time to understand where Bentonville is in Northwest Arkansas, and then they realize, "Oh yeah, the University of Arkansas is down in Fayetteville in the same area." So it really is a game-changer. And if you look at talent attraction... So if somebody gets transferred here and they don't ever become embedded in the arts and culture and feel that it's vibrant here, it's much easier for them to make the decision that when somebody calls from Austin or Nashville or Minneapolis, or certainly one of the coastal locations that they're more likely to stay here if they're plugged in and you have these attributes. So, if you wanna attract and retain talent, the arts and culture are just so critical.

23:06 Matt Waller: Well, you know, when I first got here in 1994, we had no art scene. There was an outdoors scene, 'cause you could go to the Buffalo River, which is one of the most beautiful rivers in the country, but everything's changed. So your point, Crystal Bridges, The Momentary, the paved paths, The Walton Arts Center, the...

23:28 Ross DeVol: The bike paths.

23:29 Matt Waller: And on and on and on. So for me, as Dean, I'm telling you, it's much easier for me to recruit today than it was a few years ago. And the rate at which this has happened, I can't imagine it's ever happened before at this rate, maybe it has somewhere.

23:48 Ross DeVol: Austin probably would be the closest example in the Heartland. Of course, Austin started a little bit larger than Northwest Arkansas, but not that much larger. But if you'd go back and look at Austin from 25 years ago, that's kind of where they were. They were kind of Northwest Arkansas at that point, and we're becoming more like them. And one area that we're gonna be ahead of because Austin just got a medical school three or four years ago, Dell Medical School, they kind of outgrew their health infrastructure as many fast-growing places do, and didn't have academic medicine. So one of the strategies that we're suggesting be pursued is developing a new Academic Medical Center here in Northwest Arkansas, a new medical school, because you simply do not have as sophisticated a quality of healthcare provided unless you have an academic medical center in the region, and it becomes a recruiting tool.

24:50 Matt Waller: So Ross, I'm looking at this from a business perspective as you do, and one of the most important variables in business is branding. The Intel Inside, right? That whole strategy of Intel, they were getting most of the margin on PCs for decades. But there's so many examples throughout history of where brand is everything because brand communicate who you are. And so we are not what we were when I got here 27 years ago, but I don't know if people on the outside, even people that lived here in 2010, they wouldn't understand what we are today. We've changed so much for the better. How do you go about communicating that, or what should we be doing in that regaRoss DeVol?

25:47 Ross DeVol: The term Northwest Arkansas was created to bring the separate communities together to have a common brand, and that made sense at the time, but very few places have had success naming themselves as a geographic entity. So think about the Research Triangle, when I mention that term, you pretty much know what that means, right? It's North Carolina, it's NC State, it's Duke, it's North Carolina, it's Raleigh, Durham and Cary. And so there's kind of this unique aura that comes with that, it's they're innovative, they're forwaRoss DeVol-thinking, they're creating some of the best technology companies like SaaS came out of there. And so the area needs a new brand that kinda explains who we are. So I think of Austin kinda has the mystique that they've created, Nashville, but Northwest Arkansas is this nebulous concept. And when people, they ask me where I'm located and I answer...

26:51 Ross DeVol: So if I'm talking to New York Times or Wall Street Journal, and they know I've left the Milken Institute in Los Angeles and moved here, and they say, "So where are you?" "Well, I'm in Northwest Arkansas." "Oh, I've been to Little Rock, I really like Little Rock." "Well, no, Little Rock's nice but, no that's not really Northwest Arkansas. We're up in the Northwest corner on the boRoss DeVoler with Missouri and Oklahoma, and Kansas is just a little bit away, but I actually live in Bentonville." "Bentonville? Oh yeah, that's the headquarters for Walmart." "Yeah, that's right." And then they go, "Well, Crystal Bridges... " And then they will say, "Oh yeah, the University of Arkansas is there too, isn't it, right?" So my point being is that we need to think about the common elements today within the region that would be attractive to talent, entrepreneurs and firms that might wanna move here and branding ourselves, don't be thinking about what should it be. What are our attributes? Well, our attributes are operations, colleges, one in particular, and I would say culture.

27:56 Ross DeVol: So, they need to be thinking about "How do you re-brand yourself so that others don't think Arkansas, they think of the unique attributes of this region?" We do have some experts and many of the experts had some fairly strong opinions and there are still some remnants of those opinions in the document. This is a challenge because you don't want a community to feel that it's left out, so if you end up with a name that is two out of the four major cities in the area, two are gonna feel left out. My point is, you wanna put your best foot forwaRoss DeVol, you all will reap benefits from the branding that brings more companies and talent here, don't worry about whether your name, your city's name is in the actual rebranding or go with something like the research triangle did. But the region deserves a new brand, it does no longer describes the major qualities and attributes of the area.

28:58 Matt Waller: Well, this is a challenging task, and... But I really feel like your report does a terrific job of explaining what we need to do. And again, you're leveraging things we already have some momentum in. And back to the branding, we have, if you look at mountain biking, for example, we've hosted the International Mountain Biking Association Annual Meeting here and many other things, people all over the country are now noticing us in that way. But it's so true that when you do have an attractive place to live for a certain psychographic, you will attract people, and so somehow the brand has to communicate the psychographics that we want to attract. And I thought it was neat that you put the branding piece at the end of your document 'cause it really... It kind of ties it all together.

30:02 Ross DeVol: No it does, and that's... We put it at the end because we wanted everybody to go through the various attributes and understand how the region has changed before we introduce the idea of re-branding, because if we had just started with re-branding, it could have potentially been even more contentious than it was. I'll give you another great anecdote. So when I first arrived here, I was looking for a junior economist, and the Fed, the Federal Reserve banks have a lot of great regional economists. And we put the ad up and this guy from the St. Louis Federal Reserve Bank applied. His name is Jonas Cruz, he works for us now. So it turns out he's a giant mountain biking fan, and he started coming to Bentonville in Northwest Arkansas for mountain biking from St. Louis. And so when he saw the ad that there was an opportunity to do similar work here in Bentonville, he was like here in a couple of weeks.

30:56 Matt Waller: Well, Ross this is so exciting. Thanks for taking time to explain the document to us, I really appreciate that.

31:06 Ross DeVol: Well, I was glad to participate in anything that's named, Be EPIC.


31:10 Ross DeVol: 'Cause, we all wanna be epic.

31:13 Matt Waller: Absolutely.


31:18 Matt Waller: Thanks for listening to today's episode of the Be EPIC Podcast from the Walton College. You can find us on Google, SoundCloud, iTunes, or look for us, wherever you find your podcast. Be sure to subscribe and rate us. You can find current and past episodes by searching, BeEPIC Podcast, one woRoss DeVol, that's B-E-E-P-I-C, podcast. And now, be epic.


Matt WallerMatthew A. Waller is dean emeritus of the Sam M. Walton College of Business and professor of supply chain management. His work as a professor, researcher, and consultant is synergistic, blending academic research with practical insights from industry experience. This continuous cycle of learning and application makes his work more effective, relevant, and impactful.His goals include contributing to academia through high-quality research and publications, cultivating the next generation of professionals through excellent teaching, and creating value for the organizations he consults by optimizing their strategy and investments.

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Walton College of Business

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We're sitting down with innovators and business mavericks to discuss strategy, leadership and entrepreneurship. The Be EPIC Podcast is hosted by Matthew Waller, dean of the Sam M. Walton College of Business at the University of Arkansas. Learn more...

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