Commerce secretary lays out state’s new economic development structure

Sep. 20, 2013 @ 07:20 PM

North Carolina’s brand has taken a hit in the past six months, a Wells Fargo executive said at an economic development strategy meeting in Durham on Friday.

It was held as part of a listening tour for state leaders.

Jack Clayton, eastern North Carolina executive for the bank, was part of a panel of leaders who spoke about the state and the region’s economic development obstacles and perks at a meeting at the Sheraton Imperial Hotel & Convention Center in Durham.

In response to a question about the state’s ability to attract companies, Clayton said the state needs a good brand and leaders must work to sell it.

The event was the first of a series of such meetings to be held around the state as part of a listening tour to allow state officials to get input for a new 10-year economic development plan.

N.C. Secretary of Commerce Sharon Decker and Tony Almeida, senior advisor to Gov. Pat McCrory on jobs and the economy, both attended.

“It’s clear that our current system for economic development, as good as it is, and as hard as you are working, is not giving us the results that we need,” Decker said, before outlining changes that state officials are working on for the N.C. Department of Commerce.

State leaders are creating a private nonprofit group that will take over economic development marketing duties. Decker said that new private group has been incorporated, they’re working on getting nonprofit status and she’s interviewing potential CEOs. She said she doesn’t expect it to start raising private dollars for economic development activities until the end of next year.

Among other changes, she also said in an interview that the current fiscal year is the last that economic development partnerships, which have handled marketing for regions around the state, will get state funding.

“Economic development is a local business,” she said. “The state has a role to play in policy and that includes tax policy … alternatively we will do statewide marketing.”

Decker said administrative “prosperity zones” around the state will provide one point of contact for businesses. However, she said, they’re not going to be economic development marketing areas.

She added that state leaders are focusing on economic development in rural areas, which she said have infrastructure improvement needs.

The changes to the department are happening as a special provision to the budget passed earlier this year by the Republican-led legislature and signed by McCrory gave commerce greater flexibility in how it spends its money, Decker said.

Decker said a bill they’re using as a template for the changes did not pass in the last legislative session. However, she said, commerce leaders plan to come back to state lawmakers to get legislative support.

Sen. Mike Woodard, a Democrat representing Durham, Person and Caswell counties, said he hopes that the changes will be positive for the region, but also said he had concerns about the new model. He said he needs to be “convinced” that it will be effective in helping more rural communities.

The panel that Clayton spoke on also included Chris Heivly, one of the partners behind a program in Durham that invests in and works to speed the growth of new software companies, called The Startup Factory.

It also included Tom Looney, vice president and general manager for Lenovo North America and Michael Schoenfeld, vice president for public affairs and government relations for Duke University.

When asked to assess the kind of talent they see in the region, Heivly spoke about issues that startups have in competing with the larger companies in the area for worker talent.

In response to a question about how to spread economic prosperity around the state, Looney said he believes the state needs to craft a master brand for itself.

He said that must involve the targeted business clusters and development of a unique sales and marketing message to speak to that market segment.

“It’s about innovation, entrepreneurship and quality of life,” he said.

Charles Hayes, president and CEO of the Research Triangle Regional Partnership, one of the state’s economic development regions that is seeing state funding cut after this fiscal year, said he believes there are different ways to deliver economic development.

“I think what they’re trying to do is give more flexibility,” he said of the new plan.

In response to a question about the state’s brand, he said he agreed that the state’s image has taken a hit in national media coverage, from a New York Times editorial focused on the state to TV coverage.

“That’s not a good thing,” he said. “I’m not saying it was earned …(but) that’s damage. (You) need a plan to combat that.”