Not only are we well aware of the bankruptcy of Pillowtex and the profound loss of thousands of jobs in the last three months, but we are also painfully aware of our experience over the last three years as other textile mills have closed or downsized and other manufacturing firms have laid off workers or moved their production facilities to Central and South America and Asia. We have even witnessed higher paying technology jobs being replaced by workers in India, Pakistan, the Philippines, Costa Rica, Turkey and the Middle East.
The movement of jobs is not a new phenomenon. In the early 80s, we watched the metamorphosis of the automobile industry as the traditional manufacturing operations changed and international competition wrenched substantial market share from U.S. automakers. Manufacturing jobs were fleeing Michigan for less costly production facilities in the South and the West. About the same time, textile companies began fleeing New England for the South and Mexico.
The logical response to the job drain out of the U.S. is to target resources and talent in the direction of job creation for the future. Recent growth from the creation of call centers to the southeast offer some promise, but even they are subject to competition from overseas operations. In fact, A.T. Kearney, a global management consulting firm, conducted a recent study finding that U.S. banks, brokerage firms, insurance companies, mutual funds and other financial services firms are planning to relocate more than 500,000 jobs offshore – representing eight percent of their workforce – over the next five years. These involve high-end internal functions including financial analysis, research, regulatory reporting, accounting, human resources and graphic design as well as data entry, transaction processing and account reconciliation. Overall, the study projects that these businesses will reduce annual operating costs by more than $30 billion.
Offshore initiatives and outsourcing are not simple solutions for any company. It may be too early to tell how effective and valuable these sources will prove. Nevertheless, they are to be expected, and will undoubtedly be tested in a wide range of business activities.
So how and where can the Charlotte region develop its economic future? Where will new jobs come from and what business sectors will likely provide greater long-term economic advantages to the Charlotte area?
It makes huge sense to build upon our economic foundation and apply our cutting edge resources to advance our economic futures. We are fortunate to have our substantial banking community in our central city. In addition, we have the absolute best job training institution in the country in Central Piedmont Community College and its sister colleges inside this region. We also have the rapidly advancing University of North Carolina at Charlotte with its academic schools and its Research Institute supporting area enterprises. Add to that mix our abundant labor force and our quality of life and we have all the elements for creating jobs and attracting businesses for our future.
Another important clue to our future ought to come from our success in attracting TIAA-CREF. After having been courted by other regional economic communities, TIAA-CREF chose to relocate its Southeastern Service Center to Charlotte. If they like Charlotte, how many other financial services firms might be attracted to our region?
Given terrorist threats, energy blackouts and the high cost of living in the New York area, it would seem that other financial service companies might be seeking alternative operation centers to supplement or supplant their New York operations. In fact, important segments of the Wall Street community are actively seeking back-up locations for their operations. Why not invite more of the banking, brokerage and insurance operations to Charlotte? What stands in the way of making Charlotte a more attractive location than other communities? What else do we need to become more attractive to these business sectors?
Our path to the future is certainly built from our experience with the past. We want to plan and strategize so that our limited investments in business attraction and job creation are wisely and manifestly focused upon real asset development that serves our long-term future. It would be especially wise to create a financial services cluster attraction initiative with leadership from all the appropriate partners and stakeholders. We have the business base, the resources, the location and the quality of life that form the foundation for economic growth from the financial services sector. Targeting our limited resources to key businesses in the financial services sector should succeed in attracting those entities that want to continue to compete and fortify their U. S. operations with a highly accessible southeastern location with a high quality of life. Who will lead the way?