December 12, 2001

Gov. Easley listens during Myers' remarks

Thank you, Gordon. I want to say to all of you, thank you, good morning, I appreciate you being here, but more than that I appreciate your willingness to tackle such a critical challenge as economic development in North Carolina.

Many of you have been very, very successful in many different arenas. This is a very diverse group and the backgrounds of each of you were taken into consideration. Not only geographic location, what you’ve done, what you’ve accomplished, what you know, what you don’t know, what you can bring to the table. The same is true for those Board members that were named by Senator Basnight, Speaker Black. You all have a can-do attitude and the know-how to succeed. That is why I am pleased that you are here. North Carolina needs your energy and your expertise and your commitment right now. This is a critical time for us.

Our state is enduring one of the toughest economies we’ve seen since the great depression. We’re not the only state, but nevertheless, we have to deal with it. The state has lost over 38,000 manufacturing jobs and I believe we counted 59,000 jobs total this year or in excess of that. We have one of the fastest rising unemployment rates in America...over 30% increase over last year’s numbers. Some counties like Rowan have increased 300% in unemployment over the past year. The unemployment benefits have nearly doubled this year over last year.

Ours is also an economy in transition. It’s going to be a slow transition, it doesn’t mean we are going to lose all the manufacturing jobs immediately, it doesn’t mean that we’re going to lose all the textile jobs immediately, but we certainly can’t be caught flat-footed. We are in an economy of transition, from a reliance of low-skilled jobs to a reliance of high-skilled jobs.

Government cannot create those jobs, but government can create an environment so that they can prosper and grow, all businesses and industries. We expect job shortages, its nothing new, we expect to lose low-skilled jobs, and we expect to have to educate our people more for high-skilled jobs. But that job shortening is happening more rapidly right now. We are churning more out then we are able to churn in, and we are going to have to deal with those issues.

We have to be realistic about what jobs are going to build the future of this state. I don’t think its realistic to think that those that pay $8-10 an hour in North Carolina now are going to stay here if you can get the same level of skill or labor in Mexico for $8-10 a day. Those are the ones that we are not going to be able to keep. The longer we can keep them the better because it gives us more time to transition. Companies are going over seas for the low-skilled manufacturing jobs. So we don’t want to recruit and pay for the economy of the past, we want to recruit and pay for the economy of the future. We are facing our share of challenges, no doubt about that.

What I believe is going to make North Carolina different, and what will keep us ahead of our competitors, is that we are taking bold steps, bold steps in tough times, when other aren’t doing that. We are being aggressive, when others are being cautious. We will be fast, when others are moving slow. We are doing that despite the worst budget year in the generation. North Carolina is still moving forward. We passed a budget this year that strengthens, not weakens, our commitment to education and economic development.

I would like to thank those members of the legislature who are here today for what they did in order to get this budget through. It is absolutely critical that we make progress as the budget cycles rather than letting the economy dictate what our budget is going to be in North Carolina. We have to decide what investments we want to make, what its going to cost, and where the revenue is going to come from. We can’t just sit back and see what comes in and accept it.

This year we broke through for the first time, we didn’t accept the idea that we’d just have to cut our way to mediocrity or worse. That is what I believe will make us different. This year we broke through that old mindset of hunkering down and waiting for better economic times…letting the tail wag the dog. I believe at the end of the day, when the dust settles, when the economy turns, North Carolina is going to be in a much more competitive position then it was going into this downturn.

In fact, the bond houses recognized North Carolina as one of the few states that took aggressive steps to preserve progress. Any state can make progress in good times, but it’s a great state that makes progress in tough times. So, I'm asking you to represent the greatness of this state and make progress now while we have tough times. That’s our strategy, and that is our edge, and that is what will bring us out of this downturn much stronger than when we went into it.

We're moving forward with an agenda that can build economic prosperity throughout the state. We're putting the tools in place to succeed, but we still have to execute good plans and we have to do that together. Let me tell you how we're doing that. First of all we have to understand, clearly understand, the importance of education. We're creating a system of education to prepare all of our children from birth through college for success. We're encouraging lifelong learning in this state. We started with Smart Start years ago. Now we're helping at-risk kids come to school ready and healthy to learn with our at-risk program for four-year-olds called More At Four. We're reducing class sizes in public schools. We know the combination of these two things are winners. They work everywhere they're done.

We know that the kids who get the pre-K and the kids who get the lower class sizes are more likely to stay in school. They're more likely to graduate. They're more likely to go to college. They're going to be in less trouble. They're more likely to be part of a good and prepared work force that gives you a tool that other states may not have. And one of the more important things we're instilling character education in our schools, so that we educate our kid's hearts as well as their minds. These are not just education initiatives. The important thing to remember is these are economic development initiatives and if you don't believe it ask Jim Fain when industries come to talk to you about whether they're going to locate in North Carolina.

They want to know about your education system and they want to know about your prepared workforce. We're enhancing all of our training programs. This year's budget does that. If you go to that budget, you will find it replete with one item after another that enhances our universities and our community colleges. We are working to prepare all of our students, old and young, for the workforce.

You can have all the incentives you'd want. Believe me I've been out there. But if you don't have a prepared workforce, it's a non-start. They won't come here, they won't go to North Carolina. They won't stay in North Carolina.

We can take that holistic approach, something that I don’t believe we have done in the past. You know better than anyone what it takes to bring good jobs and good business into NC and all of our communities to build One North Carolina. It is absolutely critical that we do that.

This board has always played a key role in strategy but your role this year is much more important than any other board has played. You have to be able to implement it and have to have the tools and we’ll see that you have that. I’ve asked you to serve because I believe that you have the means to take us to the next level.  I’ll make a deal with you. I’ll make this board more powerful, you’ll have more money, you’ll have more tools than any economic development board in the history of this state.

In exchange for that I want you to help me build One North Carolina where everybody has an opportunity to play in the winner’s circle. It can be done, you know how to do it and I’ll make sure you have the tools to accomplish it. It is critical that we have a strategic plan in place to guide our economic development investments. No more hit or miss, we can’t just say this company today, that company tomorrow and keep trying to bring in all of the big elephants when in fact we need to build a strong economy right here so these new jobs we build in NC continue to grow. It is going to take a strategy, we’re going to have to have some discipline and we’re going to stick to it.

We’ve got to have the vision as well as accountability in order to make progress. I want you to sit back and think where do we want to be in 10 years. What identity do we want in North Carolina 20 years from now, not just next year or the next budget cycle? What are the long-term goals? I don’t have all the answers.

That’s why I want you to develop a strategic plan within six months. I hope you can do it by March, a plan that includes measurable results, a plan that covers the entire state. I want to emphasize One North Carolina and I want you to focus on at least six areas. And let me just go over briefly so I don’t take your entire morning. First is recruitment and retention strategies, including incentive, prioritization, the core of economic development investments and community readiness. Second is workforce development. Third is collaboration with education and research institutions and development of future technologies. Fourth is a coordination of agencies, foundations and boards already in existence, like the Golden Leaf, to help the tobacco dependent communities of which there are very, very many in this state. Fifth is rural development and sixth is marketing North Carolina.

We begin with recruitment strategies. We must make our recruitment and our retention strategy more flexible, giving North Carolina the ability to aggressively seek high-skilled, good paying jobs in the new economy.

Right now we have the William S. Lee Act and thanks to the legislature we have a One North Carolina fund that is finally meaningful. We have to reevaluate our incentives. Most of the Bill Lee Act, as you know, was designed to attract and deal with the manufacturing base. That economy began back in the 30’s and 50’s. A lot of the high tech industry has come in now. They don’t need a plan to make a profit for 5 or 6 years. They’re unable to take advantage of those incentives. We’re going to have to develop a plan. Bill Owens has worked for them as well as David Redwine and Joe Tolson. We were close to getting something done in the General Assembly this year; hopefully we can in the short session.

We have to make certain that what we do is fair and effective and it’s a good return on the investment. We can’t just throw money around like seed corn hoping it will grow. We have to target, be smart, be very specific, that’s what we do. I argued the Maready case, which most of you know was a case that allowed North Carolina to finally use economic incentives. Before that, we couldn’t do it.

In the time I talked to the Court there was no law that allowed us to do it aggressively to rely on matter of fact; all of the cases were against it. I went to the Court and said I’m not here to argue a law; I’m here to argue policy. The bottom line of the 30 minute argument that I gave them was if the government takes it upon itself to make changes in the economy that are detrimental to this state, why then is it not the role of government to take some action to correct that. Now is time we have to look at what’s going on in textiles and other areas, where they’re trading out tariffs and barriers and all of our textiles to sell computers. Right now, we’re even having to cut deals with Pakistan and others, I understand this and you understand this, to build a consensus for the War.

But, if we’re going to have a tariff that allows 3.5 million workers textile workers to bring their products into North Carolina then the inventory is going to be higher and we’re not going to be able to compete. We’re working hard; a lot of the southeastern governors are working with the White House trying to get some relief if they’re going to go that route. I don’t know that in the long term it’s going to be effective.

Most of the textile people understand that they’re not going to be competing with China and so a lot of those industries are moving overseas if they don’t think they can compete here. They are trying to hold on to those where they have invested a great deal not only in their workers, but also in the equipment so that we do have a productivity rate that is much higher than those overseas.

We can’t lose sight of the fact that the single most effective tool in industrial recruiting is a prepared workforce. Even though I got involved as much as I did in as Attorney General in the Maready case I want you to know here today that my first preferred use of an incentive is an investment in our people, investment in our workforce so that we at least have an educated worker if the business doesn’t work out.

Let me talk to about workforce development for a minute. I think one of the happiest days for me was when Gordon Myers stood up as president of NCCBI and said his priority is going to be workforce preparedness. He told every member of NCCBI that it would be their priority, too. Gordon, you’re right.

We all have to recognize that and we have to not just recognize it, but find ways to make it a reality, find ways to make our people understand they have to know more today and tomorrow than they did yesterday in order to compete. I want to instill this transition into this new economy.

We have to find ways to prepare our workforce for the demands of high-skilled labor and we have to be willing to help those 38,000 manufacturing jobs that have been lost for example, help them learn a better skill more skills so they can transition into another industry. They in fact become a product that we can sell when we’re recruiting.

We have a workforce, they are prepared and they’re ready to use. Our community colleges, under the care of Martin Lancaster has done a great job and they’re going to be instrumental in achieving this goal. We have tremendous resources scattered in every region of this state. When you look at the community college system, that gives us a real competitive advantage. That has to be integral in whatever strategy that you finally accept.

We have to have the most efficient, most effective use of that resource if we’re going to meet the demands of the new economy. We’re going to have to have higher skills, we’re going to have to remember the old adage if you want to earn more you have to learn more. Our people are going to have to understand that.

Third is technology and universities. We must build on the success of the collaboration of industries and universities. There’s a myriad of great examples and the universities are willing to do more, we just have to put that piece in the puzzle, we have to use it just like we do the community colleges, more effectively.

We have to make certain the universities as well as the community colleges have the resources they need. We are trying not to cut their budgets so that we don’t cut our competitiveness. I can assure you I speak for all the Cabinet members of our administration, when we sit back and try to find ways to cut costs, the first thing we’re looking at is how do we stay competitive through this economic downturn. We’re not going to sacrifice our competitiveness.

The community colleges and universities are very important part of that, we have the finest universities and research centers in the country, let’s use them. Let’s use them to build this economy to build this state, make jobs for our people who are paying for these universities and research centers to begin with. Did you know that last year our universities were able to access 678 million dollars in grant money? That’s third in the nation behind only Texas and California with tremendous populations. We ought to be proud of that and also recognize the great resource that we have through that. All of our universities are great incentives, especially at a time when the knowledge work is in great demand.

Rural development – the day of two North Carolina’s is ending. We’re committed to One North Carolina. We have somewhere between 85 and 89 counties that are rural and we have to recognize that we have to bring them along just as we’ve done with the urban areas.

A successful economic development strategy has to include progress for all counties, all people. We simply cannot, and will not, leave anyone behind. It’s not only wrong but it is a flawed economic policy. So rural development is absolutely critical.

Now, I’ll talk to you a minute about coordinated agencies of 21st century communities. Let me just say its important that we do all that we can to help our communities prepare for 21st century global economy.

The Department of Commerce under the leadership of Jim Fain is already embarking on community based enrichment programs…customized services for local leaders who want them, all across North Carolina. We’re working on the cabinet level to ensure well, maintained infrastructure that is critical by developing better communication between agencies: Commerce, Revenue, Transportation and the department of Environment and Natural Resources.

Let me just remind you briefly of what we have there. Jim Fain is the Department of Commerce. He came out of the banking industry and he understands revenue. Lindo Tippett understands transportation being the secretary and eight years on the Board, but he also has an accounting background, so he understands revenues and numbers. He understands how revenues and expenditures must be. Norris Tolson, Secretary of Revenue also served Secretary of Commerce and DOT. And then Bill Ross at DENR, also economic development from his background in business law.

So it is important that we recognize in any strategy that all of these agencies have to work together as an integral team, because revenue is a big part of our commerce, our tax structure, and revenue is a big part of what commerce has to use when we go out and try and recruit industry.

So we have a team there, and I can promise you this- although we’re not prepared to make any announcements today- we’re going to have the strongest board of science and technology to work with you that this state has ever had. I will make that commitment today. Now, you’re going to have it pretty soon. More schools, roads, and all of those things – Lindo Tippett, Jim Fain, Norris Tolson and Bill Ross worked on, all of those things are critical just as critical as anything else to our success and economic development. Internet access is critical, and we’re making headway there.

And lastly, don’t let me forget to marketing. We have not done a good job of marketing North Carolina. When you talk to people about this state, most important that they have seen on national television has been hogs, tobacco, or floods, and those are about the only three things they can associate with us, other than great basketball.

So I think we have to have a strong marketing strategy that lets people see the real North Carolina. We’re going to Chicago tomorrow, and we’re not going to Chicago just to see one industry, we’re going to Chicago to see the consultants that the industries go to when they want to locate somewhere. We are going to tell them our vision of One North Carolina.

So, I leave you today with a challenge and an opportunity – to build a plan that truly reflects One North Carolina, where every citizen in every county has opportunity to succeed. We have a lot of work to do, but we have a great foundation to build on. I am confident that this Board will come up with an aggressive plan that meets the needs of our state and our people, and that you will follow-up to ensure accountability. I want you to act as Board of Economic Development just as the Board of Transportation does for D.O.T. You have a chance to set our state on a course of progress for many years to come. I appreciate your leadership and dedication. Thank you.

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