CONNECT » GUIDE » INSPIRE
SEPTEMBER // OCTOBER 2017
MOST ADMIRED COMPANIES 2017 MAC winners help Arizona become a hotbed for innovation
$4.95
Neill Feather is the president of SiteLock.
MOST ADMIRED COMPANIES
34
AZ TECHNOLOGY COUNCIL
65
AZ BIOINDUSTRY ASSOCIATION
81
MEETING PROFESSIONALS INTERNATIONAL
113
Table of Contents 6
Trendsetters
12
CEO Series
14
Banking
18
Law
22
Healthcare
26
Small Business
30
Marketing
32
Dining
34 Most Admired Companies 65 Arizona Technology Council
CAN YOU
14
32
81 Arizona Bioindustry Association 113 Meeting Professionals International 129 Arizona Mining Association
113
DIG IT? W
hen I first moved to Arizona just before the turn of the millennium (does that make me sound old?), one of the first things I learned about was the Lost Dutchman’s Gold Mine, which urban legend says is a rich gold mine hidden in the Superstition Mountains. Even though there is little or no evidence that the mine actually exists, as many as 8,000 dreamers try to find the Lost Dutchman’s mine every year. So, is there gold in them thar hills … or anywhere in Arizona for that matter? “Let me think of how to put this in a way that won’t get me into trouble,” says Tim Evans, Arizona’s assistant state mine inspector. “Let’s just say there are a lot of very passionate gold miners, but there aren’t any profitable, big production gold mines in Arizona. But there are a bunch of prospectors with a bunch of high hopes for success.” While there may not be gold in Arizona, mining is still a gigantic economic engine that fuels Arizona. While copper is king, sand and gravel quarries are also big business. There are more than 44,000 jobs directly and indirectly linked with the Arizona mining industry. To put that into perspective: If Arizona’s mining industry was a company, it would be the state’s biggest employer. It would also be the state’s best-paying employer because the average worker in the mining industry earns more than $100,000 per year. Want to know more? Check out the Arizona Mining Association’s supplement in this issue of Az Business. I guarantee you will dig it.
CONNECT » GUIDE » INSPIRE
SEPTEMBER // OCTOBER 2017
MOST ADMIRED COMPANIES 2017 MAC winners help Arizona become a hotbed for innovation
$4.95
On the cover:
2
MOST ADMIRED COMPANIES
34
AZ TECHNOLOGY COUNCIL
65
AZ BIOINDUSTRY ASSOCIATION
81
MEETING PROFESSIONALS INTERNATIONAL
113
SiteLock CEO Neill Feather. Photo by Mike Mertes of AZ Big Media.
AB | September - October 2017
Michael Gossie Editor in chief michael.gossie@azbigmedia.com
SHOUT-OUTS Mesa surgeon records a first Dr. Greg J. Marchand of Mesa has been recognized for removing the largest cancerous tumor — an ovarian tumor about the size of a junior-sized soccer ball — using an incision smaller than a dime. Dr. Marchand utilized “In-Bag” Morcellation, a technique he developed in which the tumor is bagged and broken down so the particles can be extracted one by one laparoscopically. Otherwise, patients would need a sizeable incision to remove such a large mass. A cancer survivor himself, Dr. Marchand said, “If we can use minimally invasive surgery to take some of the recovery time and complications out of cancer surgery, then I think we’ve really done a lot of good for patients fighting cancer.” Helping students and teachers succeed •W estern Wealth Capital and its local partner network distributed 1,300 backpacks filled with essential school supplies to Phoenix-area children. •W ashington Federal branches across Pima County partnered with Youth on their Own for its annual “Back to School Challenge.” Youth on their Own supports the high school graduation of homeless youth by providing financial assistance, basic needs and one-on-one guidance. •F our Peaks Brewing Company’s Four Peaks 4 Teachers campaign provided 3,000 teachers across Arizona with boxes filled with $100 worth of school supplies. •A PS provides an annual grant of $20,000 to the Arizona K12 Center, which serves as a vital hub connecting Arizona’s educators with the most current best practices in professional development. Veterans get ‘A New Lease on Life’ Christopher Todd Communities created a nonprofit called A New Lease on Life. In a partnership with The Veterans Directory, veterans will receive three-year rent-assistance at each of the first two Christopher Todd Communities luxury singlefamily rental home communities. Girl Scouts get big-money backing The Bob & Renee Parsons Foundation issued a $1.6 million matching challenge to the Girl Scouts Arizona Cactus-Pine Council to help complete its $18 million Campaign for Girls in Arizona. The Foundation will match all donations received between now and December 31, dollar-for-dollar, up to $1.6 million. 4
AB | September - October 2017
President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Associate editors: David McGlothlin | Jesse A. Millard Interns: Cianna Leparulo | Melissa King Contributing writers: Amy Bruske | Kathy Kolbe | Ken Peterson Erin Thorburn | Steven G. Zylstra ART Art director: Mike Mertes Graphic designer: Bruce Andersen MARKETING/EVENTS Marketing & events manager: Cristal Rodriguez Marketing coordinator: Kristina Venegas OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Amanda Bruno AZ BUSINESS MAGAZINE Senior account manager: David Harken Account managers: Cindy Kurtze | April Rice AZ BUSINESS ANGELS Director of sales: Brit Kezar AZ BUSINESS LEADERS Director of sales: Sheri Brown AZ HOME & DESIGN Director of sales: Joe Freedman AZRE | ARIZONA COMMERCIAL REAL ESTATE Director of sales: Ann McSherry EXPERIENCE ARIZONA | PLAY BALL Director of sales: Jayne Hayden RANKING ARIZONA Director of sales: Sheri King Az Business magazine is published bi-monthly by AZ BIG Media, 3101 N. Central Ave. Suite 1070, Phoenix, Arizona 85012, (602) 277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $4.95. Bulk rates available. Copyright 2017 by AZ BIG Media. All rights reserved. No part of this publication can be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from AZ BIG Media.
TRENDSETTERS
You do
what? Arizona’s business leaders have some interesting hobbies THOMAS CONNELLY, president and chief investment officer, Versant Capital Management: “Echoing back to my previous career as an exploration geologist, I enjoy exploring old mining districts.”
MARC. R. LIEBERMAN,
Arizona’s most
POWERFUL attorney?
If you’re looking for a powerful attorney, you may want to call Ashley Gleckler, an associate at Polsinelli. The 5-5 powerhouse squatted 319.7 pounds (1.96 times her bodyweight), deadlifted 380.1 pounds (2.33 times her bodyweight) and added a bench press to total 832.2 pounds and qualify for the United States Powerlifting Association’s national championship and the International Powerlifting League’s world championship. “I find the human body, and what it can do, to be amazing,” Gleckler says. “Whether someone is an Olympic lifter, a strongman competitor, a triathlete, or something else, watching what a body can achieve is incredible.” Gleckler became attracted to powerlifting after attending a Powerlifting Club meeting while in law school at the University of Iowa. She says powerlifting is a physically demanding sport that provides a great way to decompress after a day of researching, drafting, reading contracts and negotiating.
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AB | September - October 2017
senior partner, Kutak Rock: “I write novels. My first, ‘The Sign of the Anasazi,’ just won the Paris and Southern California Book Awards.”
DEREK S. RAGO, vice president, McKesson Specialty Health: “My favorite hobby is playing ice hockey. Success is heavily dependent on teamwork, communication, problem solving, discipline and responsibility, which is clearly transferable to effective leadership.”
JODY SARCHETT, senior vice president, Lovitt & Touché: “I’m a die-hard, lifelong competitor in team rodeo roping. There’s nothing quite like the mental and physical challenges of competing and winning. I went to Tarleton State University on a full-ride roping scholarship.”
RICK SMITH, CEO, Axon (formerly TASER): “I’m an amateur videographer and short film maker. I film life experiences with my kids and turn them into music videos that capture the emotional energy of key life moments.”
WENDI SORSENSEN, partner, Burch & Cracchiolo: “Pottery. I have a full ceramic studio in my home, including two wheels, two kilns and three dogs who keep me company while I am throwing. Muddy paws, warm hearts.”
Paws in the office: GOOD OR BAD?
Talk about being in the dog house. According to Robert Half research, 55 percent of managers say allowing pets in the office has a positive impact on employee happiness and 37 percent believe it helps productivity. Despite that, 82 percent of companies don’t allow furry friends at work. Employees have mixed feelings about pets in the office pod: 60 percent of workers like or love having them in the office, but 39 percent aren’t keen about it or hate it.
AB | September- October 2017 7
TRENDSETTERS
NO OFFICE NEEDED
According to the 2017 State of Telecommuting in the U.S. Employee Workforce report from FlexJobs and Global Workplace Analytics, telecommuting is a trend that’s not going away:
ZO
4-
YE
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• There was a 115 percent increase in telecommuting from 20052015 (3.9 million employees in 2015, up from 1.8 million in 2005) • The average telecommuter is 46 years or older, has at least a bachelor’s degree and earns a higher median salary than an in-office worker. • Roughly the same number of women and men telecommute. • In more than half of the top U.S. cities, telecommuting beats public transportation as the commute option of choice.
AR
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E
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ON
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4-Y
A C AR O L L E G E S IN Z I LEGES IN A
R
A
s students return to classes for the fall semester, the University of Arizona has been ranked the No. 1 college in Arizona after being thoroughly evaluated against 13 different criteria by Schools.com. UA ranks high on the basis of a wide variety of programs offering, high rate of students continuing after completion of their first-year program, affordability, community college transfer agreement and more. Based on the study, below are the Top 10 four-year schools in Arizona:
1
University of Arizona
2 Arizona State University - Tempe 3 Northern Arizona University 4 Arizona State University - West 5 Arizona State University Downtown Phoenix
6 Arizona State University Polytechnic
7 Grand Canyon University 8 University of Phoenix Arizona 9 Arizona Christian University 10 The Art Institute of Phoenix 8
AB | September - October 2017
Is Phoenix a HOT SPOT to start a business? When starting a new business, the city you choose as your launching pad has a major impact on your business’ success or failure. GOBankingRates ranked the best and worst cities in America to start a small business, based on data from the 2017 Kauffman Index of Startup Activity and Sperling’s Best Places. HERE ARE THE FIVE BEST: 1. Austin, Texas 2. Las Vegas 3. Miami 4. Dallas 5. Phoenix
HERE ARE THE FIVE TO AVOID: 1. Milwaukee 2. Pittsburgh 3. Detroit 4. Philadelphia 5. Minneapolis
LEADERSHIP PROFILE Kim McWaters Chairman and CEO Universal Technical Institute
McWaters, who started with UTI as a part-time receptionist in 1984, is the only female CEO of a publicly traded company in Arizona. Advice: “Success isn’t about a title or list of accomplishments. It’s about doing something you love and knowing you make a difference. We push too many students into college and careers that don’t fit, when we should be training them to do jobs that make them happy and help them support their family and contribute to their community.” Trend to watch: “Ideas about how we prepare students for success are changing. For a long time, American families thought a college degree was the only ticket to a good job and bright future. But the workforce is shifting. Now, we’re seeing college grads in jobs that don’t require a degree, while employers are having a tough time finding people trained to work as electricians, plumbers, transportation technicians and in other jobs that require high-tech, hands-on skills. So, I think we’ll see more people take another look at jobs in the skilled trades, which pay well and offer plenty of opportunity.”
TRENDSETTERS
HOW IS THE CLASS OF 2016 HANDLING THE REAL WORLD? As students head back to college for the fall semester, LendEDU commissioned a poll of 500 college graduates from the Class of 2016 to find out how the Class of 2016 handled their first full year in the real world. One common complaint regarding the young workforce is that they bounce from job-to-job. Well, the poll showed that 49 percent of 2016 graduates have already had at least two jobs since graduating. Here are some other findings:
42%
said their biggest complaint about the real world is managing finances and paying bills.
73%
are considering going back to graduate school to better prepare for their career.
HOW MANY PEOPLE
51%
want to leave their current job because they are not getting paid enough.
35%
said their college either underprepared them or did not prepare them for their job.
HOW DOES PHOENIX RANK FOR TECH TALENT? Phoenix ranks No. 17 on CBRE’s Tech Talent Scorecard, part of its fifth annual Scoring Tech Talent Report, which ranks 50 U.S. and Canadian markets according to their ability to attract and grow tech talent. The report finds that strong demand for talent that offer specific skills, such as software development, coupled with a tight labor supply, is driving companies to locate in markets with the largest concentrations of high quality talent. Phoenix stood out in the report in a number of key areas:
7.7
The Phoenix millennial population increased 7.7 percent, outperforming Dallas (3.8 percent), New York (2.6 percent), Boston (0.8 percent) and Chicago (-1.4 percent).
8
The Phoenix metro area was the eighth-ranked metro area for tech degree completions from 2014 to 2015.
13 9
Phoenix ranked No. 9 by percent change for tech employment growth with a growth rate of 33.5 percent from 2011 to 2016.
Phoenix has the 13th largest tech talent labor pool among large markets, with 83,140 people employed in tech jobs.
COULD A ROBOT
DO YOUR JOB?
A
study by Ball State University revealed that technology could replace as many as half of all low-skilled jobs in the United States. The findings confirm earlier findings which say that fast-food workers could be at serious risk of losing their jobs to robots in the next several years. Rob Wilson, president of Employco USA and an employment trends expert says, “While the technology industry does offer employment, it also will eventually end up taking millions of positions away. And, not
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AB | September - October 2017
only do they take positions away, they also lower wages. A recent study found that each new robot added per 1,000 workers causes wages to drop in the surrounding area by around 0.25 and 0.5 percent.” Wilson says minimum wage hikes could also make robots the preferred option for employers. “Robots don’t need raises,” he says. “They don’t need healthcare or sick days. For employers who are looking down the barrell of ever-increasing business costs, robots are a cost-saving option in the long-run.”
UNPLUG FROM WORK ON VACATION?
The Labor Day holiday and summer vacations are officially behind us, but how many people actually unplug from work when they take time off? A survey from Accountemps shows:
54% of professionals check in with the office at least once or twice a week while on vacation, up considerably from 41% last year.
37% of workers feel they don’t have enough vacation time U.S. workers plan to take an average of
10 vacation over the summer.
CEO SERIES
CUP RUNNETH OVER
The new CEO of Alliance Bank of Arizona is on par with success DON GARNER: “Taking the reins at this outstanding banking organization is an honor for me, and I will work to bring leadership that follows Jim Lundy’s example of valuing individual contributions, entrepreneurial thinking and knowledgeable, locally committed banking,” says the CEO of Alliance Bank of Arizona. PHOTO BY MIKE MERTES, AZ BIG MEDIA
By MICHAEL GOSSIE
W
hen you walk into Don Garner’s Downtown Phoenix office, it’s hard not to stare at the photo of him on the golf course with Kevin Costner. “It was about a year removed from ‘Tin Cup,’” Garner recalls. “I was president of The Conquistadors in Tucson, so I got to play with the ranking celebrity during the Pro-Am at the Tucson Open. That year, the ranking celebrity was Kevin Costner.” Emerging as the star of arguably the most iconic golf movie in Hollywood history, Costner made Garner’s crew the must-watch team of the day. But did Costner’s on-screen magic translate to the links? “I beat him,” Garner smiles. Garner has been hitting the ball right down the middle professionally, too. Garner, a member of Alliance Bank of Arizona’s original management team, became the bank’s second CEO on Jan. 1, taking the reins from founding CEO Jim Lundy. Lundy helped Alliance Bank grow from being a start-up bank in 2003 into the fourth largest banking organization in Arizona Az Business sat down with Garner to talk about his ascension to CEO.
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AB | September - October 2017
Az Business: How has the transition of leadership been? Don Garner: It’s been a lot of hard work, but it’s been fun. It has given me a little bit deeper appreciation for my predecessor and all the things he did that make it look easy. But rest assured, it is not easy.
more productive, how to do things better and make more money. I try to focus on listening and understanding the people who support us. That makes us stronger as an organization and helps us better serve our customers.
AB: What is your outlook for the banking industry? AB: Did it help having such a long DG: I like what’s in front of us. As long history with the bank? as the economy continues to send out DG: Knowing the systems and the positive messages, I’m optimistic. In terms culture and helping to establish that of particular sectors, commercial real estate culture has been a big help. Being on the has been a big contributing factor for us for ground floor and growing with the bank some time and we expect that to continue. and understanding what we do better than But we have other avenues of business that the competition helped make it a very we expect to continue to grow. smooth transition. AB: What are your goals as CEO? AB: What strengths do you bring to DG: Coming on the heels of a leader the organization? who was as great as Jim Lundy, my kneeDG: As I’ve evolved and moved up jerk response is “don’t run it into the the ranks, I’ve learned to understand ditch.” I just want to continue to grow the the perspectives of all the employees. bank in a positive fashion and continue to I understand their positions and their be the go-to business bank in the Valley input and I solicit their comments about and establish even deeper ties in the how to make the bank more efficient, commercial real estate industry.
Since 1931, Financial Executives International is recognized globally as the leading organization for senior-level financial executives. FEI AZ is proud to present the 11th annual CFO of the Year Awards.
11th ANNUAL
This event is the most prestigious financial executive awards in Arizona and one not to miss!
AWARDS DINNER NOVEMBER 9, 2018 Fairmont Scottsdale Princess
7575 East Princess Drive | Scottsdale, Arizona
602-264-6835 www.cbiz.com
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For more information go to azbigmedia.com or call (602) 277-6045
BANKING
the
UBERIZATION OF BANKING How is technology changing the financial services industry from a security standpoint and for consumers?
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AB | September - October 2017
By JESSE A. MILLARD
T
hink of how your banking habits have changed in the last 10 years. In 2007, chances are you still visited your local bank branch for any transaction. Technology has changed all of that. Want to check your statements? Pull out your phone. Want to pay your bills? Pull out your phone. Want to pay your friend some cash you owe? You can pull out your phone for that transaction, too. Even if you walk into a bank branch today, recent advancements in ATMs allow consumers to complete most transactions without talking to another person. Then there’s the use of artificial intelligence, or AI, which is changing the banking industry and how it reacts to markets. As the financial services industry has evolved, banks and modern technology have formed a match made in heaven. One recent example of these tech advancements is Wells Fargo’s announcement to increase its emphasis on new technologies through its Payments, Virtual Solutions and Innovation (PVSI) group. The creation of this group hopes to accomplish three things, according to John Sotoodeh, lead regional president of Wells Fargo Arizona: • Boost connectivity for the bank’s payment efforts • Increase artificial intelligence efforts • Advance application programming interfaces to corporate banking Wells Fargo’s new innovation group is just one example of how banks, both large and small, are betting on technology. “Technology continues to evolve around us and it is important for the financial industry to adapt right along with it,” Sotoodeh says. “By bringing our lines of business together under PVSI, we are looking to accelerate our pace for innovation.”
ARTIFICIAL INTELLIGENCE One of the major technology innovations that could both increase the speed of banking, while simultaneously enhancing its ability to predict and react, is through the implementation of artificial intelligence. As a result, data analytics, data mining and AI may be a game changer for the banking industry. Wells Fargo’s new innovation group plans to accelerate the bank’s AI efforts. The bank sees ways it can use data to create a personalized customer service experience through the use of AI. AI uses aren’t just limited to national banks. The innovative minds at Alliance Bank of Arizona feel data analytics is part of the future of banking, says Alliance Bank of Arizona President Ed Zito. Alliance Bank is studying the use of AI as it relates to model risk management and predictability, Zito says. The industry as a whole is moving toward algorithm-based, forward-looking forecasting, as well as back testing of plans and assumptions, he says. This will all be further enhanced through AI implementation. Utilizing data analytics — or data mining as it’s often called — and increasing the bank’s understanding of AI and the potential it has in the banking and financial service industry is a “dramatic step forward,” Zito says.
AI integration is an outgrowth of what the banking industry experienced during the Great Recession, and the bank’s ability to be forward looking, not only when it comes to serving customers, but managing inherent risk in the industry, he says. As a commercial bank, AI integration will help Alliance keep its “thumb on the pulse” of its clients’ industries, which will enhance Alliance’s ability to service customers, Zito explains. If you’re worried banks will become fully autonomous machines once they start using AI, relax, this isn’t SkyNet or HAL 9000. AI is meant to further your relationship with the bank and its employees, not destroy those face-to-face relationships. “The implementation of AI and machine learning — in terms of continuing to train and update our team members — will help us execute quicker, better and smarter for our clients and we see this as a way to enhance the overall relationship with our clients,” Zito says.
Businesses, entertainment and beyond have become increasingly focused around the phone. And so has banking. CUSTOMER CHOICE Businesses, entertainment and beyond have become increasingly focused around the phone. And so has banking. Past innovations from banks were geared towards online banking, but now things have moved towards mobile banking and it looks like mobile is here to stay. Wells Fargo says it had 28.1 million digital (online and mobile) active customers in March. Of that number, 20.3 million were active mobile users. JPMorgan Chase says it has 27.3 million active mobile customers in the first quarter of 2017, which was an increase of 14 percent year-over-year. Wells Fargo executive Sotoodeh notes that mobile banking has become Wells Fargo’s fastest-growing channel. Mobile transaction growth has increased, as customers interact with Wells Fargo through their phones 20 or more times a month, he says. The same is happening at JPMorgan Chase & Co. The mobile user is growing faster than any other banking channel at Chase, says Saul Van Beurden, managing director of global AB | September- October 2017 15
BANKING
Brent Cannon
Rob Nichols
Despite being able to do just as much through your phone, mobile and online banking aren’t killing the brick-and-mortar bank branch. technology at JPMorgan Chase & Co. Mobile banking is slowly taking over most of the online traffic Chase experiences, he says. Mobile banking usage and investments have increased as phone service providers increased the availability of LTE service, which has made mobile banking quicker, Van Beurden says.
BRICK-AND-MORTAR REMAINS Despite being able to do just as much through your phone, mobile and online banking aren’t killing the brick-and-mortar bank branch. Chase sees a combination of digital banking and branch banking continuing to work across the world. Van Beurden notes that the number of Chase branches across the U.S. has been stable over the last few years. Branches in some areas have been consolidating, while branches have been moved or added to other regions. “We do things with the customer in mind,” Van Beurden says. “We’re not going to be a rigorous bank where everything will be online and no one can go to a branch.” Those who wish to bank at the branch, meeting someone face to face, can continue to do so. While others will be geared more towards mobile or online banking. It’s all about customer choice. How are smaller banks seeing things? 16
AB | September - October 2017
John Sotoodeh
Saul Van Beurden Ed Zito
Like much of the industry, National Bank of Arizona sees customers who want to bank when and where they want, says Brent Cannon, executive vice president and director of community banking at National Bank of Arizona. This might mean the customer wants to bank at the branch or via online or mobile platforms, Cannon says. To survive in today’s evolving climate, banks need to be able to deliver a consistent and excellent customer experience through every channel, Cannon notes. National Bank of Arizona has increasingly invested into technology to boost the mobile and online banking options for its customers, Cannon says. Cannon says National Bank of Arizona is constantly looking at releasing new features for its online and banking platforms to keep in line with the entire industry. Currently, National Bank is making a massive investment into the replacement of its core operating platform, Cannon says. The new platform, dubbed Future Core, will integrate all of the bank’s systems, from the loan systems to the consumer deposit systems, Cannon says. All of the bank’s previous systems were built as one-offs and did not work efficiently together, Cannon says. But with the new Future Core system, National Bank of Arizona hopes to improve the customer experience, while enabling the bank to further invest into mobile and online channels, Cannon says.
SECURING THE NEW VAULT In the past, a bank’s primary security concern centered around its vault. But with everything going online, the banks are concerned about much more. Today, the online log-in, the online site and the mobile app are huge points of security protections for Chase, says Van Beurden. Every year, Chase invests hundreds of millions of dollars into every type of cybersecurity protection and prevention tool that could protect the bank, he says. In early May, President Donald Trump signed an executive order to strengthen the cybersecurity of federal networks and critical infrastructure. The executive order is aimed at protecting federal agencies and the country’s infrastructure from cyber threats. Rob Nichols, president and CEO of the American Bankers Association, applauded Trump’s executive order. “The executive order will enhance the security of government systems and help protect our critical financial infrastructure — and ultimately bank customers — through enhanced information sharing and greater cross-industry collaboration,” Nichols says.
LAW
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AB | September - October 2017
WAVE
of the future The legal industry is finding itself in the midst of a technology revolution with the adoption of artificial intelligence
By CIANNA LEPARULO
T
he technology industry is constantly growing and citizens of Arizona are likely not aware of every technology advancement that could impact the way they live and do business. Screenwriters in Hollywood have appeals to sci-fi lovers by capitalizing on these advances with technological futures such as robots and computers that can communicate with real language just like a human being using artificial intelligence. Whatever mysterious technologies are being created beyond the public’s view on Hollywood movie sets, there is an advancement that is happening right now and has the potential to affect anyone. Artificial intelligence, or AI, is currently being used as a supplement to law firms all around the country in capacities such as document production. And experts say much like email changed the way attorneys do business every day, AI will become an indispensable assistant to practically every lawyer. Although, AI will never replace the professional or personal aspect of an attorney, it will certainly change the way attorneys do their jobs. CHANGES COMING Emerging software companies, such as IPro Tech, which is based in Arizona, are creating tools to help attorneys sort through document production for various cases.
Marc Lamber
Laura Rogal
For example, the computer can identify the most pertinent information available in large databases or case files. AI helps the attorney find the “needle in the haystack” of legal documents that can become the most useful information for a case. AI can mine the documents for evidence that would be useful during litigation, review and create contracts, identify potential fraud within companies and complete legal research before acquisitions. “It allows the document review itself to be more efficient and more targeted to what is needed,” says Laura Rogal, a partner at Jaburg Wilk and an expert in effective use of technology. At present, these duties are completely up to the attorney themselves, which is equivalent to an office filled with piles of paperwork. HOW IT HELPS Obviously, sifting through paperwork is not the most glamorous part of an attorney’s job. AB | September- October 2017 19
LAW persuasive case while studying case law. “Let’s say, we do legal research right now and if I type in an issue, I might pull up “Right now, our ethical rules require us to use and 320 cases that are all on that same issue understand technology, but we cannot allow the technology and I might know that one of those cases is more persuasive than another,” Rogal to replace our decision-making processes.” — Laura Rogal says. “But for AI to get there, that’s gonna be difficult, especially if some of them are using reasonably close enough language. It’s an interpretation issue. Maybe in 15 years or so, it will be closer to that artificial intelligence resources in order to Lets say they get 10,000 pages of point, but it still won’t be able to supplant enhance its legal research. document production from another party Fennemore Craig attorney Marc Lamber, attorneys in the legal field.” as part of a lawsuit and they’re looking for There are just certain training issues whom the ABA Journal named among 10 key issues within those pages. that are still being worked out and the “Techiest Lawyers in America,” says, With AI document review, the attorney “Just like any emerging technology — like the most prevalent assistance that AI inputs the documents into one of these can give attorneys as of right now is how self-driving cars have the potential programs and the program actually document production. to eliminate certain roles of drivers in the reads the document itself and flags those A computer may be able to learn a taxi and limousine services industry — keywords or phrases that the attorney is language and determine the best suited artificial intelligence may impact research looking for and then those documents can key words for a legal case, but it is still not be reviewed that have that key information. roles in the legal field.” able to negotiate with others or analyze a Fennemore Craig has partnered with Jaburg Wilk uses the local software case as far as determining persuasion or Ross Intelligence, which is one of the company, IPro Tech, but is opening its even picking up on its own mistake, which larger legal research software companies doors to even more technological growth is why attorneys are still ethically required providing artificial intelligence in the in the future. to double check its work. United States. “I went to the ABA Techshow earlier this However, it is close to entering “At present, Ross is focused on offering year and there were probably 50 vendors into all areas of law, rather than just case law and currently covers the practice offering some version of AI for legal the few pockets to which it’s recently areas of bankruptcy and intellectual services,” says Rogal. The ABA Techshow Conference and EXPO is where lawyers and property,” Lamber says. “The areas of labor been exposed. “We’ve kind of gotten past the initial legal professionals can learn about the most and employment, tax, and insurance are hiccup stage, so I give it two to five years soon to follow here at the firm.” useful and practical technologies available. before it falls into all pockets of the law Still, there is very little chance of AI Rogal is familiar with the growth of this technology, but this kind of AI use requires taking over the job of an attorney due to its industry,” Rogal says. “It just needs a few inability to negotiate or determine the most years of evolution.” a lot of training for each field it may be working with, which means that attorneys have to be wary of its capabilities. “We have an ethical obligation to oversee the technology,” Rogal says. “Right now, our ethical rules require us to use and understand technology, but we cannot allow the technology to replace our decision-making processes.” Rogal says if the technology does not pick up on something and the attorney doesn’t double check, there could be orget what you’ve seen in the movies, because the Hollywood interpretation of serious ramifications. artificial intelligence (AI) can be a bit misleading, particularly when discussing “That is on us and that would be our the impact of AI on the legal profession. When it comes to AI and the law, we’re malpractice,” says Rogal. not talking about some C3PO with a briefcase. The definition and description that is catching on within the legal community is cognitive computing. This means WHAT’S AHEAD? teaching computers how to learn, reason, communicate and make decisions. The future of AI and the law industry is Cognitive tools are trained vs. programmed — learning how to complete tasks certainly bright as more and more law firms traditionally done by people, where the focus is looking for patterns in data, adopt it into their workdays and see potential testing the data and finding or providing results. for its supplementation to their jobs.
WHAT IS
ARTIFICIAL INTELLIGENCE?
F
Fennemore Craig is another one of the first national law firms to engage with 20
AB | September - October 2017
DA Y! TO AT E IN M NO For sponsorships go to azbigmedia.com or call 602-277-6045
JA N
UA RY
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AZ Business magazine recognizes the vital role that in-house counsel plays and acknowledges the accomplishments of leading in-house attorneys. Candidates in each category will be recognized for extraordinary legal skill and achievements across a full range of in-house responsibility, exemplary leadership and for contributions to the Arizona community at large.
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HEALTHCARE
ORAL TEST With rising costs for dental care and fewer dentists practicing, is Arizona facing a dental crisis?
By MELISSA KING
G
oing to the dentist hasn’t always been top of mind for many. It can be a stressful time, especially for those who don’t know what to expect. Dentists can’t stress enough how important oral health is, as it is tied to many other health issues that can arise if dental issues are left unchecked. With this in mind, Arizona’s oral health needs some work. There is a divide between the number of dentists in Arizona’s metropolitan and rural areas, dental health literacy is low, costs for care are high, there are problems with Medicaid benefits, utilization of benefits is low and there is a lack of philanthropy in dentistry. Arizona lags behind the national number of dentists per 100,000 population, with the state having 54.5 dentists per 100,000 residents, compared with the national average of 60.5 dentists per 100,000, according to the American Dental Association. And while metropolitan areas have approximately one dentist to every 1,000 residents, rural communities have just one dentist per 5,000-6,000 residents, says Jeff Adams, CEO of Risas Dental. Residents in the metropolitan areas only drive about a mile compared with 10 or more miles rural patients must drive to reach their nearest dentist, Adams notes. SMALL-TOWN PROBLEMS When dentists are seeking locations for a practice, they often look at a real estate chart for the most populated communities and are rarely moving to Arizona’s underserved regions, Adams says. Dentists that do go to rural communities have many more patients than those in metropolitan regions, Adams explains. Meanwhile, in the cities, dentists have open appointment times and must spend time and money on advertising to fill their chairs. One thing that may deter dentists from setting up practice in rural Arizona could be that many dentists lack cultural training and competency and the ability to speak other languages, says Mike Tilton, vice president of sales at Blue Cross Blue Shield of Arizona. Arizona can counteract this, by convincing more people from Arizona’s rural communities to pursue a career in dentistry so they can serve their communities, Tilton suggests.
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Jeff Adams
Kathy Morrow
Robert Roda
McKenzie Simmons
Mike Tilton
Kris Volcheck
But affordability for dental school is tough for those in rural communities. Dentists often graduate with upwards of $500,000 in student loans, but loan repayment programs exist, says Kathy Morrow, director of professional relations at Delta Dental, a dental healthcare benefit provider. Prospective students just need to be aware of them, Morrow says. HELP FOR STUDENTS There are a couple of these types of programs available in Arizona. In exchange for a two-year commitment to provide services in a federally designated Health Professional Shortage Area or Arizona Medically Underserved Area, qualifying students’ educational loans will be repaid. The Arizona State Loan Repayment Programs consist of the Primary Care Provider Loan Repayment Program and the Rural Private Primary Care Provider Loan Repayment Program, according to the Arizona Department of Health Services. Despite a divide between the number of dentists in Arizona’s rural and metropolitan communities, Morrow doesn’t think there is a shortage of dentists in Arizona. Most people, even in rural or tribal areas, can access dental care within a reasonable drive, she says. A problem that seems to affect everyone is the rising costs for dental care and the lack of dental insurance policies. The low and middle class still can’t afford dentistry. Even with dental benefits, the coverage is often minimal if you need anything more than preventative care, says Dr. Kris Volcheck, CEO of the Brighter Way Institute. The average dental cost per-patient in the U.S. is $685 in 2013, according to the American Dental Association. Expenditures for the 90th percentile of the U.S., which accounts for 13.4 million people, were at $1,624 in 2013. The American Dental Association states that these higher costs likely account for visits to specialists, which are often not covered AB | September- October 2017 23
HEALTHCARE by the typical dental insurance policy. This cost of dental care has been rising faster could be a huge financial burden, as folks are than inflation. Dental costs are now rising required to pay those costs out of pocket. at a rate faster than the rising cost of medical, he says. Medicaid does not cover dental care IMPORTANCE OF CARE for adults in Arizona. There is also the These costs highlight the importance of uncertainty about Medicaid’s future federal preventive dental care. funding, and this is causing Arizona to Tilton, from Blue Cross Blue Shield of tighten up its attitude before expanding Arizona, wants people to know how critical Medicaid benefits, Roda says. And it’s difficult dental insurance is to keeping costs down. There are very affordable plans out there with for practices to be able to offer Medicaid monthly costs less than a tank of gas, he says. services, which could be a deterrence. It took Risas Dental more than 18 “There’s a lot of tremendous benefits that includes free preventive examinations,” he months and an extensive amount of says. “Our goal is to really create a way that paperwork to get approved, Adams, says. But even those who have some type of lets people understand that implication dental coverage still aren’t getting in the go far beyond the mouth and promote a chair for examinations. healthy lifestyle.” Roda says only about 44 percent of those As we’re finding with the rest of with dental benefits are actually using healthcare, preventive oral care is vitally their insurance. important as it can help patients avoid costly hospital visits before a simple tooth FILLING THE ADVOCACY DIVIDE ache turns into a health crisis. Roda believes health literacy is necessary Oral health can have an impact on to get more folks in a dentist’s chair. metabolic rate, diabetes and cardiac One example of the benefit of teaching conditions, the ability to properly digest health literacy is the case of Give Kids a food, increases gastric reflux issues and periodontal disease is linked to premature Smile Day, where at the Boys and Girls Club in Buckeye, volunteers help with births. Oral health is not just a matter of children’s annual dental checkups. By the having clean teeth and healthy gums, it third year, they saw less decay, disease and can affect the entire body. problems. The most important thing, was To get people thinking more about that the children learned how to brush, their oral health, Blue Cross Blue Shield floss, learned why it’s important, took the has been trying to increase enrollment by including more information on its website messages home and changed. The location and marketing more to business owners, among other things. And businesses see a big boost to providing dental coverage to employees. Offering dental coverage is a great way to recruit prospective employees. “It’s not about the teeth and gums, but about overall health,” Tilton says. In recent years, both Blue Cross Blue Shield of Arizona and Delta Dental have seen year-over-year growth in enrollment numbers for people buying privately and from employers. Still, about 44 percent of adults and 38 percent of children living in Arizona do not have dental insurance, according to the Arizona Dental Association. And for those who can’t afford dental insurance, they’re left at risk of their oral health decreasing. And dental care costs are rising. Robert Roda, president-elect of the Arizona Dental Association, says data provided by the Bureau of Labor Statistics shows the
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had to move due to popularity and is now held at the A.T. Still University in Mesa. McKenzie Simmons, development director for Esperanca, a Phoenix-based nonprofit whose goal is to reach children who are underinsured or uninsured, says dentists in different areas should be more willing to participate in philanthropic efforts or work in underserved areas. Many need to identify resources available to them, but are hard to find, so they don’t look. One group that is reaching out to the community is Risas Dental. Risas’ staff holds its Labor of Love event each Labor day from 8 a.m. to noon. To date, Risas’ staff has provided more than $2 million in free dentistry, food and water to the community. People line up the night before. Adams says they help care for many people who have waited a long time to receive care. Still, more work needs to be done to ensure dental and overall health. If Arizona’s priority is to ensure it has a healthy population, insurance that covers the full body needs to be more common, Volcheck says. “We’ll take our resources, finances, and money and put it towards people’s health,” he says. “If one always focuses back on the patient, all questions are answered. If our goal as a society is to get care to people, we can make all of these variables work.”
percent of adults and
38 percent of children living in Arizona do not have dental insurance, according to the Arizona Dental Association.
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FAMILY BUSINESS
Family AFFAIR
It’s time to ditch the myths and stereotypes when working with relatives
V
ery few family businesses (less than 15 percent by most estimates) make it on to the third generation in the family. A primary reason for this is that leaders usually pick and choose family members based on emotions, stereotypes or myths — rather than wise business selection practices. ALL IN THE FAMILY: From left, Bashas’ Family of Stores leaders Edward “Trey” Basha, Ike Basha, Johnny Basha, David Basha and Mike Basha. PHOTO BY MIKE MERTES, AZ BIG MEDIA
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Consider the stereotype that men are just “better” at business than women — more aggressive, better sales people, the CEO “type.” It’s pervasive. There are still very few women CEOs, very few female board members, and even Inc. Magazine’s list of Top 50 business gurus only includes 3 women — all at the bottom of the list. These stereotypes, accompanied by myths such as birth order in a family business can do serious harm. We see it all the time where the family’s eldest son seems like the obvious choice to take over as CEO of the business without much thought put into whether he has the right natural abilities to be a CEO. It often happens unconsciously; the son is already playing the role of the oldest sibling and taking care of others in the family so that same dynamic is applied at the office. The baby of the family, the quiet introvert who didn’t excel in school clearly can’t take a leadership role in the family business, right? In fact, this kid may thrive in the business - often after first pursuing something else first and coming into the business for a specific role later. Our research into the third part of the mind — Conation — has revealed that every person has a natural set of abilities and a certain way they solve problems.
Kathy Kolbe and Amy Bruske Family businesses
It’s something you don’t hear a lot about, and that’s why so many businesses struggle. When applied to a family business, this means that some people are naturally better suited for certain roles. Don’t assume that men are strategists and women are organized. The female, youngest child may have the best instincts for being the CEO. The eldest son may make the best CFO or head of sales or, potentially, isn’t even a good fit to join the business at all. We’ve seen many husband/ wife operations play out with the woman being the bookkeeper or leading HR - even if she has no financial training and her instinctive strengths show that she’s better suited to lead marketing or sales.
BASHAS’ FAMILY OF STORES By MELISSA KING
A
n image of the American Dream for more than 85 years, Bashas’ Family of Stores has thrived and grown to more than 130 locations, with more than 8,500 employees. Bashas’ stores are located in every county in Arizona and in Crownpoint, N.M. Since the first store to officially incorporate the Bashas’ name was opened in 1932 in Goodyear, Bashas’ stores include four distinct formats: Bashas,’ Bashas’ Diné, AJ’s Fine Foods and Food City. Edward “Trey” Basha, president and CEO for Bashas’ Family of Stores, describes the challenges and rewards of working in the family business.
Az Business: What is the biggest challenge to working in a family-owned business? Trey Basha: Trying to replicate that feeling of family throughout the organization. AB: What is the best part of working in a family-owned business? TB: One of the best things about being a family-owned business is the trust and collaboration that we have with each other. That connection keeps us moving forward with a common goal in mind, making it much easier than it could be in a non-family setting.
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FAMILY BUSINESS SALT CELLAR RESTAURANT By MELISSA KING
S
alt Cellar Restaurant, located in Scottsdale, has been flying in the highest quality fresh seafood to the desert to the delight of Valley diners for more than 35 years. Richard Huie, Salt Cellar’s owner, says balance is the key to finding success with a family-owned restaurant. Az Business: What is the biggest challenge to working in a family-owned business? Richard Huie: Not letting the business consume your personal life. If you can’t walk away for family time, the business will own you instead of you owning the business. Confidently delegating responsibilities to key employees is crucial. AB: What is the best part of working in a family-owned business? RH: Enjoying the success of having mastered the challenges of building a business and coming out on top. We report to no one, yet are accountable to everyone — our customers, our employees, our vendors and our community.
DIGGING DEEP: Richard and Cindy Huie own Salt Cellar Restaurant, an undergound restaurant in Scottsdale.
PHOTO BY MIKE MERTES, AZ BIG MEDIA
Family business owners and family members thinking about joining the business should ask themselves the following questions up front: • Do you have shared values? • How would the business benefit from the personal strengths of the family member candidate, natural conative abilities and skills/experience? • Would the owner/founder and other decision makers give the candidate the freedom to act on his/her strengths? • How would the business benefit from these contributions? • How would the family member benefit from joining the team? If a family business can’t provide clear answers to these questions and gives into myths and stereotypes, without understanding the natural strengths of all involved, the business is setup for failure. A lasting family business is one where everybody involved can have the freedom to be his/herself, and one where everybody remembers that family is family…and business is business. Kathy Kolbe and Amy Bruske are coAuthors of “Business is Business: Reality Checks for Family-Owned Companies.” Bruske was recently named “Business Owner of the Year” by the Phoenix Chapter of the National Association of Women Business Owners (NAWBO).
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Macayo’s Mexican Restaurants By MELISSA KING
F
amily-owned businesses are spread all around the Valley. Some are new, but some have been open for many years. Macayo’s Mexican Restaurants first opened more than 70 years ago and has locations throughout Arizona and Nevada. Macayo’s uses only the freshest ingredients to make the time-honored family recipes. Sharisse Johnson, daughter of founders Woody and Victoria Johnson and CEO of Macayo’s, talks about working in a family-owned business. Az Business: What is the biggest challenge for a family-owned business? Sharisse Johnson: We live in a different and ever-changing environment today. Because of that, some of the challenges are trying to continue to innovate, solve problems and think of ways to uphold tradition and high standards for food and service, while staying true to our founding values. AB: What is the best part of working in a family owned business? SJ: Our teammates — some of who’s have been here since my father — and our guests, who have been dining with us since. Our team loves the stories of how my father could walk into the kitchen and know if a recipe was wrong just by the smell. Our guests will stop me in the restaurants to tell stories of him and the memories they have.
LONG HISTORY: Woody
and Victoria Johnson founded Macayo’s Mexican Restaurants in 1946. PHOTO PROVIDED BY MACAYO’S
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MARKETING
The foundation of a
winning partnership T
his fall, Shea Homes will kick off the third consecutive season of its partnership with the Arizona Cardinals. While many know about the relationship Shea Homes has with our outstanding NFL team, few have heard the story of how that partnership came to be — not on the back of a napkin or in a boardroom, but in a basement. We’ve all heard the term “man cave,” but in this case, our relationship stemmed from a “fan cave,” created by our talented design team in the basement of a model home at our Vista Montaña community in Peoria. Using the Arizona Cardinals as our inspiration, we decked out the basement with oversized theater chairs, framed jerseys, Ken Peterson a green football field carpet and Marketing a huge TV. Everyone loved it, including a homebuyer who had a relationship with the Cardinals and told them about this must-see “fan cave.” Upon connecting with the Cardinals’ business development manager, it was immediately clear to both of us that we were a great match. Not only do we share a commitment to provide the ultimate customer experience, we also strive to be the best at what we do — and have a good time in the process. Our affiliation began with the 2015 season. From the start, branding was, and continues to be, a big part of our relationship. A strong Shea Homes brand presence at University of Phoenix Stadium, coupled with a popular social media campaign and contests giving fans the opportunity to win tickets and merchandise throughout the season, has proven to be extremely popular. Did I mention we like to have fun? Shea Homes also hosts tailgate parties throughout the season on the Great Lawn, where we entertain dozens of homeowners and fans. In the offseason, we hold multiple “House of Cards” events at Shea Homes communities, giving the public a chance to tour our beautiful model homes and enjoy tailgate-style food and drinks while mixing and mingling with Arizona Cardinals players, cheerleaders and Big Red. One of the most meaningful aspects of our partnership has been teaming up with the Cardinals organization for the NFL/United Way Hometown Huddle program. This year, we came together in support of the House of Helps Community 30
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PROVIDED PHOTO
HOMETOWN PRIDE: Shea Homes and the Arizona Cardinals gave the House of Helps Community and Worship Center in South Phoenix a makeover as a part of the nationwide NFL/United Way Hometown Huddle program that allows NFL coaches, players, wives and staff to participate in a service project for their hometown.
and Worship Center in South Phoenix. Housed in a cramped residential home, the House of Helps was in desperate need of a renovation. While initial plans were to install a back yard garden, the passion in our organizations manifested itself and the project blossomed into a complete renovation of both the indoor and outdoor spaces. The center is now a place where neighborhood children can play, learn and build a strong foundation for the future. On ribbon-cutting day, it was a joy to watch the kids toss the pigskin and do a little hands-on gardening with Arizona Cardinals players. As we head into fall, I am both proud and excited to continue this partnership. The entire Shea Homes team is ready to bring our abundant passion to support the Arizona Cardinals for another great season. Go Cards! Ken Peterson is the vice president of sales and marketing at Shea Homes.
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DINING
Casting a shadow Hearth ’61 rises up to quickly become a must-try dining destination TASTE OF SUCCESS: Renowned Chef Charles Wiley lets the food inspire creativity and serves up seasonal fare that’s delightful in its simplicity at Hearth ’61, the signature restaurant at Mountain Shadows, the new $100-million resort on the corner of 56th Street and Lincoln Drive. PROVIDED PHOTO
By MICHAEL GOSSIE
I
f you mix one of Arizona’s most iconic resorts with one of the state’s most innovative chefs, you have a recipe for success. That recipe has made Hearth ’61, the signature restaurant at Mountain Shadows, a triumph of the tastebuds. The name Hearth ’61 refers to the centerpiece of the restaurant’s kitchen, which is a hearth. The hearth is responsible for some can’t miss deliciousness, including the Niman Ranch aged tomahawk ribeye for two ($120), the Two Wash Ranch organic half chicken ($26), the mouthwatering Moroccan spiced rack of lamb ($38) and the whole-roasted branzino ($29). The ’61 in the name refers to 1961, the year the Town of Paradise Valley was incorporated. The stylish restaurant features an open kitchen, sunken living room lounge, a welcoming bar and a glass-encased wine cellar with a tasting area. The centerpiece is a stunning water feature that casts light and animation on the mid-century modern butterfly roof. Putting together the ingredient-driven, seasonal menu at Hearth ’61 is renowned Chef Charles Wiley. Chef Wiley was named one of America’s “10 Best New Chefs” by Food & Wine Magazine for his innovative interpretation of Southwest cuisine. He
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created the award-winning restaurants elements at Sanctuary Camelback Mountain Resort & Spa and ZuZu at another local landmark, the Hotel Valley Ho. “It is truly an honor to be a part of this iconic project, the rebirth of Mountain Shadows,” said Wiley. “We will rely on all the relationships we’ve cultivated over the years with local farmers and artisans to craft a rustic yet vibrant cuisine. The culinary team we’ve assembled is nothing less than extraordinary, and we’re excited to present menus featuring a perfect balance of innovation and tradition.” For Hearth ’61, Wiley has created cuisine that utilizes cooking styles rich in tradition to create time-honored flavors — along with more than a few happy surprises. The menu constantly evolves with a daily featured roast. Diners can expect local, organic, seasonal ingredients, as well as responsibly sourced meat and seafood. Bringing a unique element to the dining experience, hearth roasted dishes stay in the same vessel from oven to table, capturing the char and smokiness the hearth brings to meat, seafood and vegetables. Beyond the hearth dishes, which all excel, these are some must-taste dishes on the Hearth ’61 menu:
• Charred eggplant and ancient grains ($20). • Short rib agnolotti ($28 and beyond the bomb dot com). • George’s Bank scallops ($34 and cooked to Gordon Ramsay-approved perfection). • Ginger carrots ($9) and thyme-roasted fingerling potatoes ($9). They are both side dishes, but stand on their own on the deliciousness meter. Hearth ’61 has all the ingredients for the perfect Arizona dining experience: Innovative food that will surprise and delight even the most fierce foodies, stunning views of Camelback Mountain and the surrounding scenery and service that is unmatched in its knowledge and sophistication. The original Mountain Shadows opened in 1959. Hearth ’61 proves that everything old can be new again — and better.
Hearth ’61
Where: 5445 E. Lincoln Dr., Paradise Valley Hours: The restaurant is open daily for breakfast, lunch and dinner Web: mountainshadows.com/dining/hearth
AZ TOTEM ART
Custom Bird Feeders and Totems made from repurposed architectural materials
aztotemart.com | By Appointment Only • 602.677.5999 AB | September- October 2017 33
Most Admired Companies
of 2017
Leadership excellence, social responsibility, customer opinion, workplace culture, healthy environments and innovation separate MAC winners from the rest By MICHAEL GOSSIE
A
lot has changed in the workplace since the Most Admired Companies program debuted in 2010. The gig economy didn’t even exist yet. Millennials have become a force in the office. And the battle for talent has become a war. When AZ Business magazine and BestCompaniesAZ launched the Most Admired Companies program in 2010, the primary goal was to find and recognize those organizations that excel in four key areas: • Leadership excellence • Social responsibility • Customer opinion • Workplace culture Soon, a fifth area — innovation — was added because companies that didn’t innovate seemed to soon evaporate. And like Arizona’s evolving economy, the Most Admired Companies program continues to evolve. With workplace wellness and the well-being of employees becoming a critical component for attractive and retaining top talent, the Most Admired Companies judging panel also weighed healthy workplaces into the equation when selecting the Most Admired Companies of 2017. Based on those six pillars of excellence, a selection committee comprised of Az Business
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magazine’s editorial and management team, BestCompaniesAZ’s leadership team and professionals from a wide range of industries rated and selected the most accomplished and prestigious companies in Arizona. With hundreds of nominations representing the most innovative, impactful and successful companies in Arizona, being one of Most Admired Companies for 2017 shows that the companies profiled on the pages that follow truly represent the best in Arizona business. If you want to apply for the 2018 Most Admired Companies awards, visit azbigmedia.com.
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Most Admired Companies 2017
AMERICAN EXPRESS
Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017 Top Arizona executive: John Standring, senior vice president What it does: Largest credit card issuer by purchase volume. Admirable quality: In May, the company introduced the AXOSOFT American Express Leadership Academy, a collection of the Most Admired Company: 2017 best tools, programs and processes in leadership development Top Arizona executive: for all employees. The initiative includes the launch of a Lawdan Shojaee, CEO flagship program — the American Express & Harvard What it does: Offers a proprietary project management and bug tracking system. University Certificate in Leadership Excellence. Admirable quality: Axosoft supports females in the tech This is a customized, best-in-class leadership industry and launched the #ItWasNeverADress campaign. development experience designed in partnership The powerful symbol went viral, garnering coverage on with Harvard. Program participants will BuzzFeed, The New York Times, CNN, The Huffington Post, gain powerful insights and skills to take Time and more. It was featured as “one of the Top 20 most notable their leadership to the next level. things to come out of Arizona.” This resulted in a partnership between Axosoft and Arizona State University to create a scholarship at the Herberger Institute for need-based students entering STEAM (Science, Technology, Engineering, Arts, and Mathematics) fields.
BLOOD SYSTEMS
Most Admired Company: 2015, 2016. 2017 Top Arizona executive: Dave Green, president and CEO What it does: Provides blood, blood components and special services to patients in nearly 600 hospitals across the country. Admirable quality: In 2017, Blood Systems rolled out a performance improvement program called Operational Excellence (OE). This program designs systems with the goal of achieving a sustainable culture of excellence. The first two principles — lead with humility and respect every individual — look to foster a strong leadership culture. All manager-level and above leaders attended five in-person classes and now regularly huddle with team members to review and track improvement projects. 36
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Most Admired Companies 2017 CBRE
BLUE CROSS BLUE SHIELD OF ARIZONA
Most Admired Company: 2011, 2017 Top Arizona executive: Rich Boals, president and CEO What it does: Offers a variety of dental and health insurance plans. Admirable quality: Every year, BCBSAZ supports more than 200 charities and organizations and encourages employees to be active participants in their communities. In 2016, BCBSAZ employees contributed more than 1,000 volunteer hours to assist community-based organizations. BCBSAZ has worked with elementary schools around the state to hold the Walk On! Challenge, which has reached more than 330,000 fifth-graders, motivates children (and their parents) to incorporate healthy habits into their daily routines.
Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017 Top Arizona executive: Craig Henig, senior managing director, Southwest Region and Arizona market leader What it does: Full-service real estate services company. Admirable quality: In January, CBRE acquired Floored, Inc., a leading producer of SaaS (Software as a Service) solutions, including scalable, interactive 3D graphics technology, for the global commercial real estate industry. Floored gives CBRE’s professionals and clients access to advanced technology, and significantly increases the company’s capabilities to develop technology innovations that enhance marketing and leasing of commercial properties. Later this year, CBRE will move into a tech-enabled, paperless office.
CARETAKER LANDSCAPE AND TREE MANAGEMENT
Most Admired Company: 2017 Top Arizona executive: Matt White, owner What it does: Landscape management, development, enhancement and design. Admirable quality: Education is a huge part of Caretaker’s culture and is something it promotes and brings its team together. Caretaker encourages its employees and often provides opportunities for them to continue their education and certifications. If you visit Caretaker’s LinkedIn or Facebook pages, you will find the company celebrating each employees’ accomplishments and educational milestones. In 2014 and 2015, Caretaker — known for its “Commitment to Caring” program — was ranked Top 10 in Ranking Arizona for Best Workplace Culture.
CBRE
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CARETAKER LANDSCAPE AND TREE MANAGEMENT
Most Admired Companies 2017
COPPERPOINT INSURANCE COMPANY
Most Admired Company: 2010, 2011, 2012, 2013, 2017 Top Arizona executive: Marc E. Schmittlein, president and CEO What it does: Arizona’s leading provider of workers compensation insurance. Admirable quality: CopperPoint gives employees the freedom to support organizations that are near and dear to them and matches individual donations – up to $500 – to the nonprofit of the employee’s choice. As a result, CopperPoint supports more than 120 nonprofit organizations who serve the hungry, the homeless, domestic violence shelters, animal rescue organizations and organizations that provide educational opportunities to youth or help in rehabilitating those seeking help from substance abuse.
CRESA
Most Admired Company: 2014, 2015, 2016, 2017 Top Arizona executive: Gary Gregg, managing principal What it does: Corporate real estate advisors specializing in tenant representation. Admirable quality: Cresa is a founding sponsor of the Industry Leaders of Arizona awards, which celebrates the top leaders in key industries in Arizona and recognizes the contributions and impacts these leaders have within Arizona. Through the ILoA program, leaders from Cresa have interviewed more than 200 companies and have recognized 120 companies total. Providing companies with this opportunity not only allows them to be recognized within the community, but also helps them meet potential clients and prospects.
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CHARLES SCHWAB & CO.
Most Admired Company: 2013, 2014, 2015, 2016, 2017 Top Arizona executive: Bernie Clark, executive vice president and head of Schwab Advisor Services What it does: Provides help with financial planning, investments, retirement planning and more. Admirable quality: As the second-largest Charles Schwab location, Arizona is home to 21 percent of its employees. The Arizona location contributes significantly to building the company’s award-winning culture. Charles Schwab takes great pride in the fact that the Arizona workforce experiences a very low voluntary turnover rate of 8.5 percent, which outperforms the industry average of 14.4 percent and regional average of 25.8 percent.
Most Admired Companies 2017 DIRECT ENERGY
Most Admired Company: 2017 Top Arizona executive: Jack Meek, senior director, call centers What it does: Retailer of energy and energy services. Admirable quality: Direct Energy supports employees’ health and wellbeing. From fitness partnerships to nutritional support and opportunities to incorporate good habits into daily work life, Direct Energy hosts an inhouse health and wellness program with opportunities for all employees. One example is an indoor fitness track that provides an indoor path to walk for exercise on Arizona’s hot summer days. Another amazing perk: Direct Energy offers 12 weeks of paid parental leave for men and women, a benefit virtually unheard of nationwide.
FENNEMORE CRAIG
FENNEMORE CRAIG Most Admired Company: 2010, 2014, 2015, 2016, 2017 Top Arizona executive: Stephen Good, managing partner What it does: Full-service law firm for businesses. Admirable quality: Fennemore Craig has been committed to fostering diversity in the workplace for many years and continues to be evident through the number of minority and women directors and the number of leadership positions held by minorities and women. Fennemore Craig has a strong track record of advancing women and minority lawyers to positions of leadership within the firm and within the legal community. Approximately 30 percent of attorneys are women and approximately 25 percent are directors at the firm.
GO DADDY DIRECT ENERGY
Most Admired Company: 2011, 2012, 2014, 2015, 2016, 2017 Top Arizona executive: Blake Irving, CEO What it does: Internet domain registrar and web hosting company. Admirable quality: Employee-driven GoDaddy groups help foster a strong workplace culture that impacts the company. GoDaddy Vets group leaders met with Michelle Obama and pledged to hire 500 veterans over the next five years. The GoDaddy Grads group compiled city guides to help freshfrom-college hires navigate their new locations. And once those new employees are on board, they can enjoy GoDaddy’s free employeeled yoga instruction to maintain a healthy mind and body.
GO DADDY
Most Admired Companies 2017
HABITAT FOR HUMANITY CENTRAL ARIZONA
Most Admired Company: 2016, 2017 Top Arizona executive: Jason Barlow, president and CEO HENRY+HORNE What it does: Nonprofit homebuilder for low-income families. Most Admired Company: Admirable quality: Habitat for Humanity Central Arizona has 2015, 2016, 2017 pioneered a new area where it is leading the nation. While Top Arizona executives: still one of the top providers of single-family homes, Chuck Goodmiller and Chuck Inderieden , co-managing partners Habitat started work on three-story townhomes in Tempe. These homes are going to a diverse selection What it does: of working class families, including refugees from Provides expertise in accounting, estate and tax issues. Tanzania; a family facing leukemia; an Iraqi Admirable quality: family; a young man from Sudan; a Mexican Henry+Horne’s leadership team has a strong focus on growth and family with three small children; and an continued success. The leadership team’s vision led to growth of nearly Arizona native single mother of two. 60 percent in the last seven years, helping Henry+Horne become a Top 150 accounting firm in the U.S. (No. 128), up almost 20 spots from last year. In the most recent Best Accounting Firms to Work For survey, Henry+Horne scored 94 percent in areas pertaining to confidence in firm leadership.
HOMEOWNERS FINANCIAL GROUP USA
Most Admired Company: 2010, 2011, 2013, 2014, 2016, 2017 Top Arizona executive: Bill Rogers, founder and CEO What it does: Mortgage company. Admirable quality: Wellness is important to HFG and is promoted in a variety of different ways. Each year, HFG hosts a wellness fair for employees to receive flu shots, biometric screenings and healthy tips. Along with this, employees are given the option to use the Rally Health App through United Healthcare Benefits, where they can log healthy activity, manage exercise and be eligible for gym membership reimbursement. HFG also hosts a MOM Van during Breast Cancer Awareness Month for mobile mammogram screenings. 44
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Most Admired Companies 2017 HYATT REGENCY PHOENIX
Most Admired Company: 2013, 2014, 2015, 2016, 2017 Top Arizona executive: Thomas Delaney, general manager What it does: Hotel with 693 rooms and mountain or downtown views. Admirable quality: Hyatt Regency Phoenix offers meeting planners a helpful tool that streamlines and captures the requests they receive when planning an event or meeting. The Hyatt Event Concierge App earned this year’s CEO’s Award for Innovation. The Hyatt Event Concierge App — which can be installed on any mobile device or desktop computer — automatically routes meeting planner requests directly to the appropriate department for fulfillment. As a result, meeting planners can quickly and efficiently manage and track requests.
HYATT REGENCY PHOENIX
INFUSIONSOFT
Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017 Top Arizona executive: Clate Mask, CEO What it does: Offers an e-mail marketing and sales platform for small businesses. Admirable quality: Infusionsoft knows it can’t solve all small business problems alone, so they invited the world to create solutions with them. The company built an ecosystem of service and technology partners to create a vibrant marketplace of apps and integrations. Small businesses can partner with hundreds of business building experts who specialize in all different types of industries and sales and marketing strategies, such as copy, website design and more.
INSIGHT
Most Admired Company: 2017 Top Arizona executive: Ken Lamneck, CEO What it does: Provider of computer hardware, software, cloud solutions and IT services to business, government, education and healthcare clients. Admirable quality: Insight encourages diversity in each of the company’s branch locations and to be representative of the larger community. Insight’s leaders work to identify where there are gaps and what type of population is under represented. From there, each recruiter has the task to build relationships with local diversity agencies in order to market opportunities at Insight. Insight also has partnerships with veteranfocused organizations that help transition military personnel into the workplace.
INFUSIONSOFT
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INSIGHT
Most Admired Companies 2017 JE DUNN CONSTRUCTION
Most Admired Company: 2016, 2017 Top Arizona executive: Brad Schenck, senior vice president What it does: Commercial construction company. Admirable quality: At JE Dunn, leadership excellence begins with empowerment. As a familyemployee-owned company, JE Dunn strives to hire the best people and trust them to make sound decisions to better the company. This effort has attracted employees who are more collaborative, more curious and passionate in their work and more driven through their empowerment and direct connection to the success of the company. JE Dunn rewards the collective efforts of the organization through the JE Dunn Employee Stock Ownership Plan (ESOP).
JENNINGS, STROUSS & SALMON Most Admired Company: 2017 Top Arizona executive: John C. Norling, managing attorney What it does: Law firm that offers strategic guidance in corporate transactions and litigation matters. Admirable quality: One of the main beneficiaries of the Jennings Strouss Foundation is Gateway Elementary School in the Creighton School District, one of the poorest in the Valley. Over the years, Jennings Strouss has developed initiatives geared toward helping students who might not otherwise have access to the resources needed to succeed. Efforts include annual book drives, providing hundreds of new books to the school’s library, annual back pack drives and donating 30 computers and several printers to the school.
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JDA SOFTWARE Most Admired Company: 2016, 2017 Top Arizona executive: Girish Rishi, CEO What it does: Software company providing supply chain management, manufacturing planning, retail planning, store operations and collaborative category management solutions Admirable quality: JDA’s workplace culture encourages associates’ success in a fun and energizing environment while fostering associates’ well-being. JDA is focused on mentoring and developing all associates to help them realize their full potential. The focus on employee development includes WIN (Women’s Interest Network), JDA Toastmasters Chapter and an in-house talent development team in Scottsdale who facilitate training which is adapted to the workforce needs.
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Most Admired Companies 2017
KITCHELL
Most Admired Company: 2013, 2014, 2015, 2016, 2017 Top Arizona executive: Jim Swanson, CEO What it does: Handles all aspects of the construction business, from concept through ribbon-cutting and beyond. Admirable quality: Ongoing professional development includes a formalized training program administered through an online personnel center. Employees are guided in their career to help them better understand the responsibilities and skills required for each job. This includes training required to aspire to other positions, ongoing classes, career path tools, feedback, self- and supervisor assessment. This empowers Kitchell’s employees to do anything they want with the potential to advance as far as they want to advance.
LANETERRALEVER
LANETERRALEVER
Most Admired Company: 2014, 2017 Top Arizona executive: Beau Lane, CEO What it does: Full-service marketing and advertising agency. Admirable quality: Unity, boldness, humble confidence, craftsmanship and integrity are some of the characteristics LaneTerralever champions in employees. The company offers flexible schedules along with a fully stocked kitchen and “speakeasy” with a keg. Companywide happy hours and celebrations encourage team-building, and pets are welcome. The company also hosts an Employee Appreciation Day, along with “random appreciation days” with food trucks, ice cream and other goodies. The agency also holds quarterly team-building events in the office, such as baseball games and the “Office Olympics.”
LAVIDGE
Most Admired Company: 2011, 2013, 2016, 2017 Top Arizona executive: Bill Lavidge, CEO What it does: Advertising and public relations company. Admirable quality: LAVIDGE has “Fun Committee” comprised of members from each department who oversee summer and holiday parties, coordinates birthday and anniversary parties, schedules foosball tournaments and ensures the LAVIDGE “keg-erator” is always full. The agency has enjoyed several events that encourage fun and team building, including the LaviOlympics and an allstaff trip to Disneyland to mark the company’s 25th anniversary. LAVIDGE also offers employees access to the “Lavi Cab,” a signature golf cart used for outings to local restaurants, coffee runs or nearby meetings.
KITCHELL LAVIDGE
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Most Admired Companies 2017
MUSICAL INSTRUMENT MUSEUM Most Admired Company: 2015, 2016, 2017 Top Arizona executive: April Salomon, executive director LOVITT & TOUCHÉ What it does: MIM showcases a collection of more than 15,000 Most Admired Company: 2015, 2016, 2017 musical instruments and associated objects. Top Arizona executive: Admirable quality: In 2016, MIM welcomed more Charles Touché, CEO than 305,000 guests—the museum’s largest annual What it does: Insurance agency offering personal attendance number to date. Length of visit is one of lines, property and liability protection, employee our best measures of guest satisfaction at museums benefits, claims administration, workers compensation and the average visit is three hours and 38 and more. minutes, while some spend more than six Admirable quality: Lovitt & Touché places an extremely high value on workplace wellness. An employee-led committee serves as hours at MIM. TripAdvisor rated MIM as the voice of the workforce, tasked with offering timely programing. the No. 1 thing to do in Phoenix and Currently, Lovitt & Touché offers employees monthly health/ 89.4 percent of MIM’s reviews on wellness seminars, hands-on wellness activities, on-site health coaches, TripAdvisor are five-star ratings. discounts on health products, gym memberships, healthy vending options and incentives for positive health status. Lovitt & Touché has an 85.3 percent participation rate in its wellness program.
MICROCHIP TECHNOLOGY INC.
Most Admired Company: 2011, 2012, 2017 Top Arizona executive: Steve Sanghi, CEO What it does: Manufacturer of microcontroller, memory and analog semiconductors. Admirable quality: Microchip has an entire training department whose sole focus is on increasing the knowledge base of its employee and ensuring they receive the necessary coaching and training to further their careers and have a high level of engagement and job satisfaction. The training department also teaches classes for Microchip’s production employees called “Successful Internal Interviewing,” which helps prepare them to interview for internal positions so employees can transfer to other positions within the company and continue to advance in their careers. 52
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Most Admired Companies 2017 QUARLES & BRADY
PROTIVITI Most Admired Company: 2016, 2017 Top Arizona executive: Alex Robison, managing director What it does: Global business consulting and internal audit firm. Admirable quality: Leaders at Protiviti believe in “tone at the top” and its leadership meetings regularly include a service activity. At one global managing directors meeting, Protiviti’s leaders built 36 bicycles, which they donated along with helmets to underprivileged children at a local elementary school. In 2014, Protiviti also launched its U.S. Intern Day of Service, an annual event in which interns and many other employees volunteer, supporting local causes. The effort received an “Excellence in Social & Community Service Award” from Consulting magazine.
SITELOCK Most Admired Company: 2017 Top Arizona executive: Neill Feather, president What it does: Provides comprehensive, cloud-based website security solutions for businesses of all sizes. Admirable quality: While SiteLock has grown from 10 to 200 employees within the past five years, its core values still hold true – maintain an entrepreneurial spirit in everything it does, whether employees are developing new products, communicating with customers, or re-defining processes. The leaders at SiteLock have created a culture in which employees are encouraged to take initiative and implement new ideas. Leadership invests in employees through mentorship and management advancement programs so employees develop the core competencies needed to succeed.
PROTIVITI
QUARLES & BRADY
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Most Admired Company: 2014, 2015, 2016, 2017 Top Arizona executive: Nicole Stanton, office managing partner What it does: Full-service law firm for businesses and individuals. Admirable quality: Talk about leading by example. Stanton is a recent recipient of the Gay, Lesbian and Straight Education Network (GLSEN) Phoenix Ally Award; Arizona Women’s Law Summit’s First-Ever Woman of the Year Award; Southwest Center for HIV/AIDS Outstanding Achievement Award, Positively Powerful Woman Philanthropic Leader of the Year Award; YWCA of Maricopa County’s Tribute to Women Business Leader Award. In addition to Stanton, the local office boasts some of the most engaged and respected SITELOCK leaders in our state.
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Most Admired Companies 2017
SONORA QUEST LABORATORIES
Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017 Top Arizona executive: Dave Dexter, president and CEO What it does: Schedules and conducts thousands of diagnostic lab tests daily. Admirable quality: In November 2016, Sonora Quest Laboratories added Valley Fever screening to the patient-ordered My Lab ReQuest test menu. Through a collaboration with public health agencies and the University of Arizona’s Valley Fever Center for Excellence, Sonora Quest also explored the development of an early warning system for when Valley Fever is active to help improve Valley Fever detection, diagnosis and to better address the needs of the state’s at-risk population.
SUNDT CONSTRUCTION
Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017 Top Arizona executive: G. Michael Hoover, president and CEO What it does: Construction services. Admirable quality: Sundt is one of the few contractors that has developed a scientific approach to maintaining lifetime customers, starting with feedback and intelligence-gathering from stakeholders, both internal and external. Sundt uses an independent contractor to survey clients at the conclusion of projects to gather information that helps the company identify where it can improve and where it excels. In 2016, Sundt was a recipient of the Grand Award from the Associated General Contractors of America, considered the Oscars of the industry.
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SMALL GIANTS
Most Admired Company: 2017 Top Arizona executive: Danielle Feroleto, founder and president What it does: Marketing solutions for the design, construction and commercial real estate industry. Admirable quality: Small Giants understands the importance of surveys as a way of continuously improving customer experience and satisfaction. Last year, Small Giants reached out to its repeat client base to gain feedback on strategic perception of Small Giants and received a 78 percent response rate. Of clients who were surveyed, the average customer rating is 9.2/10. In addition, Small Giants has a 90 percent repeat client base over the last 10 years.
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Most Admired Companies 2017 SUNTEC CONCRETE Most Admired Company: 2015, 2016, 2017 Top Arizona executive: Jerry Barnier, CEO What it does: Commercial concrete construction company. Admirable quality: In addition to supporting several community organizations, Suntec believes that creating a culture of gratitude is key to retaining employees and building a positive environment where everyone enjoys their career and does their best for each other and the client. As just one example, Suntec funded an estimated $5.5 million to employee 401Ks in 2016. Suntec also established two $5,000 scholarships with the ASU School of Construction College, along with an internship program each year to help mentor students. THE CORE INSTITUTE
THE CORE INSTITUTE
Most Admired Company: 2017 Top Arizona executive: David Jacofsky, MD, CEO What it does: Provides best-in-class orthopedic care. Admirable quality: The CORE Institute performs sports physicals for high school students, donating all proceeds back to their school athletics program. The CORE Institute has also developed a Division of Research and Development and partnership with The MORE Foundation, whose projects are studying total knee replacement devices; ways to improve hip fracture implants; improved methods of fracture treatment; and release of antibiotics from implants in an attempt to reduce the risk of post-operative infections.
THE JAMES AGENCY Most Admired Company: 2017 Top Arizona executive: Veronique James, founder and CEO What it does: Specializes in consumer advertising, public relations and digital. Admirable quality: Wanting to provide valuable marketing information to both clients and non-clients in an approachable format, TJA launched the TJA Marketing Lab in 2016. The after-hours seminar series is custom-created for the audience that attends, rather than giving the same cookie-cutter presentation to various groups. The goal is to give attendees real world tools and tricks they can implement themselves, rather than trying to sell them agency services. THE JAMES AGENCY
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Most Admired Companies 2017
USAA
Most Admired Company: 2015, 2016, 2017 Top Arizona executive: Robert Schaffer, general manager — Phoenix What it does: Provides military members and their families with insurance, banking and investment services. Admirable quality: Diversity and inclusion are essential components of USAA’s business strategy. USAA’s diversity and inclusion credo is “Many faces. UMB BANK One mission.” USAA highlights different heritages each month and Most Admired Company: 2015, 2016, 2017 celebrates with themed events, instilling the thought of diversity Top Arizona executive: Jim Patterson, CEO of UMB and inclusion through awareness, collaboration, and Bank Arizona connecting opportunities. USAA offers enterprise-wide What it does: Provides a comprehensive suite of banking educational events in recognition and celebration products and services. of various cultures and backgrounds, such as: Admirable quality: UMB strives to help wherever it is most needed, MLK March; LGBT Pride Month; Disability historically the company has emphasized four pillars, including the Employment Awareness Month and arts, agriculture, financial education and self-sufficiency. UMB offers every many others. associate two paid volunteer days off to invest back into the community, as well as numerous volunteer opportunities throughout the year. In 2016, 1,112 UMB associates volunteered their time; 9,809 hours of qualified volunteer time off; $231,000 is the estimated economic value of UMB associates’ volunteer hours.
UNITEDHEALTHCARE
TOWN OF GILBERT
Most Admired Company: 2016 Top Arizona executive: Patrick Banger, town manager What it does: It's the sixth-largest municipality in Arizona. Admirable quality: The Town’s innovative Spark App League initiative is a coding contest for high school and junior high school students from across Arizona who come together to create mobile apps and games. This program is a partnership with ASU’s Ira Fulton Schools of Engineering and is sponsored by Waymo, formerly the Google self-driving car project. The event is designed to exposes students of all experience levels to coding with the hope that they’ll choose computer science-related careers. 60
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Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017 Top Arizona executive: Wendy Arnone, West Region CEO What it does: Offers employer, individual and family health insurance plans. Admirable quality: According to J.D. Power, UnitedHealthcare member satisfaction with health plans increased 18 index points in 2017, with coordination of care among healthcare providers being the single most important criteria influencing member satisfaction with their health plan. The results of the 2017 J.D. Power Member Satisfaction Survey reflect all the work UnitedHealthcare has been doing to make healthcare more affordable and enhance its members’ experience.
Most Admired Companies 2017 VENTANA MEDICAL SYSTEMS, INC.
VANGUARD
Most Admired Company: 2011, 2013, 2014, 2015, 2016, 2017 Top Arizona executive: Matthew Walker, principal, FAS Divisional Services What it does: Offers mutual funds, ETFs, financial advice and related services. Admirable quality: Vanguard shows its commitment to its employees through attractive health and wellness benefits. Many Vanguard locations boast on-site fitness centers known as “ship-shape” and Vanguard now offers on-site primary care providers, where crew can receive preventive care, assessment and treatment of minor illnesses and injuries, support for chronic conditions, immunizations and injections, laboratory services, health and wellness coaching, nutritional counseling, physical therapy, referral management, screenings and diagnostic tests, life management counseling and prescription services.
VENTANA
VEREIT
Most Admired Company: 2013, 2016, 2017 Top Arizona executive: Ann Costello, president What it does: Innovator of tissue-based diagnostic solutions. Admirable quality: Founded 32 years ago by University of Arizona pathologist Dr. Thomas Grogan, Ventana revolutionized cancer diagnostics worldwide through state-of-the-art technologies rooted in testing automation, with the mission of improving the lives of all patients afflicted with cancer. From its Oro Valley campus, Ventana provides more than 250 cancer tests with related instruments for delivery to more than 90 countries to improve patient outcomes, making the company the leading provider of cancer diagnostic systems to the pathology market.
VEREIT
Most Admired Company: 2017 Top Arizona executive: Glenn Rufrano, CEO What it does: Full-service real estate investment operating property company with real estate industry management of retail, restaurant and commercial real estate assets. Admirable quality: The company’s executives have won national awards recognizing their positive impact on the industry, earning titles and acknowledgements like Best Boss of Commercial Real Estate (Rufrano, by Real Estate Forum), Outstanding Service Award (Todd Lockwood, senior vice president of operations and client services, by Investment Program Association) and Top Women in Retail (Christina Mayo, senior vice president, Anchored Shopping Center Property Management. by Real Estate Forum).
VANGUARD
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Most Admired Companies 2017
VIP MORTGAGE
Most Admired Company: 2013, 2016, 2017 Top Arizona executive: Jay Barbour, founder and president What it does: Specializes in home loans, refinancing and reverse mortgages. Admirable quality: Since 2011, VIP has had a customer service satisfaction survey for borrowers to complete once their loan has closed. The results are tracked and used to monitor VIP customers’ experiences and feedback. The scorecards are entered into the company’s mortgage automation system, where the company can see their performance in customer satisfaction each month from January 2012 to present. Since 2013, 98 percent of VIP clients say they would work with VIP again and/or recommend VIP to others.
WASHINGTON FEDERAL
Most Admired Company: 2017 Top Arizona executive: Mike Brown, Arizona regional president What it does: Commercial and business banking. Admirable quality: Since 2014, Washington Federal has provided the financing for the construction, purchase or refinance of more than 235 commercial properties; provided more than $500 million in commercial real estate financing; provided $10 million in financing for local farms to help them finance regional operations; provided $13 million in financing to a technology focused university, which allowed it to expand the campus and build on-site dormitories; and provided more than $342 million in mortgages, which translates to loans for more than 1,645 Arizona families.
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WebPT
Most Admired Company: 2013, 2015, 2016 Top Arizona executive: Nancy Ham, CEO What it does: Provides cloud-based electronic medical records and practice management software for physical therapists. Admirable quality: WebPT’s executive team — which includes President and Co-founder Heidi Jannenga, CEO Nancy Ham, CFO Darian Wong, and CTO Robert Rust — breaks the mold for professional leadership. Corporate hierarchy doesn’t exist at WebPT and the company highly values input from all stakeholders, including customers (whom they call “members”), partners, and employees. Employees are always welcome — and encouraged — to share ideas or concerns, and the team is committed to nurturing leadership potential in anyone who expresses that desire.
2017
ARIZONA TECHNOLOGY COUNCIL
ARIZONA BECOMES
A TOP TECH HUB The Internet of Things, 3D printing, FinTech, driverless vehicles and space technology lead state’s economy into the future
T
At the high school level, the top three schools echnology continues to take over as one in the U.S. News & World Report survey were all of Arizona’s fastest growing economic Arizona schools: BASIS Scottsdale, BASIS Tucson and business development drivers. North and BASIS Oro Valley. In fact, five of the We’re fortunate to live in a state that boasts top seven schools in this report were in our state. a favorable cost of living, innovation-focused Through tremendous effort from the governor’s educators, support from a pro-technology Office, Greater Phoenix Economic Council (GPEC), government, the best research and development Steven G. Zylstra tax credit in the nation, and, of course, Tucson’s Sun Corridor Inc. and the Arizona Technology Commerce Authority (ACA), the state also an outstanding climate. More technology continues to grow as a hot spot for innovators and executives are seeing the benefit of Arizona as entrepreneurs. The ACA’s bi-annual Arizona Innovation Challenge a favorable destination to move and grow their companies, and our provides $3 million in grants each year to the most qualified, entrepreneurial community is stronger than ever. In June, Money magazine rated Phoenix the third-hottest city innovative startups and early-stage companies. In June 2017, six for technology jobs. The publication’s report cited a 188 percent winners from Phoenix, Tucson, Flagstaff and Green Valley walked growth in technology jobs, a median monthly housing rental cost away with major grants to help jump-start their futures. Positive news is also being reported from the venture capital of $1,345 and median home prices at $216,000. Additionally, front. In the first two quarters of 2017, Arizona companies have CompTIA’s 2017 Cyberstates report found there are more than 139,400 technology industry jobs in Arizona with an average received $122 million in investments. If investments continue wage of $97,400. at this pace for the last two quarters, investments will stay Companies are also encouraged by the fact that much of consistent with 2016 for the state. In the past six months, the Arizona Technology Council, ACA, the talent capable of filling technology sector job openings is and a number of public and private individuals and companies homegrown talent. A 2016 U.S. News & World Report survey were instrumental in convincing lawmakers to pass a number of ranked Arizona State University No. 1 among the “Most Innovative Schools” in the nation. That was ahead of second-place key pieces of legislation for technology growth. House Bill 2191 Stanford University. authorizes $10 million in capital infusions over the next four
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years into the Angel Investor Tax Credit program for early-stage startup companies. The credit became available to companies in July. The Tech Council and the Arizona Astronomy Consortium were also successful in negotiating an amendment to Senate Bill 1114 supported by the advertising industry that helps protect Arizona’s famed dark skies from light pollution. Two industries that have stood out in our technology sector in the past year are the Internet of Things (IoT) and additive manufacturing (3D printing). GPEC recently launched The Connected Place campaign, celebrating the rise of IoT in Phoenix. We have become a hub for driverless vehicle testing, manufacturing and software/component development, and our state’s long history of semiconductor development makes us the perfect candidate to become a hub for IoT innovation. Companies with Arizona operations like Honeywell, Intel, Uber, Avnet and Waymo/Google are leading the way. 3D printing is another industry in which Arizona has proven to be a leader. ASU recently opened the Southwest’s largest additive manufacturing research center, the Manufacturing Research and Innovation Hub. The center boasts $2 million in cutting-edge plastic, polymer and metal 3D printing equipment. According to Kyle Squires, dean of the Ira A. Fulton Schools of Engineering, this addition makes ASU the largest producer of talent at all
degree levels with the largest college of engineering in the country. This type of talent production is incredibly important for an economy that boasts nearly 5,000 manufacturing companies. Finally, there are a number of industries that are on the rise in Arizona. Financial technology, biotech, space technology and education technology are or will be leading contributors to our technology community. In biotech, Arizona has risen from a fifth-tier state in 2002 to a second-tier state today as a result of the work of the state’s leaders and the plan laid out by the Flinn Foundation’s Bioscience Roadmap. In space technology, we have a number of major contributors to U.S. space exploration. In February, World View Enterprises opened its new headquarters in Tucson, as well as a massive spaceport on the premises. This is just a snapshot of the exciting things going on in our technology sector today. Our community continues to grow with the Tech Council leading the way, advocating for technology development and growth, as well as influencing public policy to match Arizona’s technological and economic goals. We are well on our way to competing with the nation’s leading technology hubs, and every year we get a little closer. Steven G. Zylstra is president and CEO of the Arizona Technology Council. AB | September- October 2017 67
AZ TECH
DATA
DOCTORS As the risk and incidence of cybercrime rises, Arizona is becoming a leader and innovator in the cybersecurity industry
By JESSE A. MILLARD
H
acking and data breaches have been in the public mindset for a long time. But as more technology is integrated into our daily lives and the workplace, you and your firm have become even more susceptible to a hack – highlighting the importance of cybersecurity, an industry Arizona is on the frontline of shaping. You’ve probably seen the splashy headlines about data breaches hitting big names like Banner Health, Chick-fil-A, Target, the U.S. Postal Service, Sony, Yahoo! and the list goes on. Like many other people, you might have brushed off those headlines or yawned, thinking you’re glad not to have to manage those damage control teams. But in this growing world of cybercrime and technology, it’s no longer a matter of if you’ll be playing damage control after a data breach at your firm, it’s a matter of when.
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‑‑‑‑‑‑‑‑‑ BY THE ‑‑‑‑‑‑‑‑‑
NUMBERS For cybersecurity firms and hightech manufacturing companies, Greater Phoenix is a hot spot for innovation and technology.
25
Projected industry growth over the next decade is 25% compared with the national average of 18%.
32
Greater Phoenix boasts 32% more computer science and software engineering professionals than Austin, Texas.
35.4
A relatively young region, Greater Phoenix has a median age of 35.4 – two years younger than the average age nationwide.
40
The Greater Phoenix region offers operational costs of up to 40% less than California.
77
The cost of living in Greater Phoenix is 77% less on average than leading California markets.
6.6 million
The population of Greater Phoenix is 4.4 million and is expected to grow to 6.6 million in the next 20 years.
Source: GPEC
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AZ TECH
“Small and medium-sized businesses are drastically underestimating the risk by just thinking, ‘They’re not interested in me,’” says Michael Cocanower, founder and president of Phoenix-based itSynergy. “In fact, hackers are very interested in you. They realize, ‘I can spend six months hacking into Target, or I can spend this afternoon hacking into your 20-person company and make $10,000 off that.’” Cybercrime has cost businesses, individuals, governments and the world game-changing amounts of money. COST OF CYBERCRIME Cybersecurity Ventures, a research and market intelligence firm, reports the cost of cybercrime will grow from $3 trillion in 2015 to $6 trillion by 2021. United Kingdombased research firm Juniper Research predicts cybercrime will cost businesses alone more than $2 trillion by 2019. However you cut it, cybersecurity will only get more serious and more important as time moves on. Many businesses are unprepared, with 87 percent of small businesses reporting that they do not have a formal written Internet security policy, according to the National Cyber Security Alliance. Also, The National Cyber Security Alliance reports that 60 percent of small companies are unable to stay in business six months after a cyberattack. Cocanower says business owners need to be much more aware of cybercrime and the importance of having their cybersecurity systems up to snuff. There are a variety of ways hackers can infiltrate your business and you need to be aware of them, Cocanower says. Phishing scams and downloading malware or viruses are probably the most common and known. But you could also be compromised by inputting your password on a website you think is real, using open Wi-Fi, the list of risks goes on. Nothing Web-connected is safe either. Your smart phone, watch, car and Webconnected toaster oven are just the newest items susceptible to attack. Sure, you can download the latest anti-virus software, hire a skilled cybersecurity team (if you can find people 70
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Hsinchun Chen
Michael Cocanower
Jim Lane
Chuck Matthews Sean Moshir
who are qualified and available) and do 100 different things to keep your company secure, but that’s still not enough. Why? “The weakest link in any system is the human being,” Cocanower says. No one wants to give their company a virus, but many do because they weren’t aware that simply clicking the wrong link can get you in hot water, Cocanower says. Just ask 2016 Hillary Clinton Campaign Chairman John Podesta how clicking a single suspicious link can lead to a world of trouble. Cocanower hopes the headlines about data breaches are making people aware. Each time he sees one, he thinks it will be the biggest story of the year, when instead the headlines are met with yawns. Everyone needs to look at cybercrime and cybersecurity with a holistic approach, something Cocanower says the local universities and trade schools are doing. Looking at cybercrime deterrence not just as an engineering problem, but as a people problem, will lead to better protection, he says. “I don’t think we’ll ever get to a point with cybersecurity where you can buy this set of tools and you’re done, you’re secure. That will never happen,” Cocanower says. “Of course, you have to look at technology, but I think you have to look at psychology and the social side and all these other things.” THE CYBER DESERT At the risk of sounding overzealous,
Doug Ducey
Ori Eisen
Wendi Whitmore
there’s a war out there for data. Hackers, whether they’re independent actors or hired by another entity, are trying to access the massive amounts of data your firm collects and stores. They want to bog your website down, lock you out of your system until you pay a ransom, steal trade secrets or skim every number (social security, credit card, etc.) from your hard drives. Last year, the Identity Theft Resource Center tracked 1,093 data breaches in the U.S. IBM’s Ponemon Institute’s 2017 Cost of Data Breach Study found that the average cost of a data breach is $3.62 million, putting the average cost per lost or stolen record in a data breach at $141. Hackers can make a lot of money through data breaches and there is a lot of opportunity out there. On the proverbial frontline of this cyber war are many Arizona-based businesses, organizations and leaders. For many years now, they’ve been working to keep data safe, boost consumer awareness of the risks of cybercrime and teach the next generation of cybersecurity professionals. These companies have been creating software to secure websites, mobile security applications, advanced authenticators and they work with businesses in the wake of a cyberattack. Many of these companies and leaders have been operating in Arizona since
AZ TECH the early ’90s, around the same time Arizona’s software industry started to take shape. Sean Moshir, co-founder, chairman and CEO of Scottsdale-based CellTrust, has been one of the many local leaders operating within the cybersecurity space in Arizona for many years. You don’t typically hear about the cybersecurity firms operating in Arizona because they’re mostly operating on a national level with little local marketing, Moshir says. In the past, many cybersecurity companies grew in Arizona until larger corporations acquired them, Moshir says, which is why there aren’t many large firms here. But Arizona is home to many medium-sized firms, he says. One challenge Arizona’s growing cybersecurity industry faces is that it’s unknown, they’re all in stealth mode. Despite these companies operating within the same space, they’re disjointed, Moshir says. These companies struggle to fill open positions at their firms because of the extreme shortage of cybersecurity talent in the nation. The Peninsula Press, a data analysis project by Stanford University’s journalism program, reported in 2015 that there are more than 209,000 unfilled cybersecurity jobs in the U.S. and that demand for cybersecurity jobs was expected to grow by 53 percent through 2016. There have been other projections showing an increased need for cybersecurity talent in the millions through the 2020s. This is why Cyber Security Canyon was created by local cybersecurity leaders like Moshir and Ori Eisen, CEO of Scottsdale-based Trusona. Cyber Security Canyon markets Arizona’s growing cybersecurity firms so the local firms can attract what little available talent is out there. “We started creating the Cyber Security Canyon so we could figure out how to bring more talent to Arizona and make Arizona a cybersecurity center,” Moshir says. Moshir’s firm CellTrust, Eisen’s Trusona, along with the University of Advancing Technology, the cities of Phoenix and Scottsdale and the Arizona Commerce Authority are just a few organizations working with Cyber Security Canyon to create education 72
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initiatives and more awareness of the local industry. Scottsdale’s Mayor Jim Lane was involved in the local technology sector before running for public office and is keenly aware of the local cybersecurity industry. “We are actively trying to attract and build cybersecurity companies in Scottsdale because the idea of clustering industries can become an attraction to the industry itself — or to individual businesses and components within the industry,” Lane says. “Building a critical mass is a critical component to building an industry in a region.” IN THE TRENCHES One of these Scottsdale-based cybersecurity companies is WGM, which was founded by Arizona native Chuck Matthews in 2011 after hearing about data privacy concerns from his clients. WGM helps clients identify areas of risk they have and create cybersecurity guidelines, while also helping create a client’s cybersecurity system. WGM helps the company monitor its system and, in the event of a breach, investigates the breach. Matthews sees a tremendous amount of opportunity within Arizona for his cybersecurity firm because of the tens of thousands of businesses operating here that need it. Arizona is home to many small and medium-sized businesses, which typically can’t afford the best cybersecurity protection. Large firms in Arizona, such as Raytheon, have very sophisticated and mature cybersecurity operations, because they’re a vendor of the federal government, Matthews says. But your smaller businesses, with about 300 employees, don’t have a mature cybersecurity operation, or much of a budget, which means they’ll want to partner with an organization like WGM, Matthews says. “We’ve designed our set of services and capabilities to help supplement those organizations and really meet their needs,” Matthews says. “They just can’t afford to have a full-time cybersecurity team, particularly with people who have the kind of expertise we have.” To ensure that he has the experienced staff members to serve his clients,
10 TIPS for cybersecurity policies Quarles & Brady Partner Heather Buchta, who works on e-commerce, software, technology and data privacy issues, knows what firms need to do to stay secure. A Certified Information Privacy Professional through the International Association of Privacy Professionals, Buchta offers 10 items every cybersecurity policy should have:
1 2 3
Restrict access to third party sharing/social media websites Develop a security incident protocol (aka data breach procedure) Implement vendor security requirements and audits for physical, electronic and administrative controls
4
Maintain technology to remotely wipe portable devices (i.e. mobile phones, laptops, etc.)
5
Implement a Chief Information Security Officer reporting to C-suite
6 7 8 9 10
Conduct an annual audit of internal policies Implement encryption of databases and portable devices Prohibit outside hardware (thumb drives, etc.) Limit admin access to internal systems on a need-to-know basis Implement regular employee and contractor training
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COME MEET THE
INDUSTRY LEADERS! FEBRUARY 2018
Industry Leaders of Arizona recognizes business leaders who through hard work and innovation think beyond traditional boundaries and help lead the future of Arizona.
2018 CATEGORIES • Aerospace/Defense • Software Firms/Data Support • Commercial and Residential Service Contractors • Food & Beverage • Healthcare Support Services
Sponsorships and info at events@azbigmedia.com
AZ TECH Matthews has turned towards hiring former FBI special agents to lead his teams. Matthews says Arizona is also home to some of the biggest cybersecurity users in the nation. There are military bases, federal contractors, manufacturers, large healthcare organizations and a vibrant financial services industry and all of them are potential cybercrime targets. Matthews says cybersecurity jobs tend to follow the areas where there are large concentrations of these industries because many of these companies have a higher obligation for cybersecurity and there is a lot of money at risk. Despite the large concentration of potential cybersecurity users in Arizona, it isn’t necessarily one of the top cybersecurity employers, Matthews says. But he does see aspirations from Gov. Doug Ducey, and other state leaders to encourage growth in the cybersecurity industry. If Arizona continues on its low-cost of business path and recruits large cybersecurity users, the state can continue to become a leader in the cybersecurity space, Matthews says. But even now, Arizona’s cybersecurity industry isn’t just present, it’s growing.
It’s no secret that the technology sector has been thriving in Arizona. From 2010 to 2012, the Phoenix area’s tech job growth was among the strongest in the country, according to CBRE’s annual tech talent report. Neill Feather, CEO of Scottsdale-based SiteLock, a cybersecurity firm that works to secure clients’ websites, says that growth from cybersecurity firms has been impressive recently. Arizona is a good place for SiteLock, Feather says, because it is able to attract the much-needed talent to help his firm grow, while still residing in an area that’s off the beaten track. Hiring is extremely competitive, but it is easier to do so in Arizona, Feather says. SiteLock has been in expansion mode lately. The firm recently purchased a Netherlands-based startup called Patchman. The startup’s technology automatically detects and patches vulnerabilities for hosting providers and their customers. Since the purchase, SiteLock boasts the largest threat database in the industry. “You’re starting to see more and more cybersecurity firms, either headquarter or at least have offices here in Arizona,” Feather says. “We see the continued growth not only
PROTECTING THE FUTURE: SiteLock CEO Neill Feather has made sure his company will help build the future of the cybersecurity industry by establishing the Digital Kids Fund, which is a way to provide technology for STEM-related projects in schools in Arizona and Florida. In 2016, SiteLock impacted nearly 20,000 students from 141 schools. PHOTO BY MIKE MERTES, AZ BIG MEDIA
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in our business, but across the street is a cybersecurity firm and there a few others cropping up and creating this CybersecuritySilicon Desert kind of concept.” THE CHALLENGE AHEAD Like any industry, Arizona’s budding cybersecurity cluster faces challenges. There’s a disconnect between the industry and local leaders, Moshir says. He notes that when local governments utilize local technology, such as a state entity using a locally based cybersecurity solution, the industry can really gain steam. But local authorities aren’t tapping into local cybersecurity solutions. “Somehow, they need to come to the table and start utilizing some of the technology here in Arizona to promote the industry,” Moshir says. “To me, it makes a lot of sense for state and local governments and businesses to use Arizona-based software because the money generated from that stays in Arizona and it boosts the economy as well as local businesses.” Moshir says the local industry also needs more investment, something technology companies have been struggling to attract for some time.
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AZ TECH with the AZSecure Cybersecurity Fellowship Program, which offers full scholarships for qualified U.S. students in exchange for public service. There are also programs where students can get certificates in cybersecurity, all the way up to a master’s in cybersecurity. UA has been designated by the National Security Agency and Department of Homeland Security as a National Centers of Academic Excellence in Cyber Defense. This program works to reduce the United States’ vulnerabilities in its information infrastructure. UA is also playing a unique role with its research by taking a holistic approach to better prepare cybersecurity professionals for future threats. One of the university’s leaders is Hsinchun Chen, director of UA Cyber Security Initiatives. Chen’s research is schools have been adding cybersecurity focusing on cyber threat intelligence, into their curriculums and the next step is something in which he has experience. encouraging and creating more education During the late 1990s, Chen developed the initiatives around the space. software behind COPLINK, which created One key to creating a local industry, a database of known criminals to help law Whitmore notes, it to host more enforcement agencies across the nation cybersecurity competitions for younger kids. track criminal movements. “This is a national defense issue, and we Chen is now working on creating a need to continue to encourage that level of similar database of cybercriminals. His awareness and competition to allow people research is scanning hacker forums and to really exercise those cybersecurity databases that hackers share to better skills,” she says. understand upcoming threats. This is needed, especially since any ARIZONA’S EDUCATION cybersecurity system is only as strong as LEADERSHIP its weakest link, which means you will be The talent issue cybersecurity faces isn’t breached, Chen says. just a local issue. It’s a national one. “Arizona has a more holistic perspective But to better protect the nation, Arizona of looking at the cyber threat actors, has been playing a unique role in educating understanding the emerging threats, not future talent, focusing on not just creating just taking a passive engineering approach,” new cybersecurity talent for an industry Chen says. “Taking a more holistic approach starving for talent, but by also researching between governments, industries and new ways to combat rising cybercrime. protecting your identity can help us become Phoenix is home to the Arizona Cyber the leaders in this space.” Warfare Range, which works to help Because of this, Arizona is on the cutting cybersecurity professionals work on edge of the next generation of cybersecurity, their skills through self-paced training, education and research, he says. mentoring and real-world experience. With the cybersecurity industry planting The University of Advancing Technology roots in Tucson and Phoenix, Arizona has a offers a wide range of cybersecurity real opportunity, Chen says. The University degrees, which are recognized by of Arizona will be able to create more benefits government entities and the industry for for the industry through its research, while creating the workforce of the future. the Phoenix area attracts more funding And all three of the state’s universities and creates more opportunities for the next are playing a part in workforce generation of students. development and research. “When you combine both areas The University of Arizona has one of the together, you’ll have a good pipeline for nation’s biggest cybersecurity programs cybersecurity,” he says.
Juniper Research predicts cybercrime will cost businesses alone more than $2 TRILLION by 2019. And then, at the end of the day, there’s a marketing problem, Moshir says. Just not enough folks know about Arizona’s growing cybersecurity industry. But Cyber Security Canyon is working on this issue and members are starting to see traction in that field, he says. Cyber Security Canyon has created a space to promote local leaders, post jobs and brag about how nice it is to live, work and play in Arizona. But the industry still has that pesky talent problem. There just isn’t enough of it to fill key roles at companies. One way to create more talent for the industry’s future is to increase awareness, while also reaching out to students. One group, Women in Cyber Security, recently hosted its Women in Cyber Security Conference in Tucson. This was the first time the conference was held in Tucson and hosted women from across Arizona and the country, who were mostly students. The industry as a whole is lacking prospective hires, but women’s representation in the industry is alarmingly low. Wendi Whitmore, a global partner and lead at IBM’s X-Force Incident Response and Intelligence Services, spoke at this year’s conference. She has seen the conference grow every year, with more and more female students attending in hopes of learning and being inspired to further their cybersecurity studies. Whitmore says creating more awareness around the cybersecurity industry is crucial to attracting tomorrow’s workers. Many 76
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2017 AZBio.org
ARIZONA BIOINDUSTRY ASSOCIATION
ARIZONA’S
BIOSCIENCE CLUSTER:
20 YEARS OF PROGRESS
By ARIZONA BIOINDUSTRY ASSOCIATION
I
n 1997, the Arizona Bioindustry Cluster was founded by Bob Case and Michael E. Berens, PhD, laying the foundation for what would become the Arizona Bioindustry Association, or AZBio. The Human Genome project, which began in 1990, had yet to reach a conclusion and would not be completed until 2003. Scientific leaders believed that it would lead us to great insights on how to treat disease, but they also knew that completing the project would be the beginning of a great era of scientific inquiry, not the end. In the year 2000, work by the Arizona Legislature and a coalition of community leaders supported voter passage of Proposition 301. Prop. 301 established a six-tenths-of-one-cent sales tax to support education that included funding for an estimated $1 billion (generated and disbursed over 20 years) for research at Arizona universities. The resulting Technology Research Initiative Fund (TRIF) is administered by the Arizona Board of Regents and has distributed $892 million for the period from 2001-2016 and is well on its way to reaching the $1 billion goal by June 30, 2021. ROADMAP GUIDES GROWTH The following year, the Flinn Foundation committed to 10 years of major funding for Arizona biosciences and brought together more than 100 leaders to begin to craft what would become the Arizona Bioscience Roadmap. Under the stewardship of the Flinn Foundation, the strategic plan for the biosciences in Arizona would include key initiatives, along with a commitment to measure the results. The first decade of the new century marked the completion of The Human Genome Project and a new era for life science research and development globally. From 2000 to 2010, Arizona’s Bioscience community activity included International Genomics Consortium establishing its home in Phoenix and the subsequent creation of the Translational Genomics Research Institute (TGen), which was funded by a $90 million fundraising effort and spun out of IGC. In addition to the funding from Prop. 301, the Arizona Legislature approved $440 million for construction of new university research facilities, supporting the growth of the Biodesign Institute at
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Arizona State University, the BIO5 Institute at the University of Arizona, new research facilities at Northern Arizona University and more. An additional $100 million was approved by the voters for bioscience and healthcare training and facilities at Maricopa Community Colleges. The Virginia G. Piper Charitable Trust committed $50 million to personalized medicine in Arizona and local philanthropists supported the community with additional resources for research and patient care across the state. Over the last two decades, Arizona’s bioscience industry has focused and grown. Arizona has risen in the rankings to take its place in the second tier of the bioscience rankings, based on number of firms. The Biodesign Institute at Arizona State University has grown from one building to two, with a third building under construction. Arizona is now home to the Critical Path Institute, the National Biomarker Development Alliance, the Arizona Alzheimer’s Alliance, the Banner Alzheimer’s Institute, Cancer Treatment Centers of America and Banner MD Anderson. Barrow Neurological Institute, founded in 1962 as a regional specialty center, has grown into one of the premiere destinations in the world for neurology and neurosurgery. Phoenix Children’s Hospital is now one of the largest children’s hospitals in the country and is ranked in 10 out of 10 specialties. Mayo Clinic has expanded its research and patient care capacity, added proton beam capabilities and welcomed the first class to its Arizona-based Mayo Medical School in 2017. The University of Arizona extended its reach from Tucson to Phoenix, which now includes The University of Arizona College of Medicine-Phoenix and The University of Arizona Cancer Center at Dignity Health St. Joseph’s Hospital and Medical Center on the Phoenix Biomedical Campus. NUMBERS GAME The number of life science companies in Arizona is now more than 1,400 and multi-billion dollar exits include the sale of Ventana Medical Systems to Roche for $3.4 billion and Abraxis Biosciences for $2.9 billion to Celgene. Today, companies that were born in Arizona are publicly traded, including Insys, HTG Molecular and SensTech, while others that have been acquired by AMAG Pharmaceuticals, Becton Dickinson (BD), Caris Diagnostics, Thermo Fischer, IMS Health, Merz,
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AZBIO
Stryker and more. These companies have continued to grow in Arizona, joining global leaders that include BARD Peripheral Vascular, Medtronic and W.L. Gore. The combined benefits of Arizona’s world-class healthcare institutions and diverse population demographics are driving the number of active clinical trials in the state, which more than doubled from 2012-2017, based on data at ClinicalTrials.gov. Long-time residents and new industry partners are benefiting from Arizona’s business-friendly public policy and regulatory environment, affordable operating cost structures, stable and reliable energy suppliers, well-managed water resources, talent and an affordable cost of living that provide employees the opportunity for an excellent quality of life. Free from the business disruptions that can be caused by earthquakes, hurricanes, tornadoes and floods, Arizona has become a go-to site for both high-tech manufacturing and corporate data centers. The Arizona Innovation Challenge, which made its first awards in 2011 and is powered by the Arizona Commerce Authority, awards the most money in the country for a technology commercialization challenge — $3 million ($1.5 million twice yearly) to the world’s most promising technology ventures. Awards range from $100,000 to $250,000 per company. IMPROVING REPUTATION Over this 20-year span, Arizona has gained a reputation as the state with the “collaborative gene” and attracts thought leaders looking to discover, develop and deliver life-changing and life-saving innovations to patients. Globally recognized thought leaders have left the hallowed halls of Harvard, the National Institutes of Health and other world-class institutions to innovate and collaborate in Arizona. One real-world example of this collaboration is Arizona State University’s International School of Biomedical Diagnostics. A global center for research, teaching and service in the emerging field of biomedical diagnostics, the school pulls expertise from faculty across ASU, in collaboration with Dublin City University (DCU), Ventana Medical Systems and other industry partners. ASU faculty come from the Biodesign Institute, College of Health Solutions, Ira A. Fulton Schools of Engineering, School of Life Sciences in the College of Liberal Arts and Sciences, the W. P. Carey School of Business and the Consortium for Science, Policy & Outcomes. The initiative also leverages the expertise of the National Biomarker Development Alliance that is led by ASU. Under the leadership of President Michael Crow, ASU has been named the Most Innovative University in the United states for two years running, out-ranking Stanford and MIT. Throughout the Arizona Bioscience Roadmap’s first decade, Battelle tracked performance data that was released annually by the Flinn Foundation. The performance metrics released in 2014 serve as the benchmark for the second decade of the Roadmap, with new data reported on a biennial basis. The most current data is available in “2015 Progress of the Biosciences in Arizona,” 84
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WHAT’S NEW?
Here are the organizations who have joined Arizona’s life sciences landscape since 1997: • Arizona Alzheimer’s Consortium • A lzheimer’s Prevention Initiative • Arizona Bioscience Steering Committee • Arizona State UniversityBanner Neurodegenerative Research Collaborative • Banner MD Anderson Cancer Center • Banner University Medicine • Barrow Neurological Institute at Phoenix Children’s Hospital • BioAccel • Biodesign Institute at ASU • Cancer Treatment Center of America (Surprise) • Center for Entrepreneurial Innovation (CEI) at GateWay Community College • Critical Path Institute • Gregory W. Fulton ALS and Neuromuscular Disease Center at Barrow Neurological •H onorHealth Virginia G. Piper Cancer Center • International Genomics Consortium (IGC)
• International School of Biomedical Diagnostics (ASU) • Mayo Clinic Hospital (Phoenix) • Mayo Clinic Cancer Center & Proton Beam facility (Phoenix) • Midwestern University • Mayo Medical School • Muhammad Ali Parkinson Center at Barrow Neurological • NACET (Flagstaff) • National Biomarker Development Alliance at ASU • Phoenix Biomedical Campus • Science Foundation Arizona • TGen (Translational Genomics Research Institute an affiliate of City of Hope) • TGen North • UA BIO5 • University of Arizona Cancer Center at Dignity Health St. Joseph’s Hospital and Medical Center (Phoenix) • UA College of MedicinePhoenix
WHO’S NEW?
Here are the significant employers that have joined Arizona’s life sciences landscape since 1997: • Accelerate Diagnostics • AMAG Pharmaceuticls (CBR) • Arizona Technology Enterprises (AzTE) • Bard Peripheral Vascular • Cancer Prevention Pharmaceuticals • Castle Biosciences • Celgene (Abraxis Bioscience) • DexCom • GlobalMed • Heliae • HTG Molecular Diagnostics • Insys Therapeutics, Inc. • Icagen • Isagenics
• Pinnacle Transplant Technologies • Primus Pharmaceuticals • Regenesis Biomedical • Roche (Ventana Medical • SenesTech • St. Jude Medical • Stryker’s Sustainability Solutions, Inc. • SynCardia Systems • Tech Launch Arizona • TD2 • Ulthera, Merz Innovation Center • VisionGate • WL Gore Phoenix Campus
AZBIO a report produced by TEConomy Partners that was released in March 2016. In April, the Flinn Foundation released its most recent update, the 2016 Progress of the Biosciences in Arizona. LOOKING TO THE FUTURE Could Arizona achieve the growth necessary to reach the top tiers? Absolutely. Twenty years into the process, Arizona’s bioindustry has a new funding catalyst. With the governor’s vision and the Legislature’s support, an additional $1 billion dollars will be invested in university research infrastructure beginning in July of 2018. The university bonding bill passed this year represents the state’s biggest investment in our public universities in a generation. It makes possible the development of new research and education facilities to meet the needs of future generations of Arizonans. This infrastructure plan will delivers benefits for the State of Arizona for decades to come and supports key state strategies, such as the Arizona Bioscience Roadmap. The Arizona public university system is a major economic force that represents a fundamental relationship between higher education and the economy, generating $11.1 billion in economic impact and 102,000 jobs in fiscal year 2015 alone, according to Eileen Klein, president of the Arizona Board of Regents. The real impact of this investment is in the education of our students and the discoveries that will unfold, impacting our community and our world. The construction alone that will result from these dollars is expected to generate 2,200 jobs and add $166 million to Arizona’s gross domestic product and $148 million in personal income for each of the next five years. The plan will also help ensure our campuses remain safe, vibrant and high quality places for students to learn, work, conduct research and grow as members of the community and thriving contributors to the bright future of Arizona.
“On behalf of the Arizona Board of Regents and Arizona’s public universities, I applaud Gov. Doug Ducey and our legislators for their bold vision and the courage and tenacity to deliver a significant plan to fund Arizona’s public universities,” said Klein. “Beyond infrastructure, this budget represents real progress toward the State of Arizona reclaiming greater financial responsibility for the university education of Arizona-resident students. We all have a stake in their success.” Arizona’s leaders are continuing the journey to take the state into the top tiers of the bioscience rankings and are already discussing what the next iteration of Prop. 301 will look like as it approaches its renewal on or before 2020. The Flinn Foundation has extended its commitment to steward the Arizona Bioscience Roadmap through the year 2025. With the support of the 100-person Arizona Bioscience Roadmap Steering Committee and the Arizona Bioindustry Association (AZBio) board of directors, the state’s leaders are committed to the vision of making Arizona a top-tier bioscience state and working collaboratively to make that vision a reality.
BIOSCIENCE EMPLOYMENT SECTOR Hospitals and laboratories Bioscience related distribution
2001
2014
Change 2001-2014
62,775
86,370
+37.6%
NA
8,021
NA
Medical devices and instruments
4,141
6,082
+14.8%
Organic and agricultural chemicals
1,896
595
-31.4%
Drugs and pharmaceuticals
1,601
1,867
+16.6%
Research and testing
1,463
7,475
+511.3%
Non-hospital biotech employment
9,101
24,040
+264.1%
Total bioscience sector
71,876
110,410
+153.6%
Source: TEConomy/Flinn Foundation
ARIZONA BIOSCIENCE WEEK WHAT: Arizona Bioscience Week brings together Arizonans and visitors from Oc.8-Oct. 14 to connect and share ideas on how we can build solutions that make life better for people today and for generations to come. FAMILY OFFICE ROUNDTABLES: AZBio and the Stetson Family Office will host Family Office Roundtables in Phoenix on Oct. 9 and in Tucson on Oct. 10. The theme of the Family Office Roundtables will be “Lasting impact: How our actions impact our communities today and in the future.” THE AZBIO AWARDS: Arizona’s life science and leadership community will come together Oct. 11 with visitors from around the country to celebrate life-science innovation and innovators at the Phoenix Convention Center. Highlights of the evening will
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include honoring Dr. Marvin Slepian with the AZBio Pioneer Award for Lifetime Achievement and Gov. Doug Ducey as the 2017 Arizona Bioscience Leader of the Year. Attendees will also have the opportunity to see examples of Arizona life science innovations and meet the innovators. THE STUDENT DISCOVERY ZONE: The Student Discovery Zone showcases the work of 50 students from Arizona high schools, community colleges and universities during the AZBio Awards. BMES 2017: The Biomedical Engineering Society annual meeting will bring more than 4,000 attendees from across the country together at the Phoenix Convention Center from Oct. 11-Oct. 14. INFORMATION: AZBio.org/AZBW2017
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AZBIO
ADVANCING LIVES AND
HEALTHCARE DELIVERY
W
Arizona Bioscience Company of the Year
Bard Peripheral Vascular
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hile healthcare has certainly been a major topic of conversation across the country in recent months, the political becomes personal when you or a loved one is affected. Bard Peripheral Vascular, a division of C. R. Bard, is a company in Tempe that understands the importance of quality patient care and remains focused on developing innovative medical devices to detect, treat and help manage disease. Bard Peripheral Vascular specializes in the development of surgical and interventional devices for the treatment of diseases affecting the peripheral vascular system, which consists of veins and arteries in the arms, hands, legs and feet. The peripheral arteries supply oxygenated blood to the body and the peripheral veins lead deoxygenated blood from the capillaries in the extremities back to the heart. Additionally, Bard devices are used in the treatment of cancer, end-stage renal disease (including diabetes and dialysis) and venous disease. Some Bard products, such as biopsy needles, are used to help detect disease, while others, such as catheters, angioplasty balloons and chemotherapy ports, are used to treat disease. In the last year alone, the company has launched more than 11 new products designed to make life better for patients and the people who care for them. In fact, a patient is treated with a Bard Peripheral Vascular device approximately every two seconds. Bard Peripheral Vascular was established in 1996, with the purchase of IMPRA, an Arizona company, which launched the first commercially available ePTFE graft used for AV access. Today, Bard Peripheral Vascular is the largest and fastest-growing division within C. R. Bard, with more than $1 billion dollars in revenue. In Arizona, Bard Peripheral Vascular employs more than 500
people and its labor force is growing at more than five percent each year. Bard Peripheral Vascular products are used to treat more than 18 million patients annually and hold the No. 1 or No. 2 leadership position in most of their product lines. Some of the company’s recent technologies include a novel balloon-expandable covered stent developed to improve blood flow in the leg for patients with iliac occlusive disease, and a device designed to preserve vascular access for hemodialysis patients. The strong growth and portfolio of C. R. Bard, with the Bard Peripheral Vascular division leading the way, resulted in Becton Dickinson announcing the acquisition of C. R. Bard for $24 billion in April 2017, which is expected to close in fall 2017. After the acquisition, Becton Dickinson will be the third-largest medical device company in the world. Bard Peripheral Vascular and its employees believe in supporting and giving back to their community through volunteer work and charitable contributions. The Bard Peripheral Vascular team has worked with many great local charities, including Child Crisis Center/Arizona Adoption & Foster Care, the Ronald McDonald House of Phoenix, HopeKids Arizona, Making Strides Against Breast Cancer, United Way, Amanda Hope Rainbow Angels and the American Diabetes Association. Together, the team has raised or donated more than $600,000 in the last three years to support local communities and charities. Bard Peripheral Vascular also hosts internships and funds engineering research projects with Arizona State University and The University of Arizona. Patients and caregivers around the world continue to benefit from the tireless work, innovation and dedication of the employees at Bard Peripheral Vascular.
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AZBIO
DOES SLEPIAN
EVER SLEEP? T
AZBio Pioneer Award for Lifetime Achievement
Marvin J. Slepian, MD The University of Arizona
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he maxim, “If you need to get something done, ask a busy person,” has often been attributed to Benjamin Franklin. The 2017 Arizona Bioscience Pioneer honoree, Marvin J. Slepian, MD, is someone Franklin would have recognized as a kindred spirit. Dr. Slepian is a cardiologist, inventor, entrepreneur, educator, innovator and more. At the University of Arizona, he serves as professor of medicine, professor and associate department head of biomedical engineering, professor of material sciences and engineering, professor of medical imaging and McGuire Scholar in the Eller College of Management. Dr. Slepian is also the founder and director of the newly created Arizona Center for Accelerated Biomedical Innovation (ACABI) — a “creativity engine” focused on novel solution development for unmet medical needs. Dr. Slepian attended Princeton and received his MD from the University of Cincinnati College of Medicine. He completed his residency at New York University–Bellevue Hospital, where he served as chief resident in medicine; clinical and research fellowships in cardiology at Johns Hopkins University School of Medicine; and clinical and research fellowships in interventional cardiology and a research fellowship in artificial organs at the Cleveland Clinic. He also received postdoctoral training in chemical engineering and polymer chemistry at Washington University and MIT. With a career that spans the spectrum from basic and translational research to technology transfer, Dr. Slepian exemplifies how keen clinical observation coupled with solid basic science knowledge and exploration in the lab can successfully transition to commercial products that make life better for patients. At the basic level, his laboratory has focused on three main areas:
• The role of cell-matrix interactions in vascular disease • The role of physical forces in modulating vascular cell and platelet behavior • The utility of polymeric biomaterials to modulate cell-matrix interactions as well as serve as novel therapeutic structural, barrier or drug delivery materials. On the translational level, his lab has developed many novel therapeutic solutions based on polymeric biomaterials, which have found their way into clinical use today, including drug-eluting stent technologies, stent coatings, “polymer paving,” surgical anti-adhesive barriers, synthetic tissue and vascular sealants, myocardial revascularization and cell delivery methods and cardiovascular prosthetic devices, including the total artificial heart. Dr Slepian has founded or co-founded several medical device companies, including Focal, which went public in 1997 and was acquired by Genzyme Biosurgery in 2001; EndoTex Interventional Systems, which was acquired by Boston Scientific in 2007; Angiotrax; Hansen Medical, which went public in 2006 and was acquired by Auris Surgical Robotics in 2016; Arsenal Medical and its spinout company, 480 BioMedical; and MC10, which takes high-performance electronics and reshapes them into human compatible form factors that stretch, bend and twist to move with the body. Dr Slepian has been involved with bringing many new devices through the FDA regulatory process into clinical use, including most notably the total artificial heart. Dr. Slepian was the founding president of SynCardia Systems and served in multiple roles, including chief scientific officer, president and chairman for more than a decade. Today, the SynCardia Total Artificial Heart is the only artificial heart that is commercially available in the United States, European Union and Canada for use as a bridge to donor heart transplantation.
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AZBIO
THE ROAD
TO A CURE
I
Arizona Bioscience Researcher of the Year Laurence Hurley, PhD Howard Schaeffer chair in pharmaceutical sciences at the University of Arizona College of Pharmacy, director of the College of Pharmacy’s Drug Discovery Program and CSO of Regalgene in Tucson
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n recent decades, tremendous — almost unimaginable — progress has been made in the fight against cancer. Advances in molecular and genomic research have revealed underlying complexities and provided insights into cancer. Continued research has expanded our knowledge of how this disease develops and how to target medicines for specific cancer types and individual patients, resulting in more effective therapies. The road to a cure is long, takes many turns and requires investments on a scale that necessitates support from government, academia and industry. Each of these journeys begins in the lab as researchers explore new compounds that may one day provide a cure. Dr. Laurence Hurley is the leading authority on the identification of small molecule therapeutic agents that target DNA quadruplexes, which are unique four-stranded DNA structures that control gene expression. “A quadruplex is like a knot in DNA and we have the capability, using drugs that act like natural proteins, to undo or tie up these knots," said Hurley, who pioneered the method nearly 20 years ago. “In effect, this process allows us to turn on or turn off genes. With this approach, we can turn off cancer genes and thereby mitigate the progression of the disease. In a similar vein, we have the capacity to turn on genes, which may be important to other disease areas, such as those related to the natural process of aging.” Dr. Hurley and his team work to design and develop novel antitumor agents that will extend the productive lives of patients who have cancer. Hurley’s team applies structural biology techniques to validate quadruplex control systems,
high-throughput assay technologies to identify drug leads and medicinal chemistry intertwined with clinical oncology programs in cancer therapeutics to create new medicines. Dr. Hurley has built an impressive network of clinical collaborators, including the best of Arizona. He has active collaborations with clinicians at the Translational Genomics Research Institute (TGen) and the Virginia G. Piper Cancer Center at HonorHealth, both directed by Dr. Daniel Von Hoff, and with research groups within the University of Arizona Cancer Center. The translational aspects of the research emerging from Dr. Hurley’s laboratory at the University of Arizona are being developed by Reglagene, a Tucsonbased company for which Dr. Hurley is CSO. Dr. Richard Austin is CEO. Throughout his distinguished career, Dr. Hurley has pioneered several novel drug therapies and this research has been recognized internationally with numerous top scientific awards. Since his arrival at the University of Arizona in 2000, Dr. Hurley has trained more than 40 graduate and postdoctoral students. He has placed two novel cancer medicines into human clinical trials, founded three biotech companies (Cylene, Tetragene and Reglagene) and provided the technology for a fourth company (Horizon Biotechnologies). He has also published more than 265 peerreviewed articles and has 25 issued patents or patent applications. “Dr. Hurley’s work is an excellent example of the value that is created through basic research and the impact that is made possible as we continue along the road to find a cure for cancer,” said Joan KoerberWalker, president and CEO of the Arizona Bioindustry Association.
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AZBIO
CREATING
OPPORTUNITIES
L
Michael A. Cusanovich Arizona Bioscience Educator of the Year
Carol Bender, MSSS The University of Arizona University distinguished outreach professor and director of the Undergraduate Biology Research Program and related programs
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ife science innovators are discovering, developing and delivering new products and services that will help people to live better and to live longer. Today’s breakthroughs are just the beginning. Our greatest opportunities to improve the human condition will come from the work of the bioscience and healthcare leaders of tomorrow. Inspiring these future leaders requires an excellent foundation that starts in the classroom and is refined by a wide range of real-world opportunities that expose students to the wonders of science, that allow them to learn from today’s leaders and that encourage students to explore new opportunities. Carol Bender creates opportunities for students. At the University of Arizona, Carol Bender leads the development and assessment of programs that produce students who are well prepared to enter graduate and professional degree programs that lead to careers in biomedical research and health careers. Inspired by the ideas of the late Dr. Michael A. Wells, Regents’ professor of biochemistry at the University of Arizona, Professor Bender was at the forefront of the movement to get undergraduates out of the classroom and into apprentice-style research lab experiences before this concept was popular or its impact well understood, particularly in STEM fields, where it is imperative that professionals work together on issues facing humankind. “Carol Bender’s commitment to student success is unrivaled,” shared Leslie Tolbert, Regents’ professor in neuroscience and in cellular and molecular medicine at The University of Arizona. “Using the model of apprentice-style lab experiences, undergraduates get individual attention as they work side by side with graduate students and faculty members on cuttingedge lab or field research. She gives of
herself far beyond the walls of our science buildings. Her students are inspired by her, not just because she helps them find exciting research experiences, but also because she travels with them, hikes with them, hosts gatherings for international groups with them and generally takes an interest in them as individuals.” Under her inspiring leadership over the last 28-plus years, the Undergraduate Biology Research Program and other UA-affiliated programs in the life sciences have provided paid research experience to more than 2,300 students. UBRP and the international program Bender founded — Prozkoumat! (formerly Biomedical Research Abroad: Vistas Open Program or BRAVO!) — were recognized in 1999 by The National Science Foundation with a Recognition Award for the Integration of Research and Education (RAIRE). UA was one of only 10 institutions to receive a $500,000 RAIRE award, with the intent that the highly impactful UBRP program model be shared with other institutions around the country. “Great educators open our eyes to possibilities,” said Joan Koerber-Walker, president and CEO of the Arizona Bioindustry Association. “Their work inspires new generations and lays the groundwork for tomorrow’s miracles. For those of us who may have left the classroom years ago, they create for us the gift of future scientists, engineers, medical professionals, entrepreneurs and leaders. Through her work with and commitment to thousands of students and her leadership in our community, Carol Bender has inspired us all.” For her commitment to creating opportunities for the next generation of bioscience leaders, Carol Bender of The University of Arizona is the 2017 Michael A. Cusanovich Arizona Bioscience Educator of the Year.
AZBIO
LEADING THE WAY
Jon W. McGarity Bioscience Leader of the Year Arizona Gov. Douglas A. Ducey
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“Leadership is the capacity to translate vision into reality.” These are the words of Warren Bennis, an American scholar who is widely regarded as a pioneer in the field of leadership studies. Bennis also wrote, “There are two ways of being creative. One can sing and dance or one can create an environment in which singers and dancers flourish.” Arizona Gov. Doug Ducey is a leader who know the importance of doing both. He develops innovative solutions to address challenges that leverage Arizona’s key resources and he is creating an environment where innovators and businesses can flourish. In 2017, Ducey signed a landmark $1 billion investment plan supporting Arizona higher education. The legislation enables approximately $1 billion in new investments to be directed toward research and development infrastructure at Arizona State University, the University of Arizona and Northern Arizona University. Ducey’s University Research Infrastructure Plan represented fulfillment of one of his top priorities during Arizona’s 2017 legislative session. On the day that the legislation was signed into law, Gov. Ducey stated, “Today will be remembered as one that paved the way for decades of breakthroughs at our universities; one that opened the door for Arizona students to receive the highestcaliber university experience; and one that makes Arizona second to none in support of higher education.” Gov. Ducey believes a great economy requires great public schools. During his first year in office, the governor presented an historic $3.5 billion funding plan for Arizona public schools to Arizona voters. The people of Arizona voted “Yes” on Prop. 123, providing more opportunities for students and better resources for teachers and schools. Great ideas can grow into great companies. In 2017, Gov. Ducey approved
raising the cap on Arizona’s successful Angel Investor Tax Credit program by an additional $10 million, which authorizes $2.5 million a year in tax credits for the next four years. The Angel Investor program was approved in 2006 with a $20 million cap, which was met in July 2015. Over that period, the 125 small businesses that used the tax credit received approximately $62 million in certified investments. In 2012, the number of jobs at these companies averaged 334 annually and by 2015, the number had jumped to 1,378. In addition, the 94 companies known to be active when data for the most recent study was being gathered had raised more than $420 million in seed capital, venture capital and other sources of financing. State and local tax revenue generated by the 94 small businesses was estimated to be $44 million and expected to grow as operations ramp up. Led by Gov. Ducey, the Arizona Commerce Authority provides a full portfolio of resources that are key components of Arizona’s entrepreneurial tool kit. Growing Arizona bioscience companies are benefiting from ACA administered programs, including Arizona’s R&D Tax Credit, support services that help companies win growth capital by applying for SBIR grants and access business loans to support their expansions. In addition, the Arizona Innovation Challenge (AIC) awards $3 million in grants annually to some of our most exciting young companies to speed them on their way. “Governor Ducey has led the way in developing plans to make strategic investments in our state that benefit our bioscience industry and all Arizonans,” said Joan Koerber-Walker, president and CEO of the Arizona BioIndustry Association. “More importantly, thanks to the governor’s ability to communicate the vision and bring people together to work towards a shared goal, this vision becomes reality.”
AZBIO Avery Therapeutics
M
AZBio Fast Lane Award winners
ore than 26 million people worldwide suffer from heart failure and the number of cases is increasing at more than 13 percent per year. The progression of heart failure results in a 50 percent mortality rate within 5 years of diagnosis. But what if it didn’t have to be like this? That is a question being addressed by the team at Avery Therapeutics, Inc. The startup company is based on the application of technology invented at the University of Arizona College of Medicine-Tucson and the Southern Arizona VA. In 2017, Avery Therapeutics licensed the beating heart graft technology from the University of Arizona. Pre-clinical studies have already shown that the technology, called MyCardia, improves heart function. MyCardia is implanted on the surface of the heart and treats heart failure by generating new blood vessels and heart muscle. Today, no other technology does this except for heart transplantation. MyCardia has the potential to stop the progression of heart failure and has demonstrated improvements in heart function in pre-clinical models at levels that would translate to a significant improvement in quality of life for patients with heart failure. Avery Therapeutics is currently on track to start clinical trials with MyCardia in 2020.
NuvOx Pharma
N
uvOx Pharma is a biotechnology company based in Tucson that is developing an innovative nanotechnology for oxygen delivery to treat lifethreatening diseases where hypoxia — when there is a deficiency in the amount of oxygen reaching the tissues — plays a role, like cancer, stroke, sickle cell disease, hemorrhagic shock, traumatic brain injury and heart attack. NuvOx is currently in clinical trials for brain cancer and stroke. NuvOx’s formulations are based on dodecafluoropentane emulsion (DDFPe). Upon intravenous administration, DDFPe travels through the bloodstream, arriving first at the lungs to pick up oxygen and finally to hypoxic tissue, where it passively delivers oxygen. Compared with other oxygen therapeutics studied previously, NuvOx’s DDFPe is active at less than 1/200th the dose because it delivers oxygen much more effectively. Most tumors have defective blood supplies, resulting in low oxygen within the tumor tissue. NuvOx’s drug restores the oxygen level in the tumor tissue, making radiation and chemotherapy more effective. NuvOx’s Phase II clinical trial in the hypoxic brain tumor, glioblastoma, was allowed by the FDA in April and will be performed at four different clinical sites — Banner University Medical Center-Tucson, Banner Gateway MD Anderson (AZ), Barrow Neurological Institute (AZ) and Miami Cancer Institute (FL).
Rowpar Pharmaceuticals
M
any chronic systemic diseases are linked to bacteria originating in the mouth. The Rowpar Pharmaceuticals team believes that oral care needs to be more than just about fresh breath and whiter teeth. ClōSYS reduces oral pathogens associated with oral and systemic diseases, while not impeding the healing process and not disrupting the oral ecology. Fresh breath and whiter teeth are a bonus ClōSYS delivers. Headquartered in Scottsdale since 1991, Rowpar Pharmaceuticals' motto is “A Cleaner Mouth, A Healthier You®”, connecting oral and systemic health. Cloralstan® is Rowpar’s patented core technology. Created by Dr. Perry Ratcliff and a team of dental professionals, ClōSYS products are proven effective in killing oral pathogens associated with plaque, gum diseases, oral diseases and for reducing oral malodor, dry mouth, sensitive mouth and oral mucositis resulting from chemotherapy. ClōSYS® Unflavored Oral Rinse and ClōSYS® Gentle Mint Oral Rinse are the first mouth rinses to be awarded the American Dental Association Seal of Acceptance for the management of oral malodor, commonly referred to as bad breath. Originally envisioned as a boutique product for gum disease marketed exclusively to dentists, ClōSYS is now a premium oral brand dispensed nationally by dentists, hygienists, doctors and nurses.
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AZBIO
BUILDING ON
SUCCESS
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AZBio Public Service Award
Mark W. Mitchell Mayor City of Tempe
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ayor Mark W. Mitchell is committed to the growth of the bioscience industry in Tempe and across Arizona. He currently serves on the Arizona Bioscience Roadmap Steering Committee and the executive committee for the League of Arizona Cities and Towns. He is also involved with the U.S. Conference of Mayors and the National League of Cities. Under Mitchell’s leadership, Tempe is developing a new bioscience and technology campus called I.D.E.A. Tempe at Tempe Town Lake next to the Tempe Center for the Arts. The city’s high-tech community includes approximately 15,000 people employed in technology-related fields, with an average salary of $95,000. The city is already home to the main campus of Arizona State University, including the Ira A. Fulton Schools of Engineering and the Biodesign Institute. Tech leaders, including global companies BARD Peripheral Vascular and Medtronic, along with homegrown start-ups Apex Environmental, Applied Micro Arrays, Calviri, GenoSensor, INanoBio, Korwave, Life365, PADT, Susavion and SynBuild all call Tempe “home.” “We’re a magnet for technology companies, world-class researchers and talented students who either begin their technology journey in Tempe or grow their reputation or tech company,” said Mayor Mitchell. “Tempe is building for the future because we understand that our community can have an impact on individuals, fight diseases across the globe and create technologies that will change life as we know it. Think of the impact this will have on our worldwide community. Just look at the ASU Biodesign Institute — it has generated more than $1.5 billion in impact on the regional economy and supported more than 3,000 jobs since it opened in
2003. Biodesign Building C opens in 2018 and there is so much more to come.” “Powered by intellect, energy and innovation, our researchers believe they can accomplish what others often find impossible,” said world-renowned cancer researcher Dr. Joshua LaBaer, who serves as the executive director of the Biodesign Institute. “With the addition of Biodesign C, we will soon have nearly 700 scientists of all kinds — biologists, engineers, chemists, physicists, mathematicians, computer technologists — and students working together to find creative and clean solutions for energy, air and water. We will invent new diagnostics and treatments that are accessible and affordable, and in some cases, we expect to be able to halt disease before it even begins.” Mayor Mitchell is a third-generation Arizonan with deep roots in the Tempe community. Mitchell was elected to the Tempe City Council in March 2000 and served three four-year terms. A native of Tempe, Mitchell attended elementary and middle school in the community before graduating from McClintock High School. He also earned a political science degree from Arizona State University. During his time as mayor, Mitchell has focused on strengthening Tempe’s local economy by working to attract new businesses and retain current business partners. Since his election as mayor in 2012, the City of Tempe has announced the addition of more than 28,000 jobs. In addition to the biosciences, the city has significantly grown its financial sector, with new campuses for companies including Chase, Northern Trust, State Farm, Silicon Valley Bank and Union Bank. With its combined tech and financial sector focus, Tempe is looking forward to welcoming tens of thousands of jobs over the next decade.
BIOSCIENCE COMMUNITY SPOTLIGHT:
The City of Tempe T
empe has been the favorite home for innovators since 1894, when the community was founded by Charles Trumbull Hayden, who created a business out of finding a safe way to cross a then-raging river then harnessing that river’s energy to mill grains; establishing Hayden Flour Mill. Today, Tempe’s innovation ecosystem includes tech companies large and small; the nation’s leading university for innovation; manufacturing centers; Mill Avenue entertainment and worldclass events and recreation at Tempe Town Lake. Downtown Tempe is alive with urban energy. Top finance, insurance and real estate companies such as Chase, Silicon Valley Bank, ADP and the regional headquarters for State Farm insurance made Tempe their choice for top talent and atmosphere. Within walking distance of these businesses is the famous Mill Avenue nightlife, with restaurants, nightclubs and shops - and nature. Hayden Butte, otherwise known as A Mountain, is a great hike, and there are miles of bicycle and jogging paths at Tempe Town Lake. Tempe’s got a pulse on on biotechnology. ASU Biodesign Institute is the largest single investment in research infrastructure in Arizona history. Research scientists there partner with local and global companies to fight ebola, cure cancer, create better biofuels and so much more. Tempe is at the forefront of the new frontier of science,” Tempe Mayor Mark Mitchell said. “The discoveries made in our community make personal and global impacts.” Tempe will help those exploring the science of this world with a new innovation campus adjacent to Tempe Center for the Arts. Soon, we will be able to welcome even more groundbreaking companies to our community.
ASU Biodesign Institute is the
LARGEST SINGLE INVESTMENT
in research infrastructure in Arizona history. KinetX, ASU Earth and Space Exploration and more than a dozen aerospace companies look for answers to the universe’s questions while providing new technology and products. Our community is part of the forthcoming missions to Europa and beyond, designing and sending new satellites into space and more. The best ideas often start small, and with that in mind, Tempe offers incubation and coworking spaces. Tempe serves its small and emerging businesses with its Business Resource and Innovation Center at the Tempe Public Library. Entrepreneurs can get training, use conference space and get one on one business help from experts. FABRiC, Tempe’s fashion incubator provides training, manufacturing and services for more than 150 fashion labels. To find out more about how to be involved with this forwardthinking community, contact Tempe Economic Development Director Donna Kennedy at donna_kennedy@tempe.gov or 480 350-2395.. AB | September- October 2017 103
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AZBIO
VALUE AND IMPACT:
Solutions for a changing world I
magine a world without cancer. Envision a day when we can prevent Alzheimer’s disease. Discover new ways to prevent disease. Develop new treatments to make the sick well again. Deliver innovations that will make life better for people in Arizona and around the world. Teach a new generation to achieve even more than we can hope to do today. Helping these visions become reality are key reasons why as individual investors, philanthropists, companies, states, nations, and as a world, we are investing in life science innovation.
A global population trend: A global challenge Over 10 billion people around the world by 2060. That’s what demographers are predicting. It’s over 4 billion more people than in the year 2000. It’s an increase of more than the total world population in 1975. Global population growth is creating global challenges as researchers, industry, and governments seek better solutions to support the world’s growing population. According to a joint report by the National Institute on Aging, National institutes of Health, U.S. Department of Health and Human Services and the U.S. Department of State, “We are aging—not just as individuals or communities but as a world. In 2006, almost 500 million people worldwide were 65 and older. By 2030, that total is projected to increase to 1 billion—1 in every 8 of the earth’s inhabitants will be over 65. Significantly, 106
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the most rapid increases in the 65-andolder population are occurring in developing countries, which will see a jump of 140 percent by 2030.” Studies estimate that between 2010 and 2050, the United States population ages 65 and older will nearly double, the population ages 80 and older will nearly triple, and the number of nonagenarians and centenarians — people in their 90s and 100s — will quadruple. Additional studies predict a very large increase in disability caused by increases in age-related chronic disease across all regions of the world. In a few decades, it is estimated that the loss of health and life worldwide will be greater from noncommunicable or chronic diseases (e.g., cardiovascular disease, dementia and Alzheimer’s disease, cancer, arthritis, and diabetes) than from infectious diseases, childhood diseases, and accidents. Why we are living longer Health innovations of the 20th and 21st century play a significant role in the changing demographics. It is hard for us to imagine today that there was a time when about 15 percent of infants would die. One of the biggest reasons for this was diarrhea brought about by unclean water and milk. Improvements in sanitation
Joan Koerber-Walker Arizona BioIndustry Association and food safety across the developed world have benefited people of all ages. Diseases like cholera, dysentery, typhoid fever, diphtheria and parasitic infections have all but disappeared in North America and the European Union. (Global efforts are ongoing to address these diseases and others in the developing world where millions of lives are still lost each year.) Vaccines The first polio vaccine was the inactivated polio vaccine. It was developed
The first shingles vaccine was also introduced in 2006. While rarely life threatening, shingles is painful and can be debilitating. The CDC has estimated that, without vaccination, 1 in 3 people will get shingles in their lifetime. In 2014, 28% of adults aged 60 years and older reported already receiving the shingles vaccine. New vaccines are in development for more diseases including HIV, Malaria, Ebola, Valley Fever, and Lyme Disease. In addition, a new generation of cancer vaccines, designed to train the body to better fight cancers, is also in development. Lifesaving medical innovations In addition to vaccines that help to prevent disease, lifesaving medicines and devices are another key reason that our population is growing. According to the National Bureau of Economic Research (NBER), between 1960 and 1997, new therapies accounted for 45 percent of the increase in life expectancy in 30 developing and highincome countries. Between 2000 and 2009, new therapies accounted for 73 percent of the increased life expectancy for these countries. by Jonas Salk and came into use in 1955. The oral polio vaccine was developed by Albert Sabin and came into commercial use in 1961. Additional vaccines followed for smallpox, diphtheria, tetanus, yellow fever, whooping cough, tuberculosis and measles. The World Health Organization estimates that 2-3 million lives are saved globally each year thanks to vaccines. The CDC estimated in 2014 that vaccinations will prevent more than 21 million hospitalizations and 732,000 deaths among children born in the last 20 years. In 2006, the first vaccine was approved by the FDA to protect young people against infection by certain strains of the human papillomavirus. HPV is the most common sexually transmitted infection in the United States. HPV is linked to 7 cancers affecting both men and women. If we prevent HPV infectionss, we can prevent more of these cancers.
Thanks to vaccines, public health initiatives, and antibiotics that help us to control infectious diseases, some of our greatest health challenge at the turn of the century are now greatly diminished. Heart disease is the leading cause of death in the United States today and has been since 1921. In 2015, stroke and heart disease combined was the cause of 30% of all deaths in the United States. Thanks to innovative diagnostics, medicines medical devices combined with public health initiatives relating to tobacco, exercise and healthier eating, age-adjusted death rates from cardiovascular disease (CVD) have actually declined over 60% since 1950, representing one of the most important public health achievements of the 20th century. In recent decades, tremendous progress has been made in the fight against cancer. Advances in molecular and genomic research have revealed underlying complexities and provided insights into cancer, which we now know is actually more than 200 unique diseases. Continued research has expanded our knowledge of how the disease develops and how to target medicines for specific cancer types – resulting in more effective therapies for patients. Cancer death rates have declined over 22% since the 1990’s and over 83% of
THEN AND NOW CAUSE OF DEATH IN 1900 (U.S.)
CAUSE OF DEATH IN 2015 (U.S.)
1
Pneumonia and influenza
Heart disease
2
Tuberculosis
Cancer
3
Diarrhea, enteritis, and ulceration of the intestines
Chronic lower respiratory diseases (i.e. chronic bronchitis and emphysema, asthma
4
Diseases of the heart
Accidents
5
Intracranial lesions of vascular origin
Stroke
6
Kidney disease
Alzheimer’s Disease
7
Accidents
Diabetes
8
Cancer
Influenza and pneumonia
9
Senility
Kidney disease
10 Diphtheria
Suicide Source: Centers for Disease Control and Prevention AB | September- October 2017 107
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AZBIO survival gains in cancer are attributable to new treatments and medicines. With 836 medicines and vaccines in development for cancer, 80 percent of which have the potential to be first-in-class treatments, millions of Americans living with cancer have hope for a brighter future. Diabetes and other metabolic diseases have been studied by physician scientists for over 1,000 years. Insulin was first used to manage the disease in 1922. Before that, diet and exercise were the most common treatments. A 2017 CDC report estimated that 30.3 million people in the US (9.4% of the U.S. population) are living with diabetes and that as many as 7.2 million of them are undiagnosed. Diabetes is a general term for a chronic condition where there is too much glucose (sugar)
in the blood. Normally, the pancreas makes insulin to help convert glucose into energy. With diabetes, the body either does not make enough insulin (type1 diabetes) or does not use it properly (type-2 diabetes), leading to high blood glucose levels. Uncontrolled diabetes can lead to serious health complications, such as heart attack, lower-limb amputation, vision impairment and blindness. Type 2 diabetes makes up 90 – 95% of all diabetes cases. Research shows that the incidence of diabetes increases with age and that diabetes affects 1 in 4 people over the age
POPULATION BIRTH YEAR
TRENDS U.S. LIFE EXPECTANCY
U.S. POPULATION WORLD (MILLIONS) POPULATION (BILLIONS)
1900
47.3
76.1
1.65
1950
68.2
152.3
2.52
1970
70.8
205.1
3.68
1980
73.7
227.2
4.44
1990
75.4
249.6
5.31
2000
76.8
282.2
6.13
2010
78.7
310.6
6.93
2020
79.8
334.5
8.55
2030
81.2
359.4
8.55
85.4
380.2
9.5
2040
Sources: Centers for Disease Control and Prevention. Statista
of 65. In addition, an estimated 33.9% of U.S. adults aged 18 years or older (84.1 million people) had prediabetes in 2015, based on their fasting glucose or A1C level. Nearly half (48.3%) of adults aged 65 years or older had prediabetes. For these people, the goal is to modify behavior and support their systems so that they do not cross over from pre-diabetes to type-2 diabetes. Successful management of diabetes requires constant and diligent monitoring of glucose levels. To control their glucose, patients may need multiple daily injections and/or multiple oral medicines. Insulin pumps and even an “artificial pancreas” help patients to better manage their disease. Until we can find a cure, better disease management is the best way to for people with diabetes to avoid costly and sometimes lifethreatening complications. In recent years, researchers have focused on making treatments much easier for patients, from fewer pills to less frequent injections. Careful monitoring and treatment are still needed, but current medicines in development offer a promising future. There are 171 medicines currently in development for type-1 and type-2 diabetes and diabetes-related conditions. A new wave of treatments and devices are offering patients better or more sustained control over their glucose levels. Other medicines in the pipeline may address diabetes-related complications that affect the kidneys, blood vessels and eyes. All of these new medicines are in clinical trials or awaiting review by the FDA. These are just a few of the many examples of how life changing and lifesaving innovations are making life better for patients and shaping our world. Shaping generations In 1960, the first oral contraceptive, Enovid, was approved by the US Food and Drug Administration (FDA) as contraception. By 1965, just five years after the FDA approval, 6.5 million American women are on pill, making it the most popular form of birth control in the U.S. A key factor on why Gen X, the generation sandwiched between the Baby Boom and the Millennial Generation, is significantly smaller is that as birth control became more widely used and more effective, women gained greater control of both the size of their families and the timing. AB | September- October 2017 109
AZBIO More years – better years According to data reported by PEW Research on U.S. population trends in 2016, Millennials have surpassed Baby Boomers as the nation’s largest living generation based on 2015 population estimates by the U.S. Census Bureau. Millennials now number 75.4 million, surpassing the 74.9 million Baby Boomers. Generation X is projected to pass the Boomers in population by 2028. Members of these generations will not only live longer, they have the benefit of health innovations that make life better. Today’s diagnostics, medicines, and medical devices are making life better for people of all ages, but as we age, many of us will need them more. Joints can wear out. Bones can get brittle. Eye sight can fade or get clouded. Our veins can clog and our hearts can fail. Our bodies natural ability to fight off disease is not as strong as it was before. Today’s medical innovations are addressing these challenges and many more. They help to ensure we don’t just have more years. They help us make the most of the yeas we have. Nothing has the power to curb health care costs quite like a cure. Life Science and Health Innovations save lives. They also save money. Every reduced hospital stay, every surgery avoided, every inoculation can help reduce healthcare costs and help ensure a better quality of life for our friends and loved ones. We are making important progress in addressing the diseases that steal our time with loved ones and burden our healthcare system. 21st Century cures Designed to harness America’s best minds of science, medicine and technology to tackle some of our biggest and most complex health challenges of today, the 21st Century Cures Act was signed into law on December 13, 2016. A truly bi-partisan effort that included input from industry, academia and patients from across the nation, the bill committed $6.3 billion over seven years, dealing with opioid addition, cancer research and care, precision medicine, the BRAIN initiative, mental illness, Alzheimer’s disease, and so much more. America’s biopharmaceutical companies invest more than $70 billion in R&D each year and reinvest on average 20 percent
How the world and individual nations will be able to afford quality healthcare for our growing and aging population is a one of our greatest societal and economic challenges. of their revenue into the search for new treatments and cures. No other industry in America comes close to this. The biopharmaceutical industry’s investment in R&D is more than twice the entire budget of the National Institutes of Health. The sector as a whole accounts for 17 percent of all domestic R&D funded by U.S. businesses – far more than the software (13 percent), automobile (5 percent) and aerospace (4 percent) industries. It’s hard to visualize that much money. The $70 billion biopharmaceutical companies invest on R&D is more than the combined 2016 sales of some of Arizona’s largest companies: Avnet + Freeport McMoran + Republic Services + Southern Copper + APS + SRP + Insight. Innovation saves How the world and individual nations will be able to afford quality healthcare for our growing and aging population is a one of our greatest societal and economic challenges. But just as it has been in the past, where there is innovation there is hope: • There are 836 medicines and vaccines in development for cancer. If these medicines can help to reduce the cancer death rate by 10%, it represents an estimated $4.4 trillion savings. • A s Baby Boomers age, the rate of Alzheimer’s disease will reach epic proportions. Unless new breakthrough treatments are developed soon, the consequences will be devastating for patients, families, and our healthcare system. Biopharmaceuticals are the best hope at stemming the tide of Alzheimer’s. There are 75 new diagnostics and treatments in development for Alzheimer’s Disease. If just ONE new treatment can delay the onset of Alzheimer’s by 5 years, the number of Alzheimer’s patients would
drop by nearly one half, saving over $367 billion in healthcare costs in the U.S. alone. • Hospital stays represented 32% of to the total cost of healthcare in 2015. According to the National Center for Health Statistics, from 1980 – 2010, advanced medical devices helped reduce the duration of hospital stays by 58%. • Non-adherance (not taking your medicine as directed or not following your doctor’s instructions after a procedure) is estimated to add over $290 billion to U.S healthcare costs annually according to the Network for Excellence in Health Innovation. Medication non-adherence is not only a leading driver of high health-care costs. It is also the leading cause of preventable morbidity and mortality, responsible for 30% to 50% of treatment failures and 125,000 deaths annually according to the American College of Preventive Medicine. New Health Tech Applications are now available to help us remember what out doctor told us to do, remind us to take our medicine, and in some cases even administer the treatment when our body tells a sensor that we need it! So, what does this all mean? Our global community and our nation is growing thanks in part to the lifesaving innovations that are helping us to live longer lives. Medical technology helps us to stay healthy, helps us manage or control disease when it happens, and can provide cost savings that are necessary so that we can afford the costs of healthcare as a world, as nations, as states, and as individuals. Most of all, these lifesaving and lifechanging innovations give us the opportunity to make the most of our years. Joan Koerber-Walker is president and CEO of the Arizona BioIndustry Association (AZBio). AB | September- October 2017 111
TRENDSETTERS
2017
HOW BIG IS THE
ECONOMIC IMPACT OF MEETINGS AND EVENTS?
MEETING PROFESSIONALS INTERNATIONAL
GREAT LEE-WAY
MPI president plans to keep members engaged and enthusiastic about everevolving hospitality industry By MICHAEL GOSSIE
M
ost people would be pulling their hair out. But for Lee Smith, president of the Arizona Sunbelt Chapter of Meeting Professionals International (MPI), great challenges create amazing memories. “In 2009, Phoenix was the host city for the NBA All-Star game and my hotel, Hotel Valley Ho, hosted the T-Mobile Shot of a Lifetime event,” says Smith, director of catering and conference services at Hotel Valley Ho in Scottsdale. “This event had a lot of moving parts from pre-production, custom food and beverage options that really reflected the overall feel of the night, not to mention a complete transformation of our hotel pool for the talented Katy Perry to perform at.” Coordinating all those moving parts and making them seem to gel flawlessly is what memories are made of. “My favorite part was seeing everyone so energized and working together to bring this event to life,” Smith says. “When you have the right people in the right roles that are enthusiastic and supportive it creates a magical and memorable experience.” And guiding the right people in your circle of support is exactly how MPI, the organization Smith leads in Arizona, helps its members boost Arizona’s economy while driving the state’s hospitality industry. Az Business magazine talked with Smith to see what she hopes to accomplish during her tenure as president of the Arizona Sunbelt Chapter of MPI.
Az Business: What attracted you to the meeting and event industry? Lee Smith: I enjoy meeting new people and establishing connections with our industry peers; these relationships are vital to the future and continued success of our industry. It is important for us to engage and educate our planners, suppliers, destination management companies and all those in the meeting and event industry so we can come together and transform the way we do meetings. When we meet, we change the world. AB: How did you get started professionally in the meeting and event industry? LS: Back in 1999, I accepted a summer internship for the Walt Disney World College Program in Orlando, FL which is where I got my first glimpse into the meeting and event industry. Upon the conclusion of that program, I moved into catering and conference services at the Disney’s Yacht & Beach Club Resort followed by my transition to resort sales for Disney’s Coronado Springs Resort before I moved out to Arizona back in 2003. 116
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CHAMPIONING THE STATE: “I think Arizona is underrated and people don’t realize that we have so much to offer,” says Lee Smith, president of the Arizona Sunbelt Chapter of Meeting Professionals International (MPI). PHOTO BY MIKE MERTES, AZ BIG MEDIA
What is MPI? MPI: Meeting Professionals International (MPI) is the largest and most vibrant global meeting and event industry association. The organization provides innovative and relevant education, networking opportunities and business exchanges, and acts as a prominent voice for the promotion and growth of the industry. MPI membership is comprised of approximately 18,500 members belonging to 70 chapters and clubs worldwide. Information: mpiweb.org Arizona chapter: Active since 1979, the Arizona Sunbelt Chapter is MPI’s 17th largest chapter in the world. The organization is comprised of 330 members throughout Arizona, representing a mix of corporate, association, government and independent meeting planners, suppliers who provide a variety of products and/ or services to the meeting and hospitality industry as well as student and faculty from local colleges and universities. The local chapter offers members educational, networking, and community volunteer opportunities, plus industry certification and professional growth opportunities. Information: Contact Executive Director Joanne Winter at 602-277-1494 or visit the chapter website atmpi-az.org AB | September- October 2017 117
MPI AB: How has MPI helped to enhance your professional career? LS: MPI has fulfilled me both personally and professionally in ways I never thought possible. Because of my involvement, I’ve been able to establish new connections with various planners, suppliers, destination management companies, and so much more. When I am asked, what is it about MPI that I love so much? I answer without hesitation: the people. It’s the people that make being a part of this organization so special and unique from any other organization out there. The camaraderie, the authenticity, the feeling of walking into a room and being genuinely welcomed with open arms. AB: How have concerns over safety and security impacted meetings and events? LS: Both planners and suppliers are now re-evaluating their risk management plans, some even establishing those procedures for the first time. As a supplier and hotelier, we are seeing more planners requesting what our emergency procedures are, contact info for local authorities, and even the addition of contractual verbiage. There is a level of awareness that has surfaced throughout the industry not out of fear, but rather being proactive in establishing a solid plan in the event something happens. AB: What other trends or issues do you see as impacting meeting and event planning the most? LS: Ever changing technology will continue to have an impact on meeting and event planning; staying ahead of this curve is challenging at best. In addition, social media has more ROI than traditional advertising; printed advertising and marketing is gradually becoming a thing of the past. Additionally, social media is being used as a platform in regards to real time guest feedback which is a double edged sword as both positive and negative feedback spreads faster than ever and sometimes there are consequences. AB: What is Arizona’s reputation as an events destination? LS: I think Arizona is underrated and people don’t realize that we have so much to offer. Arizona, as an events destination offers plenty of activities to supplement an event experience from various cultural activities to off-riding in the desert; or from
MEMBER SPOTLIGHT JACQI MARTH
Director of sales and details Destinations & Details Recent MPI honor: President’s Achievement Award Interest in industry: “I have always been an extremely social person. When I graduated high school, I knew I wanted to go to college, but did not know what I wanted to do. My dad told me to try travel and tourism, so I did. I have been hooked, creating amazing experiences ever since. I love what I do.” Impact of MPI: “MPI has given me the tools, skills and confidence to enhance my daily responsibilities personally, professionally and spiritually. The experiences I have had with MPI have made me the successful leader that I am today.”
professional sporting events to hiking one of our many beautiful mountains while watching one of our serene sunsets. Arizona also boasts an array of culinary concepts, local wineries and craft breweries; the Grand Canyon state offers something for everyone. AB: What are your goals as MPI Arizona Sunbelt Chapter president? LS: My focus is our members. It is because of our members that we are a successful chapter and we wouldn’t be here without them. It’s important that we keep them engaged, excited and enthusiastic about their membership. The best way we will do that is by providing quality education, networking, community outreach and volunteer opportunities. We have an amazing leadership team that is working hard to create these experiences for our members.
ARIZONA SUNBELT CHAPTER BOARD: (Front, from left) Melanie Volkers, CHSE, Hermosa Inn & Lon’s; Danielle Adams, WM Symposia, Inc.; Lee Smith, Hotel Valley Ho; David Rosenbaum, CHME, Carefree Resort & Conference Center. (Back, from left) Tiffany Higgins, The Tiffany Event; Jacqi Marth, Destinations & Details; Susie Molinich, CMP, SMMC, American Express Meetings & Events; Troy Peters, CTS, Video West, Inc.; Sukki Jahnke, Tempe Chamber of Commerce; Amy Miranda, Crowne Plaza San Marcos Golf Resort; Joanne Winter, MPI Arizona Sunbelt Chapter; Sharon Scronic, CMP, American Express Meetings & Events. Not pictured: Cathy Clifton, CMP, CMM, Experient; Wendy Frank, CMP, Sheraton Grand Phoenix. PHOTO BY MARK SKALNY PHOTOGRAPHY
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MPI
Arizona
MEANS BUSINESS
The state’s rising hospitality and tourism industries have an economic impact that goes beyond ticket sales and hotel rooms booked
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Lorne Edwards
Suzanne Hagberg
ALWAYS A NEW PLACE TO STAY
New construction and renovations and more are sprouting across Arizona. Here are a few projects that will attract the attention of Arizona visitors: By ERIN THORBURN
A
rizona is the home of the Grand Canyon and Sonoran desert; hosts Super Bowls, Final Fours and spring training baseball; full of the finest resorts and restaurants; and one of its cities — Tucson — became the first city in the United States to be recognized as a UNESCO World City of Gastronomy. Is it any wonder the Valley of the Sun’s tourism and hospitality industry remains resolute as a top economic driver of the state? No. Is it impressive that in 2016 alone, Arizona boasted 43 million visitors with a combined spending of $21.2 billion? Yes. Take a look at why, when it comes to tourism and hospitality positive economic impact, the sun continues to shine upon Arizona.
SCOTTSDALE • The Ritz-Carlton Paradise Valley Resort (2018) • 269-room WaterView Scottsdale (near the Arizona canal downtown)
Stephanie Pressler
TUCSON • Rio Nuevo Facilities District (Downtown Tucson Partnership) • AC Marriott (downtown ) GLENDALE • Home2 Suites by Hilton (Westgate Sports and Entertainment District) • 100-room, four-story Aloft Hotel (adjacent to Westgate Entertainment District, just announced)
Pamela Traficanti
PHOENIX • 320-room Marriott Courtyard Residence Inn • 210-room Hampton Inn (2018) SEDONA • 219-room Hilton Sedona resort renovation
Lorraine Zomok AB | September- October 2017 121
MPI EVENTS, TOURISM AND HOSPITALITY: ARIZONA’S ECONOMIC MIRACLE GROW Arizona already has some of the most impressive natural surroundings, national parks and recreation in the nation. What we’re coming to learn, as an increasingly hospitable state, is that the events Arizona hosts — both large and small — are the Miracle Grow sprinkled on what we already possess. “Special events are of critical importance,” explains Experience Scottsdale Community Affairs Manager Stephanie Pressler. “In 2017, more than 655,000 people attended the Waste Management Phoenix Open in Scottsdale and 320,000 attended the Barrett-Jackson Collector Car Auction.” And, like any good garden primed for optimal sun exposure, water and fertilizer, Arizona’s major cities are perfectly equipped to grow – like mad. This is no doubt attributed to the economic prosperity that for the past few years has continued to blossom, thus fueling new hospitality and tourism accommodations and (literally) making room for bigger venues. “Phoenix now has the opportunity to compete for large-scale meetings and conventions with the state-of-theart Phoenix Convention Center and its surrounding downtown hotels,” says Lorne Edwards, vice president of sales and services for Visit Phoenix. Compete indeed – and triumph. In addition to the big draws that come with special events like the Final Four, Arizona hosts annual favorites like the Arizona Rock ‘N’ Roll Marathon, Phoenix Comicon, Scottsdale Culinary Festival, as well as endless arts-related events and performances and events at Glendale’s Westgate Entertainment District and Tempe’s ASU Gammage, among others. MARY, MARY QUITE CONTRARY, HOW DOES YOUR GARDEN GROW? With the space to accommodate large events, attractive venues and hefty-size conventions come voluminous visitors – and those visitors collectively spent $58 million per day during their stays in 2016, according to the Arizona Office of Tourism. Visitor spending by nonresidents increased by 5.2 percent from 2014 to 2015, with real travel spending (inflation-adjusted) dollars increasing by 3.9 percent per year, over the past two years. 122
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It’s important to note something that is often overlooked: A notable portion of Arizona hospitality and tourism prosperity is due to generous international visitor spending, which amounted to $2.9 billion last year, according to the Arizona Office of Tourism. “International visitors are valuable to our economy,” Pressler says, “because they tend to stay longer and spend more at their destination.” As visitor spending rises and Arizona’s economic affluence blossoms, Arizona residents benefit. “The $3.09 billion in 2016 tax revenue equals an annual tax savings of $1,186 for every Arizona household,” explains Lorraine Zomok, manager of Visit Glendale, “and supports 184,200 industry jobs.” With an abundance of newly constructed and renovated accommodations in tandem with added restaurants and entertainment, experts say Arizona can expect to witness a steady (if not exponential) rise in tourism-related employment opportunities. BEES TO THE FLOWER AND HOSPITALITY BRANDING POWER Bees are essential to our gardens and to a greater degree, our entire ecosystem. Without minuscule electrically charged hairs on the body of the bee, it would have a difficult time locating flowers, which depend on those minuscule
hairs for sources of pollen. Without the branding efforts of local tourism entities – convention and visitors bureaus and destination marketing organizations – would tourism and hospitality remain a top economic impact producer for Arizona? “Much of our success in tourism comes from strong branding,” Pressler says. “Experience Scottsdale markets Scottsdale as a world-class vacation and meetings destination around the world. Through extensive visitor analysis, we can target potential, high-value visitors.” The result of investigating visitor origin, spending patterns and similar tourismrelated criteria has enabled entities like Experience Scottsdale, Visit Phoenix and other CVBs and DMOs to pinpoint and implement marketing campaigns in New York, Chicago and San Francisco. What Arizona hospitality and tourism experts are gleaning, as well, is the value of casting an even larger advertising net, which includes sending a message overseas. “Providing compelling traveling experiences, especially through social media and user-generated content, offers not only potential visitors real-time experience, but also catches the attention of meeting and event planners – anytime, any place,” explains Pamela Traficanti, national sales manager for Visit Tucson and a 23-year member of Meeting Professionals International (MPI).
IMPACT OF TOURISM Let’s go under the microscope to see exactly how impactful events, meetings, tourism and hospitality are to Arizona’s economy: • $ 9.2 billion in traveler hotel/motel accommodation spending was reported for 2016, with $18.6 billion of sales accumulated from destination stays • 33 percent of Phoenix visitors in 2016 reported they were on trips influenced through marketing • According to the Arizona Office of Tourism, the top activities and experiences visitors engaged in during their trips to Phoenix were shopping, fine dining and taking advantage of National/State Parks • 65 percent of Arizona’s travel industry state and local government tax revenues for 2016 were attributed to visitor sales • The majority of all travel tax revenue for 2016 was a result of out-of-state visitor spending
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MPI “As part of a new strategy designated by the Arizona Office of Tourism, we will see increased efforts to reach international markets including Canada, Mexico, Germany, Britain, France and China,” Zomok adds. “These strategic programs will continue to expand Arizona’s market share and are positioned to bring increased global visibility to all 15 counties statewide.” CAPITALIZING ON CACTUS, CULINARY GENIUS AND COLLABORATION One thing for which tourism and hospitality experts unanimously agree is that Arizona’s natural resources are byand-large, some of her greatest assets. “Arizona is a year-round, sought-out destination with the most national parks and monuments in the United States,” says Detours Director of Sales Suzanne Hagberg, “Our Southwest Native American culture offers unique experiences for visitors that come to vacation in our state.” “We have one of the most diverse landscapes,” Traficanti says, “From the biggest population of ponderosa pines to cactus and canyons – what other state has that?” Beyond the indisputable beauty of Arizona’s terrain and ambiance is an equally enticing abundance of recreational, entertainment and hospitality focused amenities. “There is a vibrancy found in downtown areas full of restaurants, shopping and nightlife,” Pressler says. Don’t be quick to dismiss, either, the offerings of quainter portions of Arizona in contributing to economic impact. “Places like Kingman and Douglas invite opportunities for fun day trips and historical insight,” Traficanti says. No matter where visitors come from or where they go to take advantage of Arizona’s desert-garden oasis, one thing is clear – the hospitality industry is a united front in Arizona. “Arizona’s success is the partnership of the statewide tourism and hospitality organizations,” Zomok says. “The camaraderie and cooperative spirit of the CVBs, DMOs and organizations such as MPI are an inspiration and role model for doing business the right way. The result is a shared, collective vision, voice and work ethic which elevates and advances Arizona’s tourism industry.” 124
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MPI MEMBER
SPOTLIGHTS KATIE DREIFUS Event coordinator Plexus Worldwide
Recent MPI honor: Supplier of the Year Interest in industry: “Everything! We have such a unique and fun industry. I love when people ask me, ‘How do I get that job?’ Most of all, though, I live to create unforgettable experiences that last a lifetime.” Impact of MPI: “MPI has led me to meet so many amazing people since I joined five and a half years ago. I have been able to learn so much about our industry, attend IMEX, WEC (World Education Congress) and work towards my CMP (Certified Meeting Professional designation) because of my involvement.”
TIFFANY HIGGINS
Owner and event planner The Tiffany Event Recent MPI honor: Planner of the Year Interest in industry: “I discovered my love for events several years ago while working in a local mall management office. I assisted the marketing department in putting on a Super Bowl event and immediately loved the rush, the controlled chaos and the reactions from those in attendance. I worked that event with an actual 102-degree fever and caught the fever for events.” Impact of MPI: “MPI has enhanced my career through education, leadership skills and networking. The relationships I’ve established through MPI have created opportunities, have provided an interchange of ideas and provided a pool of professionals to employ in creating successful events.”
BOBETTE GORDEN
Vice president, marketing Influence at Work Recent MPI honor: Sponsor of the Year, Influence at Work Interest in industry: “I was attracted to the meeting and event industry because I knew the decision makers for educational programs were involved there. The meeting and event industry is fascinating and involves forward thinking people who thrive on new information, marketing, social contacts, networking, travel, education, innovation, and business, business, business.” Impact of MPI: “MPI has helped me professionally by providing opportunities to volunteer in areas my clients were already experiencing. This gave me much greater insight into their challenges, their timelines and their priorities. MPI helped me by providing experiences that allowed me to be able to better understand my clients. Priceless.”
*
NEW CHEF-C RAFTED BUFFET • PRIV ATE AND SEMI-PRI VATE ROOMS SIGNATURE COCK TAILS • SOME THING FOR EVERYONE !
*PROMOTIONAL. OFFER EXPIRES: 12/7/2017. This offer must be referenced at the time of booking. Offer valid ONLY with events held between 11/27/17 -12/7/2017. 20% discount requires a buffet and $1,000 minimum spend prior to tax, gratuity and outside vendors. 20% discount applied on food, non-alcoholic beverages, Power Cards and Rental Fees only and excludes all other charges including alcohol, outside vendors, tax and gratuity. Not valid with any other offer. Promotion excludes the following buffet packages: Ultimate Happy Hour Buffet, Ultimate Party Package Buffet, Playoff Buffet & Field Trip Buffet. Should event need to be rescheduled outside of valid dates, the 20% discount will not apply. Revenue minimums apply and vary by location. Subject to availability. Valid at participating locations only and prices may vary by location. Minor policies vary by location. See store for details.
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MPI
PLAYING IT
SAFE Meeting and event planners take precautions to protect participants from potential risks
By ERIN THORBURN
I
f you’re familiar with the vision of the Arizona Sunbelt Chapter of Meeting Professionals International, you most likely know the dedication, vigilance and meticulousness in which MPI upholds safety and security. “In today’s environment, it is imperative we continue to work diligently with our clients, facilities, special event venues and of Danielle Adams course law enforcement agencies on security protocols that addresses the safety and security of all visitors to our city,” says Lorne Edwards, vice president of sales and services at Visit Phoenix. Today, more than ever, it’s imperative that meeting and event planners prepare, establish and maintain safety protocols for venues. Az Business talked with Danielle Adams, director of meeting and events at WM Symposia, to learn the latest in safety planning and processes. Az Business: We know a venue review, security checklist, liability insurance and knowing the surrounding environment are key elements in planning a safe event. Have these changed within the last year? Danielle Adams: While that is a good place to start, anyone planning an event (professional meeting, school function,
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wedding, family reunion, etc.) should conduct a risk assessment for any desired venue or destination. As a professional meeting planner, you need to ask yourself what the potential risks are for traveling to that location. That means conducting research before signing venue contracts – ensure every detail is listed, including a specific force majeure and cancellation/rebook clauses to protect you and your organization. AB: Are there any safety protocols needed to ensure safety and security in the meeting planning profession? DA: This could include determining if a venue has emergency procedures and trainings; how easily the general public can gain access to the venue; security camera placement (and that they are actively monitored); awareness of emergency fire exits, gates and doors; that potential hazards and hazardous areas are cordoned; ease of access for ambulances, police and fire trucks in case of an emergency; and designated locations for first aid and emergency services personnel. It’s also important to prepare a list of emergency contacts – police, fire, hospitals and Red Cross. AB: Enforcing security with drastic measures, like the situation that arose at this year’s Phoenix Comicon, are necessary, but can make participants feel uncomfortable and fearful. How do meeting planning professionals approach these types of challenges? DA: Attendee satisfaction is incredibly important when planning unique events such as Comicon. However, it’s our
responsibility to secure the safety of our attendees, just as it is TSA’s job to secure our air travel. Now, more than ever, we enforce tighter security procedures. The key to a successful change in security policy is communication. We must explain early and often during the planning process what to expect when guests attend events. Participants should be provided a heads-up of what to expect upon arrival, including tips for parking procedures, bag requirements and searches and metal detectors. AB: How does Phoenix measure up in terms of safety and security compared with other areas of the nation? DA: Phoenix and surrounding suburbs have already hosted large-scale events, such as the Super Bowl, Pro Bowl and the NCAA Final Four. I’m confident we are leading the way in safety and security and have our best practices with other large cities. Weather doesn’t play as large of a role here in Arizona compared to New Orleans, New Jersey and other coastal cities, but Phoenix learned from Katrina how we, too, must be prepared to mobilize at a moment’s notice. AB: What are our biggest safety/security challenges? DA: The Ariana Grande Concert in Manchester, UK, was an eye-opener to many. We have to remember that safety and security must exist far beyond the walls of a hotel ballroom or convention center. Public safety is not a conversation for just meeting and event planners – it’s for everyone. Traveling to a new destination, attending a large concert, going to church or even a movie all require the consideration of safety and security diligence. It’s critical that the city of Phoenix continues to maintain public safety as a top priority. AB: Are there any safety trends you’ve noticed within the last year? DA: Saving dollars doesn’t make sense. Organizations and companies are now willing to pay more for safety and security. Spend the time and money to formalize a plan that is unique to your organization’s event. There are professional emergency planners who specialize in evaluating weaknesses and how-to correct them. They will also look at everything from registration (identity security) and travel policies to improve them. Traveler tracking, emergency contacts, how to spot suspiciouslooking packages and individuals, who to contact in an emergency and how to communicate and manage the crowd in case of emergencies are all other areas they can help you with. Don’t know where to start? Work with the people who do. AB | September- October 2017 127
Arizona Mining Association Minerals Make it Possible
2017
AZ MINING ASSOCIATION
AN
ECONOMIC
GOLDMINE The mining industry has been the bedrock of Arizona’s business community for generations
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By ERIN THORBURN “What is not eaten is mined.” It’s a mining saying you may learn from Dave Kimball, a shareholder at Gallagher & Kennedy and an expert in Arizona mining. Kimball’s expertise has been created through decades of natural resource lobbying, legislation and advocacy in mined land reclamation, mining and more. Who better to provide a quote that all Arizonans should not simply seek to understand, but to recognize as the literal foundation of Arizona’s economic bedrock.
Dennis Hoffman
Dan Johnson
Dave Kimball
Francis McAllister
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AZ MINING ASSOCIATION
The next time you get into your car, relax in your Valley home, ride in a downtown elevator, or even drink a soda, thank the Arizona mining industry – without which, our daily lives would look much different. But that’s simply the tip of the drill bit. Arizona’s mining industry has and continues to shape the economy in the Valley of the Sun (and beyond). The hard numbers of hard-rock mining employment Let’s revisit Kimball’s quote: “What is not eaten is mined.” How does an old adage from the world of mining correlate to Arizona’s mining industry? More importantly, why is it impactful in context with the local economy? Perhaps if you knew that twothirds of the entire production of copper in the world takes place right here in your home state, the context is more impactful. Or, how about the fact that 65 to 70 percent of the nation’s copper supply comes directly from Arizona mines? “What is missing above and beyond the numbers,” explains Dennis Hoffman, PhD, director of the L. William Seidman Research Institute at ASU, “is the fact that mining is generally an export-based business.” This is important to recognize, according to Hoffman, because hard rock mining activity in Arizona induces local activity, and thus, is a vital source of job creation. Just how important is mining to the Arizona workforce? You might be surprised. “The most recent data,” explains Kimball, “reflects 44,000 jobs directly and indirectly linked with the Arizona mining industry.” To put that into perspective: If Arizona’s mining industry was a company, it would be the state’s biggest employer. The income produced by this formidable workforce: $4.3 billion. While Arizona mining employees offer a well-proportioned economic contribution to the state, they also ensure significant national security, something that Kimball explains as producing a “rippling effect” in affecting the number of suppliers, equipment and rolling stock. 132
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And, while our state and nation prosper and economic developers tout the importance of attracting high-wage jobs to Arizona’s, it might surprise many outside the industry to learn that those employed within the mining industry are among the highest paid (per employee) wage earners in the state. “According to the Arizona Mining Association,” explains Dan Johnson, vice president and general manager of Florence Copper Inc., “the average worker in the mining industry earns over $100,000 per year.” According to a report conducted by the L. William Seidman Research Institute at ASU, Florence Copper Inc. alone is projected to yield $1.98 billion in personal income in Arizona over a 25year project lifetime. So well paid are mining employees in Arizona, in fact, that they are the highest taxed at a mind-boggling 44 percent. Similarly, mining companies are taxed five times more than the average Arizona business. While mining is one of the highest taxed industries in the state, there’s a silver (or more appropriately – copper) lining. “The dollars that flow to state and local coffers are important in funding schools, public safety, healthcare and transportation infrastructure,” Hoffman says. Will technology take a toll on the mining workforce? While mining has a rich history in Arizona, gone are the days of the stereotypical miner with a pickaxe slung over his shoulder. As technology continues to force automation in other industries, will it change the economic impact the mining industry has in Arizona? The short answer: probably not. “The copper mining industry is on the forefront of both computerized mining and environmental stewardship,” Kimball says. Why? It must. Globally, mining is highly competitive. Even though Arizona has the monopoly on available mineral resources — such as the Morenci mine, the largest mine in Arizona – it also
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AZ MINING ASSOCIATION “Arizona has been blessed with minerals” — Francis McAllister
HOW VALUABLE IS COPPER? A
side from its monetary value and the significant impact copper contributes to our Arizona economy, you might be surprised to learn of the significance copper has in regard to our daily living. If you’ve ever wondered why copper theft developed into a national epidemic, the simple answer is because copper is more than a highly sought after commodity, it’s a necessity in ensuring the prosperity of our health, safety, convenience and infinitely more. Penny for your thoughts? Communication devices: Copper is much “smarter” than we give it credit for. Without it, our smart phones, tablets and other mobile communication devices would not exist; they all contain copper circuitry. Additionally, network towers use copper to transmit wireless signals. National Security: The next time you spy Luke Air Force Base aircraft in the sky, in addition to thanking our Air Force for their service, thank Arizona’s copper miners. Copper is used in the construction of both military aircraft and advanced weaponry. Renewable energy: Solar energy sources and wind turbines depend on copper. In fact, solar photovoltaic systems are composed of 5.5 tons of copper per MW. Technology: From batteries to electromagnetics, copper is a source integrated into any number of advanced economy technologies. Transportation: That car you commute in every day wouldn’t operate without copper. An estimated 50 pounds of copper is found in the average automobile. Medical usage: Not only is copper incorporated into imaging systems and surgical instruments, antimicrobial copper is a staple in the medical field, responsible for eliminating bacteria on common medical surfaces, such as hospital bed rails.
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has to adhere to some of the most stringent environmental and regulatory standards and costs. “Unless the mining industry adapts to changing times, embraces new methods and minimizes impacts,” Johnson says, “mining won’t continue to be the economic driver it’s historically been for Arizona. While advancement in technology and robotics continue to be crucial for the perpetuation of the mining industry’s economic affluence, it won’t necessarily eliminate occupations. “Mining will be increasingly automated,” Hoffman says, “so there is likely to be less sourcing of direct jobs, but local job creation will occur as a result of the state continuing to invest in the industry.” Mine eyes have seen the glory born of ore (for time to come) “Arizona is home to some of the richest copper ore loads in the country, so investment in the state’s resources will continue,” Hoffman says. Unlike coal mining, mining for ore is not a boom or bust occupation. Copper ore mines, indigenous to Arizona, can be miles deep and require years of preparation and advanced technology. The Resolution Copper mine in Superior, for example, has been recognized as the largest known ore body in the world. “To access the mine requires new technology in robotics” Kimball says. “Arizona has been blessed with minerals,” explains Francis McAllister, vice president of land and water for FreeportMcMoRan Americas and chairman of the Arizona Mining Association. “The primary mineral is copper, but other mining operations either exist or are being contemplated in minerals like gold, potash, silver, uranium, or coal. Because these resources exist in Arizona, and the world needs these resources, mining will continue to be a part of this evolving economy. The future of electric vehicles, renewable electricity, transportation, communication, housing all depend on mining. Mining will continue to be a part of the Arizona economy to continue to supply the evolving economy of the world.” The added plus of copper ore extraction is that it takes decades. In order to remain competitive, the commitment to time and environmental integrity ensures both job security and the safe keeping of economic prosperity in the mining industry. “Training employees is an added cost,” Kimball says. “Once an employee is trained, you don’t want to lose them.”
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IT’S HERE! Announcing the launch of our new and refreshed website!
azbigmedia.com AZ BIG MEDIA KEEPS GETTING BETTER!
We’re going to keep doing what we do best by bringing you the most up to date news in Az business and commercial real estate, you just sit back and enjoy
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AZ MINING ASSOCIATION
CORE
EDUCATION
Mining industry creates educational opportunities that help young people explore career options
By ERIN THORBURN
I
n 2015, President Barack Obama said this of STEM (science, technology, engineering and math) curriculum” “Science is more than a school subject, or the periodic table, or the properties of waves. It is an approach to the world, a critical way to understand and explore and engage with the world.” Yes, certainly STEM education is an approach to understanding the world, but it’s quickly becoming a necessity. It’s time to resupply a workforce for whom U.S. Bureau of Labor Statistics statistics says has a desperate need for talent in occupation sectors with skills in – you guessed it, science, technology, engineering and math. Here to answer the call and prepare a new, skilled generation of mining engineers, technological experts, material handlers and more is the Arizona Mining Association (in conjunction with its leading affiliates). Better STEM-related practices in Arizona “The current education system is not producing a sufficient number of qualified individuals to replace retirees and to meet
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the requirements of a workplace that requires strong science and math skills,” explains Tracy Bame, director of social responsibility and community development for Freeport-McMoRan. According to Bame, this deficit is a result of the combination of teacher shortages and lack of defined pathways toward higher education and preparation to support a skilled workforce. The solution: Support from Arizona mining companies. For example, Freeport-McMoRan supports programs and initiatives that are designed to spark an increased interest in STEM education, and they do so in a way that also supplies educators with the tools to do so, in addition to facilitating collaboration with others who share in the effort to refine STEM teaching effectiveness. “We believe in three key areas when it comes to improving STEM education,” Bame says, “as well as fulfilling student outcomes and resupplying a future workforce.” The three objectives Freeport-McMoRan seeks to accomplish are: • Strengthening the system • Recruiting and retaining high-quality STEM teachers
IMPACT
IN ACTION
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orthern Vertex, which is developing a gold mine in Northwest Arizona, has developed several educational partnerships: The Golden Vertex Center for Earth Sciences/ Geology Studies at Mohave High School. The program includes: • Purchase of 15 laptops • Purchase of 100 rock hammers • Purchase of 100 new Earth science textbooks • Purchase of a hydrology model • Placement of several boulders from the Moss Mine site around the high school campus so students may experience an “on-campus” field trip when studying the geology of the local area • Golden Vertex staff members spend time in the classroom several days a year • Once per semester, students are taken on a site tour • Golden Vertex sponsors the science classroom at Fox Creek Middle School. The sponsorship consists of staff participation in the classroom and site visits to the Moss Mine core sample shack. • A unique partnership with the University of Arizona College of Mining and Metallurgy has been established with Mohave High School and Mohave Community College.
• Fostering student interest in science, technology, engineering and math. “We strengthen the system by supporting a number of national, regional and state-based collaborative efforts,” Bame says, “all of which bring critical sectors and stakeholders together to determine how best to address the challenges and be part of a collective voice for the importance of STEM education.” As for recruiting qualified STEM educators, Freeport-McMoRan has several partnerships that exclusively focus on providing professional development for science and math teachers. Now, about getting those students engaged … In an age when a tween or teen would much rather don a pair of “Beats” than a hard hat, how can a STEM-related industry such as mining capture the attention of a technology-focused generation? To begin with, they start young. ASARCO Education Foundation, for example, introduces students from Southern Arizona schools to the Mineral Discovery Center, where children get to see firsthand, what a ball mill for
CHAMPION OF INDUSTRY Tom Lowry
Senior manager of permitting and sustainability CalPortland Company Attraction to industry: “I was originally drawn to the mining industry by my fascination with what’s below the surface. As a geologist, I have the opportunity to explore and discover what’s underground. Finding something of value is very exciting.” Pride in industry: “The way we live today would be impossible without miners. The mining industry supplies the material that creates everything around us. As I look out my window, everything I see — the roads, street lights, vehicles, buildings, cell phones — is here because of miners and mining and I’m proud of that.”
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Tracy Bame
Frank McAllister
grinding copper looks like, as well as being able to visit a room full of copper used in every day life, before touring the adjoining Mission Complex copper mine. As an added value to educational outlets – ASARCO fully funds admission for the mine tour and bus transportation to and from the center. After children receive a bird’s-eye view of mining, teachers can supplement and offer further insight into the mining industry and encourage employment interest by introducing students to “Dig Into Mining.” This virtual mining experience is an online learning partnership between Discovery Education and FreeportMcMoRan in which students between 6th grade and 8th grade can explore the usage and value of copper and metals, in addition to gaining an in-depth understanding of modern hard-rock mining and potential mining career opportunities. Most experts in mining agree, too, that offering an updated
PROVIDED PHOTO
SCOUTS’ HONOR: The Boy Scouts’ Mining in Society merit badge covers the history of mining, explores the status of mining in the 21st century, introduces Scouts to modern mining careers and explores the all-important topic of mining safety. 140
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version of the mining trade is important to enticing a new generation of workers. The technology and robotics of mining, for example, can be elusive to students who may simply equate mining to the age-old stereotype of a pickaxe, hardhat and endless hours underground. Mining, now more than ever, is multifaceted and dimensional in employment opportunities. Of course, it’s also worth mentioning to students, that mining offers a wide variety of higher-wage jobs. “An imbalance between the number of students pursuing trades and those pursuing professional degrees has been created and is likely to continue to drive wage increases for trade positions, making them more attractive than ever,” Bame says. Mining has literally become a badge of honor As of February 2014, mining officially became a badge recognized by the Boy Scouts of America. The Society for Mining, Metallurgy & Exploration Inc., (SME) and the Boy Scouts of America banded together to develop the first ever “Mining in Society” merit badge. While scouts are introduced to the central components of mining — such as exploration, permitting, excavation, processing, production, safety and reclamation — they are also presented with other elements of the mining industry, including various career paths. Advisor Frank McAllister, former executive in the mining industry, was instrumental in the fundamental implementation of the Mining in Society merit badge, including the editing process of the accompanying workbook. “I came to Arizona to speak to the Arizona Mining Association about the merit badge,” McAllister says. “I gave them a full presentation and encouraged mining professionals and companies to invite scouts to the mines, in addition to becoming merit badge counselors.” The result of McAllister’s involvement and commitment to sharing the mining merit badge across the nation has resulted in the obtainment of an estimated 5,000 Mining in Society badges. McAllister was also invited to participate in an exhibit specifically highlighting the Mining in Society merit badge program at the World Scout Jamboree in Japan in July of 2015. “The merit badge provides an opportunity to educate hundreds of young people on responsible management of natural resources and the essential work of the mining industry,” Bame says. “This experience not only benefits the industry by creating the next generation of well-informed citizens, but also provides unique, hands-on experience that broadens their horizons and opens a new path of learning and career exploration.” The future of STEM graduates After they visit the mines and earn their badges, both the Arizona Geological Survey and the University of Arizona are ready and prepared to meet young future mining experts and prepare them for careers in Arizona’s mining industry. “We have long-standing, positive relationships with both,” Bame says, “and both organizations have a strong history of innovation and success, and new leadership will continue to build upon their legacy working in partnership with industry representatives.”
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FORCE OF NATURE Mining industry evolves and grows by practicing environmental integrity and utilizing ingenuity to protect the planet By ERIN THORBURN
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f you conduct a quick Google search of the word “reclamation,” the result will say, “The process of claiming something back or of reasserting a right,” with this example: “The reclamation of our shared history.” It’s a more than a befitting definition and paradigm to illustrate the Arizona mining industry’s commitment to the environment — a dedication that stretches back more than a century. In fact, Arizona’s robust mining history includes some of the most progressive, dedicated and ardent environmental proponents in the practice of reclamation, promotion of biodiversity and exemplification of one of the most innovative water management systems within the nation’s mining industry.
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Kyle Bennett
Bill Cobb
Dan Johnson
Dave Kimball
Francis McAllister
The evolution of Arizona mining reclamation “Mining practices have evolved over time and now include the objective of a post-mine-life land use,” says Bill Cobb, vice president of environmental services and sustainable development for Freeport-McMoRan. “At Freeport-McMoRan, we work to create land use that coincides with community sustainability objectives – especially with community partnership panels whenever possible.” Gallagher & Kennedy Shareholder Dave Kimball, who has long advocated for the mining industry, agrees. “Those working in the Arizona mining industry are considered to be some of the most responsible stewards of the environment,” he says. In fact, Kimball’s explanation of the phrase and method of “operate to close,” practiced throughout the Arizona mining industry, is positive proof of environmental integrity – but more than that, it’s evidence of forward thinking. “Before even opening, mining companies have a game plan of how to ‘mine out’ the ore body, including plans for reclamation land use after the mine closes,” Kimball says. “Since 2006,” Cobb adds, “Freeport-McMoRan has undertaken major reclamation projects to mitigate areas impacted by mining disturbances.” The mitigation that Cobb refers to includes everything from protecting wildlife habitats, building a renewable energy facility, creating an outdoor science lab for K-12 educational purposes – or building recreational space intended for hiking or bird watching. “The rigorous state and federal permitting requirements for new mining operations create numerous safeguards that ensure mining in Arizona is done in an environmentally responsible way,” explains Dan Johnson, Florence Copper Inc. vice president and general manager. “Arizona’s residents demand that companies and regulatory agencies, enforce environmental protections and ensure that mining in Arizona is done in a responsible manner.” The commitment, for which Johnson speaks, manifests through the mining industry’s practices of grading, capping and replanting vegetation, which in turn improves visual aesthetics, eliminates acid drainage (otherwise requiring collection and management) and allows local wildlife to thrive in a sustainable habitat. In addition to preserving the environment, smart reclamation eliminates “double handling.” “Operating to close ensures that a design is implemented to designate where material, other than ore is to be placed,” Kimball says. “It makes economic sense to not have to set aside material, only to displace it again.” Natural selection Nowhere is the Arizona mining industry’s commitment to the environment more apparent than with Rio Tinto’s proposed Resolution Copper Mine, which has the potential to produce 9 billion tons of copper, enough to supply 25 percent of North America’s needs. AB | September- October 2017 143
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It’s an important biodiversity-related Rio Tinto has already spent more than modification considering this particular 16 years and $1.3 billion on the project and species of bat provides economic enrichment the mine probably won’t begin operating for and security to farmers in the area, as the another decade. bats consume significant quantities of “At Resolution Copper, we are working agricultural crop pests. to deliver world-class safety and Nearby Morenci, at Eagle Creek, Freeportenvironmental standards, practices and McMoRan coordinated a successful performance,” says Kyle Bennett, principal relocation of big horn sheep alongside the advisor for media and communications at Arizona Game and Fish Department. The Rio Tinto Kennecott. “Through 2016, we result: both reduced potential humanhave invested $37 million through local wildlife conflict and the augmentation of suppliers to restore the environment and Director of Arizona strip operations smaller big horn sheep populations in other clean up the existing 130-acre legacy site. Energy Fuels Resources (USA) Inc. areas of Arizona. We will invest an additional $23 million Attraction to industry: “I Collective biodiversity efforts within in reclamation work by 2020. All of this graduated from Fort Lewis College Arizona’s mining industry have also investment will precede any actual mining.” with a BS degree in geology. I wanted introduced educational opportunities, Rio Tinto and executives from the to work in the field studying geology as in the case of Freeport-McMoRan’s Resolution Copper Mine have developed and rocks and mining offered what I Safford operations, which earned the a partnership with farmers in the New was looking for in a career. Working Avian Project Award for its Burrowing Magma irrigation and Drainage District in the mining industry is interesting Owl conservation program. (NMID) to efficiently utilize water. Mine and challenging.” water is first treated to remove metals Water: A driving force in Pride in industry: “Arizona has a and bring the pH to an acceptable range. Arizona mining rich mining history and I have been It is then sent to NMID, where it is Leonardo da Vinci once said, “Water is given the opportunity to be part blended with Central Arizona Project the driving force of all nature.” It’s also a of that history. Over the past 30 (CAP) water and sent to growers for driving source of sustainability for local years, I have worked on some of irrigation through a 27-mile pipeline. farming, conservation for stakeholders the highest grade uranium deposits The treated mine water is suitable for and “the lifeblood of success in mining,” in the world located in northern soils and crops and made available to according to Kimball. Arizona. I take pride in directing farmers within NMID. “Every drop of water is seven-times mining operations and producing “We always want to have a legacy of recyclable in mining,” Kimball explains. fuel for nuclear power generation.” world-class environmental standards, For this, we can thank the innovative practices and performance,” Bennett mining method of pyromettallurgical says. “To achieve that at Resolution mining hydromet, a process that involves metal processing Copper, we are developing detailed plans to protect air, water, technology that utilizes a chemical procedure that combines water biodiversity and cultural resources for current and future and other elements to dissolve metal from its ore. As a result, any generations before we are permitted to operate. These plans will environmental impact is minimal (if any) because liquid streams are include technologies that will help us minimize impacts and easily contained. improve environmental performance.” In addition to environmentally responsible processes of mining, tremendous efforts to store renewable surface water Counting sheep (and bats) in an effort to honor supplies are practiced. biodiversity conservation “These water supplies that are being held in underground recharge Rio Tinto isn’t alone in environmental stewardship. According facilities will not only support existing mine operations,” says Francis to Freeport-McMoRan, 15 operating sites and facilities received McAllister, vice president of land and water for Freeport-McMoRan gold tier certification for their biodiversity efforts in December Americas and chairman of the Arizona Mining Association, “they can of 2016. This highest level of acknowledgment imparted by the also serve as drought backup and support future mine expansions.” Wildlife Habitat Council (WHC) Conservation Certification Freeport-McMoRan has additional water management program was attributed as the result of the Arizona mining partnerships and programs that include construction of a water industry’s tireless commitment to biodiversity conservation, pipeline in partnership with southern Arizona farmers to bring environmental education and community outreach programs. renewable Colorado River water to farm fields and a project involving “In Morenci,” explains officials from Freeport-McMoRan, “we have collaborated with Bat Conservation International and other rotation for farming fields designated for being plowed, but not planted. The latter initiative will conserve water for stakeholders in stakeholder groups to design and implement a bat-compatible the Gila Valley, while adding value by benefiting several endangered gate to accommodate an area heavily populated with Mexican native fish and birds that call the Gila River home. free-tailed bats.”
CHAMPION OF INDUSTRY Donn Pillmore
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SAFE HAVEN Focus on training and education improves safety of Arizona’s mining industry
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By MICHAEL GOSSIE
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rizona State Mine Inspector Joe Hart has devoted his life to Arizona’s mining industry. “I was 18 years old the first time I went to work in a big mine,” Hart says. “But my dad always had mines. By the time I was old enough to eat, I was out working in his mines.” Hart’s father, like many other Arizona dreamers, had gold mines near his boyhood home in Kingman. “My dad always said, ‘This is going to be the one,’” Hart says, then offers a wry grin and whispers, “but there’s no gold in Arizona.” The only gold in Arizona may be in prospectors’ dreams, but Arizona is home to some of the safest mines in the nation. For the past five years, Arizona’s mining industry has achieved safety rates that matched or were better than national averages for the industry. “It’s like night and day,” Hart says. “When I first started in the mining industry, we used to take safety as a joke. Now, everyone understands how safety improves the industry both from an economic standpoint and for the people working in the industry.” Numbers don’t lie To see the dramatic improvement in the safety of Arizona’s mining industry, just look at the numbers. “In the mining industry, it’s all about the LTIR: the lost time incident rate,” says Tim Evans, assistant state mine inspector. The lost time incident rate is based on the percentage of incidents per 100 employees. To calculate the LTIR, the number of incidents is multiplied by 200,000 and that number is then divided by the number of labor hours at the company.
“In the 1970s, we had double-digit incident rates of 10 or 12,” Evans says. “Over the years, we worked to get it down into the single digits in Arizona. A decade ago, we were at a lost time incident rate of 3.0.” And how is Tim Evans Arizona doing now? Get ready to gulp. “Now, we cruise in at about 1.5,” Evans says. A big impact on the dramatic drop in the LTIR was the passage of the Federal Mine Safety and Health Act (MSHA) in 1977. The Act mandated improved training, which quickly improved safety in Arizona’s mines. “It is such a different environment today,” Evans says. “My first day on the job in the early 1970s, it was, ‘This is rock. Break rock. Make go down hole.’ That was the extent of my safety training.” Education digs deep Today, the Arizona State Mine Inspector’s Office develops lesson plans, conducts classes and organizes safety conferences for mine safety education and training. The emphasis is placed on miner’s rights and current health and safety regulations to comply with MSHA. “The number of hours that go into training employees at Arizona mining sites is phenomenal,” Evans says. “There is site-specific training, legally mandated training, regular safety meetings, risk assessments, critical tasks analysis and training in safe-job procedures. There is so much effort around training and identifying hazards that it is much safer to
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AZ MINING ASSOCIATION work at an Arizona mine today than it is to work in retail mercantile.” And the industry is getting even better at self-policing. In 2016, the Arizona State Mine Inspector’s Office team performed 658 health and safety inspections, which identified 438 violations that called for corrective actions, but no cessation orders. That was 180 fewer violations than inspectors found in 2015 — a staggering 30 percent decrease in violations in one year. “The biggest thing we got was mandated training that came with the Federal Mine Safety and Health Act,” Evans says. “Leaders in the industry see the benefits in having well-trained, qualified employees and keeping them. Qualified employees are a very valued part of the mining industry, so having regulatory standards has become the biggest asset to the industry.” What lies ahead? Are there things that the mining industry can do to make it even more safe? That’s not an easy question to answer because of the variety of mines in Arizona. “Everybody thinks it’s all about copper, but there is a lot more to Arizona’s mining industry than that,” Evans says. Arizona currently has 685 active or intermittent mines, made up primarily of copper and aggregate mines. Aggregate mines primarily produce building supplies — sand, gravel, asphalt, smooth rock, decorative rock, etc.
“The Arizona State Mine Inspector’s Office is responsible for open-pit mines, sand and gravel mines, gold mines, underground mines, smelters and solvent extraction and electrowinning mines,” Evans says. “Everyone just thinks of dirtdiggers, but the industry has become a lot more specialized.” And because of that, inspectors have to be specialized, too. What they look at to improve the safety of the mines varies, depending on the type of property. “I will inspect a flagstone operation in Chino Valley very differently than I will inspect an open-pit mine in Southern Arizona,” Evans says. “Depending on the hazards at each mine, we make sure the employees are well-trained and tasktrained for their specific jobs and that the mine meets the codes that apply to that particular operation.” And if you think it’s just a cursory inspection, think again. Evans says a mine inspection can take anywhere from several hours to several months. But it’s that attention to detail that has made Arizona’s mining industry a model in safety. “I believe the most reliable indicator of future performance is past performance,” Evans says. “I used to scoff at people who suggested that we would get to an LTIR of zero. When I was first a miner, we were at double-digit incident rates. Now, we’re at 1.5. If we look at the trend, I think we will be down to 1.0 before I retire and the people
MINE MAN: Arizona State Mine Inspector Joe Hart served in the Arizona House of Representatives for 10 years before being convinced by former Sen. Jake Flake to run for the office of state mine inspector in 2007 PHOTO BY MIKE MERTES, AZ BIG MEDIA .
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I’ve trained will someday talk about 0.5.” Will the improved focus on safety change the rough-and-rugged image of the mining industry? “There’s a certain machismo about how dangerous it is to work in the mines,” Evans says. “But the truth of the matter is mines in Arizona are very safe and they’re only getting safer.”
CHAMPION OF INDUSTRY Sydney Hay President AMIGOS
Attraction to industry: “AMIGOS. Friends. AMIGOS stands for Arizona Mining and Industry Get Our Support and is a powerhouse organization of over 300 firms that drew me to become part of this great industry. Our members earn the moniker, ‘The mines’ best friends,’ daily by providing the industry with the bestof-the-best in goods and services.” Pride in industry: “AMIGOS members continue to devise amazing, new technologies that enable the mines to do what they do best – create jobs, wealth and quality of life. AMIGOS members can be counted on to show up when the mines need us. We meet challenges and give back to the industry by which we make our living. It’s a lasting friendship that enables us to continue to employ tens of thousands of Arizonans in highpaying jobs. That’s what friends do.”
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MINING DIGS INTO
TECHNOLOGY Robots and autonomous vehicles take a once rough-and-tumble industry into the future By ERIN THORBURN
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s far as technology and mining are concerned, autonomous mining “is the new black.” Az Business talks with mining industry experts Christian Lemas, technical services manager at ASARCO’s Silver Bell Mine; James Stewart, technical services manager at ASARCO’s Ray mine; and Kyle Bennett, principal advisor of media and communications for Rio Tinto Copper & Diamond Product Group. The three discuss the latest developments 150
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and advancements in mining technology, and how it will affect a new generation of mining professionals. Az Business: What are some of the most progressive aspects of mining technology today? Kyle Bennett: Significant advances in technology are taking place across our industry. These are allowing us to be precise in how we find and mine ore, reduce waste and energy consumption,
and improve safety for our employees. For example, today we use unmanned aerial vehicles to collect data and perform 3-D mapping and monitor areas previously impossible to access or areas we would avoid for safety reasons. We are also skilled at block cave mining, which is how we will mine at Resolution Copper Mine. This method allows us to significantly reduce waste compared to more typical open pit mining methods. Ultimately, our ability to develop and partner on technologies that
Kyle Bennett AB: How do you think technology will alter the mining workforce? allow us to capture better data and make CL: In my opinion, I think technology faster and safer decisions will be important has altered the mining workforce already. as we advance the Resolution project. Nowadays, robots are helping to increase Christian Lemas: Advancement in overall output and save money, but not the development of autonomous haulage helping to add jobs. At Silver Bell, we are system trucks. It is proven technology in considering installing robots capable of remote mines in Australia and Chile. stripping cathodes. Asarco’s Amarillo Some operators have demonstrated that refinery is currently using robotics implementing autonomous haulage technology for this purpose. Educational means more material can be moved more institutions will need to provide a steady efficiently and safely, creating a direct flow of graduates that have training in increase in productivity. science, technology, engineering and math James Stewart: Autonomous mining is (STEM). no longer science fiction, but a reality for JS: Across the workforce, technology is some operations. Haul trucks are navigating altering the workforce in ways that will from the loading shovels to the dumps and force workers to transition from managing back without operators, while drills can people and tools to managing networks navigate from hole to hole and set up and and data. The mining process from mine to drill a quality blast hole with no operator. mill generates huge amounts of data.
Christian Lemas
James Stewart
The challenge is how to mine this data to generate knowledge. Educational entities need to prepare the workforce to function in an environment that is shifting from being managed/supervised/evaluated by individuals to being judged by algorithms. KB: Mining will always go hand-in-hand with technology and education. We do not see innovation reducing jobs because we still need people to fix, maintain, capture and understand data. What innovation will require is a highly skilled and trained workforce that can gather and make safe and effective decisions based on the data we capture. It’s important for us to work with educators to develop the skills we will need and the pipeline required to fill roles. Our current community investments in education are focused on developing STEM capabilities, which will be critical for the workforce of the future. AB | September- October 2017 151
Committed to responsible management of our natural resources.
Asarco is a fully integrated copper company operating in the United States for more than 118 years. Mining, Milling, Smelting, and Refining American copper for American business and people.
Arizona Economic Impact 2016 Wages, salaries and fringe benefits: $156 million 2016 Property, severance and sales taxes: $21.4 million 2016 Total materials and other spending (energy, fuel and supplies): $386 million
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