By RaeAnne Marsh
Arizona’s early economy was based on the strength of what it famously called the “5 C’s”: Climate, Cattle, Copper, Cotton and Citrus.
Some of those continue to infuse strength to the state’s economy, some have morphed into a broader category, and some have had their elite spot usurped by a newcomer.
In Business Magazine offers a 2024 take on the 5 C’s economy for Arizona and especially for Phoenix: Chips, Climate, Culture, College and Construction.
5 C’s: Chips
Semiconductors may well be the economic force of the foreseeable future. Their value also to supply chain and national security was underscored a year ago when President Biden made a point of attending the “First Tool-In” ceremony at the massive manufacturing plant Taiwan Semiconductor Manufacturing Company is building in North Phoenix.
Intel has been building this economic sector here for decades. “In October 1980, the first silicon wafers came off our production line at Fab 6 in Chandler,” says Liz Shipley, community relations director at Intel. That event marked the start of what is now one of the largest manufacturing sites of a company that has invested significant time and resources to help make Arizona an outstanding location to develop and manufacture semiconductors, from education and workforce development, to supply chain and more.
Looking forward at the impact of the chips industry for our future, Shipley points out that semiconductors are the brains accelerating a digital revolution and a driving force in the digital economy. They power every essential technology that makes modern life possible — everything from smartphones and cloud servers to modern cars, industrial automation, critical infrastructure and defense systems.
“We are expanding in Arizona because of our long track record of success, along with this ecosystem of innovation we have helped develop,” she says. “Four decades later, Arizona is now home to 13,000 of the brightest minds helping Intel define the future of technology.” She reports Intel’s annual economic impact in Arizona is approximately $8.6 billion, based on 2019 data, and notes the company has also invested more than $34 billion in capital to support its operations here.
“Arizona has become a hub for chips manufacturing and R&D (power chips, sensors, etc.) during a period of technological innovation, which has created jobs and fostered collaboration to meet the growing needs of our digital age,” says Gary Pugsley, vice president of EHS, facilities, securities and business continuity at onsemi, observing that, over the last decade, technology has been integrated into our everyday lives to power the world around us and calling chips “the silent but omnipresent workers” that are essential for modern technologies and industries that depend on digitalization. “Behind this innovation and collaboration are companies like onsemi, headquartered in Arizona, that serve the automotive, industrial, communications and computing industries to create a safer, cleaner and smarter world.”
Pugsley reports the semiconductor industry is expected to continue to grow in the coming decade, driven by government incentives and technology trends and applications which could bring more investments to the state and create more jobs. In return, these investments and jobs will enable the industry to expand in Arizona and further solidify its position as a key “C” in the economic sector. “Not only is the semiconductor industry a key driver in digitalization but also delivers on the promise of creating a more electrified, green future to propel the sustainable energy revolution forward,” he says, noting, “This added benefit could also position Arizona as one the states leading the transition to a more sustainable future.”
Shipley cites a recent study by the Semiconductor Industry Association that found incentivizing domestic semiconductor manufacturing could add 280,000 permanent jobs to the economy. “That’s why Intel is making significant investments in workforce development like our Quick Start technician program,” she says, adding, “With increasing demand for technical workers, workforce availability will only tighten in the coming years, and this investment accelerates readiness and enables the workforce needed.”
Speaking of Intel’s interest in empowering Arizona’s next generation of innovators — as well as protecting and supporting Arizona’s natural resources, including water and energy — Shipley points to its efforts to make careers in technology fully inclusive and expand digital readiness for everyone. “For example,” she says, “Intel is collaborating with Maricopa County Community College District on the Quick Start program to provide a pathway into entry-level manufacturing careers in a ten-day course.” Workforce development is a topic that is taken up again in the “5 C’s: College” section.
5 C’s: Climate
Climate holds onto its recognition as one of our economic 5 C’s. But it’s not the famous “dry climate” of yore, thanks to the proliferation of swimming pools, grassy lawns, verdant landscaping and fountains. But sunny days we have plenty of, and a dearth of weather-related natural disasters.
“Tourism is a major economic driver for the state, and climate has long fueled Arizona’s tourism industry,” says Stephanie Pressler, director of Community & Government Affairs at Experience Scottsdale. It started, she relates, with travelers coming to Scottsdale for health camps in the 19th century, seeking our dry, restorative desert climate to ease their ailments, then continuing to flock here once Scottsdale traded those health camps for luxury guest inns and ranches in the early 1900s. Our warm weather allowed them to golf, play tennis, horseback ride and more — “much as they still do today,” she says. “Visitors bask in Scottsdale’s sunshine 330 days a year, whether they’re traveling here for vacation or a conference, sports tournament or special event. In 2022, 10.8 million visitors traveled to Scottsdale, leaving behind an economic impact of $3.2 billion and supporting the livelihoods of over 24,000 people.”
Referring to the same region albeit naming a different city, Eric Kerr, vice president of Insights & Development at Visit Phoenix, says, “Greater Phoenix’s climate plays a pivotal role in the city’s economic sector and overall growth.” He notes our region’s warm and arid climate attracts a substantial number of visitors, new residents and businesses. And it significantly benefits the tourism industry in particular as it draws “millions of visitors from every corner of the world who are eager for a change of pace and indulge in all we have to offer year-round.” In fact, he notes, Phoenix had a record-setting 19.5 million visitors in 2022. And a thriving hospitality sector bolsters the city’s economy. “With hundreds of hotels, resorts, world-class culinary options, shopping destinations and outdoor venues that capitalize on the appeal of our weather, climate is a pivotal anchor in our magnetism and status as a global destination,” he points out, adding, “This was a major appeal of the destination in the recovery from the pandemic, as visitors flocked to the destination to experience the open spaces and great outdoor activities and attractions the Phoenix area offers.”
However, there are some climate-related challenges, as Pressler points out. “Visitation increases throughout the fall, winter and spring, as travelers — especially those from colder climes — head to Scottsdale to enjoy our temperate weather and outdoor events from Canal Convergence to spring training. Visitation falls as the mercury rises, making the summertime a need period for area hotels, resorts and hospitality businesses.” Experience Scottsdale promotes Scottsdale as a year-round travel destination by enticing residents to summer staycations while also driving leisure visitation and meetings business from other markets by showcasing all there is to see and do when temperatures hit the triple digits.
In addition to its general attraction here, Kerr points out the climate also is a factor for the success of many annual events that call Phoenix home and draw thousands of visitors from around the globe. These include the WM Phoenix Open, Cactus League Spring Training, two NASCAR Races, Charles Schwab Cup as well as dozens of music, art and cultural festivals that, he says, “all feature our incredible weather and sunny skies as their backdrop.”
In terms of Greater Phoenix’s future in relation to tourism, Kerr says Visit Phoenix is expecting more of the same. “All eyes continue to be on the Sonoran Desert as we’ve been dubbed Championship Valley.” Pointing to the Super Bowl, a World Series appearance this year, the NCAA Men’s Final Four coming up in April, the WNBA All-Star Game in July and the 2026 NCAA Women’s Final Four, Kerr says, “We’ve become a perennial hub for sports mega-events and the visitors they bring.” Importantly, it’s not just sports that bring droves of visitors to our city and region. “The meetings, conferences and events industry is also booming,” Kerr reports, “as we’ve secured the business of premier conferences such as SEMICON West (2025, 2027, 2029), the Golf Course Superintendent’s Association of America (2024), American Associate of Advancement of Science, National Speech and Debate Association and dozens of other groups for future years.”
5 C’s: Culture
“Arts and culture not only represent an important expression of our humanity, but the sector also helps to deliver economic impact for our community and enhance our quality of life,” says Peter Kjome, president and CEO of The Phoenix Symphony.
Not only does the sector generate substantial economic impact in its own right but, he observes, it “is an important contributor to attracting investment, creating job opportunities and fostering a vibrant community.” Among numerous studies that reinforce the importance of the arts and culture sector, Kjome points to a recently released Arts & Economic Prosperity study conducted by Americans for the Arts that indicates the arts and culture sector at the national level generated more than $150 billion of economic activity in 2022. “In Arizona,” he says, “the impact was measured as over $1.1 billion, including over $500 million in spending by arts and culture organizations and nearly $600 million in event-related expenditures by audiences.”
And a thriving, vibrant and dynamic cultural sector helps “attract and retain individuals, families and businesses in our remarkable community,” Kjome adds. In fact, economic development organizations view a region’s arts and culture as an element of its quality of life – widely considered a critical factor in a company’s decision about where to locate. Kjome believes arts and culture help create community and provide opportunities for dialogue and understanding. “The sector provides important opportunities to foster diversity, equity, and inclusion – creating a welcoming environment that, in turn, helps to support and promote growth.”
Noting that cultural organizations also help provide important educational opportunities — for people of all ages — Kjome points as example to the Symphony’s groundbreaking Mind over Music® program, a professional development model in which teachers are trained to integrate music into STEM concepts. Study after study has established the correlation between music study and math skills, and, according to the Symphony’s website, evaluations from each phase of its program have reinforced the idea that Mind Over Music® bolsters core academic learning outcomes, demonstrating that the students understand the lessons better when music is involved. “This type of collaboration can produce powerful results and further increase our collective impact,” says Kjome.
Recognized for its draw as part of the tourism economy, Cactus League is also part of the cultural diversity we enjoy in Phoenix. For its economic impact, Cactus League executive director Bridget Binsbacher cites ASU’s 2018 study – the last full-season studied — that reported Cactus League generated $644.2 million in economic impact and $373 million for Arizona’s Gross Domestic Product. “ASU researchers called the Cactus League a ‘mega sporting event’ on par with the Super Bowl — but one that happens every spring,” she says. The numbers did decline, however — and not surprisingly — during the 2020 COVID-shortened season: $363.6 million in economic impact and $213.7 for Arizona’s Gross Domestic Product.
Pointing out that, in recent years, the Cactus League season has opened in mid-to-late February, Binsbacher notes that the early start means there are often plenty of tickets available for local residents as many out-of-state visitors pour into Arizona during spring break.
But about six in 10 Cactus League fans come from out of state, according to Binsbacher, who reports that multiple ASU studies have found most say it is their sole or primary reason for visiting Arizona. “Our fan base stretches across all four [continental] U.S. time zones,” she says, adding “It is an incredibly loyal fan base – the 2018 study found that more than a third of all Cactus League fans had been attending spring training in the desert for at least five years.”
While all 10 Cactus League ballparks are in Maricopa County, Binsbacher notes there is a statewide benefit as well. “Nearly a third of out-of-state fans said they would visit another part of Arizona during their trip, according to the 2020 ASU study,” she says.
5 C’s: College
Post-secondary educational facilities have been spinning out innovative new businesses and helping build a talent pool to support the varied sectors of economic growth — two of the strongest being healthcare- and technology-related fields.
Looking at education itself as an important economic sector for our growth, Alliant International University president and CEO Andy Vaughn, says, “Although the value of higher education is getting questioned from the general public, it still remains an important part of growth economy as long as the education is laser focused on specific training and education that leads to gainful employment.” He compares the situation 20–30 years ago, when many people chose degrees — especially at the graduate level — as a “nice to have,” to today, when the higher education consumer seeks, in most cases, degrees that are “must haves” to be gainfully employed in a specific career. “Further evidence of this shift is that one of the highest demand education areas are programs that also lead to specific state licensure to practice,” he says.
For economic impact, the Maricopa County Community College District — Arizona’s most extensive community college system, which enrolls more than 140,000 students annually at its 10 colleges and 31 satellite locations — can boast some impressive figures. “An Economic Impact Study from fiscal year 2016–17 concluded that MCCCD added $7.2 billion in income back into local economies throughout Maricopa County,” relates Nilam Patel, senior officer in Workforce & Industry Development at the MCCCD Foundation. “This impact is powerful when considering how many jobs this revenue stream enables — one out of every 27 jobs in Maricopa County is supported by Maricopa County’s community college system.”
Specific to workforce development, Patel notes, “As billion-dollar corporations are investing in and relocating to Arizona, MCCCD serves as a catalyst for economic growth by providing job-related training that prepares a well-equipped workforce for our state’s diverse industries.” MCCCD is focused on bridging the gap between education and occupation by connecting Arizona employers with a highly qualified workforce. “Maricopa Community Colleges continue to establish strong partnerships with industry leaders by working together to find innovative and creative solutions to address today’s challenges — economic recovery efforts and supply chain disruptions,” he says. As examples, he points to Fast Track Certificates and industry-led partnerships such as the Semiconductor Technician Quick Start and construction trades programs that enable students to enter the workforce in a few weeks or months rather than years.
The partnership aspect is important, Patel explains. Local, national and global industries are desperately in need of workers who are trained for new technologies, and they depend on post-secondary schools to provide the basics of education and the soft skills needed to function in the workplace. Conversely, colleges rely on businesses for additional support and to provide workplace training opportunities for students. “Community colleges have become the cornerstone of a robust, much-needed workplace education system.”
And workforce development, Patel observes, contributes to the overall economic growth and development of a region. “With technological advancements in industry, there is a growing mismatch between the skills and qualifications possessed by the available workforce and the skills required by employers to fill specific job roles effectively,” Patel says. In fact, the skills gap is one of the largest challenges today’s workforce faces. “Through bridging the skills gap, enhancing the competitiveness of a region and, finally, through fostering economic resilience, workforce development programs will create the educated and skilled workforces needed to continue to attract foreign investments, thus leading to economic expansion and job creation.”
Patel reports that MCCCD’s academic programs are addressing the skills gap and have proven their success by incorporating key elements to accommodate both traditional and nontraditional students: They are typically short, allowing students to work and meet family obligations; they provide certificates for specific skills that can be stacked toward college degrees and credits; they combine online with critical hands-on instruction; are linked to industry via internships and apprenticeships; and provide comprehensive support to improve completion rates. Plus, the programs embed industry-recognized credentials, ensuring academic programs are relevant to actual industry needs.
In May 2023, the White House designated Phoenix as a workforce hub to help meet the demand for qualified and diverse talent in semiconductors, renewable energy and electric vehicles — one of five hubs dedicated to building up a workforce. The designation came with a pledge to work with community colleges amongst other stakeholders to create a talent pipeline specific to the region’s needs and to expand apprenticeship programs, career and technical education programs and supportive services for underrepresented students and workers.
“As Arizona faces shortages across the board, our new bachelor degrees and quick start programs are a step in the right direction that will help mitigate several critical workforce shortages in multiple industries, including healthcare, construction, and manufacturing.” says MCCCD Chancellor Dr. Steven R. Gonzales. “MCCCD remains committed to providing our students with seamless access to our high-quality education, preparing them for a successful career, while remaining committed to providing affordable and accessible education at all levels. MCCCD’s tuition rates for our Baccalaureate Degree Programs are one-third the cost of a traditional university, saving students roughly $7,000 to $10,000 yearly compared to the average annual tuition cost at an in-state university. We are extremely proud of that.”
Addressing the workforce situation of one specific field, Vaughn reports that healthcare-related fields continue to occupy the top spots of program growth in higher education. “However, most people forget that ‘healthcare’ also includes mental health. When the term healthcare is used, most people think about physical health only, yet some of the highest demand fields are degrees in clinical psychology, marriage and family therapy, social work, and clinical counseling. We have a great shortage of mental health workers, too, along with nurses, doctors, etc.” He believes it’s imperative that colleges think about ways to offer greater accessibility into all of the shortage areas in the U.S. “Our well-being is counting on higher education to offer impact in both physical health and mental health — as we are living longer, on average.”
According to the U.S. Bureau of Labor Statistics, Arizona has about 60,000 registered nurses, and, as of 2022, Arizona ranked among the top five states with the most severe healthcare staffing shortages, with the demand for specialized nurses in Arizona projected to increase by 23% by 2025. The BLS estimates approximately 195,400 openings for registered nurses in Arizona from 2021 to 2031. And, according to a report from Vivian Health, a national healthcare hiring marketplace, Arizona is expected to experience the most significant change in demand for registered nurses between now and 2030.
Alliant University at Park Central in Phoenix is the newest addition to our burgeoning healthcare hub, beginning classes this month with licensure programs at the undergraduate and graduate level. “We expect to have more than 500 students in the next few years,” says Vaughn. In terms of economic impact, Vaughn points out Alliant also employees 20 full-time faculty and staff in Phoenix and 400 people systemwide, so far, and will hire dozens more in the coming years at professional level salaries, not to mention the $10 million of investment so far to open the Phoenix location.
Emphasizing the crucial role workforce development plays in fostering economic growth and development, Patel says, “As industries and technologies continue to evolve, it is essential that the workforce also evolves in order to meet market demands. Investing in workforce development ensures that businesses have a skilled workforce capable of driving innovation, increasing productivity, and staying competitive in the global market.”
5 C’s: Construction
Cranes, bulldozers and traffic cones evidence the hot construction activity throughout Greater Phoenix, visible affirmation of the strength of this sector.
“As Arizona’s economy expands and diversifies, the construction industry provides a critical service that enables and supports our state’s economic growth,” says Justin Kelton, president of McCarthy Building Companies Southwest Region. “Whether we are talking about facilities for new and growing industries, updating and expanding critical infrastructure, or housing for new residents, fulfilling these needs requires the expertise and skills of the construction industry. You simply can’t have economic growth and advancement without the construction industry to build what’s required for chip and EV manufacturers or biotech, and the communities for the workforce that supports these and other industries.”
Observes G. Michael Hoover, president and CEO of Sundt, “Construction is a labor-intensive industry, so high levels of construction activity (such as we have today) mean that a lot of people are actively employed in exciting jobs across Arizona.”
And Kelton affirms: “With the incredible economic development opportunities coming to Arizona and positioning our state as the ‘Silicon Desert,’ the construction industry has been incredibly busy in recent years.” He points out that, while the demand of economic growth creates challenges for the construction industry in terms of workforce needs, managing material costs and meeting schedules, these demands are also creating opportunities that are further stimulating economic growth in the form of jobs, community development, new business formation and revenue.
A cornerstone of Sundt’s workforce development efforts is its new G. Michael Hoover KAPBCS Training Center, located at Sundt’s Phoenix office. Completed and officially dedicated last summer, it features classrooms, welding booths, a large auditorium and more. This is where Sundt trains many of the people who are moving into the growing number of high-paying, high-demand construction jobs across the Valley. And the acronym captures the positive attitude throughout the company, as the employees of what the National Center for Employee Ownership identifies as the state’s largest employee-owned company enthusiastically embraced Hoover’s description of them as “kick-ass people building cool shit.”
Says Kelton, “The construction industry is a critical spoke in the wheel of the economic development cycle, and we view our role in supporting Arizona’s economic evolution seriously. We are building highly complex facilities for the growing industries and Universities here, which is helping us to attract the most talented and innovative experts in the industry much in the same way that other developing industries are, and this magnetism is creating momentum and more stability here than other markets are experiencing.”
Kelton notes that the past two decades has seen our economy transition from being heavily focused on the homebuilding and tourism/hospitality sectors to include more high-tech, manufacturing and biotech. The construction industry has responded by developing focused expertise and introducing forward-thinking innovative strategies for the design and construction of the complex manufacturing and research facilities these sectors require.
For instance, says Kelton, “More owners are valuing and embracing the benefits that collaborative delivery provides in the design and construction of intricate facilities. Collaborative delivery models, like Design-Build, allow us to build with the future in mind by enhancing the facility’s functionality and lifecycle during the design or planning phase as well as during construction.” The result is increased use of sustainable building practices and materials, energy conscious design and construction features being incorporated into the facility, and the flexibility of adaptive workspaces.
“Along with collaborative delivery, we’re seeing exciting innovation in construction, which includes greater use of technology, with mapping software, robots, and the use of prefabricated parts,” Kelton shares. “The industry is also investigating ways that AI can benefit us.” These innovations are providing efficiencies, increased quality and safer working conditions while also freeing up human capital — a significant benefit to an industry that has dealt with workforce challenges for decades. “And,” Kelton notes, “when technology can take on aspects of a job where the work is repetitive, our workforce is able to focus on the project’s most complex and technical issues.”
There is currently a backlog of construction projects, which Kelton attributes largely to supply chain constraints over the past few years, demands of Arizona’s growing population and the associated need for updates or expanded infrastructure, as well as the availability of federal funds for critical infrastructure projects.
But the forecast seems bright beyond that. “From what we are seeing across our markets, Arizona is going to continue to benefit from robust levels of public and private investment in infrastructure,” Hoover says. “Whether addressing the transportation and water needs of the state’s growing population or putting in place semiconductor capacity to meet surging national demand for advanced technology, the construction industry here in Arizona will remain a key beneficiary.”
Kelton points out that, although inflation and higher interest rates are affecting areas of the economy, large construction projects such as water/wastewater treatment plants, solar facilities, transportation and aviation projects can take years to plan and build. “Major projects like these require workers, materials, and equipment and, as a result, the demand for construction services will be essential for the foreseeable future,” he says, noting also that, since outsourcing is not feasible in construction, the industry needs to continue working together and with the public/private sector to inform more people of the rewarding careers that are available in construction while providing training and mentoring for the next generation of leaders. Calling attention to the fact that the craft workforce has been ageing and leaving the workforce over the past several decades, he states, “I can’t emphasize enough the critical role that plumbers, electricians, carpenters and mechanical craft workers play in our overall economy. The craft workforce is at the core of every building project and essential to keeping our economic engine running.”
Says Kelton, “Arizona is in the midst of transformation. Thanks to the vision that our leaders have had for developing and diversifying our state’s economy, we are poised for ongoing growth, weathering an economic downturn, and further propelling our position by continuing to attract top talent in a broad range of industries. We’re seeing the appeal in the construction industry as people from around the nation and world want to be part of what’s happening in Arizona.”