Updated Dec. 18, 2015 at 5:01 p.m.
New report: NC ‘beset with challenges’ but ‘rich with opportunities’
Raleigh, N.C. — A new ‘North Carolina Innovation Index’ report – the fifth since 2000 – offers a mixed view of where the state stands in economic development and opportunity.
While “beset with challenges,” it’s also “rich with opportunities,” says the report from the North Carolina Department of Commerce.
From the need for more venture capital and entrepreneurship to a call for more increased research and development, the plan offers a litany of “implications and priorities.”
The report, which is the first since 2013, was issued Friday afternoon. It was published the same day as new data indicates unemployment remains a challenge.
North Carolina’s unemployment rate held steady in November at 5.7 percent, but the Commerce Department noted that last month’s jobless rate was up 0.2 percent from one year ago. North Carolina continues to lag behind the national average unemployment rate. In November, that figure was 5 percent.
The number of people employed increased by 15,466 between October and November, to 4.5 million. That’s an increase of 133,800 jobs over the year. The number of people unemployed decreased 2,015 over the month, to 270,977, but was up 15,615 from November 2014.
The education and health services; trade, transportation and utilities; and professional business services sectors saw the largest increases in jobs during November, while the construction sector saw the largest losses in the month.
Inside the new report
Based on data gathered across 39 measures, the authors point out North Carolina is strong in innovation driven by its universities, ranking fifth in academic R&D spending based on share of the state gross domestic product (GDP). That’s the same as in the previous report.
Yet private sector research and development lags at No. 21. The 2013 report also warned that the private sector could be doing more.
The state is a national leader in broadband (No. 9) but falters when it comes to adoption (No. 22).
And while North Carolina is a leader (No. 9) in high-tech startups – which is particularly evident in the Triangle – entrepreneurs continue to struggle in their search for venture capital at No. 23.
Meanwhile, the state remains heavily reliant on the manufacturing sector for economic growth, ranking ninth nationally based on manufacturing as share of state GDP.
“These findings and trends paint a picture of North Carolina that is both beset with challenges but also rich with opportunities,” the authors write.
“The degree to which North Carolina prospers in response to these challenges depends on how quickly and effectively it addresses them.”
What follows are the specific “priorities” that the report says are “crucial for growing and developing North Carolina’s innovation-fueled economy statewide.”
From the executive summary:
• Research & Development – Increase Volume and Intensity: To grow its economy significantly in both the short term and long term, North Carolina must increase the volume and intensity of its research & development efforts—particularly those performed by business—relative to other U.S. states and to leading countries. In the near term it should, at a minimum, strive to be at parity with the U.S. average value. One opportune way North Carolina businesses could achieve this is by closer and more frequent research & development partnerships with the state’s universities, which have well-above-average research & development performance, and facilities, equipment, and expertise often beyond the scope of most businesses.
• Commercialization – Better Leverage Strong Asset Base: To foster the growth of businesses developing and commercializing innovative technologies, North Carolina’s universities should be incentivized and equipped to focus more on company and industry engagement, and technology commercialization. Additionally, the state must continue to support its programs focused on capturing and leveraging the benefits of the federal grant programs, such as Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR), which provide working capital to emerging companies. These steps alone will make North Carolina more attractive for later-stage commercialization resources such as venture capital, but they must be leveraged further by strategic, proactive efforts to market the state’s innovative activities and attract investors and businesses.
• Innovative Organizations – Boost Entrepreneurship and Business Linkages: To advance the technology and innovation levels of its existing businesses and to start, grow, and attract new high-technology businesses, North Carolina must ensure that a greater share and range of its population has the training, resources, and support to be entrepreneurial. Similarly, it must enhance and extend programs focused on technology adoption and diffusion, particularly in rural regions with historically lower levels of innovation. In addition, to remain competitive in the global economy, the state must continue to explore new markets for the goods and services it produces, particularly by understanding how North Carolina industries fit within global commodity value chains, and deepening and expanding relationships with overseas trading partners.
• Education & Workforce – Emphasize STEM and Strengthen Fundamentals: To intensify the innovation-relevant education and training levels of its workforce, North Carolina must grow the share of its community college and university-level students earning degrees in science, technology, engineering, and math (STEM) disciplines. One way to achieve this could entail industries, educators, and government regularly collaborating to develop a North Carolina innovation-focused technology workforce agenda and strategy. The strategy could organize education and workforce programs around broad clusters and skills, particularly ones the state has determined to be in its strategic interests. Additionally, North Carolina must raise the educational attainment of its citizens at all levels of the educational spectrum, to a level at least equal to the national average.
• Environment & Infrastructure – Reinforce, Enhance, and Broaden: To ensure that the greatest number and range of its citizens enjoy the economic and social benefits of science, technology, and innovation, North Carolina must continue to invest, throughout its regions, in basic infrastructure elements of its innovation economy, such as elementary, secondary, and higher education organizations; broadband deployment and adoption; and industries that use science and technology and a highly skilled workforce to develop, manufacture, distribute, and export products. Combined with North Carolina’s low cost of living and high quality of life, these elements provide the richest and most fundamental foundation for starting, growing, and attracting businesses that improve our economic well-being and quality of life.
“Efforts such as those above must be sufficiently long-term and well-funded to make a difference, and they must have the flexibility to respond to continually changing circumstances and to support different needs across regions,” the summary concludes.
“Moreover, decisions about their continuation and modification must be guided by clear benchmarks and performance criteria, such as those provided and explained in more detail throughout this report.”
Read the full report at:
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