Arkansas Tries a New Strategy to Lure Tech Workers: Free Bitcoin

For the past year, a Northwest Arkansas nonprofit has offered a select few tech workers, artists and entrepreneurs $10,000 to move to the region. Starting this month, newcomers can get their bonus in Bitcoin.

Never mind that $10,000 will buy you about a quarter of a Bitcoin in today’s market. The announcement marks the region’s foray into positioning itself as a cryptocurrency hub — and represents the latest twist on the economic development strategy the Northwest Arkansas Council deployed in November 2020, when thenonprofit started offering $10,000 in cash, and a bike,to individuals who were willing to resettle there. 

Incentivizing migration in this way has become a familiar play in small cities across the U.S. They’re starting to use philanthropy and public dollars to lure individuals in coveted fields to become permanent residents, in a similar model to how cities use tax breaks to lure whole companies.

Northwest Arkansas is a metropolitan region in the Ozark Mountains that encompasses several of the state’s largest cities, including Fayetteville and Bentonville. Home to large employers such as Walmart, Tyson Foods and J.B. Hunt Transport Services, andseeing rapid population growth in some pockets, the area isn’t dealing with the same shortage of workers other cities are. But the Northwest Arkansas Council is staying hyper-focused on attracting a subset of potential workers with technical skills or entrepreneurial aspirations. Northwest Arkansas Council President and CEO Nelson Peacock says that while traditional industry has thrived, the region has underperformed on venture capital investment, and hasn’t seen enough startup growth. The pandemic reinforced the idea that there were workers in these fields leaving the coasts, he said; Northwest Arkansas just needed to position itself to absorb them.

With its nationwide campaign, called “Life Works Here,” the council has marketed the region as an affordable area with a strong economy — and plenty of bike trails. (Program participants can choose to receive a street or mountain bike, or a free membership to local theaters and museums upon arrival).

“The rest of the country was probably pretty unaware of how beautiful the [Northwest Arkansas] area is, how much industry is represented there,” said Aaron Bolzle, the founding executive director of Tulsa’s migration incentive program, and now a consultant for other similar economic development projects. “Because of that, they really needed to showcase what made that community special.”

But Jared Phillips, a historian who teaches at the University of Arkansas and a multi-generation Ozarks native, says the preoccupation with attracting tech workers from elsewhere comes at the expense of addressing the deeper problems that plague existing residents. Northwest Arkansas’ poverty rate was 12.6% in 2019, higher than that year’s national poverty rate, and the state’s rural health care system has been strained by Covid. Within the region, a stark urban-rural divide has formed, with the areas around the I-40 corridor seeing the bulk of the economic development even as the less developed parts — home to the mountain biking trails the council has advertised — struggle. 

“What we've seen is that the wealth is concentrated here [near Fayetteville], and the job opportunities and the development opportunities are staying here,” said Phillips. “They’re not spreading out into the region, even though the rest of the region is being used as a marketing ploy, in part to bring people in.”

Despite the hype surrounding programs like Northwest Arkansas’, the number of people moving is relatively small in a region of almost 550,000 people. Although the nonprofit estimates it received 35,000 applicants, only about 50 people have migrated to Northwest Arkansas so far through the program, which is funded by the Walton Family Foundation. Thirty of them brought partners or spouses, and 31 kids or relatives made the move, too. More than half of them are women, and unlike other programs, they’re not all fully remote workers: 38% are in STEM fields, 36% are business owners or startup founders, and 26% are artists or creatives. The program has funding to bring another 50 people in this new phase.

By offering Bitcoin in lieu of fiat currency, the council is trying to position the region as a crypto hub, building off the 2018 launch of the University of Arkansas’ Blockchain Center of Excellence, which researches the emerging field. Gimmicky as the giveaway seems (people will be allowed to opt for cash instead), and ill-timed as it may be — the currency has dropped steadily in value since its last peak in November — Peacock says the offer is targeted at “people that are interested in and have expertise” in the crypto space. More professionals, from NBA players to the mayor of Miami, are asking to get paid in cryptocurrency. And the region joins bigger cities like Miami and New York that are advertising their crypto ambitions. 

“We know it's not for everyone, but it is going to change business in ways that are known and unknown,” said Peacock. 

For participants who go the crypto route, the council is buying Bitcoin from COINBASE and will transfer the tokens to recipients’ wallets.

Phillips says the money could be better spent on other incentives — like pushing businesses to raise their minimum wage above the state’s $11-an-hour floor

“That’s really easy, it's low hanging fruit,” he said. “But it's not a great PR ploy. It doesn’t look good on a billboard in Austin.”