Incorporating Entrepreneurship into North Carolina’s Economic Development Infrastructure

by Leslie Scott Director, Institute for Rural Entrepreneurship, N.C. Rural Center

Rural North Carolina is proud to be one of six U.S. regions working under W.K. Kellogg Foundation funding to build a rural Entrepreneurship Development System (EDS). The team’s intent is to develop an economic development system for firm startup and growth as strong as the innovative systems that the state built in the 19th century for agriculture and in the 20th century for manufacturing. In the 21st century, the new challenge is to accelerate the flow of knowledge, ideas and resources to entrepreneurial people in all sectors who can reinvigorate their own local economies.

In 2003, the North Carolina Rural Economic Development Center recognized the need to focus more attention on small business development and growth. The center validated that businesses with fewer than 50 employees created most of the net job growth in North Carolina’s rural counties between 1998 and 2002.

North Carolina has had a steady stream of manufacturing layoffs in recent years – even “leading” the nation in 2002 – and those job losses were concentrated in rural places. The state’s major recent new industry recruits (including Federal Express, Dell and CreditSuisse) are locating in urban areas where the education levels and other infrastructure are strongest, while the need for economic renewal becomes more acute in the rural areas. In October 2003, the Center created the nation’s first state-level Institute for Rural Entrepreneurship to support self-employment, small business development, and stronger entrepreneurial culture and policy in rural North Carolina.

Four rural entrepreneurs from southwestern North Carolina answer questions from community leaders about their business experiences. Graham County, N.C., October 2005.

One of the first priorities of the Institute was to coordinate the various organizations that educate, counsel and capitalize small business owners and entrepreneurs around the state. By summer 2004, the North Carolina Business Resource Alliance included 20 organizations representing higher education, state agencies, nonprofits and lenders. They were well-positioned to pursue the Kellogg EDS grant, which required broad-based collaboratives.

The Institute for Rural Entrepreneurship now leads a 21- organization team focused on building entrepreneurship infrastructure in the 85 counties of rural North Carolina over the next two years, with specific attention to three highpoverty regions in the east and west extremes of the state. Many of the partner organizations also provide business development services in the 15 urban counties and will help ensure a strong rural-urban connection.

The EDS team believes that an entrepreneurship system can be built to parallel and complement the state’s other economic development assets. For example, North Carolina has a strong industrial recruitment infrastructure, developed over the past 30 years, that helps keep the state near the top in site selection rankings. Key elements of that infrastructure include:

• Community college-based worker training customized to industry needs – available at 58 community colleges, which are within a 30-minute drive of all citizens;
  
  
• A program for certifying the quality and “shovel-readiness” of industrial sites and that gives certified sites marketing priority in a site search database – this approach was developed by AdvantageWest, a regional economic development partnership, and later adapted by the N.C. Department of Commerce for use statewide;
  
  
• Financial incentive programs, including a job development investment grant and tax credits for job creation that favor investment in rural counties;
  
  
• A vibrant statewide network for economic developers, the N.C. Economic Developers Association, as well as public-private partnerships in each region;
  
  
• Professional development programs for economic developers, including from the School of Government at the University of North Carolina; and
  
  
• Perhaps most importantly, local and state leadership culture that believes and invests in all those efforts.

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