NC Foothills Region Summary

NC Foothills Region Summary

SET V Progress – May 12, 2016

Reported by SET Coach Becky Bowen

CIVIC FORUM

October 13, 2015 – Held the Civic Forum at the Tryon International Equestrian Center in Mill Spring, NC. Attended by 78 people and 3 SET coaches (Becky Bowen, Susan Jakes, and Brian Queen). SET Coach Jonathon Baros, NC Ag Economist, prepared a voiceover to explain the data sections of the presentation. Participants reviewed demographics of the region and identified regional strengths, assets, and opportunities. Top assets included location, natural resources/beauty, highway infrastructure, educational alliances, and low cost of living. Biggest challenges identified by the participants were lack of a willing and skilled workforce (widespread inability to pass background checks and drug screenings), inconsistent broadband infrastructure, low attraction and retention of youth, lack of strategic action, and lack of branding and regional identity. Major concerns following a review of the demographics were:

• Aging workforce
• Increase in poverty, particularly among minors
• Decrease in household income
• Lower average earnings/worker as compared to the state of NC
• Number of workers leaving the region for work, as compared to the number of workers coming into the region for work

Top opportunities identified included:

• Education: funding, results, trade training in high school, free tuition to community college, pathways
• Collaborative regional marketing/branding
• Manufacturing and Hospitality/Tourism as growth industries
• Recreation
• Transportation: improve/increase public transportation; consider region as a transportation/distribution hub

SESSION 1

January 21, 2016 – Session 1 was held at Meetings on Main in Forest City, NC. Attended by 23 people and 3 SET coaches (Becky Bowen, Brian Queen, and Jonathan Baros). Session 1 concentrated on defining the impact of industrial cluster activity on regional economic vitality. Any industry that has a location quotient (LQ) of 1.2 and above is considered to have a competitive advantage nationally.

The industry clusters in the NC Foothills Region that were identified as having a competitive advantage over other parts of the nation and having significant employment numbers in the region (“Star Clusters”) are: (1) Apparel & Textiles (5.1 LQ, 3,657 workers), (2) Chemicals/Chemical-based Products (3.71 LQ, 4,403 workers), (3) Forest & Wood Products (2.2 LQ, 3,035 workers), (4) Advanced Materials (1.9 LQ, 5,425 workers), and (5) Fabricated Metal Manufacturing(2.1 LQ, 1,655 workers). These results were based on research conducted by Purdue University using 2014 EMSI data.

The Foothills Regional Team was not satisfied with the initial results of the data, and requested a deeper dive on eight of the clusters, including:

Forest & Wood Products– Star (2.2)

Agribusiness- Transforming (0.97)

Arts, Entertainment, Recreation & Visitor- Transforming (0.6)The Regional team believes that job growth is evident in the hospitality industry, as well as real estate, rental, and leasing.

Chemicals– Star (3.71)

Financial Services– Emerging (0.5)

Energy- Emerging (0.6)

Advanced Materials- Star (1.9)

Manufacturing Supercluster– Star(1.6)

Purdue provided additional data, again showing Advanced Materials, Chemicals, Apparel & Textiles, Forest & Wood Products, and Fabricated Metal Manufacturing as the leading industry clusters in the region. However, Advanced Materials and Chemicals, two of the strongest clusters, are shown to be concentrated in only 2 counties in the 4 county region.

A list of businesses in the initially targeted 4 clusters (Textiles and Apparels, Chemicals, Forestry and Wood Products, and Fabricated and Primary Metal Manufacturing) is attached to this report. These business are located in 3 of the 4 counties.

SESSION 2

April 4, 2016 – Session 2 was held at the Universal Manufacturing Center in Marion, NC. Attended by 15 people and 4 SET coaches (Becky Bowen, Susan Jakes, Jonathan Baros, and Brian Queen). The focus of the session was taking a deeper dive into the following industry clusters:

Chemicals

Apparel & Textiles

Forestry & Wood Products

Fabricated and Primary Metal Manufacturing

Advanced Materials

Information concerning these 4 clusters follows this section of the summary. Biomedical/Biotechnical (Healthcare), while a large employer (12,583 workers), and Transportation & Logistics (3,583 workers) are considered mature clusters in the region (meaning they are not projected to grow further), and Agribusiness, Food Process & Tech (2,818 workers) and Arts, Ent, Rec & Visitor Industries (2,400 workers) are considered transforming/declining clusters, based on the 2014 EMSI data.

However, the Regional Team believed that the regional clusters could not be developed in a vacuum, and because the NC Foothills Region is located close to major metropolitan areas to the west, south, and east, requested further information from Purdue on the top industry clusters in surrounding clusters.

No interest was expressed by the NC Foothills Regional Team in brainstorming strategies to support Apparel & Textiles.

Strategies supporting the Forestry & Wood Products cluster and Fabricated and Primary Metal Manufacturing were, however, suggested. The image below captures these emerging goals and strategies for the SET plan.

SESSION 3

April 29, 2016 –Session 3 was held at Isothermal Community College in Spindale, NC. Attended by 11 people and 2 SET coaches (Becky Bowen and Jonathan Baros). The larger region cluster information was presented to the NC Foothills Regional Team and follows this section of the summary. The top industry clusters in the larger region of Buncombe, Burke, Cleveland, Gaston, Henderson, McDowell, Polk, and Rutherford that are also star clusters in the NC Foothills Region are:

Chemicals

Apparel & Textiles

Forestry & Wood Products

(Fabricated Metal Manufacturing and Advanced Materials are considered “Mature Clusters” in the surrounding counties.)

In the NC counties surrounding the NC Foothills Region (Buncombe, Burke, Gaston, and Henderson), Transportation Equipment Manufacturing, Biomedical/Biotechnical (Healthcare) and Arts, Entertainment & Visitor Industries are also star clusters, while Transportation & Logistics and Agribusiness, Food Processing & Technology are emerging clusters.

In the SC counties bordering the NC Foothills Region, Transportation Equipment Manufacturing, the Manufacturing Supercluster (which includes Fabricated Metal Manufacturing, Machinery Manufacturing), and Energy are the star clusters, while Arts, Entertainment & Visitor Industries is an emerging cluster. Chemicals, Apparel & Textiles, Advanced Materials, Fabricated Metal Mfg, and Transportation & Logistics are mature clusters, and Forest & Wood Products, and Agribusiness, Food Processing & Tech are transforming/declining clusters.

SET Coach’s Suggestion:Determining which industry clusters to target for the SET plan, based on raw economic data, is challenging. The NC Foothills Regional Team has done an extraordinary and exhausting job of exploring secondary data and still has to make a regional decision on which industry clusters to focus on in the SET Plan. You cannot make this decision and know that it is the “right” one for the region without listening to the people who live there. Based on what I have heard from the people who have participated in the planning process to date, please consider the following:

• Apparels and Textiles, though a star cluster in the NC Foothills Region, is a mature cluster in both the SC counties and the surrounding NC counties. It also has the historical baggage of off-shoring, when towns throughout the region lost major employers. No one in the SET planning process has wanted to brainstorm about this cluster. Nonetheless there may be opportunities in niche markets that deserve a closer look and some exploration of this cluster with university researchers may be a plan strategy. There are 72 businesses in this cluster in the region. Although wages are higher than average, they lag behind the other starred clusters, with the possible exception of Forestry and Wood Products.
• *Forestry & Wood Products is a star cluster in the NC Foothills region and its surrounding NC counties. Given the high interest at the Civic Forum in preserving the natural amenities of the region and the fact that there was some interest in the room on developing strategies to strengthen this cluster (e.g., forestry management), it may be worth plan focus. There are 115 businesses in this cluster in the region and it is present in all 4 counties.
• Transportation Equipment Manufacturing is not a star cluster in the region (it is considered “mature” with a LQ of 1.48 and 1,268 workers), but it is a star cluster in the surrounding NC counties and in the SC counties. *Fabricated and Primary Metal Manufacturing is a star cluster in the region, which may support the Transportation Equipment Manufacturing cluster in the neighboring counties. Focus on these clusters will support the economies in McDowell and Cleveland Counties, in particular. There are 45 businesses in this cluster in the region, and it is present in all 4 counties.
• *Advanced Materials is a star cluster in the region and is mature in the surrounding NC counties and in the SC counties. It has extremely high export value and is present in all 4 counties, primarily in McDowell County. There are 78 businesses in this cluster in the region, which have higher than average earnings (addressing Civic Forum concerns).
• *Chemicals, a star cluster in the region, is also a star in the surrounding NC counties, and is mature in the SC counties. It has extremely high export value, 42 businesses, and is present in all 4 counties. It also has higher average earnings, which addresses Civic Forum concerns.
• Agribusiness, Food Processing & Tech is a transforming/declining cluster in the region according to the 2014 EMSI data, but the local food movement and the equine industry are both mushrooming in the region, particularly in Polk County. This cluster is also an emerging cluster in the neighboring NC counties. The regional team can choose to develop strategies to support this cluster, because there is evidence to support projected growth. Wage levels, however, lag behind the other clusters.
• Arts, Ent, Rec & Visitor/Tourismis a transforming/declining cluster in the region according to the 2014 EMSI data, but is an emerging industry in the SC counties and a star industry in the neighboring NC counties. Given the input at the Civic Forum that natural and recreational areas are a strength of the region, this industry cluster should also be considered for plan strategies, especially because it aligns with quality of life initiatives, including downtown revitalization strategies. Wage levels, however, lag behind the other clusters.
• Biomedical/Biotechnical (Healthcare) is one of the largest employers (behind education) in the region, but is considered a mature industry in the region according to the 2014 EMSI data. While it is not an exporting industry, it is nonetheless critical to the region’s foundation for economic growth. The region’s aging population, as well as influx of retirees due to its beautiful natural amenities and lower cost of living, make this cluster an important focus of the plan.

Critical plan steps should include targeted development of private industry engagement, particularlyin the selected starred (exporting) clusters. Strategies should include a review of how such star clusters as Fabricated Metal Manufacturing and Advanced Materials can support the Transportation Equipment Manufacturing cluster in the larger NC region and bordering SC counties.

Members of the Regional Team have also brainstormed around innovation strategies and incentives to support development of targeted clusters and should cement partnerships with research universities and private industry to address disruptive technologies (automation) which result in future job loss. McDowell, and, to a lesser degree, Cleveland, Counties are particularly vulnerable according to the NC Disruption Index ().

In addition to reviewing the industrial data provided by Purdue, Session 3 participants also identified community capitals/assets supporting each of the emerging goals identified in Session 2. These assets follow this section of the summary. They also brainstormed strategies to support the Agribusiness and Tourism clusters. These strategies follow this section of the summary.

The Ultimate Community Partnership with NC State needs to be added as a resource for targeted cluster development.

Emerging Goals as of the end of Session 3 focus on (1) Increasing Businesses Supporting Targeted Clusters; (2) Increasing Regional Wealth through Pathways to Better Jobs; (3) Preserving, Protecting, and Enhancing Quality of Life; and (4) Building a Regional Identity. These goals will be converted into SMART goals in Session 4 (S=specific; M=measurable; A=achievable; R=relevant; and T=time-framed.

Session 4 will identify strategies to support each of the emerging goals and develop an action plan for each.