Investor Presentaiton
Alaska's economy may be divided into basic and support industries.
Basic and support industries are driven by different factors and grow or decline
for different reasons.
Basic industries bring money into Alaska.
Oil and seafood are basic industries
because they sell products to markets
outside Alaska. Tourism is a basic
industry because tourists spend money in
Alaska. The federal government is a
basic industry because the federal
government spends money in Alaska.
Basic industries are affected by factors
such as resource abundance, world
market conditions, competition from other
regions, federal spending, and federal
and state resource management policies.
Support industries depend on spending of
Alaska businesses and residents.
Retail trade, services, and local
government are support industries.
Support industries are driven by basic
sector income, and also by the extent to
which Alaskans spend money in Alaska
rather than Outside. Economists say the
basic income is "multiplied" as it is re-
spent within the Alaska economy,
generating support income. As the
Alaska economy grows, the share of
money which is spent in Alaska grows,
causing the support sector to grow.
There are two ways the Alaska economy can grow: by growing basic industries, or
by increasing the "multiplier" so that support industries grow. Much of Alaska's
growth over the past four decades has been in support industries, and has come
from increasing the multiplier.
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