North Carolina is undergoing a lot of changes with regards to how the state funds regional and statewide economic development efforts. One of these changes involves the role that the seven regional economic development partnerships play in the business recruitment process. These partnerships represent multi-county regions, and they work primarily to market the region’s assets to the business community.
North Carolina’s Southeast (NCSE) is one of the state’s regional economic development partnerships. NCSE covers a 13-county region that is anchored by the major metropolitan cities of Wilmington and Fayetteville, with the remainder of the region being comprised primarily of rural, economically-distressed counties. The region has a unique blend of multi-modal transportation assets that include an international seaport, regional and international airports, U.S. and state highway systems, and ample rail access. These transportation assets provide businesses in the region with quick access to markets up and down the East Coast. Regional capital investment totaled $500 million in 2012, and total announced jobs created over the year were around 2,600.
NCSE recently developed an international marketing strategy in order to increase foreign direct investment (FDI) in the region. Specifically, NCSE is targeting companies from the United Kingdom, Canada, Japan, Germany, and the Netherlands. There is already a solid existing footprint of companies from these countries located in the region, and there is also a lot of symmetry between industry sectors in southeastern North Carolina and the five targeted countries. As a component of the broader international marketing strategy, NCSE conducted a comprehensive business cost analysis that compared the cost of doing business in southeastern North Carolina to comparable regions in the five targeted countries. The results of the research show that North Carolina and the southeast region are generally cost competitive with the countries and regions included in the analysis. However, the research also showed that non-business cost advantages play a big role in the site selection process and communities need to understand how to best leverage these assets to their advantage.
Area Magazine’s 2012 Annual Corporate Survey of business executives shows the diversity of factors that are considered in the site selection process. The majority of the top 25 factors cited by respondents as being “important” or “very important” in the site selection process are factors that are not strictly business cost related. Perhaps most striking is the fact that state corporate tax rate, tax exemptions, and state and local incentives all fell in importance from the previous year. State and local incentives fell by eight spots, the largest drop of all the factors from the 2011 survey.
The 2012 Annual Corporate Survey shows that North Carolina has a clear advantage in a number of site selection factors that are highly sought after by businesses. Highway accessibility, international port access, low union profile, right-to-work state status, highly skilled workforce, and workforce development programming are all commonly associated with North Carolina in economic development circles. These non-business cost advantages are the reason that North Carolina routinely is ranked as one of the best states in the country to do business.
Localities, regions, and states looking to stay competitive in the 21st-century global economy understand the need to take a comprehensive approach to their economic development strategy. The success of these entities in implementing an effective economic development strategy will hinge on their ability to account for the site selection factors and quality of life factors that businesses consider during the site selection process.
Ryan Regan is a 2014 MPA candidate at the UNC School of Government.
 NCSE 2012 State of the Region Annual Report, p. 4. http://files.www.ncse.org/news-and-media/report-center/NCSE_SOTR_lowres.pdf