North Carolina is Home to Tomorrow’s Innovators
04 Jan, 2013
By David Hodes
North Carolina is working on developing innovative companies, but it’s not a wholesale reinvention. In economic development in the state, there is a nod to the legacy industries — manufacturing, textiles and tobacco — that are still in the mix of economic development.
But there’s an undercurrent of effort to build on what the state already has as it works to undo the economic damage of the past few years — downsized businesses and high unemployment. “We have had some refinements of the major programs which are the basic core of the umbrella program Job Development and Incentive Grant (JDIG),” says Keith Crisco, secretary of commerce, North Carolina Department of Commerce.
The JDIG program, adopted by the General Assembly in the 2001-2002 session, is a performance-based economic development incentive program that provides annual grant disbursements for a period of up to 12 years, to new and expanding businesses based on a percentage of withholding taxes paid by new employees during each calendar year that is a grant year under a particular grant. The percentage of withholdings that is awarded ranges from 10 percent to 75 percent.
The seven projects approved in the second quarter of 2011 are expected to generate approximately $1.985 billion in GDP during the life of the grants. The first grant year may occur several years after a grant award, as a company may need substantial time to undertake construction, hire employees and begin operations at the facility.
The money a company gets back can be significant, Crisco says. “It’s the rewards of doing the big job of creating jobs in North Carolina. Here, we help you assure success. We don’t stop when you come. We start when you come. We stick with the companies and see how we can help them as they grow and flourish.”
Industries and Innovations
North Carolina’s four largest industries are government, health care and social assistance, retail trade and manufacturing. These industries account for more than 55 percent of employment in the state.
Like most of the country, and especially in North Carolina and South Carolina, employment in manufacturing is significantly declining. The manufacturing industry has lost more than 137,000 workers since 2005.
But economic developers have adjusted. The state’s legacy of manufacturing in traditional industries, like textiles and furniture, hasn’t died but instead is being refined and redeveloped to suit the times. “What we are able to do is transition or leverage our manufacturing heritage but still go into what might be called advanced manufacturing,” Crisco says.
That includes the use of technology in the manufacturing process, but also in biotechnology, aerospace and food processing. “We were able to grab hold of our heritage and combine it with a new tool and attract some very nice businesses,” Crisco says.
One example of a thriving manufacturing enterprise was announced in October by the Carolinas Gateway Partnership, a public-private industrial recruitment agency dedicated to the economic development of the twin eastern North Carolina counties of Nash and Edgecombe, which celebrated the opening of a new Superior Essex Energy Inc., manufacturing plant in Tarboro. This is a $60 million project that included the hiring of 200 employees, says John Gessaman, president and CEO of the partnership.
Just a few months before that event, Hospira Inc., a provider of injectable medicines and infusion technologies, announced that they were going to spend $270 million in new plant equipment and expansion during the next 10 years, and hire an additional 200 employees to add to their 2,400 employee base at their Rocky Mount facility.
Deborah Murray, president and CEO of Caldwell 20/20, the economic development organization of Caldwell County, says that they “might be winning a little bit of the game this time.”
For this year, Murray says, they have announced almost 700 jobs in the area, with three pretty good sized projects, one of which could add 150 jobs or more. “The rest of them have been everything from eight to 10 to 50 jobs, which we feel has been very good for us, based on the fact that we don’t have all our eggs in one basket,” she says. “We know what it feels like to lose the lion’s share of a business to downsizing or offshoring jobs. And to then have diversified products coming back in but still be the kind of jobs that our workforce is capable of doing. Those are the two most important things that we can put together in one equation.”
One example of old-manufacturing-reinvented is Woodgrain Millwork Inc., a national operation that is headquartered in Fruitland, Idaho. The company currently operates six sites across the country and employs more than 1,000 people, with a new $8 million facility to be located in Lenoir.
Woodgrain’s core business involves supplying molding products to 750 Home Depot stores and is Home Depot’s largest suppliers for wood products. “We have people with woodworking skills and manufacturing skills, but we are broadening because we are not just looking at furniture manufacturing,” Murray says. “We are looking at someone who does doors and windows and moldings and that sort of thing.”
In Cherokee County, Josh Carpenter, economic development director for the county and the city of Murphy, says that one of the projects in the area that will be a good job creator will be a casino that the Cherokee Indian tribe will be building. “This may be several hundred jobs or even a thousand or so, depending on the size of what they build,” Carpenter says.
In Rockingham County, Graham Pervier, president of the Rockingham County Partnership for Economic and Tourism Development based in Eden, says that the legacy businesses still help drive economic development there. One of those industries, tobacco, is represented by Commonwealth Brands Inc. in Reidsville, a subsidiary of Imperial Tobacco; and Amcor Tobacco Packaging, also in Reidsville, which does the packaging for R.J. Reynolds Tobacco Co.
“So we think the outlook for our rural community, especially being adjacent to a large city like Greensboro, and our strong manufacturing heritage is going to be alright in the long run,” Pervier says.
Talent and Education
Crisco says that the state has a great university system, with 16 public universities, 36 private colleges and universities and 58 community colleges. The customized training offered by the state’s community colleges is second to none, he says. “It is by far the biggest delta just about every time companies come here to expand — because of our workforce,” he says.
The partnership’s Gessaman says that they have worked with North Carolina State University and their East Carolina University, located on the campus of North Carolina Wesleyan College, to develop a partnership with Gateway Technology Center Inc. (GTC).
The center represents an innovative new concept designed to make it easier for adults in Rocky Mount to take college courses or earn a degree. GTC is a nonprofit corporation comprised of representatives from the City of Rocky Mount, Nash County, North Carolina Wesleyan College and the Carolinas Gateway Partnership. It’s funded by a variety of both public and private organizations.
“That will bring the benefits of these great big research universities to our local area in a lot of different ways,” Gessaman says.
Assets
Gessaman says that what is working well in his region is I-95 that goes north and south through the twin eastern North Carolina counties, with I-64 connecting residents and businesses from Raleigh to the east coast. “Together with Raleigh we have endorsed the concept of an interstate corridor which connects our area with the interstate and directly to the port of Norfolk,” Gessaman says.
Those two interstates enhance their region as a good place for distribution to regional customers as well as the international global market. “When you get the new larger ships coming up the East Coast, the Port of Norfolk would be the largest and the only one capable of handling their types of vessels on the East Coast,” Gessaman says.
The partnership is also promoting a 1,307-acre industrial area in Edgecombe County, called the Kingsboro-Rose Mega Site. This site is served by rail and road. CSX Transportation traverses the southern property border as does I-64, I-95 and U.S. 301. It is zoned with utilities and is shovel-ready, Gessaman says.
Lifestyle
Much of the state is rural, with natural lifestyle amenities and relatively good highway access to major cities. Murray says residents of Caldwell County have the ability to go from the mountains and the snow to the higher elevations in the Piedmont within 30 minutes to an hour. “You are 60 minutes from two international airports in a place where retirement living is extremely attractive,” she says. “In terms of where you would like to start a second career or a first retirement career, it’s a beautiful place to live.”
As North Carolina’s economy continues its steady transition from traditional labor-intensive industries to higher tech advanced manufacturing, health care and logistics, there is more focus on the positioning of the workforce.
Crisco says that people say that there is a mismatch between jobs available and the skills of the workforce in the country. “I just don’t buy that,” Crisco says. “There is a distribution issue. We have jobs where people aren’t.”
For complete details on conducting business in North Carolina, visit:
North Carolina Department of Commerce
Rockingham County Partnership for Economic and Tourism Development
Illustration by digitalart at Free Digital Photos.net
