North Carolina for Newsweek

NORTH carolina: TRANSFORMATION THROUGH INNOVATION State leverages competitive advantages, low taxes and high quality of life to foster growth

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aving weathered the double blows of the decline in its traditional industries and the global recession, North Carolina has staged a spectacular turnaround in its fortunes.

Home to almost 10 million people, North Carolina’s economy was founded on tobacco, textiles, and timber that was used to manufacture furniture. Although agriculture and agribusiness remain its biggest earners, overseas competition decimated some of its staple industries in the 1980s and 1990s, leading the state to rethink its growth strategy, re-engineer its productive sectors, and develop a knowledge-based, innovation-driven economy to guarantee long-term prosperity.

“We set up a vision for what we call The National Innovation Triangle,” explains Governor Pat McCrory, who took office in January 2013. “When we talk of innovation, we talk about Silicon Valley and the Boston-New York region. We think we can be the third pillar. We have quality of life, universities, and four economic centers.”

First, it was necessary to create incentives to bring more business and jobs. Under McCrory, North Carolina overhauled its tax code, slashing corporate and personal levies to develop a more investment-friendly climate for business. His administration has also transformed a $2.6 billion-debt into a surplus in just three years, overseen the creation of up to 280,000 privatesector jobs, reduced healthcare costs and invested in education.

“We have to be a pro-business state,” agrees North Carolina’s Commerce Secretary John Skvarla. “We have streamlined our regulatory environment to be customer-service-centric. We have the most robust incentive program we have ever had.”

According to the U.S. Department of Commerce’s Bureau of Economic Analysis, North Carolina possessed the nation’s fastest growing economy

between Q1 2013 and Q3 2015. Its commercial capital, Charlotte, is now the sixth fastest-growing city in the country. It serves as a financial services center second only to New York, and is the headquarters for Bank of America, not to mention other billion-dollar corporations that have been persuaded to move there by a can-do attitude and new incentives.

To encourage innovation, North Carolina draws on expertise acquired around the Research Triangle Park (RTP). Located in the triangle formed by the capital, Raleigh, and the cities of Durham and Chapel Hill, the park was founded in 1959 through a public-private partnership to take advantage of the intellectual capital around three top-notch seats of learning: Duke University, the University of North Carolina at Chapel Hill and North Carolina State University. The park was among the first of its kind and put the state firmly on the global R&D map in the succeeding decades.

“The park was a pretty audacious idea at the time, if you think about it,” says Robert Geolas, president and CEO of RTP, and a native of the state. “We were very poor, and most of our talent was leaving North Carolina because they could not find jobs. It was the classic brain drain.”

The universities played an important role in the development of the Triangle by linking their academic and research programs to the activities of companies that were being lured to the park. The synergy between the RTP, local government, industry and the universities was a great success.

Today, 45% of the RTP is occupied by biotech and life sciences companies, including the U.S. headquarters of GlaxoSmithKline.

However, the strong presence of pharmaceutical and related industries spreads beyond the Triangle area. “There are 600 companies in the lifesciences industry in the state,” confirms Chris Chung, CEO of the Economic Development Partnership of North Carolina, “with 60,000 people working

Top row, left to right: Pat McCrory, Governor, North Carolina · Chris Chung, CEO, Economic Development NC · Nancy McFarlane, Mayor of Raleigh · Nicholas Tennyson, Secretary of the North Carolina Department of Transport · Stephan Kutzer, CEO, Alcami Corporation · Jack Cecil, President, Biltmore Farms · Jennifer Roberts, Mayor of Charlotte · Robert Geolas, President & CEO, The Research Triangle Park · Middle row: Kevin Baker, Executive Director, Piedmont Triad Airport Authority · Henri L. Fourrier, President & CEO, Greensboro Convention & Visitors Bureau · John Skvarla, Secretary of Commerce of North Carolina · Bill Saffo, Mayor of Wilmington · Bottom row: Nancy Vaughan, Mayor of Greensboro · Michael J. Landguth, President & CEO, Raleigh-Durham Airport Authority · Eric Tomlinson, President, Wake Forest Innovation Quarter · Paul J. Cozza, CEO, North Carolina State Ports Authority · Stephanie Pace Brown, Executive Director, Asheville Convention & Visitors Bureau · Kelly King, Chairman & CEO, BB&T & Project Directors Carmen Moura & Margarita Vidal produced this report

In collaboration with

in everything from biopharma to clinical contract research. There is a very good chance that every company looking at expansion or relocation will have us on its list.”

Dr. Stephan Kutzer, CEO of Alcami, a contract development and manufacturing organization (CDMO), agrees: “Obviously, North Carolina has a lot of prestigious schools. This is very beneficial to us. We have less problems recruiting here than in some other states; there is the exposure to science and technology that North Carolina offers.”

Alcami’s headquarters are in Wilmington, on the eastern seaboard, and it has state-of-the-art facilities in strategic locations in the U.S. and Europe.

The company was created by the merger of AAIPharma Services Corporation and Cambridge Major Laboratories in 2013. It provides end-to-end solutions to start-up biotech and pharmaceutical companies, from drug development through manufacturing.

“We team up with customers very early on,” Kutzer explains. “For example, when a customer has a molecule idea to treat an unmet medical need, we come in and develop a manufacturing process around it.”

For Kutzer, however, the key to Alcami’s success has been the emphasis on communication: “Most of our competitors have been built out of various companies: they had the active pharmaceutical ingredient side, and then the drug product, development, and testing. It can become difficult for these divisions to talk to each other. The way to be successful is to have somebody in place who manages the communication between customers, the regulatory authorities, manufacturing, labs, logistics and everything else.”

In the Piedmont Triad, Eric Tomlinson, CEO of the Wake Forest Innovation Quarter, thinks that communication and cross-fertilization between institutions drives inventiveness: “We’re very fortunate that the only focus here is on innovation. The Quarter promotes connectivity between different types of people, and that leads to vibrancy.”

Tomlinson oversees 145 acres of land and three million square feet of

Wake Forest University claims the distinction of being the nation’s premier collegiate university

space in Winston-Salem, a former tobacco town. Encompassing everything from offices to research centers and laboratories, as well as apartments and condos, the Innovation Quarter is home to several prestigious academic institutions such as the Wake Forest School of Medicine, dozens of companies and thousands of students and professionals. It is also the fastestgrowing mixed-use innovation district in the U.S., specializing in advanced materials, biomedical science, clinical services, and IT. The Innovation Quarter’s beginnings date back to 1994, when R.J. Reynolds Tobacco Company donated its distinctive red-brick warehouses for research. Nowadays, its impact on the region is substantial, representing $800 million in inward investment.

Groundbreaking work taking place in the Innovation Quarter includes developing intelligent commercial networks, measuring and improving population health, growing tissues and organs, developing healing cell therapies, as well as vaccines for various infectious diseases.

“A group looking at population health is next to a company doing data mining, and those two groups are now getting together,” Tomlinson adds.

“That’s an example of different technologies being used to innovate.”

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We believe that when work and learning are a passion, there should also be spaces to live and play—there are more than 800 apartments, lofts and condominiums within or close by the Innovation Quarter. Bailey Park provides a hub for a diverse mix of community programming.

By attracting a mix of academic groups and established companies, providing robust company incubator facilities and services, and supporting the surrounding community, the Innovation Quarter is a place where people are inspired to build the future the world wants, for all of us.

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Greensboro: a heartland of history and industry A major city in the Triad revives thanks to advanced manufacturing and tourism

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fter a century making furniture and garments that were sold all over the world, Greensboro was already struggling before the Great Recession made matters worse. Starting in the 1980s, the city began losing well-paid jobs in traditional sectors as manufacturing moved overseas.

Along with Winston-Salem and High Point, it forms part of the Piedmont Triad region, home to 1.6 million people, 100,000 of whom found themselves out of work by the end of the last decade.

Over the past five years, however, Greensboro has bounced back, leveraging its old strengths and unrivaled connectivity to reinvent itself as a center for healthcare, tourism, high-tech industries and logistics. Cone Health, Honda Aircraft Company and top clothing manufacturer VF Corporation have chosen it as their headquarters, while FedEx and UPS have important hubs here.

The third-largest city in North Carolina, Greensboro has a population of 275,000 that is well-educated and trained. After the downturn, it feels ready to take on new challenges.

“We’re looking for advanced manufacturing to take the place of those legacy jobs,” says Nancy Vaughan, mayor of Greensboro. “We look forward to being as diversified as we can possibly be and competing globally.”

Brent Christensen, the president and CEO of Greensboro Partnership, adds: “To survive and thrive you have to innovate. We have a workforce that has built a new jet from the ground up. You know that you’ve made it as a manufacturing destination when you make things that fly.”

Greensboro’s compact footprint not only benefits businesses, but also enables residents and visitors to enjoy easy access to everything the city has to offer. Downtown has been transformed in the last few years by Center City Park, while seven universities and colleges in the area, museums and a Science Center make it a family-friendly destination. With a $78-million performing

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With a population of 275,000 and set to grow, Greensboro is revamping its look

arts center scheduled to open in 2018, Greensboro’s renaissance is only just beginning.

The city also profits from its strategic location in the heart of a major economic cluster. “We have a lot of things that draw business travelers into town—and then they get to play with the fun part,” says Henri Fourrier, the president and CEO of the Greensboro Convention and Visitors Bureau. “We also like to say that a destination is defined by its facilities.”

Catering to business and leisure needs, facilities in the city include the Koury Convention Center, where 250,000 square feet of space are available for meetings and conventions. The Greensboro Coliseum Complex has eight venues, including a 22,000-seat arena that has hosted ACC and NCAA basketball championships as well as concerts by some of the greatest names in music. The Special Events Center within the complex adds three exhibition halls, a 4,500-seat mini-arena and eight meeting rooms to the mix.

“Greensboro has embraced change to improve for the future,” Fourrier notes. “And the great thing is that within a 30-minute drive, you have Winston-Salem and High Point. Each city is unique and complements the other for an incredible travel experience.”

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Wilmington: the right place at the right time Coastal city bets on cutting-edge innovation and scientific start-ups to leverage its maritime connections

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pread between the Cape Fear River, the Intracoastal Waterway and the Atlantic Ocean coastline, the city of Wilmington is home to 113,000 people, with more than 384,000 in its three-county metropolitan statistical area. Long known for its historic downtown, riverfront, and the state’s largest port, it has earned a reputation for itself recently as another pole of innovation in North Carolina, combining a dynamic entrepreneurial culture with an enviable quality of life.

In 2015, Forbes ranked Wilmington second in its The 10 Best Cities to Start a Business list, a reflection of its growing status as a corporate incubator. New ventures will join a long list of cutting-edge companies already in the city, such as Corning, which has the world’s largest fiberoptic factory here; General Electric, which manufactures aircraft engines and nuclear power plants; and PPD, a local clinical research success story.

Wilmington is also a popular place to make movies, with over 300 films, including Iron Man 3, shot in the city.

It’s not just private-sector players ensuring Wilmington stays in the picture, either. The University of North Carolina and the city council are lending a supporting role to assist fledgling firms in taking their first steps: “UNCW and the city have created a Center of Innovation and Entrepreneurship, where people opening up a business can use the university’s resources to get established,” explains Mayor Bill Saffo, who is now in his fifth term. “From marketing to finance to technology, we can help. Small companies can create thousands of jobs if it’s the right product at the right time.”

Launched last September, InnovateNC is a North Carolina State University cross-city learning collaborative that is providing technical advice and support worth $250,000 to boost Wilmington’s innovation efforts, together with four other cities selected for the program statewide: “We want to increase their capacity and activities,” says Sarah Langer Hall, from NCSU’s Institute for Emerging Issues. “We work directly with entrepreneurs to help communities. We offer expertise and help them find the best opportunities.”

Wilmington’s quarter million is destined for its emerging life-sciences ecosystem. The city’s Innovation Council, which is working with InnovateNC through 2017, is co-chaired by Dr. Daniel Baden, the executive principal of MARBIONC (Marine Biotechnology in North Carolina).

MARBIONC is a public-private partnership leading the way in R&D at UNCW’s CREST Research Park: “The goal is to take our scientific research and translate discoveries into applications and processes that could spin out

into businesses or be licensed,” Dr. Baden explains. “Many inventions come out of academic institutions. That’s what is fueling business in the U.S.”

Room to grow at the state’s busiest port Among the top-ten fastest-growing ports in the U.S. for exports and imports, the Port of Wilmington is owned and operated by the North Carolina State Ports Authority. Located 26 miles up the Cape Fear River, it has a 42-foot channel, bulk, breakbulk and container terminals, modern transshipment and storage facilities, and connects with interstate highways and CSA Transportation’s 21,000-mile railroad network.

The Port of Wilmington will undergo a $100-million modernization plan

With the opening of the Panama Canal expansion this June, the port has the potential to serve as a gateway for the southeast to trade with the world.

Wilmington is perfectly positioned to compete for pan-American traffic and, thanks to the North Carolina State Ports Authority’s $100-million Port Modernization Plan, will soon boast new post-Panamax cranes, enhanced berths, and other improvements.

“The Port of Wilmington is expanding to increase the speed and efficiency of loading and unloading vessels,” confirms Paul J. Cozza, the Port Authority’s executive director. “By summer 2016, the port will be prepared to accommodate post-Panamax container vessels in the 8-10,000 TEU range.”

That’s just the tip of the iceberg, Cozza says, as a deal signed with USA InvestCo in 2013 gave the port one of the few cold-storage facilities on the East Coast. And, at the start of 2016, transport company CSX unveiled plans to invest $272 million to develop the ‘Carolina Connector’ in Johnson County, a 450-acre, inter-modal terminal that will allow containerized goods to move seamlessly through the Port of Wilmington to and from global markets.

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Robust network presents opportunities Land and maritime infrastructure will receive a boost, while aviation soars

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y 2040, if Governor Pat McCrory’s plans come to pass, North Carolina will have extended and improved its transportation networks to “connect all North Carolinians with jobs, education, healthcare, recreation, and each other.” His 25-year Vision for North Carolina, entitled ‘Mapping our Future’, aims to be the blueprint for the state’s development, defining how infrastructure can be capitalized upon to create economic growth.

With the number of state residents growing rapidly and forecast to expand by another 20% within just 15 years, North Carolina’s existing transportation infrastructure is already feeling the strain. According to Nicholas Tennyson, the Secretary of the North Carolina Department of Transportation (NCDOT), North Carolina has long been playing “catch-up.” In the 1950s, its capital, Raleigh, was not connected to the interstate highway system, and Interstate 40 to Wilmington, the state’s biggest port, was only completed in the 1980s.

North Carolina’s dramatic geography—which extends for 560 miles from east to west, including the Appalachian, Blue Ridge and Smoky mountains ranges and the highest peak east of the Rockies, Mount Mitchell—had also proved a hurdle to connectivity in the past.

“Our role is to build a robust network that makes things possible,” Secretary Tennyson insists. “We need to focus on completing connections.

We understand that the state boundary is not the limit in terms of logistics or transportation. International connections and the opportunity to be in the world economy will bring benefits to North Carolina.”

Last September, the state legislature approved a budget that, over the next two years, will see $700 million of additional funding destined to infrastructure projects, including $498 million to improve 27,000 miles of roadway in all of North Carolina’s 100 counties, and $70 million for modernization at its ports in Wilmington and Morehead City.

Last December, the passage of the Fixing America’s Surface Transportation (FAST) Act guaranteed that $305 billion of federal funds would be spent over five years on rail, road, and public transit initiatives nationwide. In North Carolina, these projects will include the state’s stretch of U.S. Route 70, a 2,835-mile highway that crosses seven states and connects the Atlantic coast with Arizona, and the commencement of work on the planned $1-billion, 213-mile-long Interstate 87. This new road will eventually replace U.S. 17 in the Raleigh-Norfolk Corridor, linking North Carolina’s Research Triangle region to neighboring Virginia via a high-speed route.

In terms of air transport, things are looking up. North Carolina’s airports generate an annual economic impact of $31 billion, provide 123,000 jobs, and boost government revenues by over $900 million. The state has four international hubs—Charlotte-Douglas, Piedmont Triad, Raleigh-Durham and Wilmington—as well as 11 regional airports and over 100 facilities.

The first three are all located in the central region, which accounts for two-thirds of the state’s GDP, and constitute vital gateways for commerce and communications in its high-tech industries, research facilities and educational institutions.

Charlotte-Douglas International Airport (CLT), is the sixth-busiest airport in the U.S. in terms of operations, the eighth in terms of passengers, and is a major hub for American Airlines: “The growth of the airport has actually served to attract new businesses,” says Aviation Director Brent Cagle. “The Charlotte Chamber of Commerce very frequently cites the airport as the most important business development item in the city.”

In the Research Triangle, the impact of Raleigh-Durham Airport (RDU) is estimated by the NCDOT’s Division of Aviation to have been $8.5 billion in 2015. “They concluded we generate about 20,600 jobs and produce about $272 million for the state in local taxes,” says Michael Landguth,

The aviation and aerospace industry thrives in the Piedmont Triad

president and CEO of the Raleigh-Durham Airport Authority, adding that air-services development means economic development in North Carolina.

Strategically located in a major innovation cluster and connecting three top American universities to the world, RDU handles 10 million passengers a year. The Airport Authority is at work on a master plan study of its own: Vision2040. Currently in public consultation, it is scheduled to be concluded by the end of 2016. Among its key goals is the need to accommodate connectivity to other forms of transportation, so that people can come and go via RDU as easily and quickly as possible. That includes the Triangle Transit Rail Link, a planned regional rail system that will connect surrounding cities to the airport, possibly via a bus connection and metro rail station in the initial stages. “Our community is one of the fastest-growing in the country,” says Landguth. “Therefore we are very concerned about road congestion.”

Much as CLT is an advantage for corporations looking to move to Charlotte, Landguth is aware of RDU’s responsibility in attracting talent to the Research Triangle: “We want to recruit international companies into the park and region since talent can be found all over the world. We need to

make sure that we have a conduit to encourage it to come to the area, start businesses and conduct research. Increasing tourism to this beautiful state is also a priority.”

For Piedmont International Airport (PTI), on the other hand, competing for passenger or cargo traffic with CLT, RDU or Atlanta was not the wisest avenue for sustainable growth. “This is the third busiest airport in the state behind Charlotte and Raleigh,” says Kevin Baker, executive director of the Piedmont Triad Airport Authority, “and it’s way behind in terms of size. But airports nowadays are not there only to move people or packages from one place to another.”

Instead, with a steady number of passengers over the years, PTI saw a niche in manufacturing and Maintenance, Repair and Overhaul (MRO) by providing land, installations and services to the thriving aviation and aerospace industry in the Piedmont Triad. “Today the industry is coming south and east,” Baker says, “and the Triad is one of the few regions that have a significant depth in design, manufacturing, maintenance and logistics.”

Lying in the heart of the Triad, between Greensboro, Winston-Salem, and High Point, PTI stands on 4,000-acre campus that has attracted hundreds of millions of dollars in private-sector investment and some very notable tenants. Honda Aircraft Company chose to develop and manufacture its cutting-edge light aircraft, the HondaJet at PTI. HAECO, Cessna and FedEx are also among the 50 other companies employing 5,000 people on airport grounds.

For Baker, it’s important to look ahead and be ready for future demand.

He points out that infrastructure projects happening in the area will open up and connect more land, allowing PTI to accommodate other large companies: “Imagine if we had not been able to say ‘yes’ when Honda Aircraft came along wanting to establish themselves here: 1,800 jobs wouldn’t have happened, and those jobs yield twice the average rate of household income in this region. So we always have to be ready and willing to say, ‘Yes, we can do that.’”

North Carolina Set to Become America’s New Innovation Hub Pat McCrory, Governor of North Carolina When you took office in 2013, North Carolina’s unemployment rate was among the highest in the Southeast. Today your state has experienced the 10th largest decrease in unemployment in the country. How did you achieve this turnaround?

Our first priority was to solve North Carolina’s competitiveness issues. We had the highest income and corporate taxes in the Southeast, a region that is the boom area of the U.S. So we lowered both by about 2%, and we continue to lower it this year. We also had a $500 million spending forecast on Medicaid, which meant a lot of money was diverted to areas that were unproductive. Thirdly, we had a $2.6 billion debt to the federal government for unemployment. We took the very controversial decision not to extend unemployment because had we done that, our debt to the federal government would probably have increased from $3 billion to $4 billion. I am pleased to report that we paid off the outstanding $2.6 billion debt and have since built up a $1 billion reserve in the unemployment trust fund. Once the decision was made, we had one of the largest drops in unemployment of the U.S. We were at 8.8% adjusted and we are now down to approximately 5.6%.

Our second priority was to set up a vision for what we call ‘the national innovation triangle’. This means positioning North Carolina as a pillar I am a Governor of innovation in the U.S., alongside who firmly believes the Boston-New York region and that manufacturing is California. We have the universities, we have the quality of life, but more innovative.” importantly, it’s a better business Central America and China because of labor costs. But now they are not so deal here. Companies like Red Hat, dependent on labor but rather on new, innovative equipment. We are also Cisco and MetLife, among others, are coming to this state as they recog- more competitive in terms of power cost, and we have a skilled workforce. nize they get a better return on investment. There is a synergy of innova- So these industries are coming back; we call it the Carolina comeback. I tion and part of our goal is to get universities—notably UNC Chapel Hill, am a Governor who firmly believes that manufacturing is innovative.

NC State University, Duke University and UNC How does North Carolina compare against Charlotte—to work together through research other southern states? grants so they can compete with the Stanfords of One of our main advantages resides in our the world. We want to compete for venture capital university clusters. The second advantage is money and let venture capitalists know they get a North Carolinians our lower tax rate. The third is that we offer better deal here. a choice among very different and dynamic Is North Carolina moving away from its cities: Charlotte, Durham-Raleigh, Winstontraditional economic sectors and towards Salem, Wilmington on the coast, Asheville, an innovative, knowledge-based economy?

Greensboro to name a few. Furthermore, our 9th highest GDP We are not giving up on our old industries, includtransportation infrastructure is very good, in ing manufacturing, textile, and furniture. But old particular because we have two large airports, in the U.S.* manufacturing is becoming high tech. Innovation Charlotte and Raleigh, and because almost every will keep our old manufacturing alive and well in major highway in the U.S. intersects here, which the United States. We will have fewer workforces is a key competitive advantage for logistics. because innovation will make us more competiNorth Carolina is affirming itself as a tive. These traditional industries were primarily competitive, innovative state. People don’t know located in Greensboro, High Point and Winstonthat they use a lot of products made here, from growth in 2014 compared to aerospace to bio, to medicine, to food. North Salem, an area of several million people in the cen1.3% nationwide* ter of our state. They took a big hit in the 1970s Carolina already has a big impact on the rest of the up to the 1990s when production was moved to world. * U.S. Department of Commerce

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Want to Start a Business? North Carolina Is The Place to Be John E. Skvarla, North Carolina Secretary of Commerce What are your priorities as Secretary of Commerce of North Carolina?

My job and hence my priority is to bolster, create, enhance and grow the economy in the state of North Carolina in order to make it the most robust in the United States, and to keep it there. Everybody focuses on incentives but it is really the fundamentals that bring companies to the state. The number one fundamental is that we have to have a good business environment. The question is not about bending or getting rid of regulations, but about becoming customer-service centric, and treating the citizens of North Carolina as if they were customers. Under governor McCrory’s leadership, we have reduced corporate tax from 6.9% to a projected 4% in 2015, and down to 3% in 2016 if we reach certain revenue targets. Individual income tax rates have dropped from 7.75% to 5.49%, which is noticeable.

Then there is the national tax and regulatory environment, and that is where incentives come into play. Right now we have the most robust incentive program that North Carolina has ever had. And I believe we can be We are competitive with anyone. Ours is not pushing very hard like a scholarship program, it is a reimbursement program for new tax dolfor legislation lars created. Other states have similar that will allow programs. At the end of the day, incencrowdfunding tives are absolutely necessary. I am not up to $5 million a believer in giving scholarships hoping within the state.” for success, I am a believer in reimbursing money that we would not otherwise have, for a period of time. Because the energy is allowing ancillary benefits are bringing new jobs that translate into housing purchases, sales tax, etc. They are offset by roads, schools and other public investments but at the end of the day, our economic model concludes that it is new and expansion a net benefit for the state. projects reported in

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North Carolina is increasingly becoming a major innovation and high tech hub. But there is also a lot of innovation going on in the traditional sectors. Can you tell us more about that?

Our GDP in 2014 was $481.9 billion, and agriculture and agro-industries represent about $78 billion, about 16%. From the beginning we were an agricultural state, with tobacco being an important part of our economy.

After World War II, we morphed into textile and furniture; we were leaders in the U.S. and probably the world. Then from the 1970s onwards, Asia started to take over, mainly because of their cheap labor. But now, our traditional sectors are coming back, in large part because of our low energy costs and also because wages have gone up in Asia. Cheap

2014

$5.4bn announced investment

31,520 jobs announced linked to these new projects

companies to offset the labor and transportation differentials. It allows companies to kick up here again or, if they haven’t left, to stay comfortably or start a new business.

Apart from incentives, what other measures do you take to encourage business creation?

There are three components that assist entrepreneurs. One is broadband capability. We are probably the most robust broadband state, from coast to mountain, of the United States. We have made a concerted effort to get broadband in the cities that were big manufacturing centers. Then we are enhancing that with a program called Crowdfunding. We are pushing very hard for something that will allow you to raise up to $5 million inside the state, exclusive of the federal law. The third component—we just passed legislation—is to set up an early stage, $40 million fund for startups, on top of the crowdfunding.

Taking into account our business packages and the dynamism of our enterprises, I would say we are the entrepreneurial state of the U.S. You want to start a business? North Carolina is the entrepreneurial place to be.

North Carolina to Increase Connectivity with Neighboring States Nick Tennyson, Secretary of the North Carolina Department of Transportation North Carolina has a large and diverse transportation system consisting of highways, rail, aviation, ferries, public transit, bicycle and pedestrian roads. You have a significant annual operating budget of about $4.4 billion. What are the characteristics of North Carolina’s transportation system?

We have a very large and consistent network of roads that totals some 80,000 miles and is the second largest state-maintained road network in the country after Texas. One of our priorities is to think of this network as well as the other transportation modes in a global manner, in the sense that we cannot limit our vision to North Carolina but that we must also take into account our connections with neighboring states. This means that the economic center of the northeastern part of the state is actually not in North Carolina but in Virginia. Likewise, the western part of North Carolina is more connected to Tennessee and Georgia than to the eastern part of the state. Furthermore, we need to be even more connected not only to the whole country, but also to the world, notably through our port connections, both air and sea.

How important can the Port of Wilmington become?

We are indeed investing in Wilmington to make sure that we can serve those ships that are in the post-Panamax class. At the moment we can handle ships that carry up to 4,000 containers. We are modernizing and enlarging the turning basin so that we will be able to handle ships carrying up to 10,000 containers.

We are inspired by the example of the Port of Savannah, Georgia, We need which undertook a major deepening to invest more and dredging investment. Savannah in infrastructure Port is interesting for us because it is It is interesting to note that these clusters are spread along a corridor to ensure that that follows an old Indian trading path, where situated at about the benefits of people have been settling since the 17th century. the same distance But indeed, we need to invest more in infrastructure innovation reach all up river as to ensure that the benefits of innovation reach all Wilmington Port, our territory.� our territory. and it has been is the annual For this to happen, we will certainly need very successful.

NCDOT operating public-private partnerships, in particular for the Beyond the capacity to handle larger ships, the real budget modernization of our ports. It is a bit early yet challenge is connection. Wilmington has a good to name potential investors, but we have started railway connection with Charlotte, where there discussions with a number of private companies. are already intermodal facilities. About 40% of the containers that are generated or received by North What are you aiming to achieve in terms of Carolina’s industries go through Charleston but the transportation network by 2040? there is a certain degree of congestion in Charleston We need to focus on completing the connections. as well as in Savannah and Norfolk; we believe that length of the An important one is the Asheville-Wilmington by improving our intermodal service, we will be connection, which will certainly exist by then, since able to save money and time for businesses by going road network construction work has already started for a bypass through Wilmington. around Shelby. I hope that by 2040 there will be The economy of North Carolina is increasingly a good highway and rail connection along that based on innovation clusters, which are corridor, which will give businesses in Asheville however limited to a number of geographical the ability to reach international markets. We will highway projects areas. What role will the transportation also have improved our connections with Tennessee planned for infrastructure play in spreading innovation and Virginia. This will undeniably bring new throughout the state?

2016-2025 opportunities for North Carolina.

$4.4bn

80,000 miles 478

North Carolina: Skilled, Innovative and Affordable Christopher Chung, CEO, Economic Development Partnership of North Carolina What is the purpose of the Economic Development Partnership of North Carolina (EDPNC)?

The functions that we are now responsible for used to be housed in the Department of Commerce, a state government agency. In October 2014, they were lifted out of the public sector and put into the EDPNC, a new, nonprofit organization. We are a public-private partnership and we get some of our financial support from the public sector. But like a nonprofit, we are now able to go and generate funding from the private sector, which is a key advantage compared to the public sector.

We handle five functions that all concern marketing and selling North Carolina. The first and most visible is business attraction, which concerns, in particular, corporate headquarters, advanced manufacturing, IT, life sciences, biotech, and warehouse distribution.

The second function is serving the needs of the existing industry. We want to make sure that as we compete to recruit new companies, we do not forget the needs of those that are already here.

The third function is international There are 600 companies trade and export assistance, which in the life sciences means helping a lot of small and midsize North Carolina companies industry; it is increase their sales overseas. It is a real gem for very important because the success North Carolina.� of our companies abroad translates into money coming back to North Carolina. Our fourth function is smallbusiness counseling. We have a small team that provides assistance to individuals who want to set up a business here; the team answers more than 17,000 inquiries a year. The fifth function is travel and tourism promotion, in particular leisure tourism, conferences and conventions, and amateur sport tournaments.

Tourism is a very important sector in North Carolina, worth $21 billion.

Are you competing against many states in trying to attract the same sectors?

Indeed, a lot of states want to attract biotech and life sciences because they are high-tech, higher-paying jobs. Who wouldn’t want a pharma company? But very few offer the mix of assets and critical mass that we have in North Carolina. There are 600 companies in the life sciences industry, 60,000 people working in everything from biopharma manufacturing to clinical contract research operations. It is a real gem for North Carolina.

The economy of North Carolina also relies on traditional sectors such as agriculture. Do you see innovation taking place there as well?

$425bn 9th highest GDP in the U.S.

$31.3bn exports in 2014

#1

North Carolina ranks first in the Southeast, in terms of manufacturing employment

Innovation is happening everywhere.

Whether it is agriculture, food processing, aerospace components manufacturing, everyone is looking at how they innovate, how they make their workers more productive, how they use robotics to replace some of the needs on the labor front. The question is: What enables innovation? That is where the concentration of world-class universities in North Carolina is important.

That is something a lot of states and cities do not have. Areas such as Boston, with its Cambridge cluster, and California in general do foster innovation, but they are tremendously expensive to do business. That is a consideration companies have to look at.

Where can I access the types of resources that a city with world-class universities can give me? But where can I do it in a place that’s not going to break the bank? North Carolina really plays well in that sweet spot.

Growing Tourism While Preserving Nature and Authenticity Wit Tuttell, Executive Director, Visit North Carolina, Economic Development Partnership How important is tourism for the economy of North Carolina?

Tourism is a huge industry and one of the main drivers of the economy. The sector generates $21 billion in spending each year with an overall impact of $23 billion. We are the sixth most visited state, with 70% of our domestic visitors coming from outside. They spend money, which in turn generates state and local taxes: in total, we raise about $1 billion a year in tourism-related taxes. Another important aspect is that tourism employs some 200,000 people across the state.

Most of them work in small businesses—50,000 SMEs are engaged in the tourism industry throughout the state, and this is very positive because it keeps many communities alive and thriving.

What makes North Carolina’s tourism offer different from other states?

Our first asset is North Carolina’s natural beauty. This is what we are known for. It is also an amazingly diverse nature: we have the coast, but also high mountains where you can go skiing, and several cities that are all very different. Another key aspect is that North Carolina offers authenticity. The vibe you get here is real, and visitors are drawn to that. You can go from an Asheville, which is a sort of hippy mountain enclave, to Charlotte, a real modern southern city and a banking capital, but the vibe is still there. This North is why we have chosen as the tagline Carolina’s key of our promotion campaigns, ‘Deeper assets are its Connection’. amazing natural For domestic tourism, our core beauty and its market goes from New York to Florida on the East Coast. We are perfectly authenticity.

There is a genuine located since we are right in the middle of the Eastern Seaboard. The type of vibe here and clientele we attract are families because that’s what draws we offer soft adventure, outdoors visitors.” travel, and kid-friendly vacations.

Another important market is sports: worth mentioning is that several blockbuster movies were shot here, such as Dirty Dancing, Blue Velvet, the first we are already quite Hunger Games, and Iron Man 3 to name a few. This well known for our 400 golf courses; we are also particularly appeals to international visitors. home to the NASCAR automobile competition, and we have six ski resorts that are a huge draw for people of Florida in particular. generated each year What do you do to attract more foreign

$23bn

visitors?

North Carolina is also known for its local culture. Is that a draw for visitors?

Definitely. What attracts visitors is not only the local arts scene but also the popular culture itself, our laid back way of life, our hospitality and friendliness. Many visitors mention that in our surveys. Regarding culture, we are of course the home of bluegrass music and there are plenty of venues in all our towns and cities where you can go and see live bands. Another interesting aspect is our unique gastronomy: our local chefs are increasingly recognized internationally. And yet another asset

200,000 tourism-related jobs

400

golf courses

We want to grow but the challenge is to create awareness in international markets where we compete with other states that are known the world over. The solution is to team up with neighboring states to offer visitors packages and itineraries for the whole South, rather than just North Carolina. This allows us to get a better return on our investment. But we want to develop tourism while also preserving our natural environment and authenticity. What we really want to do is responsible development and responsible growth, that is the key.

The City Where Quality of Life Leads to Innovation Nancy McFarlane, Mayor of Raleigh You were recently elected for a third term. What are your priorities for this mandate?

This third term is definitely centered on growth. We are one of the fastest-growing cities in the country. Why? Because we are doing great things and because people think that Raleigh is a great place to live. This also brings challenges, such as transportation and the management of natural resources.

Raleigh is one of the most successful cities in the U.S. in terms of growth, quality of life and innovation. How does the City Council support innovation?

We are fortunate to have three Tier One universities as well as many other colleges and universities. Moreover, the city of Raleigh has made important investments. We understand how important quality of We do what life is, and we do what it takes to keep graduates and to attract talent from it takes to keep graduates and to outside. We work in partnership with those universities, in particular NC attract talent from State. Furthermore, the City Council outside.” supports initiatives such as HQ, which is a co-working space, and we collaborate with industries and companies in the area, such as Citrix and Red Hat, which are headquartered here.

What are the main areas of excellence of Raleigh in terms of innovation?

We have a very diverse economic base. The Research Triangle Park gives us a strong R&D base in pharmaceuticals and biotechnology. Another important sector is the video gaming industry, which grew on the back of the large defense industry we have in North Carolina. The military do a lot of virtual training with cutting-edge video gaming technology, which is also used in the corporate world.

and individuals see that a city is investing in its own development and residents, they see it as a secure investment destination. We have attracted over $1 billion of investment. What we do is a mix of public-private partnerships, working with the universities and companies, including startups through our partnership with Citrix and Red Hat.

450,000

How important is quality of life in the economic performance of the city?

It is very important. As the economy becomes increasingly knowledge-based, and with the new generations coming to age, we see that talented people now tend to choose a location primarily because of the quality of life. Then, once they are settled, they go out and look for a job or start a business. We are moving away from the old model whereby a city would attract a company and then everybody would follow. The city of Raleigh has been working hard on that and one of our most recent moves has been the acquisition from the state of North Carolina of the Dorothea Dix Park, which will give us acres of open space downtown.

What does the City Council do to attract investment?

First of all, it is important to stress that when companies

inhabitants

$72bn is Raleigh’s GDP (source: US Bureau of Economic Analysis)

26%

growth between 2009 & 2014

How do you explain the gap between the economic success of Raleigh and other large cities, comparing unemployment and lack of development in other parts of the state?

North Carolina is not different from other states: there is gravitation towards urban areas. I think that cities are increasingly becoming hubs, which is why transportation is becoming so important, be it by road or rail. Another piece of infrastructure that makes the difference is broadband and high speed Internet, which are key to connecting rural and urban areas.

What is Raleigh’s unique advantage?

A city means many different things to different people. Safety is definitely one of our strong points: people here know their children are secure. We have a great education system, which is also an advantage for families. Raleigh’s big success is that it offers something for everybody. We are not focused on any one thing; we try to be creative in everything we do.

The Challenge of Developing RDU Airport in a Sustainable Manner Michael Landguth, President & CEO of Raleigh-Durham Airport Authority How important is Raleigh-Durham International Airport in the state and the region’s economy?

The North Carolina Department of Transportation, division of Aviation, just completed their 2015 economic impact analysis of the airports in the state. They concluded that Raleigh-Durham (RDU) has an economic impact of $8.5 billion a year, generates about 20,600 jobs and produces about $272 million in state and local taxes. Furthermore, we handle about 10 million passengers per year and we are the second largest airport in the state, next to Charlotte. Overall, we make a very significant contribution to the state’s economy.

What are the main goals of your masterplan?

We have six main goals. The first is to keep ensuring safety and security because they are obviously paramount. No matter what we do, this is our number one priority. The second goal is to optimize infrastructure and resources in an operationally, financially and environmentally sustainable manner. So we need to make sure that we get the most out of our entire infrastructure before we go and build something new. The third goal is to enhance the passenger and customer experience, notably through Wi-Fi and new apps that enable people to easily access services such as parking, food, etc. The fourth goal is to define development plans that are scalable to respond to variations in demand and to develop infrastructure in a timely fashion, not too much, not too little. The fifth goal is to preserve flexibility to adapt to As the second airport in emerging and future technologies and the state, we make make sure our IT infrastructure supports that. The sixth goal is to accommodate How does innovation affect airport management? Are there a very significant connectivity to various modes of new trends that transform the way you operate? contribution to its transportation. Our All U.S. airports are trying to figure out how to change their business model. Our traditional financing community is one of economy.” sources—federal funding for infrastructure and the fastest-growing passenger facility charge—are becoming extremely in the country and tight and as a result, we need to figure out how covers quite a large passengers to pay for our development plans. We need to landmass, so people drive their car a lot. Now, per year transform our business model and be more like a the region is planning to significantly develop its private company. We are looking in particular at transportation infrastructure, so we need to make parking management, online reservation systems sure we can accommodate it. Those are our goals and and demand-management. there is of course a schedule for each one.

10m

You just opened a route to Paris, France. Why this move?

Because opening an international flight always has a huge economic impact and because we are keen to develop our links with Europe. According to a study we commissioned to Dr. Michael Walden, an economist at NC State, over a 25-year period, one flight a day can have a $1.4 billion annual economic impact, and can generate 14,000 new jobs and some $142 million in taxes. This new route will enable North Carolina to attract investment from Europe as well as talent.

$8.5bn

annual economic impact

20,600 direct & indirect jobs

What are the unique advantages of RDU airport?

We hope that we reflect the community. If you look at the facilities and the quality of the infrastructure, we provide a gateway for someone to get into our airport and into our region quickly and easily so that they can access Duke University, UNC, and NC State. We provide quick and easy access to the Research Triangle Park, beaches, mountains and all the great things in terms of technology, talent, investment and R&D that are going on in the region, both for business and vacation.

North Carolina Becoming Top Business-Friendly State S. Lewis Ebert, President & CEO, the North Carolina Chamber The North Carolina Chamber has 35,000 members employing in total 1.25 million workers. What is your vision for the fastchanging North Carolina economy?

Three years ago, we launched a strategic plan called Vision 2030 in which our members, businesses of all sizes from all kinds of sectors, presented their vision and plan for achieving the growth we believe our state can attain. We identified four priority areas. Firstly, becoming the best state for talent, because education is a big part of who we have been, who we are, and where we’re going. Secondly, to be a competitive place to do business, an area in which we have already greatly improved. Thirdly, investing in infrastructure. In this respect, North Carolina is getting ahead of growth with major infrastructure investment. The fourth area is entrepreneurship and innovation: we need to keep nurturing that and making sure that entrepreneurs and ideas start, grow and stay here.

As the state’s economy shifts towards innovation, how do you make sure that less skilled people are not left behind?

When the downturn hit, North Carolina lost more than

300,000 jobs. In the last three years, our state has created more than 70,000 jobs annually and some projections estimate our state could create as many as 100,000 new jobs this year.

The job creation machine in North Carolina is working and more people are getting back to work. That puts North Carolina well ahead of the pace we need to hit our growth goals as we prepare to add two million more residents by 2030.

What challenges remain for North Carolina to overcome in terms of its business environment?

35,000 members in North Carolina Chamber

2.5%

growth forecast for NC in 2015

As North Carolina competes more aggressively for a lower rate of job creation in the current world economy, our biggest challenge is to be as agile as possible to get better, work faster and harder to continually be the best state for business. As a result of having a future-focused plan, driven by the business community, North Carolina has turned some of the worst job losses in America into a real success story. That success is a testament to North Carolina workers, the companies that call our state home and the growing number of companies investing in our state.

The City Where Talented People Want to Stay and Grow James Sauls, Director of Economic Development, City of Raleigh Raleigh is one of the most successful cities in the U.S. in terms of growth, quality of life, and innovation. Why? One of the main reasons is our strong educational system in the whole of North Carolina, but specifically in Raleigh. The city’s backbone is NC State, the largest public university in North Carolina. But we also have five other colleges and universities, which given our population of 439,884 is quite unique even compared to larger cities. And graduates want to stay here. As Raleigh continues to grow and add amenities, more people stay. Having such talented people in our city keeps us on the cutting edge of innovation and quality of life.

What is the role of the city’s department of Economic Development in fostering innovation?

Sometimes it is what we don’t do that spurs innovation. We are not heavy on regulations and we work hard to not stifle innovation through bureaucracy. Actually this office was rebranded Economic Development and Innovation precisely to align our goals as a city. We spend a great deal

of time in the field, in our co-working facilities, at NC State and the other universities, meeting with startups and entrepreneurs to find out what their needs are and then connect them to the resources. I could give many examples of innovation but to name a few, I would mention the 500KW solar array on top of the Convention Center or the trash cans that are solar-powered trash compactors. Innovation is not really new to Raleigh but what is new is that we are increasingly talking about it.

How does the quality of life in Raleigh influence its economic development?

#9

among fastest-growing cities in the U.S.

47.9%

population with Bachelor’s degree or higher

First of all, I would define our quality of life by our openness—everybody is accepted here, whether you have blue hair or tattoos—, our vibrant culture and arts scene and the fact that we are so green. It does have a direct impact on our growth because Raleigh is attractive for young people, in particular university graduates, which means that companies find a great pool of talent here. Also, startups can find here the resources and the money they need. The one thing that keeps them here and allows them to grow is talent.

One of the World’s Oldest Research Parks Reinvents Its Future Robert Geolas, President & CEO, Research Triangle Park The Research Triangle Park is one of the oldest and most renowned research parks in the world. How did it change North Carolina?

It is a remarkable history. When it was set up at the end of the 1950s, North Carolina was not poised to take advantage of the new economy that was emerging from the global changes of WWII. As a state, we were in a desperate situation, but fortunately our governor at the time, Luther Hodges, who had worked with General Marshall on rebuilding Europe, understood that a big investment was necessary to change the course of the economy. The only assets North Carolina had were its three universities: Duke in Durham, the University of North Carolina at Chapel Hill, and North Carolina State University.

So the state authorities had the idea to build around that, which was very audacious and groundbreaking at the time. In order to get political support, they targeted mothers and said, “If we don’t build something like the park, your sons I personally saw how the park will graduate, move away, and you’ll changed people’s never see your grandchildren.” Then the park really ‘took off’ in the 1960s lives when my and 1970s after IBM moved in. The father took a job at change in North Carolina was quite spectacular. I lived it personally as Motorola.”

I was growing up. I came from a working class background and I saw how my parents lifted themselves up to the middle class after my father took a job at Motorola in the Research Park.

What have been the advantages of a publicprivate partnership?

Indeed, the park started as a private land venture, and the state government made a commitment to support the necessary infrastructure: roads, water, sewers, etc. A private business leader, Archie Davis, raised the equivalent of $15 million and then people gave too, just out of generosity of spirit. But it was decided from the start that the park would forever operate as a not-for-profit, private foundation, with the aim of doing three things: support education, create meaningful work, and contribute to lifting up the people of North Carolina. We have operated that way for almost 60 years now. This is what was really disruptive about the park: the fact that it was a commitment to a public-private partnership, to the synergy between industry, government and university working together.

Sixty years on, it seems time has come for the park to reinvent itself. What are the objectives of the restructuring?

The park was built around a suburban model, which is no longer the model people want. We have been preparing the park’s redevelopment for the past four

220

companies located in the RTP

50,000

people with a wide range of expertise work at RTP

$296m

invested by park-related industries in R&D annually

years, and we have four main objectives. Firstly, we have to create a highly collaborative environment physically and programmatically. There are 220 companies in the park, but employees do not have access to a lot of collaborative environments.

Secondly, we want to remain authentic to who we are rather than trying to imitate others. Thirdly, we need to create an inspiring place. When you drive through the park, you don’t see the companies because they are hidden behind trees and gates.

Similarly, few people know about all the innovations that came out of here: AstroTurf, the bar code, research on the AIDS virus, or working on the Ebola vaccine. We need to tell that story and inspire people around the promise of science and technology and how they converge with arts and humanities. The fourth point is accessibility and affordability: we are going to create a Park Center, a celebration of people and ideas. There is no other way forward. We and North Carolina as a whole have to continue to innovate and disrupt the way we think about how people want to work together.

Powering a Cleaner, Smarter Energetic Future for North Carolina David Fountain, President, Duke Energy North Carolina The largest electric power holding company in the United States, Charlotte-based Duke Energy is at the forefront of innovation in the energy sector. What kind of innovative services do you offer customers?

Duke Energy is undergoing a period of transformational change that will, in essence, lead to the re-powering of the state of North Carolina in the next 15-20 years with cleaner energy and a smarter grid network. How does that translate, already, in innovation for customers? I could give many examples but one that is particularly interesting is the deployment of half a million smart meters in North Carolina, which will enable customers to be updated in real time, One of the on their smart devices, about most exciting developments in their energy consumption solar energy is in much the same way as they access our exploration of their banking information. This is an battery storage added advantage they have on top of our electricity rates here in North Carolina, options.� which are about 20% below the national average.

An interesting aspect of innovation is the technology you use to repair or inspect power lines and other installations with drones, 3D imagery, smart glasses...

Indeed, we constantly upgrade our technical capacities and tools for intervention on power lines and other equipment. One of our priorities is reliability—although we are already 99.9% reliable—so we are deploying self-healing circuits that will reduce the number of potential faults on the system. We also use drones to inspect our transmission and distribution system in places where access is difficult.

Another key area for innovation is renewables. Where does Duke Energy stand in this respect?

Because of the investment Duke Energy has made in solar, North Carolina is now ranked third in the nation in installed solar capacity. In 2015, we interconnected about 600 MW of solar, more than twice the amount interconnected the previous year.

Now, one of the main challenges is that solar is an intermittent resource that depends on weather and seasonal factors. So one of the things I am most

excited about is our exploration of battery storage options. We already have significant utility battery storage in the U.S. and we just announced a new pilot project in Gaston County. It will enable us to test the capacity of this new battery to smooth the solar impacts on our system simultaneously with any weather change. Another great example of our transition to cleaner energy is our Asheville project. We just got the approval to retire our Asheville coal plant early, which will allow us to build a cleaner natural gas combined-cycle facility to power the growing energy needs of that region. As part of that project, we are seeking to build a new 15 MW solar facility, and a 5 MW battery storage project.

7.4m

electric customers & 525,000 gas customers

52,700MW generating capacity

$121bn in assets

As the economy of North Carolina shifts towards a knowledge base, there is a risk of leaving behind the less privileged groups of population. What does Duke Energy do in this respect?

We directly serve about seven of the ten million residents of North Carolina. We are dedicated to investing in the communities we serve, in a variety of ways. For example the Helping Home Fund, which is a $20 million fund providing energy efficiency audits and upgrades for our lower income neighbors, and the Share the Warmth program, which provides financial assistance to families in need in the wintertime. We have also provided customers with more than $650 million in fuel and joint dispatch savings since the 2012 merger with Progress Energy. And we are investing in the future through our educational institutions, including $30 million in North Carolina community colleges since 2004.

How LED Lighting Went From the University Lab to the New York Nasdaq Charles Swoboda, President, CEO & Chairman, Cree Inc. Can you tell us about your background and how Cree became one of the most innovative companies in the lighting business?

I first started working with Hewlett Packard in Silicon Valley, and HP is one of the companies that invented the original, red LED. At the time, there was also green LED but not blue, without which you cannot create the color white. Then, I met a group of graduates from North Carolina State University who had just started North Carolina’s innovative a little company called Cree, and who approach is not only had invented the first commercially viable blue LED. They knew that in technology but if they could really make it work, it also in how we think would change the whole industry. I joined them in 1993. Cree had just about business.� gone public and had about $6 million in revenue, out of which $5 million came from R&D contracts. Last year, our revenue was a little over $1.63 billion and we now have about 6,500 employees, so it has been quite a journey.

Has Cree benefited from the innovative environment in North Carolina?

Definitely, the technology was being developed at NC State when they spun the company out. So, the university helped create the basic technology, and Cree took that entrepreneurial spirit and turned it into a company. It is really one of North Carolina’s success stories that creates another generation of success stories.

According to the U.S. Department of Energy, LED lighting could reduce electricity demand by some 30% in the next 20 years, yet it is not as widespread as one would expect. How do you explain that?

As an innovative company, we would like things to go faster but technology always takes longer than expected to be fully adopted. We are working on the innovations that inspire people to change to LED lighting, but we are also trying to change human behavior. So, we have to balance these two factors and make sure that technology comes in a way that people can embrace. The key to our success is that we made Cree light bulbs that look and work like your old light bulbs, except they use less energy and save you money. The last 10 years have been a phase in which we developed the products that get people to start switching. We are now moving to another phase to accelerate market adoption with products that not only save energy but also give a better light than the one you had before.

What was behind the decision to restructure your LED products business?

We had more capacity than we had demand for our high-end products, so we consolidated two factories

to focus all of our product development and sales on our high power LEDs, which have a much higher value in the market.

Now that we are focused on where our technology is unique, that business is running much better. At the same time, we have a very big lighting business, Most Innovative which has been growing all along. The restructuring Company in Energy is behind us, the LED business has stabilized and, more importantly, you can see the success that we have had in the lighting business over the last few years. Last year, the combination of the two was clearly visible for the first time.

#1

$1.63bn Revenue

4,000+ Issued Patents

28+ Years in LED Technology

Do you think North Carolina can compete in terms of innovation with other places in the U.S. and the world?

It already does. North Carolina has its expertise. The Research Triangle Park has proven it can not only be competitive but also that in some technological areas, it is one of the top places in the world. The innovative approach in North Carolina is not only at the technology level but also in how we think about business and commerce. I believe the upside for North Carolina going forward is tremendous.

Great Ideas that Stick With Us Edward Auslander, President & CEO, LORD Corporation LORD is a diversified technology and manufacturing company established 90 years ago. What are the most innovative products you have invented over the years?

One of the most important is Chemlok Adhesives, which was developed in the 1950s.

It is a specialty adhesive for bonding rubber to a substrate like metal, composite or plastic. It is so prevalent today that just about every car manufactured in the world uses it. Another landmark innovation was what is called magneto-rheological (MR) fluids. The idea came to one of our scientists when he was eating a fruit yogurt: he thought if Dannon can suspend fruit in yogurt, why don’t we try to suspend iron particles in water? This technology is now used in every magnetic primary suspension in the automotive industry. So there is indeed a lot of LORD technology that people use every day without knowing it. The car, the bus, the train, the plane, whatever people move around in, there’s a bit of LORD in it.

You spend about 8-10% of your turnover on R&D. What can we expect from you in the near future?

Typically, the Chemlok Adhesive is used in a mold, in a

press where under heat and pressure, the rubber bonds to the metal through our adhesive. Now, we are interested in the plastic industry, which uses an injection mold and press: we have just created a technology for bonding plastic to various substrates. The applications are notably used in the wearable or personal electronic device market, automotive and medical. With this technology, manufacturers can design their devices in unique ways that could not have been conceived previously.

You also have innovative training programs for employees. How do they work?

3,000 employees in 26 countries

9

R&D centers worldwide

Indeed, we have various programs. One of them is the Career Foundations Program, whereby we take four university graduates who go through an extensive two-year training comprised of four different “blocks” of work. We do something similar for the sales and manufacturing teams. One of the benefits of our training is that we put people right into real work, with real responsibilities. We had an intern last summer who developed a new material for a world-famous electric vehicle company, and we’re now commercializing it.

Growing Fast, Captivating Big Customers and Stealing the Spotlight Jim Datin, President & CEO, BioAgilytix In what ways are you more innovative than other contract research organizations (CROs)?

Our model is quite different than the rest of the industry. Historically, the industry would have an assembly-line format. Everyone would do a little piece of research and pass it on to the next person. It was not very gratifying for the staff, and there was a 20-30% turnover of employees every year. We changed the model several years ago, and we now have one point of contact: the bioanalytical project manager, who is the “captain” in charge of delivering the project on time by using our internal resources. As a result, our employee turnover is the industry’s best with less than 5% per year. Furthermore, we are 98% on time.

Research and trials can be very expensive for pharma and biotech companies. How much better do they fare by using a CRO? We have 100 scientists and if these biotech companies wanted to duplicate that, they would have to spend a lot of money and they would probably never have the true expertise and means that we have. We are able to bring these concentrated experts so that we can learn

best practices from all the companies we work with. Today, we work with 21 of the top 35 pharma and biotech companies in the world.

It would be nearly impossible for a biotech company to do that unless it was a very large company. They would be better off partnering with someone like us who have such domain expertise that we can solve very complex problems. They can also turn us on and off, so to speak.

50%+

PhD/Masters-level scientists

21

Partner to 21 of the top 35 global pharma & biotech companies

You have grown significantly in a short period of time. Is there a possibility of plateauing in the medium or long term?

We have some tail winds with a continued trend in outsourcing. Also, a lot of emerging biotech companies created recently are virtual and they would rather find a partner like us than employ a lot of people. The industry is growing at nearly 10% per year, though clearly our growth is many times higher. Also, because our model is so successful, we continue to grow from our customers. Many of them are expanding in other parts of the world, and this is why we recently acquired IPM Biotech’s lab in Europe.

InnovateNC to Boost Innovative Economic Development Statewide Sarah Langer Hall and Anita Brown-Graham, NC State University Institute for Emerging Issues InnovateNC is a two-year initiative launched in 2015 by NCSU and nine partners to support innovation economies in five communities: Asheville, Greensboro, Pembroke, Wilson, and Wilmington/ Carolina Coast. Why was it necessary now, and why these communities?

Even though North Carolina has a strong innovation economy, the reality is that it remains positioned in the middle of the pack among the other American states in terms of overall innovation capacity and effectiveness. Moreover, there is a gap between thriving innovation hubs such as the Research Triangle Park and smaller communities. These five communities were selected among 18 applicants through a request for proposals. We wanted this cohort to reflect the variety of geographic locations, populations, resources, cultures and ventures. There is also quite a bit of variation in the resources available in each of these communities, as well as the unique local assets they are emphasizing in their innovation ecosystems.

Each community will receive benefits valued at

$250,000. How do you work in practice to help them set up and grow their project?

5

communities throughout the state

$250,000 each in services & support

Indeed, the nine partners of NCSU’s Institute for Emerging Issues have collectively committed an estimated value of $250,000 of services and support for each of these five communities, for example strategic direction, gathering and analysis of data on each community’s innovation assets, and tools and methodologies to support innovative entrepreneurs. Each community has their own goal; for Asheville to grow the city’s emerging environmental and climate science sector, for Greensboro to develop a global innovation and design ecosystem, for Pembroke to build upon existing entrepreneurial resources and assets by utilizing the region’s diversity and heritage, for Wilmington/Carolina Coast to develop a marine and bio-technology cluster, and for Wilson to develop a downtown space to support and accelerate startup and emerging companies. At the end of the project, we expect these five communities to have a clear vision of their innovative economy, a more inclusive innovative economy and a significant new project reflecting their vision.

Connecting Higher Education to Economic Development Tom White, Director, Economic Development Partnership, NC State University Could you give us a brief overview of the NC State University Economic Development Partnership?

We are a land-grant institution at NC State. The genesis for this partnership started with Dr. Michael Porter of Harvard University about 12 years ago when the Research Triangle Regional Partnership - a consortium of 15 counties around the Raleigh-Durham International Airport including NC State, UNC Chapel Hill and Duke University - determined that universities should have a more prominent role in the economic development of the state. Dr. Michael Porter carried out a study to identify industry clusters and concomitant companies that would be good prospects to help attract inward investment and create jobs as well as retain and expand existing enterprises. About a dozen or so clusters were identified; life sciences, aerospace, aviation, automotive assembly, biotechnology, medical devices, high-tech textiles, etc. Our mission is to connect the intellectual resources of the academy with local, regional and state economic developers, all of whom have the same goal of attracting capital investment and creating jobs,

which is the pre-eminent target. We use the analogy of the triple helix where you take the best from the academy, the business interests who want to relocate, and governmental entities who want to capture investment for their communities.

How have the unique advantages of the Centennial Campus and North Carolina convinced companies to relocate or set up operations?

12

The NCSU Economic Development Partnership was founded 12 years ago

100

counties

in North Carolina

An example would be the Japanese corporation CBC Americas, which came to Long Island in the 1960s. They put out an RFP and we were able to outcompete Allington, Pennsylvania, because of the intellectual advantage that our universities provide, rather than offering a more financially lucrative package. The corporation moved to Cary bringing 100 jobs and a $3.5 million capital investment. It is very important that we create jobs and benefits in rural areas, not just in RaleighDurham and Charlotte, but in all the 100 counties in North Carolina through derivative investments and through the Kenan Fellows, a STEM-focused teacher training leadership program.

Greensboro Bounces Back After Decline of Old Industries Nancy Vaughan, Mayor of Greensboro Greensboro is a community that was hard hit by the downturn of traditional industries and the Great Recession. How are you faring today?

The Triad, where Greensboro is located, has indeed been hard hit. In the 2000s, the region lost over 100,000 jobs as traditional employers, mainly tobacco and textile, downsized or offshored production. Since then, we have managed to recoup more or less the number of jobs lost but not the same quality. People here used to make a livable wage in tobacco and textile but unfortunately, those jobs have been replaced by ones in the service sector. So our policy is not based on simply attracting jobs by number but on really looking at quality and wage growth.

How do you that?

We do not want to focus on only a few sectors because we have seen how devastating it can be when there is a downturn. Rather, we focus on small business and job growth and retention. The most important thing we are doing as a city and a county is fostering workforce development to make sure that local people have

the necessary tools to compete in the global economy. For example, we have assets at the airport, which employs some 5,000 people with higher than average wages. Through our school system, we put an emphasis on aviation so that graduates can either find a job at the airport or take a step further and go into engineering or aviation-centered maintenance. At the same time, we are looking to attract large employers that come with a dense supply chain, such as automobile or advanced manufacturing.

280,800 inhabitants in Greensboro

34.6%

job growth over next 10 years

What are Greensboro’s specific advantages compared to other places in the Triad?

We have lots of advantages! We are smaller; we are growing but are not overgrown. Logistics and transportation are very good here. We have a very high quality of life. We have seven colleges and universities.

Workforce development is another point: we partner with our local colleges and universities to make sure we have the people ready to fill employers’ needs.

Furthermore, the city is extremely collaborative when it comes to looking at solutions to problems and engaging businesses.

Collaborative Thinking Fosters Innovation in Greensboro Brent Christensen, President & CEO, Greensboro Partnership How does the Greensboro Partnership function?

What industrial sectors are you targeting in priority?

Ten years ago, there were three organizations here: the Economic Development organization, specialized in entrepreneurial development, the Chamber of Commerce, and Action Greensboro, which works on community development. We had this vision that they should all work together, and the Greensboro Partnership was thus created to build the community, attract or retain businesses, and market them. We also have the new Guilford County Economic Development Alliance, which links us with the city of High Point.

Aviation is a priority. We already have HondaJet, Haeco, which is a maintenance, repair and overhaul (MRO) company, Cessna, FedEx, and Landmark, to name a few. We are currently building additional land for development in and around the airport. Another important sector is life sciences; we already have the leading biotechnology firm Syngenta based here. Other priority sectors are supply chain and logistics, specialized businesses and services, and innovative manufacturing.

What are Greensboro’s unique selling points?

We excel at making things. We have always been a manufacturing community, which started out with textile and tobacco and evolved into innovative manufacturing. We are awfully proud of our work force, which is the first asset businesses look at when considering a location. Another advantage is our thriving life-sciences community. A third point is connectivity: our network of roads puts us within a day’s drive from about half of the population in the U.S. This is why FedEx’s mid-Atlantic hub is located here.

We are extremely proud of our work force; it is a key asset for businesses.”

As North Carolina’s economy is increasingly shifting towards innovation, what are the areas that need most attention to keep the momentum?

One of our priorities is to retain talent. We have a program called Opportunity Greensboro, whereby we ask businesses to offer internships to the best and brightest so they can get a feeling of what it is like to live and work here. Another area is business mentorship, connecting successful local entrepreneurs with rising ones to accelerate their growth.

Becoming a Leading Aerospace Center Kevin Baker, Executive Director, Piedmont Triad Airport Authority You have been Executive Director of the Piedmont Triad Airport Authority since 2010. What were your objectives when you took office and what has been achieved since then?

This is the third busiest airport after Charlotte and Raleigh, but we are far behind in terms of passenger volume. It is not a problem for us because these are totally different airports, which serve completely different communities. I would say the most important evolution is how we have succeeded in focusing on our strengths and on who and what we are, rather than trying to emulate sister airports that we will never equal. Up until not that long ago, airports were thought of only as places for people, luggage and packages to move by air. Certainly we maintain that focus to promote the best experience our travelers can have; but we have also focused on aircraft design, manufacturing, maintenance and logistics. We of course provide service to travelers but our real competitive advantage is in Maintenance, Repair and Overhaul (MRO). Honda Aircraft Company is based here and designs and manufactures advanced light jets; HAECO performs large-scale thirdThe airport party maintenance on aircraft for has significantly customers worldwide.

Cessna has one of its busiest MROs contributed to the at the airport. Finally, the FedEx Mideconomic recovery Atlantic hub located on the airport and of the region.” its sister FedEx ground facility which is near the airport provide key logistics capabilities. Over the past 20 years or so, the Southeast has become a hotbed for aerospace industries, and we are part of that niche. One of our strong points is that we operate in all four segments: design, manufacturing, maintenance and logistics. Furthermore, we are located in the middle of the densest part of North Carolina, the so-called “Piedmont Crescent”, halfway between Washington D.C. and Atlanta, and between Boston and Miami. Last but certainly not least, we are served by a topquality road network.

How are you planning to grow in that niche position that you have reached?

Our challenge is to make sure that we are always ready to say ‘yes’ to the next company. To do so, we need to have the land, the necessary environmental permits, and the funds to be able to construct sites for these companies to locate. We have almost 1,000 acres on one side of the airport that will have airfield access.

A new interstate road is already under construction and adjacent to and through airport property. We have that land ready to go right now for a large OEM or MRO. It could also serve future expansions of our existing tenants looking to grow their operation here. This is very important because it could mean thousands of new jobs. Already, Honda and HAECO collectively employ approximately 3,300 people, so the more land we have ready for new operations, the better it is for employment.

$2bn

revenue generated for the region annually

5,000+

employees on campus

50+

aerospace companies

Greensboro was hard hit by the crisis, but now it is recovering. Did the airport play a role in that?

Indeed, in the 2000-2010 decade, some 91,000 jobs were lost, which is the equivalent of the entire population of downtown Charlotte. But the region is definitely making a comeback. The airport has played a role in this because it is a significant center for employment, with higher than average wages. Now our plan for the next five to ten years is to build our aerospace presence while at the same time preserving and hopefully expanding our market in terms of passenger travel. I believe the airline industry has gone through the most important mergers now and that we will see a rather long period of stability. Our long-term goal is to become the center of aerospace manufacturing and maintenance on the East Coast.

Medium-Size City Gets Big on Business and Leisure Tourism Henri L. Fourrier, President & CEO of the Greensboro Convention & Visitors Bureau What are the main tourist attractions of Greensboro?

What makes it unique for visitors?

Greensboro is a unique treasure, with plenty to do and see. We are steeped in history; we started as a city in the wake of the Revolutionary, Colonial and Civil Wars. We cater both for leisure and business tourism, the proportion of visitors being respectively 60% and 40%. There are some 135 attractions here, notably our Coliseum Complex that seats 22,000 people and is great for concerts, sports tournaments and other types of events. For congress tourism, we have the Koury Convention Center, which is a 1,000-room hotel with 250,000 square feet of meeting space. We also have a lot of trade shows at the Exhibits Center. I could give many other examples of all the things visitors can do when they come here, such as the Greensboro Science Center, which has been through three major expansions including the indoor aquarium SciQuarium and SKYWILD, an animal-inspired treetop adventure park located above the Science Center’s zoo.

How important is business and conference tourism for Greensboro?

We have a lot of industry that brings visitors to town. For example Mac truck, Volvo truck, HondaJet and the Center for Creative Leadership are all headquartered here. There is a project to develop an aerotropolis in the area of the airport in order to attract aeronautical industry, knowing that we Our sense already have one of the largest aircraft maintenance companies in the country, of hospitality makes us unique: HAECO. Our top notch convention center caters to the growing segment we welcome of business and conference tourism. What are the most important investments made recently in the everybody, It attracts one million visitors per year tourism sector in Greensboro? and is the largest on the East Coast Greensboro is a dynamic community. For example there is an $8 whatever their million project currently being carried out in the between Atlanta lifestyle.� neighborhood where the Convention & Visitors and Washington Bureau is situated to create a new thoroughfare, the D.C. The economic Gate City Boulevard. Furthermore, our Coliseum impact of tourism on Greensboro is significant as it has undergone a $24 million renovation to remain touches all kinds of local businesses, from restaurants state of the art. Our Koury Convention Center has to banks. It has a huge ripple effect. inhabitants undergone a $30 million room upgrading. A park is How important is the Piedmont Triad being developed downtown, and there is a brand new International Airport for the tourism sector in performing arts center under construction that is set Greensboro? to open in 2018. It will be state of the art so that we Piedmont Triad International airport is the third can get back in the business of producing Broadway busiest airport in North Carolina averaging 280 shows. These are examples of the efforts undertaken attractions takeoffs and landings each day. It is a relatively small in Greensboro to increase our tourism offer and have airport whose size is in line with the size of our top notch facilities. Obviously, these efforts also community, and it has been recently renovated and directly benefit local residents. modernized. The advantage is that the flow of traffic What makes Greensboro unique? in and out is very expedient: there are short lines and Our southern hospitality sets us apart. We are nice the waiting time is short. It is connected to just about and welcome everybody. Our doors are open and we anywhere. We are very proud of our airport, which is accommodations have no prejudice, no matter how people choose to situated close to town. It is an important element in to choose from live their life. our tourism offer.

273,000 135

87+

Taking the Apparel Industry to the Cutting Edge Eric Wiseman, Chairman & CEO , VF Corporation VF Corporation is a century-old, leading global apparel company based in Greensboro. Would you say that innovation is the key to VF’s longevity and success?

Indeed we have been around since 1899 and we have a long history of transforming this company. You don’t get to be 116 years old doing the same thing every year. Over the last 15 years, we have reinvented this company once again. We made the strategic choice to invest in activity-based lifestyle brands because they define how people live and it has been a winning formula for us. We transformed in many other ways. Twenty years ago, we had no retail stores; we were purely a provider to other retailers. Now, we have more than 1,500 branded stores around the world. Ten years ago, we had zero e-commerce business. Now, it is a $600 million business. We have had to invent new ways of engaging with consumers around an ever-changing portfolio of brands and we have grown globally. Our annual revenue is now past the billion dollar mark in Asia.

What would you say is your unique way of innovating?

In September 2010, after two years of preparation, we launched our corporation-wide innovation initiative. Why? Because consumers value return on that investment for our shareholders. I’ll give the example it, they buy innovative products. If you can innovate, you are rewarded of the Timberland brand, which we bought in 2011. To test our new financially and your brand is rewarded. So strategy, we talked to 18,000 people when most brands do focus groups we set up the VF Innovation Fund, through with a dozen people. I have met personally with scores of consumers, There is which we invited all our employees to come in China in particular, in their bedroom, in front of their closet, talking about what they wear, when, how, and why. These so much going up with ideas, which we would finance. We spent very thorough discussions help us understand what well for this about $15 million in consumers want better than anyone else. state in terms the first five years, and of supporting a culture of innovation Is the business and innovation environment in North Carolina important for your company? spread throughout the business: we in revenue There is so much going well for this state in terms company. But there love it here.” for 2015 of supporting business: we love it here! All the big was a problem: people surveys rank North Carolina among the top states could not realize their for business. We appreciate the continuous dialogue ideas because, they told us, they had a day job that with researchers, which is one of the reasons why we consumed all their time. So we changed the system based one of our three Global Innovation Centers at and opened three Global Innovation Centers in the Gateway University Research Park in Greensboro.

U.S. that work exclusively on new breakthrough brands Here, our scientists regularly collaborate with other projects proposed by our teams. researchers to pursue breakthrough innovations for To what extent do these new projects stem our jeanswear business. Also, there are so many from your conversation with consumers? good universities here from which we can hire We are indeed one of the best consumer insight talented young people. Last but not least, there are employees companies in the apparel and footwear space not many states where you have the quality of life because we invest more in it; we believe there is a we enjoy here.

$12.4bn

30+

64,000

Winston-Salem Spearheads Innovation in the Piedmont Triad Allen Joines, Mayor of Winston-Salem In the past twenty years, Winston-Salem was transformed into an innovation hub.

How did this take place, and why?

Winston-Salem was built on tobacco, textile, furniture and very heavy manufacturing. But these industries were either becoming mature or the jobs were being outsourced to lowercost producing areas, particularly in textiles and furniture. There was a period in the late 1980s when we lost about 10,000 jobs in some 18 months; it was an eye-opener. We began focusing on rebuilding the economy towards knowledgebased industries in seven sectors: financial services, medical, biomedical, design, travel and tourism, advanced manufacturing, and logistics.

We have since made good progress. I would like to also emphasize that the tobacco company R.J. Reynolds has made a significant contribution to the resurgence of the city by donating buildings.

How do you make sure thoses changes do not leave the less privileged behind?

Indeed, it is a priority. We have a great partnership with Forsyth Technical Community College, and they create programs adapted to the new economic

areas in which we are moving, in order to make sure that local youths are on board. And when companies set up here, such as Caterpillar or Herbalife for example, Forsyth Tech helps us train individuals for the specific jobs offered by the company.

What kind of investment are you looking to attract?

241,000 inhabitants

In the top 10

most technology-advanced cities of its size in America

We want to continue to grow the seven sectors I mentioned earlier, and notably financial services. We have a good, strong base already with BB&T being headquartered here; Wells Fargo also has a strong presence. There are great opportunities in this sector. BB&T in particular continues to grow and brings new segments of the corporation here. There are also good opportunities in advanced manufacturing, now that jobs are being re-shored in the South.

Where do you see the city in the future?

We set a goal for ourselves to be one of the top 50 metro areas by the end of the decade, which means creating 27,000 jobs over the next five years. But we want to keep our soul and not lose our quality of life, and all the amenities we have.

A New Model of Medicine Based on Keeping You in Good Health Terry Akin, CEO, Cone Health According to ‘U.S. News & World Report’, Cone Health is one of the best healthcare systems in North Carolina. What makes it perform so well?

We are very determined to provide the highest possible quality and the best possible service as cost-effectively as possible. In the U.S., we spend almost 20% of our GDP on healthcare, an amount roughly double that of other developed countries.

This is not sustainable. So we have challenged ourselves in recent years to attain measurable results that are on par or better than others locally, regionally and nationally. We want to be innovators in providing value-based population healthcare that is focused not just on treating you when you are sick, but rather on managing your health and keeping you well.

If people don’t go to the doctor, or to the hospital, how do you generate an income?

We are moving to a value-based model, whereby we would be at risk for a pool of funds that we are paid to take care of a particular population. It is then in our interest to maximize the health of that population and not use all those resources.

In the Triad, we have about 1,400 physicians who are part of the Triad HealthCare Network.

The whole premise of the organization is how to work together more closely—hospital and physicians—to provide more proactive intervention, enhancing quality and decreasing the cost of care.

How do you do that in practice?

12,000 employees

120 locations including 6 hospitals and 4 urgent care centers

It is essential to understand data. We have stories of patients who went to the Emergency Department a hundred times in a year and, under the current model, there are limited incentives to stop this type of dynamic, because the hospital and the doctors are getting paid for nearly every visit. To understand why, we sent nurses to people’s home. It turns out that a lot of times, people go to ED because they don’t have financial resources, basic knowledge, access to primary care, or because they are lonely. So the idea is to address those problems at home, in the community, which is what most people prefer anyway, rather than at the hospital. Providing the right care at the right time in the right place is really the key.

Wake Forest Innovation Quarter Gives New Life to Winston-Salem Eric Tomlinson, President, Wake Forest Innovation Quarter What has been the impact of the Innovation Quarter on the local economy?

A number of factors inform us that the economic impact of the Innovation Quarter on Winston-Salem and the Piedmont Triad is substantial. It has become a major engine for economic revival of what was once a tobacco town. Over the last few years we have been one of the fastest-growing innovation districts in the U.S. By the end of 2017, we will have attracted around $800 million of inward investment into creating the place. By then we anticipate there will be 3,500 jobs (many of which will be high-tech and high-paying), 6,000 student/work force trainees annually and about 70 companies in the Quarter. Furthermore, substantial infrastructure will have been created—fiber optic cabling throughout, roads, hardscape, residences, hotels, restaurants, and We are full and building publicly accessible spaces for recreation. extensively to be We calculate that by the end of 2017, some $200 million a year of salaries will able to receive be generated in the Innovation Quarter more companies alongside an increasing property tax base.

The $800 million inward investment for and tenants.” the Innovation Quarter compares with a total for downtown Winston-Salem of about $1.5 billion of inward investment over the last decade; you can see how significant we are to the economic vitality of the city and the county.

Are you focusing on any particular area of innovation?

No, precisely because our focus is on innovation, whether it is information technology, bioscience, digital health or advanced materials. We focus on attracting small, emerging companies that can grow organically. School of Medicine, which includes one of the nation’s leading centers This is a vibrant community where people live, work, learn and play. in population health. What is interesting is that the technologies these The Innovation Quarter is close, connected, and companies use are coming together: for example contributes to making Winston-Salem what we call data mining and analytics are used in epidemiology a ‘15-minute city’: there are 270,000 inhabitants and in clinical medicine. There are many other in the city, of whom the majority live close to applications for new technologies in medicine: downtown, which in turn fosters collaboration printing skin to heal wounds, or developing new and interactions. We nucleated around Wake tissues and organs. The Institute for Regenerative in inward investment Forest Baptist Medical Center and the Wake Forest Medicine, based here, already has more than School of Medicine. Then the tobacco company 30 organs being studied in the clinic.

R.J. Reynolds very generously donated all these What was essential to the Innovation manufacturing plants and buildings, which Quarter’s success as a public-private enabled space development. This attracted more high tech partnership? companies that began to cluster, and created a high-paying jobs It is a great example of a private-public critical mass. We are now close to being full, and partnership. The growth of the Innovation Quarter we are building extensively to be able to receive has been driven by Wake Forest Baptist Medical more companies.

Center working cooperatively with private real Can you give some examples of innovative estate developers and the city of Winston-Salem companies that are thriving here? and Forsyth County through numerous economic One example is Inmar, a groundbreaking company assistance agreements. The state has been strongly that provides intelligent commercial networks involved through providing historic tax credit based in the using big data analytics. Inmar has more than incentives, and the federal authorities helped us Innovation Quarter 4,200 employees, of whom about 900 are based with infrastructure. All of this has been knitted here. Another good example is the Wake Forest together very well over a period of 10-15 years.

$800m

3,100 61

companies

Innovative Teaching to Train Leaders for the Common Good Nathan Hatch, President, Wake Forest University Founded in 1834, Wake Forest University is a private, coeducational collegiate university.

What does it mean?

I believe that universities should have a clear mission, and we clarified ours in our name. We came to call Wake Forest a collegiate university because it is a university with professional schools—medicine, law, business and so forth—but that teaches like a college, with a very strong focus on students. This is our niche.

Can you give some examples of innovations you brought in since you took office in 2005, and are particularly proud of?

We try to be radically traditional and at the same time radically innovative, not only in our curricula but also in the way we run the university. For example we strengthened our Office of Personal and Career Development to help students, most of whom are coursing liberal arts, decide what they can do Modern problems need to be in life. We also have a well-being Are humanities still important in a technology-driven world solved by blending program called Thrive that helps and economy? students live an integrated life outside You can go back to an influential lecture by C.P. Snow called The Two science and the the classroom and come to terms Cultures, in which he said that modern problems cannot be solved liberal arts.” with the various stresses they face. only by science or the liberal arts, and that we need to blend those two areas, which is certainly our philosophy. And also, Concerning the whether in political or business life, people need curricula we offer, to know how to read carefully and to write clearly. we combined together the business schools that were At Wake Forest, which has small classes, our separate before, for undergraduates and graduates, students excel in verbal communication—how to and decided to de-emphasize the full-time MBA the year Wake discuss, to debate and to work in teams. All those in order to focus on a one-year MA in Business for things are necessary to run a company, even if it is liberal arts students. This year, we launched a new Forest University a technical one. master’s program in Business Analytics, which teaches was founded how to deal with big data. In yet another area, faculty What is the legacy you would like to leave? members in our School of Medicine developed the I am proud of the programs we are launching Wound Vacuum-Assisted Closure (VAC), which is through Wake Downtown; they present huge a major, groundbreaking form of healing. This is opportunities as well as risk and innovation. Now, an intellectual property that we took to market and we have to deliver on our promise to educate the which has already returned several hundred million total university whole person, and we are continually aiming to dollars for the medical school. do that better. Emerson said the university should This said, the most interesting innovative enrollment educate the intellect and the character, however, development has been Wake Forest Innovation in the modern university, you take classes, you are Quarter. As a matter of fact, it is probably the most evaluated on that, but the rest of your life is your dramatic change in North Carolina. Our medical own. Wake Forest is already doing that with our school is moving there this summer. On the other Office of Personal and Career Development, and we side of the building, we will be starting a set of need to do more. Our motto is “Pro Humanitate”, undergraduate programs in biomedical sciences and of students which means for the good of humanity. We want engineering that we are calling Wake Downtown— study abroad to train leaders who, whatever their profession, will literally and figuratively bringing medical and liberal really work for the common good. arts education together under one roof.

1834

7,837

60%+

An Honest, Trustworthy Bank Made in North Carolina Kelly S. King, Chairman & CEO, BB&T Corporation How important is BB&T, one of the largest financial services holding companies in the U.S, to the economy of North Carolina?

We are a homegrown company. We started in a little town, Wilson, situated east of Raleigh, in 1872. Over 144 years, we have evolved, changed and innovated just as North Carolina has. I remember when I started in 1972, we were just 100 years old and we were a $250 million bank. Now we are at more than $212 billion and we are the ninth largest American bank. We have always innovated not only because we had to, but because it is in our DNA; we have come a long way, and we are a good example of how North Carolina as a whole has progressed.

How did you weather the 2008 financial crisis and the Great Recession?

It was a very challenging and scary period of time, but it never occurred to me that we wouldn’t make it because we have always been a very conservative institution. We had, as we always had, strong capital, strong liquidity and we are really diversified. But beyond that, we made it because of our culture. We have very strong values; we are not just about making money. We want to do the best for our clients, and we want our staff to be happy about their work. So when people were out selling those crazy mortgages, we didn’t do it because it wasn’t good for the client and it wasn’t just, it wasn’t honest.

Values are really important, especially in We are not our sector.

just about making money. We have very strong values and we always do the right thing.”

Does that apply also to community engagement?

Indeed, it is also a strong value. We have numerous programs but one of the most predominant is our Lighthouse Project, whereby our employees, whom we call associates, go out to work in the community. We give them money to buy material and they go out and carry out projects.

Over the past seven years, we have done more than 7,000 projects that touched over 11 million people.

laptop. It helps you keep track of your accounts in a user-friendly, visual way and it is also very customizable. We launched it in October 2015 and we already have over 1.5 million active clients, which is incredible. It is very innovative; it is the new world.

$212.4bn

In what ways is BB&T innovating in terms of operations and relations with customers?

Relations with customers are a big area of innovation. It is interesting to note that we are of course constantly building a very advanced digital distribution system but at the same time, we have to maintain the traditional brick-and-mortar system because customers, even generation X, Y and Millennials, still care about having their local branch, even though they may never go there.

Right now, we are very happy because we have just introduced what we believe is the best digital banking platform, which has already received quite a few accolades. It is called “U” because it is focused on you. It is a very seamless platform and it works whether you are on your phone, tablet or

in assets

$26bn

market capitalization

2,137

financial centers in 15 states and Washington, D.C

Would you say North Carolina has all it takes to be innovative and business-friendly?

The state has made huge progress in reducing personal and corporate tax and improving the regulatory environment. It has a long tradition in innovation, and now it is very advanced in biosciences, life sciences, aerospace, the Research Triangle Park, and it has fantastic universities.

Now, the area where we really need to improve is our K-12 educational system. In fact, our company is trying to help that with our BB&T Leadership Institute, providing free leadership training for principals in schools. We believe the best way to improve K-12 education is to help the principals, who are like the managers of their business, to become leaders and that is what we are doing.

Innovative, Well-Connected & Savvy Charlotte Jennifer Roberts, Mayor of Charlotte When you took office in December 2015, you said one of your priorities was to “expand economic opportunities to all the neighborhoods� of Charlotte. Why is that a priority?

The economy of Charlotte is doing well but, at the same time, there is an increasing divide between people on the lower end of the economic scale and the wealthy. When I was campaigning, meeting people and groups from all neighborhoods, this was a recurring theme.

The City Council can make sure that all parts of the city have the same access to opportunities.

The main areas we are working on are education, affordable housing, transportation and developing small businesses.

What are the areas in which Charlotte is the most innovative?

We are a leader in renewable and smart energy, thanks notably to Duke Energy. North Carolina was the first state in the Southeast that required utilities to have a portfolio of renewables. We are also the fourth biggest producer of solar panels. The whole community is very involved in

this area of energy efficiency and weatherization, for example shading windows to reduce the amount of energy spent in buildings, etc. The City Council led a very interesting program, Envision Charlotte, to connect 61 buildings uptown and give them access to real time information so they can adjust their energy consumption. It has resulted in a 17% decrease and has inspired the nation-wide Envision America program.

Why have so many top-level corporations chosen Charlotte for their HQ?

827,000 inhabitants

6th

fastest-growing U.S. city

There are a lot of good reasons. The first one is that we have a great airport; it is really one of our big assets that connects us with the rest of the U.S. and the world. We are the seventh busiest airport in the world in terms of operations. Then we have several leading universities that provide companies with the talent they seek, but also graduates who stay here to launch their own startups. Another advantage is that we offer great quality of life and a vibrant arts and culture scene. Innovation and creativity go together: a lot of people working in innovative sectors want to have entertainment options because it feeds their creativity.

Playing in the Big League Brent Cagle, Aviation Director, Charlotte Douglas International Airport How important is Charlotte Douglas International for North Carolina?

Our development plan over the next 10 years preserves our current assets. The terminal needs a full renovation because it was built for about eight million annual passengers and last year we had about 12.5-13 million. Another priority is a new runway. We have four runways, three are parallel and one is crosswind. We are looking at removing it and making it a fourth parallel runway that would enable non-stop service from Charlotte to anywhere in the world.

It is the eighth largest airport by passenger in the nation and the sixth largest by aircraft operations (landings and takeoffs). We are the second largest hub for American Airlines. We are also the second largest hub on the Eastern Seaboard, which is home to a third of the nation’s population.

You have set passenger traffic record for the sixth straight year. To what do you attribute this growth?

Over the last 15 years, Charlotte Douglas has become a primary hub for US Airways, which is now American Airlines. That fueled some of our growth through additional air service. We are also seeing regional population growth fueling it even more. We are a very unique connecting hub in the U.S. Charlotte provides a very good airspace and is situated halfway between Washington, D.C., and Miami.

We are a great option for connections that allow northsouth traffic to collect here and then move out east-west.

What are the priorities of your development plan?

$12bn

economic impact* *2012 Economic Contribution of Airports in North Carolina

76%

increase in passenger numbers over the last ten years

What are you going to adapt in terms of new technologies?

Charlotte has always been a leader in flight innovations.

Right now, we are the only airport in the country that is working with the FAA for improvements in their Nexgen Program. All the technology that the FAA is investing should lead to more efficient use of the national airspace and improved air travel. This means more efficient travel, which helps lead to less fuel burn and less time in the air for passengers. All of those benefits are obtained through the Nexgen program, and we are working very closely with the FAA as a primary partner to lead on some of their initiatives.

Sealed Air Wraps Up Innovative Reorganization in Charlotte Jerome Peribere, President & CEO, Sealed Air Sealed Air is in the process of moving its headquarters from New Jersey to Charlotte, a move that will be completed in early 2017. Why Charlotte?

Up until recently, our three main divisions were located in South Carolina, Amsterdam (Netherlands) and New Jersey. Then our global headquarters was in yet another place, also in New Jersey, and our R&D was scattered around the world. This was preventing collaboration and cross-fertilization among our staff; we needed to regroup. We chose Charlotte because of a combination of factors. One is the city, its location and its airport, which is very important for us since we are a global company. The other factors are the affordable cost of living, the schools, the availability of skills, access to universities, and financial incentives. Putting all these factors together, Charlotte came before all the other competing states.

Sealed Air is particularly known for having invented Bubble Wrap®, but you recently announced the launch of a new product, Bubble Wrap® IB, which doesn’t pop. Fans are going to be heartbroken!

Bubble Wrap® started the company but it is not, by far, our biggest product. Today, we have a whole range of packaging solutions adapted to very specific markets and needs. We are a $7 billion, global company with a commercial network in about 170 countries and physical presence in about 60, as well as plants all over the We really world. are all about

innovation and re-imagining the industries we serve.”

Sealed Air has always innovated in different aspects of the packaging business, such as food preservation. What are the areas in which you most innovate now?

There is plenty of innovation in all our lines of product. Our Food Care division represents about half of our business, notably through our brand Cryovac®, by far the world leader in protein packaging. This type of product addresses the 5-10% of the meat that is not sold at the original price because it reaches its sellby date. Packaging can prolong the shelf life and thus bring a lot of value for the retailers.

Then we have our Diversey® division, which has the mission to improve the level of hygiene in restaurants, hotels, hospitals, offices, etc. We are the second largest in the world in this area.

Here again, we believe our differentiation is innovation by reducing the level of manpower, which is the costliest area in hygiene packaging.

Regarding our Protective Packaging division, we reduce freight costs by optimizing the dimension and weight of our packaging, again through innovation. So we really are all about innovation

and our tagline, Sealed Air Re-imagine™, reflects that, because our mission is to re-imagine the industries we serve. We spend about $150-160 million on R&D including digital work, which represents about 2% of our sales, a higher percentage than all our competitors.

$7bn

in revenues for 2015

170

countries covered by its network

$150-160m spent each year on R&D

There has been a lot of movement recently in the structure of the company. Will this drive the share prices further up?

In the last three and a half years, the stock increased from about $13 to $55, and it now stands at about $44. This reflects the big changes going on in the company. We have a program called Get Fit, which is about transforming Sealed Air into a truly modern company, and the move to Charlotte is part of that. We want to be a company where everybody collaborates and where R&D is not centralized but rather organized around centers of excellence. The other program is called Change the Game, which is about being disruptive, innovative, moving faster than our competitors and changing our own industry. We are already market leaders but what we now want is to become market makers.

New Wave Economy on Wilmington’s Shores Bill Saffo, Mayor of Wilmington You have been Mayor since 2003. What are the City Council’s most significant achievements and priorities for the near future?

One of the most important changes has been the redevelopment of our downtown. We have spent the last decade improving this area and bringing private companies and industries. We made significant improvements to infrastructure—water, sewer, bridges, roads, streetscapes, and river walks for tourism—making sure that the community had faith in what we were doing with taxpayers’ money. Now, the priority is to transform our local economy and make it more innovation-led so that we can compete in the globalized world. We want to bring in more technology and higher skilled jobs into our community. This area has been blessed with a lot of entrepreneurs because larger companies gravitate towards the Research Triangle Park area and Charlotte.

Wilmington being a coastal city, our economy is more based on tourism, so our main advantage is our quality of life and we publicize ourselves with that angle. We set up a coordinated plan together with a great number of players, individuals and organizations in order to grow our

innovation economy. Furthermore, we provide direct incentives to companies that are creating jobs and make significant investment; we did it for example for CastleBranch, PPD and GE. There are also incentive programs at county or state level, so we work in several ways to foster development and entrepreneurship in the community.

How does Wilmington benefit from the presence of the University of North Carolina?

111,000 inhabitants

18.8%

population growth since 2000

We have an excellent working relationship. The city of Wilmington and UNC created together a Center of Innovation and Entrepreneurship, which is hosted at the university, where people who have small businesses or are thinking of opening up a business here in Wilmington use the resources of the university to this end. These can be for example marketing, finance, or technology. These small innovative companies can create thousands of jobs if they produce the right product at the right time so the City Hall is very keen to provide them with the environment they need to flourish. I firmly believe that a community can never have enough incubators.

From Under the Sea to Over the Counter Dr. Daniel Baden, PhD, Executive Principal MARBIONC, UNCW CREST Research Park The Research Triangle Park has proven groundbreaking and hugely successful.

Are you trying to replicate this model in Wilmington with the CREST Research Park?

The Research Triangle Park is a very special place that was organized over a period of 45 years and it is one of the most successful ventures of this kind in the world. What we are striving to create in southeastern North Carolina is a bit different. We would like to build on the kind of “network of networks” that RTP has built and create cluster areas around this region that would be “live, work and play” environments. Now, the InnovateNC program that supports five innovative projects in five communities builds on the success of RTP in the sense that it fosters networking in crystals of individuals and corporations with clusters around them to provide all the assets that are necessary within a very small region. Such an arrangement allows rapid prototyping to bring products to market.

You are head of MARBIONC, a company specialized in marine biology that is a result of InnovateNC. What does it do concretely?

Stimulating economic development through products and technologies derived from living sea organisms.”

MARBIONC’s mission is to stimulate economic development in North Carolina through the discovery, development and marketing of new products and technologies derived from living organisms found in the sea. It is a UNC Wilmington state-funded program to translate basic science discovery into practical applications, and finally into processes that could spin out into businesses or be licensed.

It identifies niche markets to ensure products are developed to meet specific needs; it also assembles teams of researchers from science, business and academia, and provides infrastructure and necessary support to bring the new marine production to the marketplace. For example, based on research on a certain type of algae, we found a drug substance that we believe is useful in the treatment of cystic fibrosis. That molecule and the intellectual property associated with it was licensed out to industry, and if corporate development is successful, it could become a drug that will be a game changer for people suffering from this disease. There are also drugs as escorts for other drugs, and drugs for human herpes/equine encephalitis.

Port of Wilmington Embarks on Extensive Modernization Plan Paul J. Cozza, Executive Director, North Carolina State Ports Authority What is the importance of Wilmington Port in the economy of North Carolina?

North Carolina’s Ports generate about $700 million in tax revenues each year and some 76,000 direct and indirect jobs across the state; the Port of Wilmington contributes approximately 90% of all this. We are an economic driver and contributor for the state of North Carolina. Moreover, while receiving no direct taxpayer subsidy, we provide an annual economic contribution of $14 billion to the state’s economy by goods moving through our ports.

How does it position itself compared to its larger southern competitors such as Virginia, Charleston and Savannah?

We handle 300,000 TEUs and four million tons of bulk cargo per year, which is only half of our overall Wilmington is expanding to increase the speed and efficiency of loading capacity. With new infrastructure and innovations in the next two years, and unloading vessels. Specific improvements include the enhancement carriers seeking cost-effective and efficient solutions will find even of multiple berths and purchasing new post-Panamax container cranes. greater results at North Carolina’s We are also installing a submerged toe wall in preparation for future Ports. Even for large loads, the infrastructure improvements. In addition, we are working to further We provide an productivity and turnaround times develop the channel of the Cape Fear River. By this summer, the Port at the North Carolina State Ports of Wilmington will be fully prepared to accommodate post-Panamax annual economic contribution of $14 Authority are second to none, container vessels in the 8,000 to 10,000 TEU range. with one of the highest crane billion to the state’s productivity rates in the South How important is technological innovation in the operations economy.”

Atlantic, more than 45 moves per and future growth of Wilmington Port? hour. On the ground, the average Innovation is a big part of who we are. We pride ourselves on being time to load and unload a container cargo carrier at a North Carolina flexible and innovative as we run our day to day business. Right now, we have the advantage of flexibility in our space. We are port is roughly eight hours with truck turn times of at 50% capacity, so we have significant room to grow approximately 18 minutes per move and 30 minutes while avoiding the congestion that is a problem for for a drop-off and pick-up. These are efficiencies other ports. To stay ahead, we have invested heavily that cannot be touched by other ports. They result in our new terminal operating system, which provides in lower wharfage costs, quicker cargo delivery to its a stream of information to our cargo owners and destination, lower emissions through shorter truckTEUs container customers on their shipment and supply idling times, and increased profitability for carriers, chain status. As we continue to grow, this system will shippers and trucking companies. In addition, our allow us to maintain steady communication and topteam provides excellent service and customization. notch customer service, all while maintaining our How will the opening of the new Panama current efficiency. We also continue to invest in our Canal impact the activities and growth of machinery. We are now looking at more modern, postWilmington Port?

Panamax cranes for our portfolio to complement our tons of bulk To meet new industry standards, the North Carolina stable of post-Panamax cranes that currently service cargo per year State Ports Authority is investing more than $100 vessels at our Port of Wilmington. We are investing million in a Port Modernization Plan. The Port of millions more in our port-side terminal equipment.

300,000 4m

Providing Tailor Made Solutions for Pharma & Biotech Customers Stephan Kutzer PhD, CEO, Alcami Alcami is the new name of AAIPharma Services Corporation (AAI) / Cambridge Major Laboratories, Inc. (CML), a leading provider of custom development and manufacturing services for the pharmaceutical and biotechnology industries. What distinguishes you from other pharma service providers?

I have to go back to the past to explain how we position ourselves. Up until a few years ago, the pharmaceutical service industry was built around two types of organizations: Custom Research Organizations (CROs), focused on clinical trials of new programs and molecules, and Custom Development Manufacturing Organizations (CDMOs), which do the same for the manufacturing and development side. Basically they would take one part of the manufacturing to one supplier, and another part to another supplier, etc. so manufacturing was quite spread out. Large pharma companies can do that because they have the resources but smaller ones, in particular startups that only have a few people, cannot. A few years ago, American Capital Ltd. and a few other investment companies had the brilliant idea to combine multiple CDMOs into one company to provide end-to-end solutions to small / mid size pharmaceutical and biotech companies. CDMOs team up with The immediate their customers very early on in the development process. For example, objectives are when a customer has a molecule to streamline, idea to treat an unmet medical incorporate and need, we come in and develop a synchronize all our manufacturing process around it.

At Alcami, we take our customers operations.� and clients by the hand very early on and walk them through all the stages up until the clinical phase and the launch, including commercial supply material. We also provide the regulatory support to work with the Food and Drugs Administration (FDA) and the European Medicines Agency (EMEA).

The name and brand Alcami was created quite recently, in March this year. Why this change?

Alcami was built on four companies that were specialized in the scientific molecule solid state chemistry work, manufacturing active pharmaceutical ingredients (APIs), analytical testing, and drug production formulation development and manufacturing of tablets or vials. We chose the name Alcami because it is an anagram of the initials of the companies out of which we were created (AAI and CML), and also because it is a play on words on alchemy, the ancient chemistry of transforming metals into gold. This type of innovation and transformation is what Alcami is about: we have gone through a transformation to become one company and we will continue to innovate and find new solutions for our customers’ problems. For us, customer

focus is paramount and what drives us each day to become world class.

Most of our competitors have been built out of various companies that have merged, and when they do, the most difficult thing is to have them talk to each other. Actually, you wouldn’t believe how difficult that is, but that is the key issue and the key to success.

$210-215m annual revenue

1,000 employees

7 sites

including 6 in the U.S. and one in the Netherlands

What are your objectives for the short and medium term?

The immediate objectives are to streamline, incorporate and synchronize all our operations with clear and standardized programs, processes, instruments and obviously the necessary IT support and systems. This is our one-to-twoyear timeframe. Over the past few years, we have reached growth rate in the mid-teen range without necessarily adding a lot of capacity. We are in the midst of starting two to three shift operations at our sites that will ultimately lead to all our sites becoming 24/7 operations. This will add a lot of new capacity and opportunities to serve the market. We are currently assessing the market and demand to see whether we will add capacity at various sites, acquire certain technologies we currently do not have in house, or expand in Europe.

Leland Looking to Create a Brick and Mortar Hub Gary Vidmar, Director of Economic & Community Development, Town of Leland How is Leland attracting new businesses in the area and what is your unique selling point?

Leland is a rather new town, which was incorporated in 1989, but it is the first stop going south across the Cape Fear River from Wilmington, and we have land. We therefore have an enormous resource that the city of Wilmington and the New Hanover County do not. We have wide expanses of property available on which to create clusters of businesses.

Furthermore, we have intellectual capital, in particular because we attract retired people from the northeastern part of the country who have business acumen and are willing to invest in the town on a pro bono basis. Lastly, we have a community college that has many unique programs, in particular in marine biotech, which is the sector we are looking to develop as a priority.

What do you do to develop the marine biology/ biotech sector?

Our project is based upon expanding the base of marine biotechnology and commercializing the world

There is a tremendous amount of research and accomplishments in biotech and life sciences in the region.�

class research that is being conducted here, and attracting investment dollars and resources to convert the research into jobs and an economic development driver. This is the objective of our participation in the InnovateNC program.

In the southeast region, there is a tremendous amount of research and accomplishments being made in biotech and life sciences; the challenge is to improve our economy by building on this asset. Our objective is to create products that will lead companies to establish themselves here and create jobs so that money circulates in the economy. However, even though marine biotech was the original focus of our project when we applied for the InnovateNC grant, we realized it was too narrow. It takes long-term, very educated investment and specialized researchers and spaces to develop new products. So now, we have decided that the support system we are building will not be limited to marine biotech but open to all kinds of entrepreneurs no matter what their sector.

Furthermore, we are planning to create a brick and mortar hub building where entrepreneurs will be able to find all the resources that are available for them.

Asheville, the Cool City Where Everybody Wants to Be Stephanie Pace Brown, Executive Director, Asheville Convention & Visitors Bureau How important is tourism for the economy of Asheville?

The city of Asheville, which has a resident population of 85,000, attracts about 10 million visitors a year. There are some 225,000 residences in Asheville and Buncombe County and visitors spend about $1.7 billion annually so it is quite significant: it saves each household about $1,200 a year in local taxes. Visitor spending supports 25,000 jobs across all economic sectors, representing about one in seven jobs. The other driving force is not only tourism itself but tourism promotion. We do a significant amount of advertising, and in the coming fiscal year, we will have $10 million of paid advertising in the airways, on Internet and in print. These campaigns not only attract tourists who spend money but they also increase the reputation and appeal of Asheville as a place to go to college, start a business or relocate. So beyond tourism, we have built a reputation that has spurred the economy of the whole of western North Carolina.

How does innovation play a role in Asheville’s tourism policy?

One example is the creation, in the early 2000s, of the Tourism Product Development Fund with the aim of increasing product development.

Since then, it has funded 27 projects with a total of $23 million and it has really helped increase the appeal of the destination through new experiences, and it has helped our private sector to thrive by enhancing the quality of life and the number of things you can do here. Asheville has always been innovative in its marketing approach; actually it has a national reputation for being on the leading edge in this field as well.

10m

visitors a year

$1.7bn a year in visitor spending

Is the hip, cool vibe of Asheville an important part of its tourism appeal?

Indeed, self-expression and acceptance are core to our brand because it is so much what Asheville is all about. It is the spirit of Asheville and it is appealing to all kinds of people, Millennials as well as older folks.

There is the tourism product per se, the culinary scene, the incredible outdoor offerings, the music, and encompassing all this is that indescribable sense of place and that independent spirit that are at the heart of Asheville.

From Dairy Farm to Sustainable Community Development Jack Cecil, President, Biltmore Farms How did Biltmore Farms transform from a dairy into a multi-faceted operation?

My great-grandfather, George Vanderbilt, founded the Biltmore Company and dairy farms in the 1890s. It was originally designed like a European estate producing agricultural products for its residents, guests and employees.

The surplus was given to the hospitals and education institutions. However, there was still too much milk production and so it was turned into a commercial business which ran from 1897 until the 1980s. After the Great Depression in the 1920s, Biltmore House was opened to the public and became a way to attract tourists and build the economy of Asheville. The estate now attracts about a million tourists a year, with two hotels, restaurants, winery and other activities. In 1978, the company was divided into Biltmore Farms and The Biltmore Company.

We decided to sell the dairy business and concentrate on real estate development which led us to embrace the philosophy of community development which is based on the five tenets of healthcare, education, economic development, arts and culture, and the environment.

This builds directly upon the philanthropy that my great-grandfather established here in Asheville in the 1890s.

My father and I are driven to find, create and develop employment opportunities for everyone in a sustainable way.

You have undoubtedly been innovative in your ventures. What is an example of a innovative success story that you have had?

5

tenets of community development

1897

Year Biltmore Farms was founded

Having a real estate development company which invests in the broader community is very innovative. We have tried to recreate the European traditional model of a village alongside a baronial estate. We build homes, but at the same time we also design master-planned communities; offices, retail shopping centers and hotels.

In terms of Asheville, the four ways that I consider it to be creative and innovative are the Collider, the historical legacy of the arts and craft movement which has led to advanced manufacturing, the food and craft beverage industry combined with the farm to garden movement, and natural biotechnology based upon our bio-diversity.