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Arizona: An emerging hub for technology, business innovation

As the Arizona business community rebounded from the Great Recession, business and policy leaders made the strategic decision to diversify the region’s economy. A key part of this diversification has been the passage of legislation that eliminates regulatory burdens so that business owners, entrepreneurs, and startups are empowered to create and innovate across industry sectors.

These efforts have been most evident in Arizona’s technology sector.

According to CompTIA’s Cyberstates report, nearly 20% of Arizona’s workforce is concentrated in technology. And, technology companies contribute approximately $25 billion in economic impact to the state.

Over the past few years, Governor Doug Ducey, state lawmakers, and community leaders—including the Greater Phoenix Chamber—successfully championed legislation and policy to support this growing business sector.

In 2017, the Governor and the legislature invested in the continuation of the Angel Investment Tax Credit, which provides capital investments in local, qualifying startup companies, especially small businesses aiming to grow Arizona’s economy. H.B. 2191 refunded the program.  Participating small businesses have recognized the Angel program as one of the primary reasons they were able to secure additional private funding sources and remain in Arizona. A prime example of businesses using this program is Pinnacle Transplant Technologies.

In 2018, the Governor signed H.B. 2434, which created the nation’s first-ever FinTech Regulatory Sandbox. Arizona’s FinTech Sandbox encourages fintech companies to make Arizona their home base. According to the Arizona Attorney General’s office, “startups, entrepreneurs, and even established companies can launch products on a limited, temporary scale to consumers to test innovative products, services, business models, and delivery mechanisms in the real market without incurring the regulatory costs and burdens that would otherwise be imposed.”  To date, six companies have joined the FinTech Sandbox.

This past legislative session, Governor Ducey signed H.B. 2673 into law. This bill—introduced by Representative Jeff Weninger—established a Property Technology Sandbox.  Similar to the FinTech program, the PropTech Sandbox provides opportunities for startups and existing technology companies, focused on real estate, a regulatory free space to test products and services.

In addition to supporting innovation through investments and creating regulatory-safe spaces for technology companies, Arizona’s leaders also opened the roadways to autonomous vehicles and the potential for Artificial Intelligence businesses to thrive. In 2015, Governor Ducey issued an executive order to pave the way for “self-driving vehicle testing.” This executive order paved the way for companies to test new technology that has the power to transform Arizona’s economy. The economic landscape continues to change, and companies continue to need a regulatory framework that allows them to innovate and push industry boundaries. Arizona’s leaders must remain focused on pro-business, pro-growth policies to continue being a leader in innovation through these key policy initiatives, and future opportunities.

Learn more about the Chamber’s positions on key policies by reading the 2019 Public Policy Guide.

-Written by Miranda Cain-Morton, Development and Communications Manager заём

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