1. East Coast (USA): An Optimum Location
The Value of Clusters in
Eastern North Carolina
John D. Chaffee
2016

2. East Coast (USA): An Optimum Location
Economic development can be defined as efforts that seek to improve the economic well-being and quality of life for a community by creating and/or retaining jobs and supporting or growing incomes and the tax base.
Much of the work in economic development is preparing your community for job creation and setting the stage to attract investment: product development, workforce development and infrastructure improvements – including the likes of developing I-42 corridor!

3. East Coast (USA): An Optimum Location
Economic Development
Retention
Expansion
Recruitment
Tourism
Arts & Culture
Entrepreneurship
Many different components that fit within economic development – recruitment includes attracting retirees and sporting events as well as business.

4. East Coast (USA): An Optimum Location
A cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field.
One of our goals is to assist companies in drawing their suppliers to the region – shortening the distance of their supply chains

5. East Coast (USA): An Optimum Location
Clusters have the potential to affect competition in three ways
Increasing the productivity of the companies in the cluster
Driving innovation in the field
Stimulating new businesses in the field
Innovation and entrepreneurship represent key opportunities in expanding & strengthening clusters, which requires connectivity to & engagement with universities

6. East Coast (USA): An Optimum Location
This ‘bubble’ chart represents a snapshot of the economy straddling the US70/I-42 Corridor – big drivers are food/beverage, life science, transportation/aero, nonwoven goods but another sector, household appliances, is particularly significant on the corridor w Electrolux & BSH

7. East Coast (USA): An Optimum Location
Several of our clusters have relatively high average wages/salaries – biopharmaceuticals, chemicals at the very top >$60k, then appliances, nonwovens, aerospace, electronics, & transportation equipment all >$50k…but note, the employment for aerospace does not include the civilian workforce at Cherry Pt or Seymour Johnson – the defense sector employs over 80,000 in ENC

8. East Coast (USA): An Optimum Location
All of these sectors just mentioned are above the regional average of roughly $42k per year – the red horizontal line. One of the few major economic drivers of our region that pays relatively low wages is the value-added ag sector that includes food & beverage and wood products. Paper products is about the lone component that pays above-average wages and it is a relatively small and declining sector…so, how do these various clusters play out across our region?

9. The largest of all our clusters representing over 120 companies and relatively diverse – meat, snack foods, pickles and produce, grains & products, desserts, paper products, lumber, wood chips, etc.

10. A sector that took a bit hit during the recession – we lost several automotive part manufacturers and had many others reduce employment, but the resurgence of Detroit and the overall automotive industry, many of those jobs have come back and we’re adding new employers

11. This sector also includes metalworking – which supports both the automotive/transportation sectors AND the aerospace industry – critically important to their supply chains – we have several VERY sophisticated machine shops in the region – which highlights the interaction between clusters or the interdependence of supply chains. For example, this machining group would also be a key support for the household appliances sector.

12. One of our clusters that continued to grow during the recession – driven by two main employers: Spirit AeroSystems and Fleet Readiness Center East on board Cherry Pt. MCAS

13. The Life Science cluster – the core being composed of manufacturers of biopharmaceuticals and medical devices – was also one of our key sectors that added jobs during the recession and continues to lead the way in job creation – projects announced in ENC over the past 3 years will add nearly 2,000 new jobs and result in roughly $2.5 billion of investment (including the Clayton companies of Grifols and Novo Nordisk). Sizeable suppliers include West Pharmaceutical Services, Berry Plastics, Package Craft and Smurfit Stone Container.

14. The boatbuilding sector also took a huge hit during recession but has now bounced back.

15. …and all of these clusters are supported by an expanding logistics cluster, represented by trucking companies, warehousing/distribution, 3PLs, shipping companies, etc. The conversion of US70 to I-42 will accelerate the growth of this sector in particular. At our last SOR, Charles Edwards referenced what truckers refer to as ‘blue-line highways’ – those that are identified as Interstates – companies expressly state their drivers should stay on these corridors whenever possible and site location consultants pay attention to these corridors. When QVC sought a new site, their RFI specifically stated their site had to have immediate access to a freeway w/o at-grade intersections (stoplights) or at-grade rail crossings.

16. East Coast (USA): An Optimum Location
John D. Chaffee
President & CEO
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