Seeking critical mass

Piedmont Triad leaders believe the region needs the cooperation of
all its cities and counties to reach its full economic potential.

Cities and counties in the Piedmont Triad must work together to leverage the region’s assets if it’s to compete with the Research Triangle and Charlotte as well as metro regions outside North Carolina. That is the opinion of a panel assembled by Business North Carolina for a round-table discussion sponsored by the nonprofit Piedmont Triad Regional Partnership. Participating were Don Kirkman, president and CEO of the partnership; Rosemary Wander, UNC Greensboro’s associate provost for research and public/private partnerships; Austin Pittman, president of UnitedHealthcare of the Carolinas; Chuck Greene, regional director for the Piedmont Triad Region, AT&T North Carolina; and Kevin Baker, assistant director of Piedmont Triad International Airport. The discussion, moderated by Arthur O. Murray, BNC managing editor for special projects, was held at the partnership’s office in Greensboro.

Where is the Triad economy headed?

Kirkman: Some of the sectors that continue to do very well are traditional clusters in manufacturing, transportation, distribution and logistics, but we are also seeing significant growth in emerging technologies and research and development.

Wander: Growth is going to come from the health/biotech/nanotech arena. What’s happening in our companies and in the way our universities are tying into that will mean that we will build this from basic research into applications that are unique. Our work in transportation and logistics, with the five interstates and support from the universities, also will help us grow. Another place where we have real strength is in creativity. Just on our campus, we have 250 faculty associated with the arts and almost 1,500 students, and that’s just one of the region’s 11 four-year universities.

Greene: The region’s biggest asset is the resource we have with our community colleges and our private and public four-year institutions. The critical mass behind the research going on is going to fuel the next generation of our economy.

Pittman: We’re facing the same kind of national issues that everybody is. Biotech is a big piece. We’ve got a real leg up with Wake Forest University. The investments we’re making in all of our universities are really going to drive this economy forward.

How does the creative sector drive the economy?

Wander:Creative people look at new approaches. Then, on top of it, you put this work that we have going on in Winston-Salem and Greensboro around design, pulling from the folks at the university/community-college level as well as those who are actually doing it. If we unite these talents, we brand ourselves. Another way you can spin this out is that this is a place to come to. We have cultural tourism, art tourism. You put enough activity around it, and then things begin to flock to it.

Kirkman:The premise is that we are transitioning from an economy that has been based largely on manual labor and relatively low-skill commodity manufacturing to an economy where the power of knowledge and creative thinking will drive activity. We’re trying to nurture skills in problem solving and critical thinking that employers of every kind are going to require. Those skills can help drive a regional economy.

Wander:We had a Nobel laureate on campus yesterday. He took his understanding of art and his understanding of science and melded the two. When we’ve put our scientists and our artists together in the same room, there’s an exchange that’s really pretty exciting. It’s a way of thinking.

Kirkman:A lot of innovation is occurring at the inter­sections of disciplines. It may be Internet technology with biotech or nanotech. It may be an area like transportation or distribution that maybe we thought about in one way, but now, through the creative application of ideas, we can think about in an entirely different way. What we’re seeing, for example, at the airport, in thinking about this vision for an aerotropolis, is that multimodal integration of activities will drive a tremendous amount of employment and investment.

Baker:I grew up in Pittsburgh. When steel went away, there were big problems. But the city has rebounded. It’s after nanotech. Every city in the country wants to be a nanotech center. This region has to figure out why we’re better than those other regions.

Greene:This region has one of the greatest demands for high-end IT business services in the entire Southeast, even more so, in some cases, than Charlotte and Raleigh as well as Atlanta. Watching those demands for the services increase over the past few years really tells me that technology is going to play a key role in the future of this region.

Why is demand greater in the Triad?

Greene: It’s because of the critical mass we’ve got going on at the universities with all the research there, as well as the biotech industry that is emerging. Financial services also is a big user. It’s not just one specific segment that’s driving demand.

How can the Triad stand out for biotech and nanotech?

Kirkman: The key is to find niche markets where we can develop expertise. In biotech, I would hold up the Wake Forest University Institute for Regenerative Medicine. That is really going to transform medicine and organ transplantation by allowing people to grow replacement organs using their own cells. As for nanotechnology, we have tremendous opportunity with materials science and composites and with applying nanotechnology to medical technology and the emerging area of nanobiotechnology.

Wander: Nanobiotechnology fits very well with the whole spectrum of health activities in this region. Another strength is, we’re hungry. We know we need to change, and when you feel this way about what you’re trying to do, you can move forward in ways that people who are complacent do not.

Kirkman: In this field of medical and biotechnology development, having the FedEx hub is going to be a hugely powerful arrow in our quiver. You could theoretically deliver for surgery at 10 a.m. the next day a medical device that a hospital simply can’t inventory. Or a human organ. Or laboratory testing samples.

How else will the FedEx hub affect the region?

Baker: One need only go to Fort Worth and look at what has happened there in the last 15 years. FedEx opens a hub, and all of a sudden you have all of these supply-chain, logistics, overnight, just-in-time products made there.

Greene: It also will force the issue of the project we call The Heart of the Triad [a multijurisdictional effort to guide development of mostly rural land along the Guilford-Forsyth county line]. Pulling together as a region is something we need to work on, and the Heart of the Triad project is going to give us a launching pad.

Kirkman: The socioeconomic study done as part of the environmental-impact statement for FedEx projected that as a direct result of the hub, we would see about 20,000 new jobs in the Piedmont Triad region. UNC Chapel Hill professor Jack Kasarda has suggested that the figure probably significantly understates the true impact of the hub.

Pittman: It’s going to drive regionalization, whether we want it or not. And I do. I came from Dallas/Fort Worth. That’s the best example of how our economy can be built if we cooperate. We’re not much behind Charlotte or Raleigh-Durham, but a lot of citizens and business people haven’t made that leap to think of ourselves as that size of economy.

Regionalization has long been a goal. Is it happening?

Kirkman: We have some unique challenges as a polycentric region, where we don’t have a single city that drives our economy. It has some advantages. We have a dispersed population and employment base, and we consequently don’t have some of the gridlock of other metro areas. We have some challenges because these cities and counties historically have competed against one another, and it’s a paradigm shift to get them to where they realize that we’re all one market.

Greene: What’s going to be the key is not only convincing the residents and the business community that we need to operate as a region — which is where we’ve made progress — but also working with the local governments. For them, everything revolves around political boundaries.

Kirkman: We’re making significant progress in raising awareness of the fundamental premise that we’re going to sink or swim together. We’ve got a ways to go before that translates into changed behaviors. If we can crack the code to get these communities pulling together so that we can leverage the collective assets of this 1.6-million-person population, that is the key to long-term prosperity.

Pittman: An effective revenue-sharing agreement is going to be critical because the political folks are going to follow how those dollars move around. The infrastructure emanating from that airport hub — whether it’s roads, light rail, all the things that we could do to connect our universities, hospitals and all of those things to make it easier to move around — will over the long haul pull the citizenry together.

How does health care fit in?

Pittman: There’s plenty of collaboration as well as competition. When you look at what Moses Cone [Health System] and Wake Forest [University Baptist Medical Center] have done, that’s a great example of leveraging two systems. I talked to Tim Rice [president and CEO of Moses Cone]. As soon as the alliance was announced, he had folks in his hospital talking to folks at Wake Forest about how to increase the flow of residents over into Moses Cone. That’s a tangible symbol of people saying, ‘You know what? We are one market. Why don’t we reach across that little swath of land that separates Greensboro and Winston-Salem and create an alliance to better the community?’

Kirkman: I have been enormously impressed with the collaboration among our health-care providers around work-force development and training. There is a shared need for trained doctors, nurses and allied health professionals, and they all recognize that the pie of trained workers has to grow.

Wander: That extends to the universities because we do a lot of collaborative projects with Wake Forest and especially with Moses Cone to increase the number of nursing educators as well as the number of nurses.

Pittman: There’s going to be no shortage of patients because of the aging population. Tim and I talk about that often because we employ a lot of nurses and physicians at our site in Greensboro. In fact, we trade nurses back and forth. He and I talk about how we can try to help increase the output of qualified nurses and other health-care professionals.

Other than roads, what infrastructure needs are there?

Greene: We’ve faced a lot of challenges with air quality and have had kind of a sword of Damocles over our head with the noncompliance threat from the EPA. Being spread out creates problems. You don’t have the gridlock, but you still have a lot of traffic moving back and forth, and bringing in alternate transportation like light rail and the bus service that [the Piedmont Authority for Regional Transportation] already has going are going to be key.

Pittman: If we connect the airport with light rail to both downtowns, the universities and the hospitals and then connect to heavier or high-speed rail to Raleigh and Charlotte, you could see this region really become the center point of this state’s economy.

Greene: As far as broadband, this region is one of the most wired in the country. We have a lot of infrastructure going back and forth between the cities and even in the more rural areas. We’re sitting very well compared to other regions of the country.

Baker: It is interesting that we’re so well-wired. That’s key for moving any region forward, given the changes in the technology. But the roads are most vital.

Pittman: We’re going to have to take matters into our own hands with regard to a lot of that infrastructure — the completion of the urban loop, for example. That’s the next challenge to wrap our collective brain around: how to get that done irrespective of state funding.

Baker: The Great State of Mecklenburg goes out and gets it done somehow with state funds not there, so we’ve got to figure out that same approach. It really comes back to regionalism. Not one of the three major cities or the minor cities is going to make that happen, but the group could.

How do you spread growth?

Greene: When we’ve attracted some of the major employers in recent years, the work force has been one of the major reasons. The work force comes from all those counties. When Dell announced it was coming to Forsyth County, a lot of the folks in Greensboro were like, ‘We lost one.’ But something close to half of the employees at the Dell facility are from Greensboro or Guilford County.

Kirkman: We need to be careful not to think about the urban hub of the region being the job creator and then having everyone else come in to work. That is a prescription for economic disaster in the perimeter counties, where they become bedroom communities with no investment in business and industry but requiring all the services like schools and police and fire.

Pittman: We’ve got to keep all our communities in mind because it creates a diverse offering for where a person can live, whether in Winston-Salem or Greensboro or a smaller community. That’s a great treasure.

How will the research parks boost the economy?

Wander: Piedmont Triad Research Park and Gateway University Research Park give us a way to brand our community around technology in niche markets like with Tony Atala’s [Institute for Regenerative Medicine] or our joint School of Nanoscience and Nanoengineering with North Carolina A&T on the South campus of Gateway. We begin to have a way to identify very concretely where our real skills are.

Pittman: If we combine research with our history of manufacturing and turn it into high-tech manufacturing, there is a real opportunity to create a long-term economy.

Wander: These things fit together to promote entrepreneurial activities. For instance, there is now a wet lab at Piedmont Triad Research Park and a wet lab being built at ours.

What else can be done to promote entrepreneurship?

Greene: The lifeblood is the capital necessary to get it up and going. That’s the most obvious need — to make sure that the activities here are on the radar of the venture capitalists.

Kirkman: We need to create networks across jurisdictions and disciplines, where you have the ability to share experiences between entrepreneurs and investors and receive mentoring through agencies that exist to help support entrepreneurs. The other thing to do is to create a culture where it’s OK to fail.

Pittman: In places like Silicon Valley, it’s almost a badge of honor if someone has started a company that didn’t make it. We have to embrace that same notion here. You get back up again and have another idea and pursue that.

Wander: We have a course on campus in which students build their own business. They go try, and we support them, so if it doesn’t work they’re willing to come back and modify it and try it again.

Pittman: That’s important to bigger businesses as well, because what I’m looking for on our team are leaders, people who behave in an entrepreneurial spirit, irrespective of whether it’s their own money in a small enterprise or running part of a larger business. Those folks help drive a business forward.

Baker: If you define niche markets that this area is going to excel in and then you have entrepreneurial ventures that attack that niche, this region becomes known for that niche and the VCs are going to come in and say, ‘Hey, we’re going to go support that.’

Pittman: It gets right back to the whole idea of a region. There are people who look for communities that are the best places to develop business. The more it becomes part of the way we think about our community, the more it will drive entrepreneurship.

Kirkman: The converse is that our failure to walk the walk can send a very negative message. There have been some examples where we maybe represented the community as being a very integrated, seamless place, and when people came here, they may have discovered it was not as seamless as had been promised. But if you look at some recent successes here — Honda comes to mind — they represented a collaborative recruitment strategy that literally involved investments by multiple communities. We’re making tremendous progress in not just talking about collaboration but also actually collaborating.