Adding value to resources in-state: more jobs, bigger tax base, lower consumer costs.

• Author: Bohi, Heidi
• Position: MANUFACTURING

[ILLUSTRATION OMITTED]

Value-added manufacturing has long been touted as the galloping white steed that could ride into Alaska on the heels of a collapsing oil industry, leaving in its wake economic development benefits that create jobs, business for statewide companies, and a bigger tax base for local communities.

Making something from natural resources within the state rather than exporting the resources in the raw would also allow Alaskans to buy the products made here without having them shipped back from out of state. Whether the resource is logs, fish, minerals, or oil and gas, industry and academic leaders say the potential and resulting economic benefits are unlimited.

A bigger tax base would result from value-added companies and transportation carriers. There would be more manufacturing jobs in a more diverse economy. The move away from natural resources would mean more sustainable economic development. Youth would be less likely to leave the state in search of work because there would be more employment options. For consumers, more efficient manufacturing and transporting of goods would result in lower costs marketwide.

USING OUR FOREIGN TRADE ZONE

"Think of cargo coming into Anchorage from Asia, such as fine clothing, textiles, flowers and fruits. It comes to Anchorage first, then it's shipped to the Lower 48 where it's packaged and cross-docked, then made available for sale Outside and in Anchorage--which means it has to fly back to Maska," says Darren Prokop, professor of logistics at the University of Alaska Anchorage. "What if the value added application was done in Anchorage in our foreign trade zone? There would be no tariff applied."

The question, though, is what will it take to make this a reality and who is going to take the lead in making it happen?

Although several organizations, businesses and government entities continue to work to advance the idea of value-added manufacturing, including the Anchorage Economic Development Corp., World Trade Center Alaska, the Alaska Chamber of Commerce and the University of Alaska, to date, most efforts have fallen flat, including the State's 1980s attempts to create an agriculture industry in the Interior, and the seafood-processing plant in Anchorage that folded several years ago.

The list of value-added manufacturing successes is limited to only a few, which are in the food services industry, including fish processing, the Matanuska Creamery and Alaska Sausage and Seafood. Despite...