Investment in education and infrastructure will propel Alaska to an economic leadership position according to Scott Minerd, Chief Investment Officer of Guggenheim Partners.
Minerd was speaking at an Alaska World Affairs Council luncheon recently. During his presentation entitled “Alaska’s Place in the World Economy”, Minerd said that Alaska has favorable demographics with a higher percentage of work-age individuals, those under age 25 and those aged 25-34, than the rest of the U.S. However, he said, Alaska is vulnerable by having so many workforce people undereducated. Alaska comes in behind the rest of the country in teachers per 100 students; those having earned bachelor’s degrees; and those enrolled in graduate degree programs. Alaska also has a higher dropout rate than the rest of the nation. “Alaska should have a world class university,” Minerd said.
Minerd says that growth in Alaska will come from outside organizations that come to the state to develop the natural resources. With more than an estimated 21 years’ worth of oil and gas to develop, Minerd says Alaska should expect those companies who come to the state to do business to invest in infrastructure and education. “Alaska needs capital investment,” Minerd said. “History shows that once resources are gone, unless there was investment in infrastructure, the society devolves.”
Alaska needs to take advantage of its unique position on the globe regarding future transportation through the Northwest Passage or risk being left behind and exploited by other Arctic nations. Minerd recommends building port(s) along the Arctic or western coasts of Alaska. Though there are technical challenges, he says these “gas stations” are a great way to exploit Alaska’s position on the globe. “When other Arctic nations, such as Russia, build ports to cross the Northwest Passage, Alaska will be left out,” he said.
But there is great opportunity in Alaska, Minerd says. Though Alaska’s economy is next to Iceland as the second-smallest economy of the eight Arctic nations, it is also right behind Norway as the second-largest economy per capita. “I see a lot of opportunity,” he said. “Alaska has the opportunity to be the driving economic force of the U.S., if not the world.”
Scott Minerd is Chief Investment Officer of Guggenheim Partners, a privately held global financial services firm with more than $125 billion in assets under management.
Click here to see Minerd’s accompanying presentation.
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