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March 2014
Our New N.C. Economic Development Strategy
By John Paul Galles

     Ever since Pat McCrory assumed his elected position as Governor of North Carolina in early 2013, we have heard about his ambition to turn the economy of North Carolina around. He attends nearly every media conference that celebrates a new business moving to North Carolina or opening a new office or expanding its workforce in our fair state. I don’t blame him. I would be front and center too, if I were in his shoes.

     Governor McCrory has appointed several people from the Charlotte area to his leadership team that are quite knowledgeable about economic development including Tony Almeida, his senior advisor for jobs, Sharon Decker, his Secretary of Commerce and John Lassiter, who will chair his new Economic Development Partnership.

     While Almeida stepped down in January soon after the new jobs plan was released, Decker and Lassiter are directing a transition from a governmental agency, the Commerce Department, to a public/private partnership called the Economic Development Partnership of North Carolina, Inc.

     I have had the privilege of listening to presentations from both Decker and Lassiter. They have done their homework and speak with clarity about their plans and the importance of them. Over the past year, they have reviewed the performance of the Commerce Department and they have many recommendations for its improvement. Their North Carolina Jobs Plan was completed in December 2013 and released in January 2014. It is comprehensive and covers the gamut of economic development initiatives.

     The plan is actually quite good. It covers all the valuable ambitions…targeted industry clusters with an N.C. brand to carry them forward, business climate issues including deregulation and lower tax rates, innovation and entrepreneurship to encourage small business and startups; talent and retiree attraction to assemble workers and prepare them to good use; education and workforce development taking full advantage of our community colleges with a greater focus on Science, Technology, Engineering and Math (STEM); and added emphasis on rural and community development as well as delivery of services. This plan works to serve all corners of the state and every community within it.

     What I don’t get from this plan is why this needs to be implemented with a move from a state agency to a “public/private” partnership. Will it save money? Will it remain accountable for its use of state funds? How will it prove to be more expeditious in response to corporate inquiries about opportunities within the State of North Carolina?

     I have two primary concerns.

     First, I am not confident about the need to create a new organization that will serve the public interest any differently from a state agency. Transparency, accountability, expeditious responses and annual plans should be part of any organization whether it is a state agency or a public/private partnership.

     The Governor, Decker and Lassiter have already spent the last year reviewing previous economic development strategies over the last 20 years and building their plan of action. They don’t even have implementing legislation prepared for this newly revised agency and it could not be passed into law until, at least, July or August at the earliest. That is nearly two years into a four-year term of office.

     Even if Governor McCrory is re-elected for a second term, this team has not even begun to raise any of the “private dollars” that are to be raised along with public dollars for this organization to function. I would much rather that they spend their time promoting the state using existing resources more effectively.

     But, what troubles me most is my second concern. I am troubled by the underlying messages in this plan. Concerns about regulations, costly litigation and taxes are always front and center when politicians are trying to gain support from the business community. Both Republicans and Democrats rail against unnecessary and burdensome regulations and onerous business taxes.

     After further investigation, however, it is often the case that regulations have been written to protect consumers or public interest after private enterprise has failed to provide protection or has taken advantages to the detriment of the public. North Carolina will be right for some businesses and not right for other businesses. We need to be selective. Not every match is the most appropriate match for this state or region.

     What is most important is to build upon the rich investments we have made in education and innovation within North Carolina. In the midst of global competition, we should use our limited resources to serve our statewide interests.

     Our state is located at the center of the East Coast and Midwest with abundant land. We have an ample and growing supply of competent, capable and trainable workers. We also have access to major markets with great highways, railroads, airports and ports. We have clean water resources, low cost electricity, low cost natural gas, great universities, outstanding community colleges, quality public and private school systems, and an outstanding quality of life and environment.

     We can compete for business anywhere in the world. We need to be careful to protect, preserve and expand on our assets so that we can be competitive for many years to come and for future generations.

John Paul Galles is the publisher of Greater Charlotte Biz.
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