MARCH 30, 2001

Economy in transition: North Carolina has been recognized for having the largest percentage of the workforce employed in manufacturing. This worked to our advantage for many years. However, the decline of traditional industries like textiles and furniture, and unprecedented downsizing by Fortune 500 companies have combined to drastically impact our citizens and the state's economy. Recent reports indicate that North Carolina now has the distinction of having lost the greatest number of manufacturing jobs per capita as any state in our country.

Rural communities especially hard hit: While the sweeping changes have occurred in the manufacturing sector, our rural communities have experienced the added pressures associated with the decline of the tobacco industry. In fact, the agribusiness sector has experienced a deterioration of farming income based on all crops grown, and livestock and poultry produced. When you combine these trends with the dilemma created by low-wealth schools and inadequate infrastructure, one realizes that the problems in our rural communities have reached a serious stage.

Diverse economies are strong economies: While the announcement of a 400-employee manufacturing plant in any community generates fanfare and attention, that same community may be better off if 10 quality companies possessing 40 employees each start up during the same time frame. The small- to mid-sized companies represent the fastest growing area of our economy and offer a viable alternative to major corporations.

Time is of the essence: The lead-time involved with decision-making by businesses and industries has been condensed significantly. At one time, a site consultant and/or client would visit a region of our state for a two-three day period to consider potential locations for a new facility. Today, this has been condensed in some instances to as little as two-three hours. This dynamic has significantly changed the recruitment process at the local, regional, state and national levels. Everyone involved in the process has to use a rapid-fire response when an opportunity is presented. Community preparedness is also crucial and has been taken to a new level. The N.C. Department of Commerce is in the process of implementing the Certified Industrial Site Program on a statewide basis. It will take this and other proactive measures to address the immediate needs of new and expanding industry.

Labor is the new driving force: Today's companies believe strongly that their level of success is directly related to the quality of their workforce. When a new or expanded industry is conducting a site search, their need for skilled labor must be satisfied first and foremost. Companies are no longer persuaded by proposals that rely on unemployment statistics and the prevalence of low wages in a community or region. Quite the contrary, it is important to demonstrate the level of underemployment and the retraining in place within a community to prepare citizens for quality jobs. In Western North Carolina, we have implemented a comprehensive labor market assessment, which will lead to a workforce development plan. Our objective is to have the most sophisticated labor data and the most well coordinated workforce development system in the country.

Technology has moved to the plant floor: The need for highly skilled labor is no more evident than the modernization that has occurred in the manufacturing sector. Automated and programmable controls are used in the most basic production lines within industrial plants. Companies have steadily transitioned to equipment-intensive operations that hardly resemble the labor-intensive assembly lines of the past. One way to address these issues is through short-term certification programs that offer the high-tech training to full-time employees through flexible schedules at nights and on the weekends.

Financial incentives have become the norm: Regardless of one's personal view on this subject, incentives appear to be here to stay. A few years ago, Virginia appropriated $33 million for their version of the Governor's Competitive Fund. During the same time frame, North Carolina appropriated $3 million for our Governor's Competitive Fund. As long as this type of disparity continues to exist, our state will continue to work at a disadvantage in competitive situations involving capital-intensive projects that include high-quality jobs. The same type of compelling need exists at the local level. It is in the best interest of any community that wishes to attract quality companies to proactively develop an incentive policy.

Broadband and the knowledge-based economy: Access to affordably-priced broadband is as important to the knowledge-based economy as water and sewer was to traditional industries. Even the most basic types of businesses and industries in our state are being pressured to transition to e-commerce transactions with their employees, customers and suppliers. As our state pursues a strategy of successfully recruiting fast-growing, high-tech companies to the rural regions, high-speed broadband will be crucial. This makes the work of the North Carolina Rural Internet Access Authority an extremely important and urgent priority.

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