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ASU research shows how deregulation could help minority businesses

ASU research finds that easing startup costs could boost minority businesses.
October 21, 2021

New 'Doing Business' report ranks 134 cities on commerce regulations

If cities tweaked their regulations to make it easier to start a business, it might lead to more minority business ownership, according to an economist who analyzed a new Arizona State University dataset.

“I wanted to see, ‘Is there something we can put our finger on when it comes to the ease of doing business, and if we relax this barrier, will we see more minority business ownership?’ ” said Alicia Plemmons, an assistant professor at Southern Illinois University Edwardsville.

Plemmons examined ASU's newly released Doing Business North America 2021 report and compared it with data on minority business ownership. She found that even a small increase in the ease of doing business, measured as a one-point increase in a city’s score, correlated with a nearly 4% increase in minority-owned businesses relative to the minority population in a city.

Plemmons, who studies occupational regulation and taxation, spoke at a webinar held Tuesday by the Center for the Study of Economic Liberty at ASU, which produced the Doing Business North America 2021 report. The report, in its third year, compares a wide range of business regulations among 134 cities in Canada, Mexico and the United States. The center is a joint endeavor of the W. P. Carey School of Business and the School of Civic and Economic Thought and Leadership.

Doing Business North America 2021 was compiled by center researchers, including undergraduates at ASU, who analyzed publicly available datasets and websites, collecting information on regulations that affect small and medium-size businesses, such as required maternity leave, how many steps it takes to get the power turned on and how high the tax rate is.

The more regulations a city has, such as mandated paid time off or multiple steps for rezoning, the lower the score and the rank.

The analysis showed a wide range of experiences in starting a business. For example, it takes an average of one day to start a business in Colorado Springs, Colorado, compared with 12 days in Phoenix.

Among the 134 cities evaluated for the 2021 edition, Colorado Springs ranked first in overall ease of doing business, with a score of 78.04 out of 100.

The full top 10 are: Colorado Springs; Durham, North Carolina; Henderson, Nevada; Sioux Falls, South Dakota; Salt Lake City; Raleigh, North Carolina; Charleston, South Carolina; Cincinnati; Tulsa, Oklahoma; and Las Vegas.

Chandler, Arizona, a new addition this year, ranked 13th, with a score of 74.53.

Phoenix, which came in 59th last year, ranks 36th this year, scoring 71.58. The other two Arizona cities ranked were Mesa, 34th, and Tucson, 45th.

The cities at the bottom of the list were all in Mexico. The lowest-ranked U.S. city is Charleston, West Virginia, at No. 95.

Plemmons found that the subcategory of “ease of starting a business” had the biggest correlation to increased minority business ownership.

“Minimum wage is loosely related to a decrease. The higher the minimum wage, we start to see slightly less minority business ownership,” she said. 

“Severance or paid maternity leave or sick days didn’t have much of an effect, and neither did getting electricity,” she said.

The results can translate directly into policy decisions for cities that want to encourage minority business ownership, she said. So decreasing startup fees or streamlining licensing and permiting might prove beneficial, whereas decreasing the corporate tax rate might not.

Plemmons’ analysis found that, when considering the proportion of minorities in the population, the four Arizona cities rank fairly high among U.S. cities in the report for minority businesses: Mesa is eighth; Chandler is ninth; Tucson, 23rd; and Phoenix, 25th.

The Doing Business in North America project was led by Stephen Slivinski, who was a senior research fellow and project director at the Center for the Study of Economic Liberty until recently leaving ASU.

The primary motivation of the research is to find business migration patterns, he said.

“So we looked at the world as it existed before COVID, and now we’re looking at how it’s coping with COVID,” he said.

“People can leave and work remotely, independent of where their workplace is. There’s been a large exodus of businesses from California to several places. Phoenix is one of those places, as well as cities in Texas, Nevada and as far away as North Carolina.”

The 2021 report includes four new cities: Chandler; Durham; Fort Worth, Texas; and St. Petersburg, Florida.

“We realized that if we were only looking at the largest cities in the U.S., we were not looking at growing cities, and that’s important if you want to capture what the migration of people and businesses look like long term,” he said.

“So we added four cities that had the highest population growth.”

The new analysis found one surprising factor, Slivinski said.

The most significant reason why some cities moved up the rankings, or dropped, was the score in the category of getting electricity. That category measures the price of electricity per kilowatt hour and reliability

“When you scale it up, you realize that even a one-cent change for a small manufacturer can have a several-thousand-dollar change in the cost of doing business,” Slivinski said.

Reliability, the number of blackouts or brownouts, is based on annual data from the U.S. Department of Energy.

“Salt Lake City bumped into the top 10 this year, and it was almost exclusively because the state of Utah saw a one-cent-per-kilowatt decline in electricity prices and saw a halving of the number of days that a business would be offline because of electricity blackouts,” he said.

“So we’re getting a glimpse of how states are dealing with infrastructure needs and challenges they had when lots more people were working at home and residential energy consumption went up.”

“Texas saw a migration of businesses during the pandemic but suffered severe problems with its electricity grid earlier this year. Next year’s report might show the effects of that.”

Top image of the Phoenix skyline by Deanna Dent/ASU News

Mary Beth Faller

Reporter , ASU News


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No tricks, all economic treats this Halloween

October 20, 2021

ASU business expert weighs in on Halloween enthusiasm and the impact it will have on the local economy

The spirit of Halloween is creeping into neighborhoods across the country. This year in particular, there’s not only an appetite for candy and treats, but the opportunity to party like it’s 2019, pre-pandemic. An estimated 65% of Americans are planning to celebrate or participate in Halloween activities, up from 58% last year, according to the National Retail Federation. And Halloween spending is expected to reach an all-time high.

ASU News spoke with Lee McPheters, a research professor of economics and the director at Arizona State University’s JPMorgan Chase Economic Outlook Center in the W. P. Carey School of Business, about the economic impact of this year's spooky season.

Question: After a lackluster Halloween in 2020, Americans are ready to celebrate. What are they willing to spend, and how will this benefit the retail industry and other areas of our economy?

Answer: Halloween’s economic impact is expected to reach an all-time high in 2021, as witches and goblins put the pandemic behind them and spend $10.1 billion on costumes, treats and partying. Total spending will be up by nearly 20% over the $8 billion in 2020, according to the National Retail Federation.

Here in Arizona, economists at the W. P. Carey School of Business estimate the Halloween impact will be $180 million, extending over a two-month period, and generating approximately 5,000 jobs, not only in retail but also in wholesale and transportation of products for sale. Spending per person is estimated at $103 for the 65% who said they intended to celebrate in some way. In 2020, only 58% said they would celebrate Halloween.

Q: How many people are expected to dress up this Halloween, and what are this year’s costume trends?

A: According to national surveys, 46% of those celebrating will wear a costume or part of a costume, and a surprising 20% of people intend to buy a costume for their pets. Among children, the most frequently mentioned costumes this year are the ever-popular princesses for girls and Spider-Man for boys. For adults, the top costumes planned are witches and vampires. For pets, the most popular costume is a pumpkin.  

Q: How much money will people spend on Halloween essentials?

A: Costume spending, the single largest component of Halloween expenditures, is projected to climb to $3.2 billion at the national level, up from $2.6 billion in 2020.  

For Arizona, analysts estimate costume spending of $60 million, decorations $57 million, candy $54 million and greeting cards $11 million.

Top photo courtesy of

Jimena Garrison

Media Relations Officer , Media Relations and Strategic Communications

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Where's my package? ASU expert finds kinks in global supply chain

ASU supply chain expert sees choppy waters ahead for global network.
Cost efficiency has long ruled the supply chain mindset. Now resiliency is king.
October 19, 2021

Research shows that climate change, COVID-19 are creating a need for new models with a view toward complexity

Every consumer who has seen empty grocery store shelves or waited extra weeks for an online purchase over the past 18 months is aware of how the COVID-19 pandemic disrupted the supply chain.

An Arizona State University professor has studied another disruptive disaster – the 2011 tsunami in Japan – to see how automotive supply chains coped, and he sees parallels to what’s happening now.

“You have to look at different aspects of the supply chain and understand what is most important during which stage of the disruption,” said Robert Wiedmer, an assistant professor of supply chain management in the W. P. Carey School of Business at ASU. His paper, “The Dark and Bright Sides of Complexity: A Dual Perspective on Supply Network Resilience,” was published in the Journal of Business Logistics.

Wiedmer and his co-authorsZachary S. Rogers of Colorado State University, Mikaella Polyviou of ASU, Carlos Mena of Portland State University and Sangho Chae of Tilburg University found that supply chain complexity is a paradox — sometimes helpful and sometimes a hindrance.

And climate change is only going to make things more complicated, he said.

It’s getting more and more difficult to run global supply chains efficiently.

— Robert Wiedmer, assistant professor of supply chain management

The researchers wanted to measure “complexity” in three areas: the number of parts in a product, the number of suppliers and the number of carriers, or logistics.

And they wanted to see how “resilient” the supply chains were, which means how quickly they were able to return to normal after a disruption.

So they compared shipments of vehicles and vehicle parts from Japan to the United States before, during and after the tsunami, and compared it with vehicle imports from Germany, which was not affected by the tsunami, during the same period.

The results show a complicated picture:

  • Having a lot of suppliers makes the impact of a disruption worse at first, but it helps during the recovery.
  • Having a lot of carriers has no effect on the impact of the disruption, but helps during the recovery.
  • Having a complex product with a lot of parts makes the impact disruption worse but has no effect on recovery.

Wiedmer answered some questions from ASU News about his research and how the results parallel what is happening now.

Question: Are the results of your research good or bad for companies?

Answer: When you talk about complexity, it’s not just good or bad. It’s in between.

We find that different aspects of supply complexity can have different impacts depending on where we are in the disruption sequence.

Certain characteristics had very different effects on the companies’ ability to import products during the impact versus during the recovery. For example, having many, many suppliers during the disruption impact was detrimental. It made the situation worse, which is counterintuitive. It was probably because it was difficult to reach all of the suppliers and they couldn’t just focus on two or three.

During the recovery, it’s the opposite. Having many suppliers is good, and diversification is helpful.

So it’s not only good or bad.

Q: What is the message for managers?

A: Understand what can help you and what can potentially hurt you. One lesson would be to focus on core suppliers during a disruption and maybe expand and reach out to your full base when you’re trying to recover from a disruption.

It’s similar for logistics service suppliers. We didn’t find an impact during the disruption, but when you’re trying to recover, having a large pool of carriers is helpful.

Q: How does what happened during and after the tsunami compare with the supply chain disruptions we’re seeing during the COVID-19 pandemic?

A: It confirms what we found. Right now, the biggest issue is logistical capacity. We see that companies are not able to ship goods from China to the Port of LA. Having a bigger portfolio of logistical service providers can be helpful, especially if you’re trying to catch up in bringing a lot of stuff into the country.

COVID is unique in a way because it is prolonged and extended beyond the disruption, with an extended recovery phase. It’s even more complicated because so many more industries are affected and so many more markets.

We’re also seeing different phases. We had the phase (in spring 2020) with the huge disruption in global supply chains. We had a complete shutdown.

The discussion back then was, “How can we find the right supplier?” And, “How can we make sure we have enough toilet paper in the store?” On the other hand, certain industries had to stop because nobody needed stuff for restaurants. They had to shut down for zero demand.

Between industries you find many differences, so you need to be really aware and clear what you’re talking about because not all industries were positively or negatively affected.

Now the story has changed, and now it’s clearly a logistical crisis. There are no containers available. Carriers are having problems satisfying all their clients, and it’s a problem to find ports in the U.S. Everyone is completely overwhelmed.

Related to our findings, during recovery you need a broad portfolio of logistical service providers. That’s always easy to say post hoc.

Q: Is COVID-19 the main factor driving disruption right now?

A: It’s getting more and more difficult to run global supply chains efficiently. I think the times when everything went smoothly with this globalized network of companies is more difficult to make happen these days.

COVID is one thing, but then think about climate change, with more severe weather events.

Think about the trade wars, which are definitely not over yet. China is more strict in certain industries, and we’re observing more frequent disruptions. Certain industries are shut down or restricted.

There are so many moving parts globally that the times of certain supply chain management are over.

And that means we have to deal more often with disruptions, and that means we need a more resilient mindset than before. Just saying, “We are managing a lean and efficient supply chain” is not enough.

Having a lean inventory, or no inventory at all, was definitely not a good idea during COVID and was not a good idea during the tsunami.

Q: What does this mean for a researcher?

A: We need to find new concepts and new models of how to manage global supply chains in the next 30 or 40 or 50 years. We need to make this trade-off analysis between what is cost effective for a company and what is potentially more resilient for a company. We have to discuss having domestic suppliers who are closer by.

The demand for researchers is, “If I’m saving money, what is the risk of being hurt by a disruption?” Many companies realize that there were inherent risks they never considered.

Companies want more information and better models. The job of supply chain researchers is to provide those models to be easily implemented and to make managers make better decisions.

For so long, it was, “We can do it faster and more efficiently for less money.”

Now the mindset is changing.

That doesn’t mean we have all the answers yet, but it’s a call to supply chain researchers to work hard to provide those tools.

Q: What are you studying next?

A: We learned during COVID that it’s not enough to look at one industry. One example now is the automotive industry and semiconductors. Or the automotive industry and steel or plastic. We’re looking at interdependence between different types of supply chains that are seemingly unrelated.

Who would have thought that the automotive supply chain is competing with the computer entertainment industry?

We see that they need to understand the interdependence at the product level and the country level to better understand vulnerability.

Q: Is it strange that people outside of the supply chain world are talking about supply chains in their daily lives now?

A: I think it’s great.

I remember times when we had undergraduate students and you assumed they knew what supply chains were and they didn’t know. For the longest time, no one was really aware of it because we took things for granted. We know we sourced things from China, but consumers didn’t really know the implication of that.

I tell my students that it’s not only about managing suppliers and carriers. It’s managing customer expectations because now they care where things are coming from.

Top image courtesy of Pixabay

Mary Beth Faller

Reporter , ASU News


COVID-19 and the 2021 global supply chain crisis: Event to explore where we go from here

Free Nov. 2 lecture with ASU alum and supply chain expert Zachary Rogers

October 18, 2021

Record queues of container ships wait at anchor outside the Port of Los Angeles. A 20-mile traffic jam clogs rail lines in Chicago. Store shelves are bare and shortages of numerous products — from automobiles and laptops to clothing, toys and even Christmas trees — are showing up across the country. Given that the U.S. has been living with the COVID-19 pandemic for more than 18 months, why are there still kinks in the supply chain?

For years, global supply chains expanded and became increasingly complex in a quest to make shipping goods and services around the globe cheaper and faster. The COVID-19 pandemic threw these finely tuned systems into tailspin. Supply chain expert Zachary Rogers from Colorado State University will explain where we go from here, opportunities in innovation and connection, and how this may affect our lives at a free lecture at 5 p.m. Tuesday, Nov. 2, that can be attended in person or online. Zachary Rogers Supply chain expert Zachary Rogers from Colorado State University will explain why are there still kinks in the supply chain at a free lecture on Tuesday, Nov. 2, that can be attended in person or online. Download Full Image

Supply chains are experiencing growing pains as they adjust to the new reality. Fortunately, COVID-related disruptions are also bringing to light new ways to innovate for the future. COVID-19 was not the first disruption to impact supply chains around the world, and it will not be the last. We must heed the hard-won lessons from COVID-19 and build resilient systems that will be ready for future disruptions.

Rogers is an Arizona State University alumnus who earned a doctorate in supply chain management from the W. P. Carey School of Business in 2016. He is now an assistant professor of operations and supply chain management at Colorado State University. His research focuses on the financial impact of supply chain disruptions, emerging purchasing and logistics technologies, and the increasing importance of supply chain cybersecurity.

Rogers serves as an analyst co-author for the Logistics Managers’ Index (LMI). This bimonthly publication tracks a broad range of logistics activity in the United States and publishes key logistics metrics that act as leading indicators predicting future economic activity. Its information is critical to companies dependent on the complex national and international network for product distribution. Such data are also used by investment professionals and government agencies in planning strategies for U.S. economic growth. This lecture will provide an inside look into the challenges facing consumers as we enter the holiday season — and perhaps an optimistic perspective on opportunities for new business growth.

This lecture series is an annual event that highlights the ASU Biodesign Institute’s broad range of excellence in human health, community safety and global sustainability. The series was inspired by Charles Arntzen, Biodesign’s founding director from 2001–03. He is a biotechnologist best known for his research on new strategies for biomanufacturing protein pharmaceuticals.

Currently, Arntzen is an emeritus professor at the ASU School of Life Sciences. He is a member of the U.S. National Academy of Sciences and the National Academy of Inventors, and an elected member of the National Academy of Sciences of India. In 2001, Arntzen was appointed as a member of President George W. Bush’s Presidential Council of Advisors on Science and Technology and in 2004 received a presidential appointment to serve on the National Nanotechnology Oversight Board.

The free, annual Arntzen Grand Challenge Lecture will be held in-person at the Marston Auditorium Interdisciplinary Science and Technology Building IV, 781 S. Terrace Road on the Tempe campus. Livestreaming also will be available.

For more information, visit

Julie Kurth

Manager, marketing and communications, Biodesign Institute


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October 12, 2021

New report chronicles first year of ASU's LIFT Initiative and efforts to address inequities, injustices and bias

In follow-up to ASU’s commitment to enhance and support the lived, teaching and learning experiences of Black students, faculty and staff, the Advisory Council on African American Affairs at Arizona State University has released The LIFT Report: Status of Black and African Americans at Arizona State University for 2021.

The report is the first in a planned series of annual reports that will document the process and progress of 25 calls to action announced by ASU President Michael Crow in fall 2020 to address embedded injustices and structural problems within our institutions and society at large.

“This is a design transformation process for ASU,” Crow said of the LIFT Initiative at the unveiling of the report during the African and African American Faculty and Staff Association (AAAFSA) meeting on Sept. 24. “Our design is not modern enough. We have an opportunity to accelerate our institution’s evolution and then subsequently impact the broader evolution of society’s aspirations of social equity and social justice. LIFT is launched, and we are holding ourselves accountable.”

A first-year overview of the implementation of the 25 launch points, the 2021 LIFT Report outlines the progress and developments being made in the effort to find solutions to issues of bias, discrimination and underrepresentation at ASU.

LIFT Initiative - Feedback Loop

The LIFT Report – FIRST Feedback Loop

The work of identifying some of these issues is underway through the LIFT-inspired Faculty Inclusion Research for System Transformation (FIRST), led by Victoria Sahani, associate dean of special projects and professor in ASU’s Sandra Day O’Connor College of Law.

At the AAAFSA meeting, Sahani said FIRST was developing data sets to review and track initiatives and policies related to the experience of inclusion and belonging among faculty who identify as Black, Indigenous or persons of color, and other identity-disadvantaged faculty at ASU. The goal, she said, was to create a research system for the transformation of the faculty experience at ASU that includes a virtuous cycle, or feedback loop. 

Sahani said the in-development data set augmented by additional data in the future will help determine the effectiveness of current policies and practices and allow for adaptation to improve the experiences of faculty at ASU. 

Postdoctoral fellows and graduate assistants

Other launch points underway for LIFT (an acronym for Listen, Invest, Facilitate and Teach) include the initiative’s "Teach" commitments to establish a Presidential Postdoctoral Fellowship program and Presidential Graduate Assistant program.

Both programs are currently in motion. They are designed to diversify the faculty of the university and better prepare Black students to navigate graduate school and obtain research and teaching assistantships.

The postdoctoral fellowship program is funding a minimum of 30 positions over a period of two years, and the graduate assistant program will establish 50 assistantships over the next two to three years. The first cohorts of both programs were recently recognized in a welcome reception hosted by the Graduate College on Sept. 22.

Speaking on the progress of the initiatives at the unveiling of the LIFT report, Nancy Gonzales, executive vice president and university provost, cited the presidential postdoctoral program and the LIFT "Invest" commitment to prioritize the practice of cluster hiring as demonstrative of work being done to recruit and retain leading faculty members from underrepresented groups. To accelerate the effort, Gonzales said ASU is also building relationships with several historically Black colleges and universities and other minority-serving institutions to develop partnership and pipeline opportunities toward graduate degrees.

“We have been actively engaged with several presidents of HBCUs and developed some unique educational programs and partnerships with HBCUs,” Gonzales said. “That’s something we want to be able to grow — to better learn from them, partner with them, develop pipelines with them.”

RELATED: Collaboration committed to diversity in engineering | Partnership to help increase diversity in the real estate industry

To Be Welcoming

Another key initiative highlighted in the 2021 LIFT report is the adaptation of the ASU-Starbucks “To Be Welcoming” training. The original 15-course online diversity, equity and inclusion module was created in response to a racially charged incident in Pennsylvania in 2018. It has since been expanded and modernized by a dedicated group of ASU faculty, staff and graduate student fellows led by Bryan Brayboy, President’s Professor in the School of Social Transformation, Mako Fitts Ward, assistant professor of African American studies and Jessica Solyom, postdoctoral research fellow in the Center for Indian Education.

The group aligned to adapt the original “To Be Welcoming” training into three 90-minute sessions in support of  LIFT’s “Teach” commitment to help the ASU community understand the value of inclusivity in academic success. Three versions of the “To Be Welcoming” training will be presented to all incoming graduate students, staff and faculty. A version for undergraduate students is also in the planning stages for fall 2022. 

Multicultural Communities of Excellence

The LIFT report also highlights the progress made in developing ASU’s Multicultural Communities of Excellence. The convening spaces, long championed by members of ASU’s diverse student population, are now open across ASU’s four campuses.

They were developed in alignment with LIFT’s commitment to invest in inclusive and empowering spaces for students of color and allies of these communities. Multicultural Communities of Excellence also provide a sense of place and support for students of color to address histories of exclusion, according to the report.

Cassandra Aska, deputy vice president and dean of students at ASU’s Tempe campus, told attendees at the Sept. 24 AAAFSA meeting that programming around dialogue and study were in development for the multicultural spaces. Dialogue and programming around justice, equity and inclusion are also in focus in ASU’s Office of Inclusive Excellence (formerly the Office of Inclusion and Community Engagement) in the Office of the University Provost.

In alignment with the LIFT Initiative’s commitment to facilitate the universitywide effort for inclusion and awareness, Tiffany Lopez, vice provost for the Office of Inclusive Excellence, said a council of dean designees embedded in ASU’s various schools and colleges were working with faculty to advance the work of the initiative through faculty and staff hiring, curriculum evolution, and recruitment of graduate students. 

Evolving toward transformation

The efforts now to evolve curriculum is building on work and programming started by faculty and students in various schools and colleges across ASU, well before LIFT's launch in the fall of 2020. Earlier that year, with the help of ASU English Professor Natalie Diaz, graduate students in ASU's English Department took a big step in effort to build a more equitable and accessible department by inviting guest speakers to lead discussions around race, social and gender justice.

Realizing the potential of such discussions, Joshua Horton, English literature graduate student and co-president of the Graduate Scholars of English Association (GSEA), said he and others put plans in motion to incorporate what they learned from the discussions into the training pedagogy of graduate teaching assistants.

“The English department reaches more students than probably any other department in the university because we teach first-year writing, and everybody has to take that class. That also means (English graduate teaching associates and assistants) are one of the first experiences students have of the university,” Horton said. “It’s important that we have an understanding that different students have different needs. A lot of our students didn’t just go to school before they got to ASU, they survived it. Because there's not just one school system in this country, and not everybody has the same opportunities.”

Just getting started ...

The LIFT Report also chronicles the launch and implementation of several previously announced commitments such as the multi-college initiative The Difference Engine to help elevate equality across the United States, and the expansion and implementation of Staff Personnel Policy 601. The policy increases the number of hours of annually approved release time from 16 to 24 to allow all ASU personnel more time to participate in educational and professional growth opportunities and university mentor or mentee programs.

With work still ongoing, Colleen Jennings-Roggensack, vice president of cultural affairs, and Jeffrey Wilson, associate dean and professor in the W. P. Carey School of Business, have both committed to continuing their leadership roles as co-chairs of the Advisory Council on African American Affairs to see the LIFT Initiative through.

“It’s been exciting working with the council over the past year to bring these 25 actions to life,” Jennings-Roggensack said. “What’s also exciting is the president’s commitment to the LIFT Initiative. We are looking forward to seeing the expansion of LIFT and other initiatives that ASU will be doing to support Black and African American faculty, staff and students.” 

To read the 2021 LIFT Report and learn more about the LIFT Initiative, visit

Sr. Media Relations Officer , Media Relations & Strategic Communications


Why Is It So Hard

"Why Is It So Hard" is a book designed to help you navigate today's social, economic and political challenges and to help you enjoy the "peace of kindness" that comes from knowing and "connecting the dots." In their words, "Gaining a broader and deeper perspective of this unique time in America's history, and the social and political changes that are occurring, can be life changing. We truly believe that the comfort and clarity, which comes from connecting the dots, and the elimination of the anxiety and confusion, can be both inspirational and uplifting."

Real estate developer's donated ranch aids university's mission

Real estate gifts are increasing because of the benefits they offer for donors

September 30, 2021

Iconic real estate developer Rusty Lyon Jr. wanted to help future generations pursue their educational and professional dreams. One way he did that is through what he knew best — real estate.

Lyon was a real estate visionary who started his career at his father's brokerage, Russ Lyon Realty, after serving as an Air Force pilot in the Korean War. He founded Westcor Companies in 1964 and developed more than 12 Valley malls in his career. Lyon branched into hospitality development and is credited with designing and building the Boulders Resort and Spa and others. A large log home sits among the Ponderosa pines near Payson. The main residence of La Cienega Ranch, a 77.25-acre property donated to the ASU Foundation that was recently sold.

He ran Westcor for nearly 40 years before selling it to shopping center developer Macerich in 2002. He then retired to spend more time at his 77.25-acre La Cienega Ranch at the base of the Mogollon Rim near Payson, Arizona. The ranch was a place to unwind and escape the metropolitan busyness for Lyon, his wife, Rosie, and their children and grandchildren.

Rosie Lyon died in 2008, and once her husband's health declined in 2016 the family donated La Cienega Ranch to the ASU Foundation for A New American University to benefit Arizona State University. Rusty Lyon died several months later.

The foundation's real estate affiliate, University Realty, recently sold the ranch that included nearly 15,000 square feet of livable space among seven homes, a barn with horse stalls, helipad, pond and group ramada for $4.5 million.

Real estate gifts are increasing for universities because of the many benefits they offer for alumni and other donors. From fiscal years 2016 to 2020, public and private U.S. colleges and universities received more than 3,630 real estate gifts valued at $928.3 million from donors, according to survey data from the Council for Advancement and Support of Education.

"Gifts of real estate may provide donors income, tax benefits and the opportunity to make a difference," said Brad Grannis, portfolio and assets manager for University Realty. "There are several options to donate real estate, depending on when you want to transfer the property and whether money is owed on it."

Over the years, Grannis helped the ASU Foundation receive several real estate gifts, which have funded scholarships and enrichment opportunities at ASU.

For the Lyons, donating the ranch to ASU made the most sense.

"It all depends on each person's estate, but it certainly can have tax advantages," said Scott Lyon, one of the Lyons' sons and founder of Westroc Hospitality. "At the time, the market was pretty soft, and it's such a narrow market for who would be buying a property like that. If they (my parents) sold it, they'd have to pay capital gains taxes. If they kept it in the family, we would have to pay estate taxes on the value of the ranch and not be able to sell it in time before the taxes were due. They eliminated a burden on the family from an estate standpoint."

Lyons' support of ASU

Lonnie Ostrom, former president of the ASU Foundation, has fond memories of the Lyons and their ranch. He and his wife, Martha, became good friends with the Lyons and visited their ranch periodically where they played bridge and enjoyed the property's amenities.  

"They were just really humble, down-to-earth people," Ostrom said. "They were very wealthy, and you'd never know it."

Ostrom recalls taking development officers from ASU's Teachers College — now the Mary Lou Fulton Teachers College — to Charleston's Restaurant for lunch, and he'd invite Rosie Lyon to join them.

"She always brought coupons," Ostrom said. "I'd say, 'We're paying for it,' and Rosie would say, 'I know, but this will make it a little less.' She had a great sense of humor, and they loved ASU."

The Lyons were longtime ASU supporters who donated to athletics, W. P. Carey School of Business, The College of Liberal Arts and Sciences, Mary Lou Fulton Teachers College, Arizona PBS, Herberger Institute for Design and the Arts and other units and programs.

Rosie Lyon graduated with a degree in elementary education from Arizona State College, the precursor to ASU. She was inducted into ASU's College of Education Hall of Fame in 2004, and she received the Alumni Service Award in 2006 and became a lifetime member of the ASU Alumni Association. She served on the executive committee for the ASU Campaign for Leadership from 1995 to 2001 and was a member of the Adopt A Devil Program.

Rusty Lyon served on the ASU Foundation and the University Research Park boards and was active with the university for a while, Ostrom said.

La Cienega Ranch history

La Cienega Ranch – named after a ranch in Rosie Lyon's family – was a summer retreat for the Lyon family from the mid-1980s until 2016 when they donated it, said Scott Lyon, who toured the property with his parents when they first saw it.

"My mom, Rosie, it was really her gig," he said. "Dad loved being there when he was there, but she had a soft spot for it."

There was an old post office at the site of the tack room until it burned in 1990 in the Dude Fire, which devastated more than 24,000 acres, destroyed more than 70 structures and killed six fire crew members. The other structures at the ranch remained, but the surrounding ponderosa pine forest was ravaged by the flames.

"That fire really broke my mom's heart at that time," Scott Lyon said. "They stuck it out. They continued to improve the property."

Two homes, a maintenance garage and a barn with tack room were built on the property following the fire.  

One of the original structures at the ranch, called the Gingerbread House, served as a primary residence until the Lyons built the more than 3,700-square-foot rustic lodge in 1986 that was designed by Bob Bacon, architect for the Boulders Resort and Spa in Scottsdale. The Gingerbread House was built in approximately 1880 and was actually two historic homes that were later connected together to make one log cabin, Scott Lyon said, adding that he, his wife and daughters stayed there several times.

He and his four daughters have "super fond memories" of La Cienega Ranch and spending time in the area hiking, exploring and horseback riding.

The Lyon family's generosity will enable University Realty to invest in real estate for the benefit of ASU.

The family wanted their gift to benefit real estate-related opportunities, given their involvement in the industry, Grannis said, adding that real estate gifts to ASU can be designated for any cause the donor chooses.

"Donors receive a charitable deduction for the appraised value of their property and forgo the expense of closing costs," said Frank Aazami, broker with Russ Lyon Sotheby's International Realty who represented University Realty in the sale of the ranch. "The donation of appreciated real property to the foundation is a wonderful way to provide enhanced benefit to donors.”

His colleague Erika Sahagun Dickey added that escalating land prices have many owners assessing their options.

"Real estate gifts of appreciated property potentially save significant capital gains tax and can increase the after-tax impact of your charitable giving," she said. "They are a great way to rebalance your property portfolio and support the university in the process."

To learn more about real estate gifts to ASU, contact Brad Grannis at 480-965-8098 or or your development officer.

Michelle Stermole

Director of communications, Enterprise Partners


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ASU research finds that rule on ethics boosts nonprofits' performance

September 28, 2021

New York law leads to CEO pay cuts but more donations, revenue

An Arizona State University professor’s research has discovered that holding nonprofit organizations to best practices reduced CEOs’ pay and improved performance.

Ilona Babenka, an associate professor of finance in the W. P. Carey School of Business, looked at compensation data for 14,765 nonprofit organizations in New York state for the years 2009–17.

Babenka and her two co-authorsBenjamin Bennett of Tulane University and Rik Sen of the University of New South Wales wanted to see what happened after the state's Nonprofit Revitalization Act of 2013 was passed. Their paper, “Regulating CEO Pay: Evidence From the Nonprofit Revitalization Act,” has been posted on SSRN and will be submitted to a journal.

The researchers found that after the law went into effect, the compensation for CEOs of nonprofits declined, but the executives didn’t work any less. Other performance metrics — such as donations, revenue and volunteers — improved.

The Nonprofit Revitalization Act prohibits CEOs from participating in board or committee meetings in which their salary is discussed or voted on.

Babenka studies executive compensation and said that although many researchers look at the pay for CEOs of for-profit businesses, not as much attention has been paid to nonprofits.

“They’re very important to the economy, and they employ 10% of the workforce,” she said. “They also represent a lot of important sectors like child care, senior care and education.

 “These organizations are at least partly financed by public dollars through tax deductions and tax benefits, which is why it’s interesting to know how much their executives are being paid.”

Babenka said that there is a longstanding debate in finance on whether executives are overpaid or paid fairly, and whether reducing CEO pay would create turnover.

“Fortunately, there was legislation that allows to have a good empirical look at that,” she said.

The Nonprofit Revitalization Act created a natural experiment for the researchers to compare CEO pay before and after it went into effect.

“What we see is that pay dropped by 2% to 3% for CEOs, which is not a negligible amount,” she said, adding that the figure is probably an underestimate because some nonprofit boards already operated using best practices before the act was passed.

“The other key finding is, OK, the pay got reduced, but what happened to the performance metrics of the nonprofit? Do we see executives leaving the firm? Are they putting in the same effort, working the same hours?

“And what about the other metrics, like donor contributions, number of volunteers and revenue? Has that been affected?”

Essentially, no.

“In general, we don’t find any negative consequences, and we find some positive consequences,” Babenka said. “The CEOs worked a slightly longer hours, about 2%, or about one hour a week. It’s not a lot, but at least they don’t work less,” she said.

The research team found that, after the new law went into effect:

  • The new requirements did not lead to more CEO turnover.
  • Contributions and grants increased by nearly 4%. For the average nonprofit in the sample, that represented an increase of $525,000 in contributions per year.
  • The number of nonprofit volunteers increased by approximately 2.4%.
  • Revenue generation increased significantly, by approximately $15,000.

The researchers wrote: “These results suggest that the outside stakeholders generally had a better perception of N.Y. nonprofits following the act’s passage, with volunteers and donors willing to donate more of their time and money.”

All of the data on CEO pay, hours worked, donations, revenue and volunteers are publicly available on tax forms.

The law was not intended to curb CEO pay, but was meant to increase efficiency.

“At the time, New York was worried that they were losing business to other states with more favorable laws,” she said.

“So the law made it easier to register nonprofits in New York, and easier to classify the types. To make it palatable to legislators, it was, ‘And by the way, we’ll also implement good practices.’ ”

Babenka said it’s difficult to judge nonprofit CEOs on performance metrics.

“They can always say, ‘We had lower revenue, but we delivered more bowls of soup,’ ” she said.

“Because they have multiple objectives, it’s harder for their boards to determine whether performance is good or bad. But that is what makes the pay more interesting to study.”

Top image of New York City courtesy of Pixabay

Mary Beth Faller

Reporter , ASU News


W. P. Carey School to honor Northern Trust chief economist as most accurate forecaster

Carl Tannenbaum to share 2022 predictions and accept the Lawrence R. Klein Award at Oct. 11 virtual event

September 24, 2021

Despite continued uncertainty driven by the ongoing pandemic, labor shortages, supply chain disruptions and a series of geopolitical uncertainties, Northern Trust Chief Economist Carl Tannenbaum predicts the U.S. economy will continue its recovery from last year’s shocks.

Tannenbaum, the forecaster with the most accurate projections over the past four years, will deliver his economic outlook at a free, live online event from 6 to 7 p.m. (Eastern time) Oct. 11 with the W. P. Carey School of Business at Arizona State University. At that time, Tannenbaum will be honored with the Lawrence R. Klein Award for Blue Chip Forecast Accuracy, regarded as one of the best-known and longest-standing achievements in the field. Carl Tannenbaum Northern Trust Chief Economist Carl Tannenbaum. Download Full Image

“I am delighted to win this award. I’ve been a Blue Chip forecaster across several institutions for more than 30 years, and it’s the first time I’ve been with the winning team. It is a great honor,” Tannenbaum said.

This is the second time Northern Trust has won the Lawrence R. Klein award as an organization. Amy Ostrom, interim dean of the W. P. Carey School of Business, will present Tannenbaum his award, which will be followed by his economic forecast for the coming year. Charles Evans, president of the Chicago Federal Reserve Bank, will introduce Tannenbaum.

There are 50 contributing forecasters for the Blue Chip competition from leading organizations across the country, including financial institutions, manufacturing firms, consulting companies and universities.

The award is judged and sponsored by the W. P. Carey School of Business. The Blue Chip Economic Indicators newsletter is the source of the forecasts used to select the winner.

“The award is based on the smallest average error for GDP (gross domestic product), CPI (consumer price index) and unemployment over the past four years,” said economics Professor Dennis Hoffman, director of the L. William Seidman Research Institute at ASU. “The predictions of Carl Tannenbaum and his Northern Trust team have held up remarkably, even through more recent developments such as inflation concerns, supply chain bottlenecks and the persistence of the COVID-19 pandemic.” 

In addition to his economic duties, Tannenbaum is also responsible for the analytics and modeling group within Northern Trust’s risk management division, and he monitors the strategic risks facing the organization. He also publishes weekly commentaries and is frequently interviewed by media outlets such as The Wall Street Journal, Bloomberg and Reuters.

Before joining Northern Trust, Tannenbaum spent four years at the Federal Reserve, where he led the risk section. He was deeply involved in the central bank’s response to the 2008 financial crisis, helped to create and conduct its stress testing program, and advised senior Federal Reserve leaders on developments in banking and the financial markets. Tannenbaum began his career in banking at LaSalle Bank/ABN AMRO, a global banking organization with $1 trillion in total assets. 

Tannenbaum is the current chairperson of the International Conference of Commercial Bank Economists and a past chairperson of the National Association for Business Economics, the Conference of Business Economists, the American Bankers Association’s Economic Advisory Committee and the North American Asset/Liability Management Association. He holds an MBA and a BA in finance and economics from the University of Chicago.

During the ceremony, Tannenbaum will deliver his 2022 predictions regarding:

  • Which sectors of the U.S. economy will exhibit turbulence or growth.
  • How a buildup of excess savings will impact consumer spending.
  • How long current supply chain concerns will linger.
  • How inflation will affect consumer behavior and business decisions in the year ahead.
  • What COVID-19 spikes and declines mean for employment trends, policies, and the growth cycle.

For more information or to register for the Lawrence R. Klein Award event Oct. 11, visit Journalists who attend as members of the virtual audience can ask questions during the Q&A section of the event. 

Established in 1976, Wolters Kluwer's Blue Chip Economic Indicators is synonymous with the latest in expert opinion on the future performance of the U.S. economy. Each month Haver Analytics compiles the forecasts of 50 leading business economists for key indicators of economic growth.

Communications assistant, W. P. Carey School of Business

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Teamwork, innovation led to game-changing saliva tests at ASU

ASU Biodesign team used innovative approach to avoid pandemic supply shortages.
September 23, 2021

Biodesign Institute's Josh LaBaer describes how his lab scaled up in a time of intense supply challenges

“Let’s go save some lives.”

Seven days a week for months on end, that’s how Josh LaBaer ended his 8 a.m. meeting with the Arizona State University team that was developing a new kind of test for COVID-19.

After the first month, he decided to stop saying it.

“But everyone told me that I had to keep saying it,” he said.

“It was something that informed every decision we made. Everything we did, the fundamental question was, ‘What will save the most number of lives?’ ”

LaBaer, who is executive director and professor of the Biodesign Institute at ASU, discussed his team’s efforts during a webinar presented Wednesday by the Economic Club of Phoenix, which is part of the W. P. Carey School of Business.

LaBaer’s team developed the qPCR diagnostic test at the beginning of the pandemic and scaled it up in mere months thanks to an unimaginable level of teamwork and an innovative approach.

Along the way, ASU built a new lab, the ASU Biodesign Clinical Testing Lab, which gained certification initially for testing nasopharyngeal swab samples and then became the first in the western U.S. to offer and run public saliva tests for coronavirus.

The lab will soon surpass a million test samples.

LaBaer described the timeline, starting back in February 2020, when public health officials noticed that the coronavirus was spreading quickly outside of China.

At that time, there was almost no testing capacity or supplies in Arizona.

“The only tools available to us were keeping people separated and finding ways to test people to tell them if they were infected so they could quarantine,” he said.

“I talked to President Crow, who was justifiably concerned that with well over 100,000 souls at this university, how would we get them tested?”

LaBaer was on a phone call in early March 2020 with all of the hospitals in the state.

“We tallied it up and there were probably 1,000 nasal swabs in the state of Arizona at that time and virtually no (personal protective equipment),” he said.

Josh LaBaer, executive director of the Biodesign Institute, described how his team dealt with pandemic shortages of testing supplies during a talk Wednesday sponsored by the Economic Club of Phoenix, part of the W. P. Carey School of Business. Screenshot by Charlie Leight/ASU News

LaBaer said that his lab was already working on a research problem using the core technology for testing.

“Could we pivot that technology and know-how from testing radiation responsive biomarkers to SARS COVID-19?” he said.

They could. The lab developed the rapid and accurate qPCR test in March.

By April, the lab was testing first responders and hospital staff, and by June it had partnered with the state Department of Health Services to provide free public testing around the state.

Saliva tests were a game changer, he said. They are less invasive and less uncomfortable, as well as safer for the health care workers.

“If you put a stick in someone’s nose, they will cough or sneeze and put the virus on the health care workers,” LaBaer said.

The workers doing the nasal swab tests had to wear head-to-toe personal protective equipment, which was difficult to find.

Plus, the drive-through nasal-swab tests could only produce 25 samples per hour per lane.

Health care workers are not needed to administer the saliva tests, in which people spit into a tube.

LaBaer emphasized that the work required an interdisciplinary team.

“We had to develop tools for training people in how to collect samples. We had visual aids, instructional videos, methods for storage and shipment,” he said.

“We had to collect data in a fashion that was HIPAA compliant to maintain privacy. It had to be easy to do on a phone and send text alerts when test results are ready.

“All of this had to be tracked with informatics. We needed quality systems in place, which meant lots of documentation of every step in the process.

“And all of that had to be communicated.”

That’s why the team met every morning for nine months. In the beginning of the pandemic, seven people were on the call, but it eventually grew to 140 people.

“We wanted every team to report every day so that everyone knew what everyone else was doing,” he said. “One reason for that level of communication was that we couldn’t allow a mistake to last for more than 24 hours.

“We made a lot of them, and we had to find them and fix them quickly.”

He described the process as “moving train dynamics.”

“To get to scale, we had to be constantly innovating. We had multiple teams innovating simultaneously,” he said.

“As soon as we got an innovation in place, they had to leap onto the train and add it so we could move the whole train faster.”

He described one challenge the team faced: They knew they needed a machine to uncap the sample tubes.

“We have a device that will uncap 24 tubes at a time in roughly 20 seconds, a lot quicker than people could do it,” he said.

“There are individual motors for each tube, and the motors were dying on us. It turns out that if the rate at which you lift the cap off is too slow, it wears out the motor. Who knew?

“You have to fail quickly and adapt quickly.”

Critically, one team was dedicated to procurement strategy, or “finding stuff.”

Swabs, personal protective equipment, chemicals needed for testing and other items were in short supply. The United States had no manufacturing capacity. Most of the inventory was coming from overseas.

“We knew that as testing accelerated in the state and the country, the competition for supplies would get even worse,” he said.

They took the “road less traveled” strategy.

“We designed all the processes to follow the path that everybody else was not following, so there would be more availability of supplies,” he said. “We always used an alternative compared to what everyone else used.”

For example, using regular plastic drinking straws in the saliva test kits was a critical innovation.

“They’re much easier to use than medical devices, and they are key because they prevent phlegm or snot from getting into the samples, which would ruin the results,” he said.

Test-takers use the straw to deposit their saliva into small plastic tubes that are labeled with bar codes. LaBaer said that his procurement team convinced a manufacturer of the tubes to dedicate one of its plants to ASU’s efforts.

“That kept us running. We never experienced a slowdown due to supply chain,” he said.

The turnaround time for test results has never been longer than 48 hours, he said.

LaBaer said the lab is now soliciting staff and student volunteers on campus to give blood samples for antibody tests.

“That will give us some sense of how many still remain COVID-19 naïve — unvaccinated and uninfected,” he said.

“If that number is small, we are likely to not see another big wave.”

LaBaer noted that the Biodesign Institute was founded with money that voters approved by passing Proposition 301 in 2000.

“People don’t appreciate the wealth of knowledge we have at places like ASU, where we have so many people with so much experience that we can get something like this up and running so quickly,” he said.

“It’s a testament to the investment the state has made in its own people.”

Top image: An ASU student submits a saliva sample for residence hall testing in 2020. Josh LaBaer, executive director of the Biodesign Institute, said that using regular drinking straws in the test kits was critical because they were not subject to pandemic shortages. Photo by Deanna Dent/ASU News

Mary Beth Faller

Reporter , ASU News