(Sponsored) The need for a clear cut economic development policy

by | May 5, 2015 | Ads, Economic Development | 2 comments

Last week prominent NC State Economist Dr. Michael Walden issued a report showing that our state’s economy was slowing down again.  In his report, Dr. Walden said the NCSU Economic Index was not “flashing recession” but did indicate a less upbeat year than what was thought four months ago.

Dr. Walden bases his NSCU Economic Index on a number of key criteria including weekly unemployment claims, building permits issued in the state, average weekly hours of NC employees working in manufacturing and weekly earnings of all NC employees in manufacturing.

WRAL reported that the NSCU Economic Index has dropped four of the last six months.  “It appears the surge in the index is late 2014 may have been temporary, and the adverse impacts of the higher-valued dollar on manufacturing and weak household income growth on spending may be taking its toll,” said Dr. Walden to WRAL.com.

We know there will always be a constant ebb and flow in our state’s economy on a short-term basis.  This compression noted by Dr. Walden may be a result of our cold weather winter especially impacting building projects and permits across the state.

It is the long term economic strategies that deserve our time and attention.

Over the course of the past seven years, our state has been through the economic ringer and there is continuing hangover in rural North Carolina.

Two weeks ago, Volvo announced they eliminated North Carolina from their prospective list for a new billion dollar manufacturing facility – choosing South Carolina and Georgia as their top two options.  The news coupled with a similar decision by Mercedes Benz is stinging.

While our Governor has worked to reshape the state’s economic development model with a dual public-private agency, there is a sense of floundering in our efforts to recruit new industry and commerce to North Carolina.  There is very little clarity in our economic development efforts.  Over the past three years we haven’t been successful in developing a recruitment strategy.  We haven’t defined our goals and objectives.

There is a lack of vision in the State Legislature when it comes to economic growth and development policies.  The Republican leadership has been more focused on a conservative social agenda than working with the Governor to develop a comprehensive plan for our state’s future economic success.

I am very concerned that the State Legislature has not yet passed a comprehensive  economic development incentive plan.  In rural Southeastern NC, economic incentives have been a successful tool in recruiting new industry and jobs to our region.  Incentives are critical when recruiting business and industry to our state.  I understand the conservative’s argument that the state shouldn’t be in the business of picking winners and losers.  But the fact of the matter is that South Carolina and Georgia, both states run by conservative Republican governors and legislatures, are eating our lunch right now.

We need to have an economic development policy that includes incentives allowing North Carolina to compete on a regional and national basis.  There is no way to tell how many economic projects have been lost because of the uncertainty about incentives.  Site selectors are hesitant to mention North Carolina to clients now because of it and we are losing businesses to other states that would otherwise consider locating here.

Throughout history our state has led the Southeastern United States on a regional basis because we have made the investments in our roads, our schools, our community colleges and our university system.  We offer an appealing quality of life with a profitable business mindset.  We need to compete with our neighboring states.

That starts with a comprehensive economic development policy that clarifies who we want to recruit and clearly identify the tools we intend to use to help recruit major employers and big business to our state.  When we say North Carolina is “open for business” it shouldn’t be just a slogan, we should really mean it.

State Senator Jane Smith (D-NCSD 13 Columbus & Robeson Counties)

Member of the Main Street Democrat Legislative Caucus

2 Comments

  1. George Watts Carr III

    Sen. Smith knows whereof she speaks as she has been involved hands-on with real-world economic development (ED) activities over the past twenty-five or more years . She correctly assesses that North Carolina has recently lost its economic development zip/luster/success/ way. After having been seen as the most progressive and forward-thinking Southern state for decades , and after routinely being ranked among the top one , two or three state’s in the country for economic development by Site Selection magazine , North Carolina has had her ED reputation tarnished and has plummeted in this significant ranking continuously for well over a decade .

    Initially perhaps it was the seeming lack of gubernatorial interest in this important arena by Gov. Easley that hurt us , and then the more conservative and anti-incentive philosophy of many legislators indicating that North Carolina was no longer a real player in the ED world was a further blow . Then the mixed signals emitted by a state that would pass Amendment One , reject a broader Medicaid program , terminate a noted University CEO with no apparent reason , and other similar “subtleties” and we now have a state people are unsure of .The professional site selection consultants whom Sen. Smith touches base with have apparently let her know just how far we have fallen and that we are no longer considered a must-see state for major projects . The uncertainty of who we are and where we are headed is a powerful and negative factor today .

    Hopefully the new “privatized” economic development structure will produce desired results and North Carolina will return to her former position as a top ED state and our economy , citizens and communities will prosper accordingly . The jury is out . Professional site selection consultants and economic developers are “holding their breath” to see if N.C. can turn it around or if we remove ourselves further from the fray and continue to decline . Some will not spend time and energy looking seriously at us until the dust settles . Maybe Se. Smith can get the attention of enough of her colleagues to make a positive difference .

  2. Appy Liberally

    “There is a lack of vision in the State Legislature when it comes to economic growth and development policies. The Republican leadership has been more focused on a conservative social agenda than working with the Governor to develop a comprehensive plan for our state’s future economic success.”

    This ^^^^^ says a lot, but not all. Yes, the NCGOP cares more about its social policy “to-do” list than job creation. But it also is getting mired down in an anti-urban, pro-rural crusade —despite that fact that the state’s urban areas, especially those having research universities nearby, are where new and high-tech businesses that offer good wages will spring-up and spin-off. Plus, the GOP is also bogged down in a self-defeating anti-science, anti-higher ed, and anti-public ed mindset. And that mindset is a counter-productive attitude and belief system that can only dissuade enlightened companies and their employees from relocating to NC or from expanding existing facilities already here.

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