Can Charlotte maintain the growth it has experienced in the past couple of decades?

Zeiss: Growth is happening. But it carries challenges. And I see three for our region, including a tax rate that we’re going to have to be careful about because we still want to attract new companies and jobs. The second one is public education and public schools. And the third one is infrastructure. We’re in desperate trouble with the roads. And right behind roads are water and sewer.

Kinney: Talking about the economy without talking about infrastructure is like talking about a car without wheels. Infrastructure improvements are absolutely critical, whether it’s public education, highways or our business of energy. North Carolina expects by 2030 to see 4 million new residents. A lot of that growth will come here in the Charlotte region. We have to have the infrastructure to manage it. We’re not going to close the borders.

Jones: There are other aspects of the infra- structure issue that we have to keep in mind. Charlotte is operating under some severe air-­quality issues. We need to look very hard at how we get people into different types of mass transit. Last fall, there was a serious movement to defund mass transit. Thankfully, the voters were more astute than some of the people who were leading the charge.

Kinney: At Duke, we are seeing 40,000 to 60,000 customers added annually. Just over the next five years, we expect to spend about $7 billion on capital infrastructure, whether that’s power plants, power lines or other backbone systems that keep the lights on. Over the next 20 years, we expect to need close to 11,000 more megawatts of electricity. That’s about four plants the size of McGuire Nuclear Station.

Higgs: There are some real-life ramifications of our water situation in trying to recruit farming and biotechnology companies. We were on the list of a company that was looking at our region as a new location, and because of our water issue we just kind of got pushed down the list. It’s a real concern.

Zeiss: Back to K through 12. This is the one, the public schools, that worries me the most. At this college, 77% of recent high-school graduates have to be remediated in mathematics and 72% must be remediated in English. That does not bode very well for an economy. You can’t sustain a great economy, even if you have the infrastructure and reasonable tax rates, unless you have the people who have the skills to do all the jobs.

Jones: But when you are talking about infrastructure, you’re talking about tax rates. You can make an excellent argument that we’re not doing nearly enough in terms of public investment. And while you can also argue that our taxes are high, you have to drop back and consider what the right tax structure is to pay for these needs, particularly when you include education.

Zeiss: These numbers were just put out by the Charlotte Regional Partnership: 22% of workers in the region have less than a high-school diploma, 28% have only a high-school diploma. That’s 50% of our work force, 1.3 million workers in our region, who have a high-school diploma or below. That won’t get it. We won’t be able to attract the jobs. So who’s going to retrain them? The community colleges. We have to have infrastructure, good tax rates and, certainly, a good school system, beginning with K through 12.

How will the region’s water needs affect economic development during the next 20 years?

Kinney: We have to keep our arms around the supply, and not just during droughts. Water is going to be an issue, not only for this region but also for this state. We have to manage the future growth. Industry that doesn’t see water is available in Charlotte won’t relocate here.

Bryant: What the drought has under­scored is our lack of regional, multicounty and multistate cooperation. This is not a Charlotte problem. This is not a Charlotte region problem. It’s a Southeastern United States problem. We’re in litigation right now with South Carolina and, really, that’s not the way this should be handled.

Kinney: Duke manages the Catawba River from up near Morganton down through Lake Wateree in South Carolina. We were able to put together, from utilities up and down the river chain, a group focused on how we manage the river. We talked on a weekly basis when the drought was very severe, back in the fall, and determined cooperatively, regionally, how to manage the shortage of water. A lot of legislators are looking at the model we have created here along the Catawba.

Bryant: I’m glad to see it happening in the private sector. Now we need to move that type of collaboration to our public sector.

Jones: There are some things we can do that would go a long way toward water conservation. People who administer building codes and real-estate developers ought to be facing some positive pressure — market pressure — to look at construction techniques that are sensitive to our conservation, such as road-paving materials that create less runoff and more absorption.

Is the region too dependent on banking?

Jones: Forty years ago, a bank was a place where they took in deposits and made loans. Banking today is a much more internally diversified industry, with a whole lineup of products that aren’t traditional banking products. They do so many things. Recent downturns in the mortgage-lending market may make you wonder whether that’s always a good idea, but it’s a fact. We’re probably not overly dependent on the banking industry because banking itself is diversified.

Higgs: If you start peeling back that banking onion, you can see companies in the information-technology sector that depend on banks, but the banks are not their only well. We are not overly dependent on them. They attract some really important companies that help with our economy.

Zeiss: When a bank comes to Charlotte, other companies come with it — auxiliary companies that help support that whole industry. So, yes, we are diversified, but part of that diver­sification comes from the very fact that the banks are here.

Where is the region’s economy headed? What sectors will emerge?

Higgs: We definitely see the medical-and-biotechnology sector as an emerging industry and not just at the North Carolina Research Campus. A lot of people don’t know that Charlotte has a great ancestry and that a number of technology companies are already here. That’s one of the things that we hope to exploit in the next nine or 10 years.

Jones: With the research campus, we have an opportunity in this region to really change people’s perception about what goes on in Charlotte. We also have two large regional hospital chains with huge presences here — one headquartered here — and that adds to it.

Bryant: In the 20-plus years I have been in this business, I don’t think I have been associated with a project as exciting as what’s going on there in Kannapolis. To see that project coming off the ground, looking at the tremendous impact that’s projected, not only on Kannapolis or Cabarrus County but also on this region, is thrilling. Most of that research and productivity has taken place on the eastern side of the state, but now this side of the state will become a significant player.

Jones: I expect a continuing increase in the number of people who come into their retirement years and view Charlotte as a nice alternative to Florida. Industries that cater to active retirees — real-estate developers or golf communities or companies that focus on the needs of an aging population that will need health care further into the future — are likely to be important aspects of the region’s emerging economy, which ties in nicely with the biotech and health-sciences aspects of the research campus.

What kind of impact will the North Carolina Research Campus have on the region?

Higgs: Scan the U.S. for a minute and look at some of the big hubs for science and technology — Boston, San Diego, San Francisco. Your typical research hub may have one, maybe two universities anchoring the campus. We’re going to have over seven. Then when we talk to companies about locating to our region, one of the first questions they’ll ask is, ‘What about the work force?’ And they always ask about the community colleges because they want to know that when they hit the ground they can hire a hundred people to work in their shop.

Bryant: In our national and international marketing, we position the campus as a regional, U.S. and state asset, not as a Kannapolis asset. We truly believe the impact of that facility will extend much farther than just the immediate county. Making sure it’s a regional project and understanding the regional benefits are really high on our agenda.

Zeiss: All the colleges that are involved with it are very excited about this project because of the technology-transfer issues and the incubation of these new small businesses, particularly manufacturing. You are going to see great synergy come out of this project.

Kinney: We have worked with economic-development organizations across the region over the last several years now to put our manufacturing work force back to work. The research campus clearly will have a hot and heavy tie-in with our economic growth over the long term. It’s not a quick fix for some of the issues we have seen. We have to have community-college and university support for what Clyde and his team need.

What does the campus need to ensure its success?

Higgs: We don’t have a lot of laboratory space for these companies to occupy. There are some companies that are going to want to come to our region, and they’ll want to build their own lab. At the same time, there are going to be companies that want to come here and they want to move into a prebuilt lab in the next six months or so.

Kinney: We are already seeing smaller companies, incubator companies, talking to us about where they might site. They are small, but they are here to grow. So even though it feels like the research campus is in its infancy, it’s already having an economic impact.

Higgs: Another piece that we have to have in our region to be really credible is risk capital. We all know that Charlotte is a big banking center. But a lot of these companies, especially startups, can’t go to Bank of America or Wachovia or BB&T to get funding. It doesn’t work that way. So we need to make sure that we recruit some of the venture-capital funds here.

What else can be done to avoid air-quality sanctions?

Bryant: Unless we make some significant changes by at least 2011, we will begin to see significant federal sanctions on our transportation-related endowment. About 81% of the auto­­mobiles in this region are occupied by one person. We have high-occupancy-vehicle lanes that are empty.

Jones: Like a lot of cities in the United States, Charlotte is a car-cultured city. We like our privacy, we like that space, we like leaving when we want to leave and getting there when we want to get there and not necessarily being tied to a schedule. But I don’t know what else we can do that would have as much of an impact on the air quality as simply getting out of our cars and riding a bus or riding a train or riding a bike.

Bryant: One program that we’re plugging is Clean Air Works, a private-sector initiative supported by quite a few major companies. They give incentives to employees that participate in carpooling and public transportation. Automobile technology will help us clean the air somewhat, but continuing to invest in the transportation infrastructure and public-transportation modes will help us reduce the problems.

Kinney: Mobile sources are absolutely key. As a company, we have started free transit through Clean Air Works. We will reimburse employees for mass-transit costs, whether it’s express or local routes. We have seen a dramatic increase in ridership, 300-some-odd employees that have shifted to transit. We were under 100 before that. There’s a dramatic increase when you bring the cost down.

Jones: I agree with Dr. Zeiss that if we only had one place to put our money, it ought to be in public education. But if we had two places to put our money, I think it would be a huge benefit to expand our access to transit, both rail and bus. If I were the king of the transit system, I would make the buses and the trains free to encourage ridership. Even if you ran them empty for a while, until people got used to catching them, I still think that would be an appropriate investment toward reducing the problems that we have with air quality.

Kinney: Clearly, we have to monitor the emissions from plants. We have spent several billion dollars over the last several years on the North Carolina Clean Smokestack Act. Up in the north end of Lake Norman, you see a puff of steam coming out of the stack instead of smoke, and it’s because we are cleaning up. Well over 90% of the sulfur-dioxide and nitrogen-oxide emissions that used to be there are no longer there anymore. We’ll do the same thing at our plant in Gaston County and at Belews Creek up in Winston-Salem.

What can be done to help entrepreneurs in the region?

Higgs: When you start looking at economic development or technology-led economic development, you have to think about growing your own. We have terrific technology entrepreneurs here. But we don’t have the necessary infrastructure to help those companies grow. Risk capital is vitally important. The reason Google thrives in the San Francisco area is because its executives can walk across the street and talk to a venture capitalist who can fund their business. We don’t have that.

Zeiss: Capitalization is the first and most important thing. Right next to that is a support system for these entrepreneurs. Most have great ideas, but they don’t know a thing about how to start a business, run a business or even do QuickBooks. We have the Institute for Entrepreneurship at Central Piedmont Community College, and most community colleges have small-business-development centers. We’ll help them not only start their business, but then we’ll connect them with people who are already experts in those fields, whether it’s law or energy or whatever it happens to be, to make sure that they’re going to be successful for those first critical months.

Bryant: We need to go back further. I don’t think we teach entrepreneur­ship in K through 12. We need to start planting the entrepreneurship seed at a much earlier age and grow a new generation of entrepreneurs that then tap into the services that these gentlemen alluded to.

Higgs: There are some other, maybe less-sophisticated ways to address that capital issue, through angel investors — high-net-worth individuals who can pool their money to invest in some of these new companies. But when you start thinking about job creation, you need to start thinking about the small businesses, because that’s where the hockey stick growth curve is actually going to happen.