New chamber initiative gets creative
By Sarah Bon

Herb McKim finds it increasingly difficult to recruit engineers at the Wilmington office of McKim and Creed.

“We have offices in Raleigh, Charlotte, Tampa and Virginia Beach,” he said.

“There’s a large pool of engineers. Here in Wilmington, there’s not a very large pool. The demand for engineers is growing.” What tends to happen, McKim noted with obvious frustration, is local companies feeding off each other’s workforce.

To increase the number of workers available for positions at places like McKim and Creed that fall under the broad umbrella of the knowledge sector, the Greater Wilmington Chamber of Commerce is spearheading a new regional initiative called Cape Fear Future.

As its foundation, they are utilizing Richard Florida’s book “The Rise of the Creative Class,” which defines a knowledge worker as being scientists, engineers, architects, writers, entertainers, artists, among others. The creative class often is consolidated in cities with high levels of diversity, flourishing arts scenes and abundant recreational opportunities. According to the author, the knowledge sector workers make up 30% of the U.S. population but account for 50% of all U.S. wages.

Cape Fear Future aims to further develop the region’s knowledge sector economy to promote economic development.

If forecasts hit the target, the Cape Fear region and the entire country will face a workforce shortage. By 2008, the U.S.

Bureau of Labor Statistics estimates that for every two employees who leave the workforce, only one will enter. The picture doesn’t get better. The Bureau also predicts that by 2010, there will be 10 million more jobs than skilled workers to fill them.

“In the old days, you talked about recruiting industries,” said Wilmington Mayor Bill Saffo. “Today, it’s minds – the recruitment of minds and talent into your community.”

The chamber chose to eliminate the “creative class” verbiage from their initiative to avoid a misconception that it is focusing on the arts community. While the area’s thriving arts sector is a part of the initiative, the net they plan to cast is much wider. Connie Majure-Rhett, executive director of the Greater Wilmington Chamber of Commerce, views the knowledge sector as part of the solution to fill the brain reservoir that serves the region. “If you look down the road, the fastest growing segment of the economy is knowledge workers,” she said. “There’s a higher potential. That’s not saying we’re trying to eliminate manufacturing and service industries.”

The initiative is not just about attracting knowledge sector businesses and employees to the region.

“It’s growing our knowledge sector,” Majure-Rhett said.

Baiting brains
The groundwork for Cape Fear Future began nearly two years ago when Majure- Rhett contacted Catalytix Inc., a Richard Florida Creativity Action Team that provides performance measurement, strategic planning and transformation management for the public sector with a focus on economic development groups and the foundation community.

Lou Musante, one of the founding partners of the company, suggested polling the business community first to gauge support for a service gaining momentum across the country. Last year, the chamber held roundtable discussion led by Catalytix.

“Unless the business community is engaged, you don’t get traction as fast and implemented as fast,” Musante said. “That was critical.” The chamber was able to get key players to the table, including McKim, Dr. Fred Eshelman with PPD Inc. and Andy White with GE Energy’s Wilmington nuclear division.

“It’s not just the big guys – everybody is desperate right now,” Majure- Rhett said “We’re crazy if we don’t work on sectors we’re already successful in – health care, nuclear, PPD, AAI, UNCW and marine science.”

The city and New Hanover County also have publicly supported the initiative. “We need to have a plan of action that gives us a roadmap to recruit these folks and keep them here,” Saffo said. “It’s an important initiative that will take time, energy and money to implement. We have a lot of natural assets, but there are things we need to be doing to attract them.”

At a cost of $250,000, the process requires buy-in from the community at large. Last month, Majure-Rhett reported that all the money was raised. At the chamber board retreat in January, Catalytix presented data specific to the Cape Fear region. Using data compiled nationally, they outline a region’s rank in knowledge sector development based on the “4 T’s” – technology and innovation, talent and workforce, tolerance and diversity and territory assets and quality of place. Overall, Wilmington’s knowledge index ranks 118 out of 331 U.S. regions. Breaking it down by category, the area ranks 54 in technology, 164 in talent and 182 in tolerance and diversity. Catalytix does not rank territory assets as they are unique to each region.

Majure-Rhett said there was some surprise about Wilmington’s technology rank.

“We were above average because of a tremendous number of patents in the community,” she explained. According to statistics pulled from the U.S. Patent and Trademark office on the Catalytix report card, 722 patents were issued to primary inventors in the region in 2004. The U.S. average was 1,652 during the same year.

Knowing where Wilmington stands in the “4 T’s,” the Catalytix team now is in the process of defining the study area to develop a regional knowledge economy strategy and tactical implementation cookbook.

“This is a regional study – not a Wilmington study,” Musante emphasized. “We need to understand what’s going on in Brunswick County, Pender County and New Hanover County.” The first task is to determine “natural connections” between the Wilmington region and other cities. “Instead of trying to define it politically, we’ll look at the natural connections,” Musante said.

The next step will involve benchmarking and a comparison with a couple dozen regions. Once that is complete by Labor Day, Catalytix will come back to Wilmington this fall to hold a series of focus groups, roundtable discussions and town hall meetings.

Pulling together all of the raw material collected during the entire process, Catalytix will create a cookbook that is specific for the region.

“None of it is the same to any community,” Majure-Rhett said. “It’s based on community assets and community needs.”

What others say
Only in existence for five years, Catalytix helped other communities develop recipes for expected success in recruiting and growing their knowledge sector economy.

One city was Syracuse, NY, which needed to re-energize its downtown and keep young people. From its Catalytix cookbook, the city held a Below 40 Summit, which led to 18 nonprofit boards of directors creating seats for around 100 young people. This year, Below 40 brought public art to the city, including a floating gallery to present local art in vacant downtown storefronts and a project that shows videos on the sides of buildings. “Involvement is one word in attacking brain drain,” Musante said.

For as many followers of Florida’s economic development strategy, there are as many detractors. A common criticism is that it spotlights the elite and ignores lower-income people in the community. Majure-Rhett doesn’t see Cape Fear Future doing either.

“This is going to improve education levels,” she said. “This is going to improve our quality of life. This really is a community focused effort.”

Cape Fear’s future Musante expects similar success with Cape Fear Future.

“We really have to pick our engagements wisely,” he said. “We need a check in the win column. We need a homerun.”

According to the brochure marketing the initiative, Cape Fear Future needs to succeed to ensure the future prosperity of the region. Education most likely will be a key component in the strategy.

“We need everybody graduating from high school, and when they come out of high school, they need to be absolutely ready to go to a university, community college or enter the workforce” Majure-Rhett said. “We’re all – the whole world – going through a worker shortage. We have to make sure that every person eligible to work is trained. We aren’t going to be able to keep employers if they can’t find employees.”

Related to education is the brain drain index, which measures the percentage of the workforce 25 years and older that holds at least a bachelor’s degree divided by the percentage of 20 to 34 year olds actually going after a four-year degree. The national average is 0.88. In Wilmington, it’s 0.77. “Wilmington is losing a lot more educated people than it’s retaining,” Musante said. “You’re never going to keep them all, but how can we improve that brain drain? Businesses today are attracted to places that have a good workforce. It used to be tax incentives.

Workforce is the new magnet that attracts businesses. Great quality of place attracts people.” Which comes first? To build up the workforce, there needs to be jobs. To create jobs, there needs to be businesses.

Musante said the answer involves three tactics: attracting people or businesses; expanding what already exists; and growing the region’s own knowledge workers. Focusing on the knowledge sector economy is not going to produce results overnight. With a long time frame in mind, the cookbook measures accountability into the process.

“It will take years to build this,” Majure-Rhett said. “We will really see results in 10 years. The key is that we will keep moving.”

Entrepreneurs like McKim are counting on Cape Fear Future to maintain its momentum.

“The knowledge worker is the next group of people that is going to be successful in this economy,” McKim said. “We’ve got to build a community that is attractive to that type of worker.”