Chatham EDC Memo: Economic Development Strategies Beyond 2020
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1 CHATHAM COMPREHENSIVE PLAN March 2017 Chatham EDC Memo: Economic Development Strategies Beyond 2020 The Plan Chatham comprehensive plan process has provided the opportunity to consider a more expansive view of economic development opportunities and threats impacting Chatham County. To augment the Chatham Economic Development Corporation s (Chatham EDC s) current Strategic Action Agenda, this memorandum will explore emerging trends and suggest longer-term strategies for strengthening Chatham s economic performance. A. Global and National Trends Urbanization and Job Concentration: America s non-metro counties recently recorded their first-ever overall population decline. In addition to population gains being concentrated in major metropolitan areas around the nation and the globe, business and job growth is increasingly concentrated in select urban centers. A 2016 report by the Economic Innovation Group showed that half of all U.S. business growth after the Great Recession was concentrated in 20 large, urban counties. Fifty-nine percent of counties across the nation saw a net decline in the number of businesses. Similar concentrations have been shown in recent job growth, particularly with technology sector employment. The recent NC State of Technology Report showed that while the state added technology jobs at the 3 rd fastest rate in the country over the past five years, almost three-quarters of the job gains were in Wake and Mecklenburg counties. Digitization: Digitization and use of the internet, especially mobile internet, is rapidly changing behaviors at home and at work. Trends include surging online retail sales and the resulting reduced demand for brick-and-mortar locations; remote diagnosis of medical conditions and long-distance provision of other medical services; and distance learning providing a wider and deeper range of educational offerings without expert educators present on-site. Much of the U.S. economy has yet to realize the increased productivity of digitization; a December 2015 study by the McKinsey Global Institute estimated that America is only realizing 18% of its digital potential. Technological Unemployment: An increasing number of observers are predicting that robotics, artificial intelligence and other work automation will lead to a permanent decline in the need for human workers. Studies show that almost half of current jobs could be eliminated or significantly changed over the next 20 years. While new jobs will be created, there will be tremendous disruption across all industries. 1
2 Skills Gap: Employers continually point to gaps between the demands of many positions and the skills of the available work force - be they soft skills such as reliability and communication, or more job-specific skills. Studies indicate that living wage jobs will increasingly require at least an Associate s degree, certification or work credential past high school. Close proximity to a deep, qualified labor pool is currently the number one site location factor, and the availability of a skilled workforce is projected to become even more important in the coming years. Flexible Work Arrangements: Emerging trends include more flexible work schedules, working from home, contract work arrangements, and working in mixed-use Live/Work/Play environments. There is greater emphasis on freelancers, entrepreneurs, and a person s individual brand. Consequences could include less demand for traditional office space, more shared co-working spaces, and greater demand for mixed-use environments. The concentration of at-home workers is also impacting house design and the need for nearby support services. Potential Increase in Leisure Time and Spending: Greater efficiency promised by digitization and automation could lead to increases in leisure time, positively impacting the travel, tourism, and recreation sectors. However, wage stagnation and reduced employee benefits might portend smaller increases in disposable income. Agricultural Transformation: Per the United States Department of Agriculture, Modern farms and agricultural operations work far differently than those a few decades ago, primarily because of advancements in technology, including sensors, devices, machines, and information technology. Today s agriculture routinely uses sophisticated technologies such as robots, temperature and moisture sensors, aerial images, and GPS technology. These advanced devices and precision agriculture and robotic systems allow businesses to be more profitable, efficient, safer, and more environmentally friendly. The proximity of Chatham County s agricultural industry to the technology resources of the region creates an ideal opportunity for support and innovation within the existing sector. B. Regional Trends in North Carolina Economic Success of the Triangle Region: Built upon a strong foundation of university innovation, healthcare, state government, and the Research Triangle Park, the Triangle region has had an enviable track record of economic performance for the past 40 years. Over that time, the region has enjoyed steady job growth and reduced impacts from recessions compared with other metro areas across the United States. Wake County is projected to be one of the fastest growing counties in America for the next twenty years. Eastern Chatham County has benefitted greatly from its proximity to employment opportunities and an affluent, well-educated Triangle population. Uneven Economic Performance Elsewhere: While certain North Carolina metros such as Charlotte, Asheville, and Wilmington have experienced economic success and employment gains, many others have not. The Triad region of Greensboro, Winston-Salem and High Point has seen virtually flat job growth over the past 20 2
3 years. Smaller metros and rural areas have struggled greatly. Since the Great Recession, only 21 of the state s 100 counties have experienced job growth greater than the state average. Numerous counties in northeastern and south-central North Carolina are in danger of continued population and job losses. Suburbanizing Formerly Rural Areas: Many of the collar counties adjoining the most urbanized counties in the Triangle Wake and Durham counties have experienced population increases with suburban densities and highway corridor commercial development. Formerly rural parts of Harnett, Johnston, and Chatham counties have witnessed this trend. While attracting higher-income residents and more expensive new housing, this trend also brings increased conflicts with agricultural operations and potential degradation of the rural character valued by many residents. Economic Development Marketing and Client Handling in Flux: In recent years, North Carolina s state-level economic development efforts have moved from a state agency to a public-private partnership. Many of the regional economic development partnerships have seen decreased public funding, increasing the importance of private sector contributions. One result is that the most urbanized counties with larger employers play a greater role in economic development planning, potentially decreasing the resources dedicated to collar and rural counties. On their own, smaller and less urbanized counties usually lack the resources to undertake robust economic development marketing and recruiting campaigns. C. Potential Economic Development Strategies for Chatham County beyond 2020 Promote appropriate targeted industries and commercial uses at Megasites and Employment Centers. To increase job opportunities and tax base throughout the county, suitable industry targets should be matched with the most appropriate locations and sites. Industry targets should reflect the priorities of Chatham EDC, Research Triangle Regional Partnership, Piedmont Triad Partnership, and the Economic Development Partnership of North Carolina. These currently include - Chatham-Siler City Advanced Manufacturing site: Aerospace Automotive Food Processing and Manufacturing Agriculture Biotechnology Furniture Moncure Megasite: Defense Technologies Pharmaceuticals Food Processing and Manufacturing Agriculture Biotechnology Smaller-scale business and industry, particularly those in growing or emerging industry clusters and paying above-average wages, can be targeted at designated Employment Centers - 3
4 U.S. 1 Employment Center: Wood Products Distribution and Electronic Commerce Complementary support services for Moncure Megasite U.S. 64 Employment Center: Advanced Medical Care and other medical offices Business and Financial Services Information Technology Focus on assisting growing industry clusters. The following industry clusters have grown employment in recent years, are expected to continuing adding employees, and pay above-average wages in Chatham County: wood products; business services; distribution and electronic commerce; and agricultural inputs and services. Embrace a human capital strategy focusing on increasing the competitiveness the knowledge, innovation, and competencies - of Chatham County residents. In our globalized economy with technology allowing for dispersed supply chain activity, some economic development strategists believe that regional industry clusters will wane. They could be replaced by clusters of people with knowledge and expertise. Attracting, retaining, and supporting the creative class of entrepreneurially-inclined people may become increasingly important for a locality s economic success. Focus on quality of life and placemaking. Going hand-in-hand with a human capital strategy is the necessity of building attractive, lively, and diverse communities where interaction and innovation can thrive. This includes having urban destinations (even if in relatively small towns) with public amenities and supportive of cultural offerings, while also offering outdoor recreation opportunities. Partner with the towns to incentivize and attract investment and business development in Pittsboro, Siler City, and Goldston. Traditional county-level economic development policy focuses on larger employers, especially manufacturers. But increasingly counties are joining with their towns and cities to encourage all sizes and types of development to increase urban vitality. This can include incentivizing retail stores, offices, restaurants, lodging, entertainment, service providers, and public gathering spaces. Incentives don t have to be monetary. They can include zoning that encourages more dense, mixed-use developments; alternative building codes designed for adaptive reuse of older buildings; and infrastructure improvements from parking, to street lighting, to increased police foot and bike patrols. Investment in government facilities in or near downtowns is another way to support the vitality of Chatham s towns. Bring top-level telecommunications infrastructure to all parts of the County. In a global innovation-driven economy, all citizens and businesses students, farmers, 4
5 home-based businesses, large corporations - need access to high-speed internet and telecommunications. Chatham County could partner with other levels of government, with foundations, or the private sector to build out telecommunications infrastructure in areas where it is lacking. Strive to become the Green Heart of the Triangle and Triad regions, for outdoor recreation and authentic rural tourism. The more the Interstate 85 Piedmont Crescent corridor grows, the more residents throughout the region will seek out green space and recreation options. Chatham will need to develop additional ways to raise awareness and capture visitor expenditures, potentially including hotels, restaurants, entertainment venues, and Chatham-based tour companies and guides. Develop shared workspace options in Pittsboro, Siler City, and perhaps along the corridor. As the county attracts a more affluent, educated, and older population, there s an opportunity to encourage the entrepreneurial spirit of freelancers and people exploring their second or third careers, including retirees. Making flexible, shared workspaces available is one way to do this. Chatham County could encourage the creation of such spaces, or partner with other organizations to develop them. In agriculture and forestry, the county could team with statewide experts to help local farmers modernize, increase productivity, and reach new markets. Experts at North Carolina State University and NC A&T State University could be engaged to study the most promising opportunities for Chatham farmers and provide direct assistance. Collar counties such as Chatham usually lack the budget for recruiting on a national and global scale. Business growth will likely come from existing businesses in the region. Thus, the Chatham EDC could make a concerted effort to increase membership and involvement in Triad and Triangle business organizations, and the North Carolina Partnership for Economic Development, with the goal of marketing Chatham s assets to existing small and medium-sized businesses. Target health and wellness services and expenditures. The county has a more affluent and older population, and is already home to numerous medical and continuing care facilities. A Central Carolina Community College health sciences center is planned for Briar Chapel. Focusing on health and wellness providers could strengthen what is already a significant industry cluster in Chatham. Improve relationships between Chatham EDC, county commissioners, public schools and the community college. It is easy for those in government, education, and business to become siloed within their spheres of influence. For a local economy to function effectively, key players in these sectors must communicate and coordinate efforts. Examples include increased commissioner visits to local 5
6 businesses; EDC board members providing student work experiences, student mentoring, and speaking in schools; and representatives from the EDC, community college and K-12 schools meeting regularly to discuss workforce preparedness needs. 6
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