High-tech disconnect: Why firms bypass Wilmington

Communities love high-technology companies. They offer clean, high-paying jobs. Their products and services are exported around the world, expanding the regional economy. They regularly sponsor educational programs and the arts. And most important, high technology has the highest economic multiplier effect, pumping dollars into a wide variety of other local industries.

Not surprisingly, high-tech development also is the most researched topic in regional economics. We know a lot about why technology companies locate in a region. We know why technology clusters develop in some areas, and not in others. We know why most communities fail in their efforts, while others succeed.

Unfortunately, high technology companies won’t be rushing to Southeastern North Carolina anytime soon. And it’s our own fault.

How could this happen?

Technology-based regional economies are driven by six basic conditions. To be successful, a community must have all six factors in play. Fail at one, and technology companies most likely will look elsewhere. Without all six factors, significant technology clustering won’t happen, no matter how many development councils, incubators, industrial parks and marketing campaigns are started.

The Wilmington region is very lucky to have the first four factors in place, and because of that we have a few local technology companies, such as PPD, CastleBranch and nCino.

The first factor is to be geographically located in a fun place. Engineers, scientists and technology entrepreneurs are like tourists -- they want to live by the beach, the mountains or near a lively city. The second condition is an active creative culture. Most technology clusters form around communities with a historic downtown, its restaurants and theaters. The third condition is high-quality recreation opportunities -- parks, bike trails and soccer fields. The more, the better. The people that drive high technology want the most livable communities for their families. In fact, they demand it.

The fourth requirement is a university. While technology firms look globally for their top personnel, a local university provides the entry level engineers, programmers and lab techs. More specifically, the local university needs to be a research university. Research creates discovery and intellectual property, the fuel that drives technology development. This leads to spin-out companies, licenses, and collaborative partnerships with the private sector. Technology transfer is everything.

UNCW is clearly moving in the right direction, but the more Ph.D. programs in technical disciplines, and the more UNCW can build its advanced engineering, computer, health, and science programs, the better it is for the region’s technology economy.

Unfortunately, the region struggles with the final two factors. This is frustrating because these are both under the control of local politicians and could be changed.

First, high-tech employees want their kids in great schools. But the Wilmington region doesn’t have a single school in U.S. News and World Report’s ranking of the top 60 public high schools in North Carolina. Technology leaders really do consider this.

Perhaps more important is the final requirement -- community attractiveness. Are the streetscapes inviting or not? Is the zoning correct? Digital billboards, sign clutter, road trash, inadequate commercial landscaping, ugly strip malls – these are the death of a vibrant, modern economy. In fact, recently several visiting CEOs of technology firms told me how congested and trashy looking Wilmington’s main streets appear to be. Particularly offensive seems to be electronic signs and digital billboards. My own research indicates that the existence of electronic signs reduces a person’s first impressions of a community by 40 percent.

Research also shows digital billboards hurt surrounding property values and create significant driver distractions. Despite the predictable, self-serving protestations of the outdoor-advertising industry and a few misguided developers, ugly and congested commercial streetscapes kill high technology economic development. Simply put, all new high technology clusters have commercial streetscapes that are well-planned and beautifully maintained.

The politicians that have allowed this to happen are responsible for lost economic activity probably worth hundreds of millions of dollars. That is really a waste, particularly since the Wilmington region benefits from the first four conditions for high-tech development, something that the vast majority of U.S. communities do not enjoy.

Perhaps we can still fix the last two problems and kickstart our 21st century economy.

Dr. Craig Galbraith is Professor of Management at UNCW, where he teaches technology entrepreneurship and serves as director of the Technology Transfer Office. Learn more about his work and background: www.tinyurl.com/ybg42qcq