[vc_row][vc_column][vc_column_text]On this episode of the Economic Development podcast, we speak withÂ Chris Chung, CEOÂ of the Economic Development Partnership of North Carolina, and he shares the growth and opportunities in the state’s bio sciences sector and other industries he believes will make a comeback. The state has also seen success in companies seeking to relocate or expand in North Carolina.
Being an advanced manufacturing state where 10% of our economy is rooted in manufacturing, I suspect we’ll be able to leverage some of the re-shoring and return of U.S manufacturing capacity. I think as a country, these past few months [of the pandemic] have really shown us the downsides of being overly reliant on manufacturing overseas to supply us with some of these critical medical supplies or pharmaceutical products.
- 01:22 – As the sixth most visited state, North Carolina’s tourism industry and all of the tourism related businesses have been disrupted in the pandemic.
- 02:18 – Alternatively, as home to major life sciences companies, the pandemic has presented tremendous growth particularly in the race for a vaccine.
- 04:09 – Some traditional industries in the state are finding success pivoting in the pandemic, such as the textiles industry.
- 05:41 – North Carolina has seen several biosciences companies relocate to the state.
- 09:05 – Christopher shares why he thinks manufacturing is making a comeback for the long haul.
- 10:26 – Do companies begin to change what’s important to them when they decide on a new location?
Christopher ChungÂ 00:00
So we’ve continued to see this steady flow of companies who are locating here or expanding here because of the rich ecosystem for life science companies, for biotech companies, be that the workforce,Â be that the world class educational institutions like Duke University, University of North Carolina Chapel Hill, North Carolina State Wake Forest, or whether it’s just because of the overall business climate that we have here. I think it’s really probably all of those different factors that led to these life science companies continuing to step up their presence here or locate major new investments here as part of their future growth strategy.
Fabiola FleuranvilÂ 00:50
This is Fabiola Fleuranvil of Blueprint Creative Group where we provide strategic communications counsel during times of opportunity, change and crisis. And you are tuning in to the Economic Development podcast. Today’s guest is Christopher Chung, who is the President and CEO of the Economic Development Partnership of North Carolina.
Fabiola FleuranvilÂ 01:11
So let’s jump right into it. So what’s been the business climate like these days in your region within the landscape of industry growth, challenges, and economic development?
Christopher ChungÂ 01:22
So it really depends on what sector of the economy you’re looking at. Of course, in North Carolina we’ve been considered a very popular tourism destination for a very long time. If you look at the numbers, we’re the six most visited state when you measure it by visitor spending and visitor traffic. That’s a way into everything from our 300 miles of coastline to beautiful settings like the Blue Ridge Mountains and the Smoky Mountains, and of course, a lot of golf and barbecue in between the coast and the mountains. So we’ve been a very popular tourism destination. It’s one of the responsibilities we have at our organization to drive greater visitor spending and travel due to state, but as you can imagine, especially in the early stages of this pandemic, when people were in lockdown, unable or unwilling to travel, that, of course is going to have a tremendous impact on our tourism economy as well as all the small businesses who cater to tourists and visitors.
Christopher ChungÂ 02:18
That’s a very different picture than maybe what you see in terms of some of our other industrial sectors that may have not seen as much of a direct impact. We’re home to a lot of technology employers and companies in the life sciences industry, be that pharmaceuticals, be that clinical research. I would say certain companies and industries like that have seen perhaps greater level of activity as a result of a pandemic, whether that’s because technology enables people to work more remotely or whether it’s because there’s a focus on doing research around vaccines and cures and treatment regimens for this pandemic and for other diseases. You can see that, that would be a very different experience perhaps than for example, what our tourism industry is seeing.
Christopher ChungÂ 03:06
We have a lot of aerospace companies here in North Carolina. While we don’t have big companies like Boeing or Airbus, we certainly have a lot of companies that supply critical parts and components to those major aircraft manufacturers. And as you can see, with the slowdown in air travel, that, of course, is having a downstream effect on demand for aircraft equipment. We are starting to see some of that play out with some of our major Aerospace suppliers and what they’re needing to do to adjust their head counts on their facility. So really, like I said, the picture varies across the board, depending on which slice of the state economy you’re looking at. Hopefully that addresses the question.
Fabiola FleuranvilÂ 03:47
So let’s talk about some of this targeted industry growth that you are potentially seeing particularly in your biosciences sector, especially in the area of innovation with the search for a vaccine and other opportunities that are coming out of that. We’re seeing a lot of the growth and opportunity surging in these last 100 days since the pandemic has really been at the forefront here.
Christopher ChungÂ 04:09
So if you look at one of the interesting stories out of North Carolina, we have North and South Carolina where there was such a huge concentration of the textiles industry historically. We still have a lot of that going on here in North Carolina, of course, textiles looks very different than it did 50 years ago. It’s not nearly as labor intensive. It’s a much more capital intensive industry. But you look at what textile companies were doing, whether they were doing upholstery for the furniture sector, or apparel or other materials for textiles. Many of those types of companies have been able to make a quick, and in many cases successful, pivot to producing some of the personal protective equipment and other critical medical supplies that our healthcare workers and our first line responders need around the country, to deal with the pandemic and all those ramifications. In fact, we got a company here in North Carolina.
Christopher ChungÂ 05:01
So it’s a great example. They’re testifying before Congress this week. It’s a company by the name of Kids Bow. Anyone who’s big into cycling should know Kids Bow as a premier manufacturer of apparel for the cycling industry. They had moved their operations and headquarters from California to western North Carolina last year, thinking of course, that they’d be manufacturing this great apparel for the cycling industry. As soon as the pandemic hit, they were able to make a pivot to produce face shields, and now face coverings for, of course, healthcare workers and others who are on the front lines.
That’s a really interesting example of how certain companies have been able to look at the events of the past few months and make the strategic shifts that they’ve needed to as a business while also addressing some very strong public health needs that this country and our state of course are having in addressing the pandemic.
Christopher ChungÂ 05:41
That’s again, just one story of many for us. But you look at life science wins. North Carolina started off 2020 very strongly there we had a couple of big announcements in terms of additions to our life science industry. One is a company by the name of Audentes Therapeutics. It’s owned by a Japanese parent company, and they’re in genetic medicines and treatments. They announced a new operation in North Carolina.
Eli Lilly, the major pharmaceutical company, also announced a major new presence in our state. Even in the week since the pandemic has taken hold across the US, we’ve continued to see more companies announce the intent to set up sizable operations in North Carolina. So one is a Grail, the Bay Area company focused on early cancer detection.
Christopher ChungÂ 06:50
Another one is Grifols Therapeutics. They do blood plasma based treatments. They expanded their operation here in North Carolina. So, we’ve continued to see this steady flow of companies who are locating here or expanding here because of the rich ecosystem for life science companies, for biotech companies, be that the workforce, be that the world class educational institutions like Duke University, University of North Carolina Chapel Hill, North Carolina State Wake Forest, or whether it’s just because of the the overall business climate that we have here. I think it’s really probably all of those different factors that led to these life science companies continuing to step up their presence here or locate major new investments here as part of their future growth strategy.
Fabiola FleuranvilÂ 07:38
Given some of the strengths that you mentioned of your region, that seems to be perhaps even a pivot from the macro-level with your economic development organization on where some of your targeted industry growth and even investment promotion is being directed. And now that we’re really more so in a digital remote world, it expands the opportunities for those companies to come in from a market that’s not as business friendly and to come into a market such as yours where there’s a lot of talent already. And the landscape already makes it attractive to these types of businesses.
Christopher ChungÂ 08:15
North Carolina, whether you’re talking about an area like the Research Triangle, or you’re talking about the area that we call the triad, but there are markets like Greensboro, Winston Salem, High Point, working your way down to places like Charlotte, of course, you’ve got Asheville, in the west, Wilmington, the east, wherever you go in this very big diverse state of 10.3 million people. You’ve got a really compelling mix of industries and industry ecosystems that can support a wide variety of sectors. That was the case before the pandemic that I believe will continue to be the case going forward. In this near term I suspect life sciences and biopharmaceuticals, that’s going to be a historically strong suit for North Carolina where we can expect to see even greater activity.
Christopher ChungÂ 09:05
Being an advanced manufacturing state where 10% of our economy is rooted in manufacturing, a state that’s got a history of manufacturing, I suspect we’ll also be able to leverage some of the re-shoring and return of US manufacturing capacity to the US. So rather than many of these companies, depending on overseas manufacturing arrangements or partners, I do believe that we are going to see some of that make its way back simply because I think as a country, these past few months have really shown us the downsides of being overly reliant on manufacturing overseas to supply us with some of these critical medical supplies or pharmaceutical products.
Christopher ChungÂ 09:46
I just think from a national security and economic security standpoint, that’s not the position that any country wants to be in, especially a country like the United States that’s just so abundant in resources. So I believe North Carolina will benefit from this return and re-shoring of certain manufacturing, and of course, we look forward to making our case as to why those companies should select North Carolina if they’re gonna move back here to the US.
Fabiola FleuranvilÂ 10:10
So that’s the silver lining in all of this. So, lastly, what have you noticed from your peers around the industry around economic development and how the industry in general is rethinking their initiatives or even how they pursue growth and investments?
Christopher Chung Â 10:26
Yeah, that’s a great question. So, I do check in with a few of my counterparts from other states, again, having done state level economic development work during my 23 year career now in three different states, Ohio, Missouri and of course, here in North Carolina, I of course, I keep in touch with folks in those two states, some colleagues of mine now and up and coming economic development states like Arkansas and in South Carolina. We’re comparing notes with some of them over the past several months. I think we’re all waiting to see what the trend looks like in terms of do companies begin to change what’s important to them when they decide on a new location. Up until March, it was all about talent availability and workforce. Of course, that’s still going to be important.
Christopher ChungÂ 11:08
I think there’s certainly to be expected some changes in what other factors may now be important to companies. Will some of these technology employers or professional service companies, headquarters, for example, are they really going to focus much more on being in a core urban downtown market or will they opt for a more suburban location just to allow a more spread out place? Somewhere where people aren’t dependent on public transportation, there’s more space to build offices to allow for social and physical distancing.
Christopher ChungÂ 11:43
I mean, these are all the changes that some people are predicting, we don’t yet know if that’s going to manifest in the activity that we see because we’re only three and a half months into it, Ask me a year from now probably have a better review of visibility into that, but I think we’re all just kind of grappling right now with what’s going to change. We think things will change, but we don’t have enough data yet to tell us exactly what it’s going to look like. And only time will tell for some of these changes that we’re going to observe in our industry.
Fabiola FleuranvilÂ 12:11
So that’s an interesting point you make to see if some of those typical criteria that have been used for market selection, site selection, if they’re going to matter the same. Are there going to be some adjustments in that? So that’s going to be very interesting to really look into and see what the trend tells us. So, thanks for sharing that.
Christopher ChungÂ 12:30
Fabiola FleuranvilÂ 12:31
Thanks again for tuning in to the Economic Development podcast presented by Blueprint Creative Group. There’s more episodes featuring economic development leaders throughout the country. And we thank all of the participants for sharing their perspectives. Check out all of the episodes in this series at blueprintcreativegroup.com/economicdevelopment.