New initiative helps eastern N.C. community tap a valuable economic resource
While communities across North Carolina and the nation seek ways to rebuild their economies, experts from the Kenan Institute and one eastern North Carolina region are leveraging an often-overlooked asset to create jobs: existing businesses.
The Twin County Business Growth Initiative is identifying companies in Edgecombe and Nash counties that have the highest potential to expand and add jobs, finding out what those companies need to grow, and mobilizing community resources to provide it.
It is a project of the Kenan Institute and Carolinas Gateway Partnership, a public-private economic development agency that promotes economic growth for the two-county region that surrounds Rocky Mount.
“Existing businesses create up to 80 percent of all new jobs but are often overlooked,” said Thomas A. Stith III, the Kenan Institute’s program director for economic development, who conceived and leads the initiative.
“If you nurture your existing businesses, you help the people who are going to create the vast majority of jobs in your community,” he said.
The project goes to the heart of why Carolinas Gateway Partnership exists, said President and CEO John R. Gessaman.
“Our bottom line is keeping the jobs we have and creating new ones,” Gessaman said. “We want to make sure our existing industries have the infrastructure resources they need to compete and grow.”
Arming the Community for Action
Effective economic development, Stith said, requires a three-pronged approach: recruiting large, new job-creating industries; promoting the startup of new ventures; and helping existing businesses prosper and expand.
The Business Growth Initiative focuses on the third prong—helping communities identify companies with the highest potential to grow and taking strategic steps to help them do so.
“Small businesses face a range of factors that affect their ability to grow,” Stith said. “Many need help to assess and develop their markets, to find and train skilled workers, or to finance new equipment and facilities. Meanwhile, many community organizations offer services that can help. Linking local businesses with these resources can have a major impact.”
The initiative involves three key steps:
- Identify high-potential companies. Develop a database of companies that are well positioned for growth and local vendors that can service and supply them. That includes businesses that are already partners of the economic development agency as well as companies identified by institute researchers using a proprietary database.
- Mobilize a community action team. Recruit individuals and organizations that are willing and able to respond to the needs of local businesses, such as community colleges that provide workforce training and development; banks that can provide loans and financial services; business support organizations that provide technical assistance; and universities that offer research, expertise, and knowledge workers.
- Assess business needs. Send UNC Kenan-Flagler Business School MBA analysts to interview leaders of high-potential companies, understand their business strategies, and find out what they need to grow.
In the end, the project will arm the Carolinas Gateway Partnership with a wealth of company data, a robust tool for managing company information and contacts, and a community poised for collaborative action to help its businesses grow and create jobs.
A Model Others Can Follow
The Twin County project is the first of what Stith hopes will be many such partnerships with communities to drive business growth across eastern North Carolina and beyond.
“North Carolina’s economy was not immune to the recent economic crisis that resulted in more than 8 million jobs lost throughout the country,” Stith said. “Our state’s current unemployment rate of nearly 10 percent is a key indicator that we must take uncommon steps to address the devastating effects of our state’s economic downturn.”
Eastern North Carolina is of particular concern because of the higher-than-average unemployment rates it has experienced for decades due to the decline of traditional industries, such as tobacco and textiles, he said.
“The pool of new companies has shrunk, and the competition for them is greater,” Stith said. That’s why it is so important to take a comprehensive approach to job growth. While new business location should continue to be a component of eastern North Carolina’s economic development strategy, let’s not forget that existing businesses are creating most of the new jobs.”
For more information, contact:
Thomas A. Stith III
Program Director, Economic Development
Frank Hawkins Kenan Institute of Private Enterprise
Campus Box 3440, Kenan Center
Chapel Hill, NC 27599-3440