Aug 8, 2018
By Richard Craver for the Winston-Salem Journal
Winston-Salem and the Triad will look to the interstates and the skies for its short- and potential long-term prospects for economic growth, according to local officials working to find success.
How successful the city and 10-county region are at attracting logistics and transportation companies, along with bolstering its niche in life-science research, could be the key factor in how close their economies stay in range of rapidly expanding Charlotte and the Triangle.
The 10-county region has about 1.65 million residents. The population is projected to increase by 25 percent, or a net gain of 412,000 residents, between now and 2050.
Like Charlotte and Triangle, the population is expected to continue to shift toward the Triad’s urban centers of Winston-Salem, Greensboro and High Point, and away from its more rural counties, such as Rockingham and Surry.
“The Triad’s four major advantages for economic development are: its location on both north-south and east-west interstates; a regional airport that should continue to expand; a moderate cost-of-living compared to regions of similar size; and quality universities and colleges poised to train the workforce of the future,” said Michael Walden, an economics professor at N.C. State University.
“A focus on medical technology and transportation – both road and air – should serve the region well.”
Wake Forest Baptist Medical Center is the largest employer in Forsyth County at 12,873, which represents 7.4 percent of the workforce. Novant Health Inc., which operates Clemmons, Forsyth and Kernersville medical centers and Medical Park Hospital, is second at 8,145 employees and 4.7 percent of the workforce.
The logistics and transportation sectors are more of a factor outside Forsyth, with top-10 less-than-truckload carrier Old Dominion Freight Line Inc. in Thomasville, the FedEx Ground hub on the Guilford County side of Kernersville, the FedEx sorting hub at Piedmont Triad International Airport and Epes Trucking.
There’s also the potential for the Guilford side of Kernersville to gain a 1-million-square-foot Amazon distribution facility in Triad Business Park that would employ 953 full-time workers.
When the Triad’s economic and elected officials combined their long-shot bid for Amazon’s second North American headquarters, they tailored the Triad’s pitch around the region’s diversity, focusing on geography, educational institutions, industry sectors, workforce and population, international visitors and companies, and culture and leisure activities.
“Separately, we are great communities,” Stan Kelly, president and chief executive of Piedmont Triad Partnership, said about the bid.
“Together, we are a region with the assets, culture, resources and quality of life that is a perfect match for Amazon.”
Risk of gentrification
Looking internally for improvements, rather than focusing primarily on competing with other cities or regions, may be the best growth strategy for the Triad, said John Quinterno, a principal with South by North Strategies Ltd., a research firm in Chapel Hill that specializes in economic and social policy.
Though focusing on competition “is the dominant mentality of many practitioners and policymakers, it is very shortsighted and leads to a single-minded focus on growth in quantitative measures,” Quinterno said. “That mentality also tends to foster a dependence on tax subsidies that often fail to deliver and wind up diverting resources that could benefit current residents.”
Quinterno said that “investing in local people and their capacities often is a way of sparking sustained and sustainable progress.”
Quinterno said the recent investment in Wake Forest Innovation Quarter “is an example of how the region could go either way.”
The downtown research park bills itself as one of the fastest growing urban-based districts for innovation in the United States. It has more than 170 companies, five academic institutions and a workforce of more than 3,700, led by Inmar Inc. with more than 900 employees.
Downtown investments from 2000 to 2016 total about $1.5 billion, according to a study by Winston-Salem/Forsyth County Planning and Development Services. The Innovation Quarter accounts for much of that capital spending.
There are plans to spend another $800 million to double the square footage of the district over the next 10 to 15 years.
“On the one hand, the project is attempting to use existing resources, such as old manufacturing spaces, the existing institutions of higher education, and the medical system, to produce goods and services that are relatively new to the region,” Quinterno said. “If, however, the emphasis become more on attracting activity into the region, instead of consciously providing opportunities to local residents, any growth that occurs there will drive problems of gentrification and inequality.”
Job Growth
Mayor Allen Joines said local officials have set a goal of gaining 5,500 jobs annually, which would boost the Winston-Salem metropolitan statistical area to be among the 50 largest in the country.
Joines expressed confidence the community’s workforce will expand from the growth of existing companies and from start-ups.
“In order for us to be competitive, we must have the infrastructure to support growth,” Joines said. “We will need additional sites, buildings and a strong, well-trained workforce. We are also beginning to focus on the impact of digitization of the work place and to be sure we are ready for all of the implications of that phenomenon.”
Joines agreed with Quinterno’s assessment that the Triad should concentrate “on our own internal goals.”
“We must also carry out programs to ensure equity for all citizens as we grow, because we cannot achieve our goals if we don’t address our poverty issue.”
Tony Plath, a finance professor at UNC Charlotte, said the Triad has the three key elements for successful future growth: location; macro infrastructure, which he defined as physical, educational, sociopolitical, industrial, transportation and cultural; and demographics.
“Some of the things here are quite controllable, infrastructure, for example, some are not (location), and some can only be manipulated gradually over long periods of time, such as culture and demographics,” Plath said. “Just like you can’t pick your genetic heritage, you can’t pick your location or your neighbors. You bloom where you’re planted.”
Plath said the Triad “is planted in precisely the right spot for the next 50 years” between the Charlotte and Triangle economic engines, along the major interstate systems, and being within a few hours’ drive of the mountains and beach.
Strong middle ground
Plath is among analysts and economists who believe the Triad eventually will become part of one major North Carolina economic engine as the Charlotte market moves to northeast and the Triangle shifts westward.
Carolina Demography, part of UNC Chapel Hill’s Carolina Population Center, said in December 2013 there could be an intertwining of the Triad’s economy with Charlotte and the Triangle into what was called a “megalopolis” by 2050.
Such a region, based mostly on the Interstate 85 corridor, could resemble the urban corridor that connects Baltimore and Washington with New York and Boston, said Rebecca Tippett, director of Carolina Demography, a unit of the Carolina Population Center.
It also could lead to the swallowing up of small- to -medium-size communities, such as Burlington, Lexington and Salisbury, which are between the three urban hubs. Those communities likely would maintain their independence, Tippett said, but lose a portion of their identity.
Plath takes his vision a step further, saying that by 2068 the Triad will anchor the northernmost point on a continuous Southeastern Regional Urban Economic Crescent running from Raleigh/Durham in the east, through the Triad and Statesville and Charlotte region, through the Upstate South Carolina cities Greenville, Spartanburg and Andersen), and terminate down on the western side of Atlanta.
In that scenario, Plath said the Triad’s main economic advantage will be as the crescent’s launching pad of trade and distribution into the Northeast and Midwest
“That’s what FedEx saw in establishing their PTI hub several years ago, and that’s why Amazon’s interested in locating a major distribution in the Triad today,” Plath said. “That’s how the world is going to look when our grandkids born today are entering their retirement years.”