Three years on from a pandemic that upended the workplace and even fast-growing cities like Charlotte face the challenge of how to return to their prior energy level. Rising interest rates, uncertainty in the banking sector and hybrid work are just some of the hindrances to a return to past growth. An even bigger challenge is failing to adjust to a rapidly changing marketplace, where more than half of the jobs that will be available in 12 years likely don’t even exist today.
“The next wave of companies coming to the region will look different from the last 20 years of growth here,” says Danny Chavez, chief business recruitment officer for Charlotte Regional Business Alliance. “Next generation talent and next generation industries is the focal point for the next generation of growth.”
Keeping an eye to the future – and not just the successes of the past – is among the key ways economic development leaders plan to drive growth into the decade.
Chavez made his comments as part of a discussion about the Future of Cities hosted by the Charlotte Business Journal and moderated by president and publisher, T.J. McCullough.
Joining Chavez on the panel were Christopher Chung, CEO of the Economic Development Partnership of North Carolina, Christina Thigpen, deputy director of economic development for the City of Charlotte, and Michael Verdier, Southeast managing principal for architectural design firm BHDP.
On the top drivers for Charlotte’s future
The Charlotte region’s accomplishments continue to be fueled by the availability of and the continued arrival of talent. Those skilled workers are a “major magnet” for companies coming here, says Chung.
“You can count on one hand the states growing at the pace of North Carolina,” Chung says. “Those are Florida, Arizona and Texas, and they are all states that continue to deepen their talent pool.”
In a tight labor market, those locations that are growing their talent pool at the fastest clip rise to the top of the list for companies.
“That’s a definition that North Carolina very much satisfies,” Chung says.
In particular, Chavez agreed, North Carolina leads other states in attracting Gen Z and younger millennials, a key target for employers.
“That is something that will continue to fuel site selection decisions,” he says.
Chavez says those generations want to work in industries such as financial technology, smart manufacturing, including small research-based functions. It makes sense for those industries to look to this region for expansion as well as the broader state for life sciences.
“From the city’s perspective,” Thigpen says diversity of industry is important.
“As we evolve in different sectors, investments in infrastructure and development are critical.”
Finally, collaboration from the business community helps fuel growth.
“We like to say Charlotte is built on the power of partnerships, and that will play a key role in continued growth,” Thigpen says.
On why BHDP made more investment here
BHDP is an international design firm with two offices in Ohio and two offices in North Carolina, including a Raleigh office that opened in 2007. When BHDP considered its next expansion, Charlotte rose to the top among seven or eight cities evaluated, Verdier says.
“We used part of our own design process to evaluate cities and put together criteria to evaluate them on economic indicators such as GDP growth, manufacturing growth, cost of living, and were there clients here that we wanted to work with and did their values and mission align with our collective ambition,” Verdier says. “We looked at the talent. North Carolina has 52 universities throughout the state several with architectural programs from which we could draw top talent.”
The state is also rich in advanced manufacturing, life sciences, pharmaceuticals, and automotive, some of the firm’s key markets.
As manufacturers bring work back to the U.S. from overseas, Verdier says those expansions are a big part of BHDP’s portfolio.
“North Carolina makes it very attractive for businesses to come here. You think about the shovel-ready sites, intermodal transportation, the major airports, the two seaports.”
BHDP also looked at Atlanta, Boston, Austin, Nashville, and Indianapolis.
On what excites business recruiters
Chavez says he’s excited about a regional strategy more than a year in the making to draw the traditional industries that have long been attracted to Charlotte but also attracting future industries.
“We can’t cut off the well of talent wanting to move here by not diversifying our ecosystem to be the job functions that people want,” Chavez says.
The strategy is individualized to the counties in the CLT Alliance region to pursue the types of businesses each county wants to attract and for which it has assets those employers need. Being strategic in that way shortens the site selection timeline and moves toward a data-driven approach to economic development.
“Economic development is turning into a data science profession in the acknowledgement of industry trends and organic data sets in an important piece of the things we will always talk about, which are talent, real estate and incentives.”
Chavez says the CLT Alliance currently has 131 identified investment opportunities in the pipeline. 41 of the identified investment opportunities are qualified projects and those are opportunities in which Charlotte is one of just two or three sites being considered. Those qualified projects represent $7.1 billion in capital investment and nearly 19,000 jobs from qualified projects. That’s about 30% of our overall pipeline.
“Economic development is sophisticated, and our model demonstrates that by how we qualify projects,” Chavez says. “We have a 3-step process on how a general lead becomes a project. We have to be one of three to five sites max to be a project with many variables that influence our qualification of a project.”
Chavez says with rising interest rates and ongoing inflation, as well as recent bank system instability, some project developers, particularly those with publicly traded companies, are putting projects on hold. That may stretch out the timeline for some projects.
On how the region differentiates itself
Competition to recruit new business is stiff among the cities Charlotte most often competes with, such as Nashville, Tennessee, and Austin, Texas.
Chung says North Carolina among business communities is among the most attractive in the country. The state has differentiated itself by bringing many voices to the table with prospects and demonstrating a true sense of partnership here.
When recruiting Amazon HQ2, the UNC system chancellors and community college presidents were at the table, an approach Amazon did not see elsewhere.
“It’s a state that naturally plays well together and that can be a differentiating factor,” Chung says.
Thigpen says Charlotte-Douglas International Airport is a huge asset that sets Charlotte apart. The recent recruitment of the Atlantic Coast Conference to Charlotte – and the potential to host more Division 1 football, basketball, and baseball here – also adds to the Queen City’s draw.
“We are a sports city,” Thigpen says. “The more sports we have, the more talent we attract.”
Chavez says North Carolina always shows up on short lists.
Beyond that, he believes having diverse economic development teams that represent the local community can provide decision makers with valuable insights.
“To have a diverse team that represents the workforce, either by age or race, ethnicity or gender and have backgrounds from many different states is important because we can give comparisons.”
“My Gen Z team member often gets asked a lot of questions by these companies that come through because that is their target demographic for workforce, so they want to know why she moved to Charlotte.”
On the region’s biggest challenges
Chung says the greatest challenges the state faces are those created by rapid growth.
While the challenges of growth are preferable to challenges created by population stagnation, they still represent a threat to future growth. Housing affordability, traffic congestion and crowding in schools, if left unaddressed, become detrimental to the perception of a market as a place for someone to move to.
Chung says companies are increasingly attuned to how their potential employees perceive a place as welcoming and inclusive. Social legislation pushed by elected officials can send signals that locations are not welcoming.
“I think companies have become much more sensitive to that especially in this competitive labor market. If they are fighting for talent, why would they pick some place that’s seen as unwelcoming to a large portion of the talent base they are trying to recruit? North Carolina learned that lesson a few years ago with HB2. As long as we continue supporting North Carolinians and make our state attractive to talent, we’ll steer clear of things that might alienate the business community and the employees they’re trying to attract and retain, all while other states are clearly tripping over themselves.”
Chung says North Carolina could benefit from such efforts in other states.
“Business leaders will tell you that these types of political and legislative decisions ultimately have economic development consequences,” Chung says.
Verdier says infrastructure and affordability are important. He is currently relocating to Charlotte and searching for a new home. Maintaining the quality of schools and curbing traffic are additional concerns.
“There needs to continue to be investment in Charlotte so this doesn’t become barrier to people wanting to move here or move their business here.”
Thigpen says the region’s biggest challenge is mobility.
“It’s beyond Charlotte,” Thigpen says. “It’s all about the need for regional connections.”
In addition, Thigpen says there’s an effort underway to help with job creation. A new initiative called Hire Charlotte aims to work smarter to prepare residents for jobs of today and tomorrow.
“There’s so much incredible work going on in our community, but it had never been coordinated before.”
Chavez says other high-growth tier-two markets such as Nashville and Austin don’t have light rail or the scale of the airport that Charlotte has.
“We have to understand where we are already ahead and utilize those assets as we become a Tier 1 market that we are projected to be with population growth over the next 25 years with better existing infrastructure than our competition.”
Read more about the industries seeing demand for expansion, the bank sector fallout, and hybrid work.
