To be economically competitive, NC must win the war for talent

Getty Images/iStockphoto

Much of North Carolina is in a difficult economic situation. The difficulty stems, at least in part, from the disruptive demographic trends transforming our state. At one end of the demographic pipeline, nearly half of the state’s 100 counties are losing population. Nearly one-third are literally dying, as deaths exceed births and outmigration exceeds in-migration. In many of these counties, the number of people who are either too young or too old to work exceeds the number of workers who support the local economy as consumers and taxpayers. These are mainly rural counties where prime working-age people have left in search of better opportunities elsewhere in the state and beyond. At the other end of the demographic spectrum, a substantial share of the state’s under-age-18 population faces what we refer to as the triple whammy of geographic disadvantage. The problem stems from the way the state’s population is sorting itself across the generations and along racial and ethnic lines.

Nonwhite youth in particular are concentrated either in racial generation gap counties – where the voting age population is predominantly white emptynesters and the youth are predominantly nonwhite – or in majority-minority counties. In the former, there is little political support for public education. In the latter, the tax base does not generate adequate financial support for public education, the issue in the Leandro case (Whammy No. 1).

At the same time, the state’s nonwhite youth also are highly concentrated in separate and unequal neighborhoods characterized by hyper-segregation (Whammy No. 2) and extreme poverty (Whammy No. 3).These racially isolated and economically marginalized neighborhoods are found throughout the state, in both urban and rural counties.

A substantial percentage of the working-age population left behind in our dying counties does not possess the skills needed to compete for new economy jobs. And most of the young people who face the triple whammy of geographic disadvantage are not receiving the type of high-quality education that will make them – and by extension our state – competitive for jobs in the growth sectors of the American economy.

If North Carolina doesn’t implement strategies to address these two issues, business recruitment and retention will remain major hurdles, especially in the state’s rural counties. And far too many of the state’s young people will remain on the outside looking in.

To enhance the attractiveness of our state as a place to visit, live and do business, we must address the triple whammy of geographic disadvantage and develop a K-12 school system that ensures every child has an equal opportunity to access a high-quality education. We must guarantee employers graduates with the analytical and soft skills as well as the entrepreneurial acumen and contextual intelligence needed to navigate the “certain uncertainty” that constitutes the “new normal” in the volatile global economy of the 21st century.

Given generational shifts in our population, ensuring every child a high-quality education

requires us to convince aging emptynesters, who typically vote self-interest in fiscal matters, that they do have a dog in the K-12 education fight. It is called the competitiveness of our state in a knowledge-driven economy.

With regard to our rural counties, we also must augment efforts to recruit large employers like automobile plants with efforts to recruit talent. Human capital with 21st century knowledge and skills is required to foster economic growth and opportunity in these areas.

In 2003, U.S. senators representing four Midwest states (North Dakota, South Dakota, Nebraska and Kansas) sponsored the New Homestead Act, which would have provided incentives to individuals and businesses to locate in counties where many more people were moving away than were arriving. The legislation was never enacted, but several states with slow-growing populations, including Iowa and South Dakota, adopted a “bring back our own” human capital strategy as a core component of efforts to rebuild their local economies.

North Carolina should likewise offer incentives to Tar Heels living in other states who have capital – such as land, houses or aging parents, grandparents or other relatives – in our rural counties and small towns to come back home. Some of these potential returnees might have national or international contacts that could be leveraged locally for economic development purposes. And some expatriates, especially those recently retired or near it, might aspire to come back home and launch second career entrepreneurial ventures.

To attract return migrants to rural areas, the state should develop policies and programs that, among other things, match potential returnees’ skills with local economic development priorities. It should also create a unit to inform potential return migrants of major investment opportunities in the state. Moreover, as an added incentive to come back home, the state should give expatriates preference for investment opportunities.

To rebuild the human capital base of our dying counties, immigrants also are a major opportunity. Immigrants are far more entrepreneurial and generally younger than long-term residents so they are more likely to start businesses and contribute to population growth through both natural increase and attracting their friends and relatives to join them where opportunity develops. Immigrants also would diversity these communities – a situation the state can potentially leverage to create export-marketing opportunities in Mexico and other countries for North Carolina-produced goods and services.

Winning the war for talent is the key to North Carolina’s success and viability in the 21st century knowledge-based economy. Allocating the necessary resources to assure that our diverse base of home-grown talent is properly equipped with 21st century skills – perhaps beginning with a reallocation of lottery funds – and aggressively recruiting both expatriates and immigrants must become strategic imperatives. Failure to do so could spell economic disaster for our state.

James Johnson is Kenan Distinguished Professor of Strategy and Entrepreneurship at UNC Kenan-Flagler Business School in Chapel Hill. Allan Parnell is vice president of the Cedar Grove Institute for Sustainable Communities in Mebane.