How would you like to earn an extra $100,000 a year?
The key is incremental improvements over the course of a career, just as the key to building a vibrant and resilient Southeastern North Carolina is tackling both the small and large projects. From 2010 to 2016, over half the employment growth in North Carolina came from businesses with between five and 500 employees, and those under 100 employees accounted for over a third of the growth!
If you’ll let me be a little cliché for a moment, when it comes to economic development, it’s the little things that matter.
Wilmington is a town of small businesses, franchisees and risk-takers who are willing to take a risk to pursue their dream in a beautiful region. For our region to be successful and resilient, we need to continue to build out the support structures for these businesses.
For example, many small or young businesses are often undercapitalized, and unexpected events, such as hurricanes, can be devastating.
In addition, a tourism-based economy is particularly exposed to hurricane threats as revenue is generated from short-term transactions and is not easily made up. A week of downtime in a multiyear construction project may be easier to make up than a week of lost rental revenue. (Note, this loss of business is likely more true for smaller hurricanes with disruptive impacts than major hurricanes with destructive impacts.)
Building a resilient local economy must be part of our economic development strategy – easier said than done.
Over the years, economic development has gone through waves of approaches with the first wave being the use of incentives to recruit and attract large, typically industrial, employers. However, the effectiveness of incentives in long-term economic development is hotly debated. The second wave of approaches, taking hold in the late ’90s and early 2000s, was aimed at retaining existing business and nurturing entrepreneurs.
Finally, the third and more contemporary view is to facilitate development through good policy, programs to support existing businesses and the use of incentives to fill holes and develop a resilient ecosystem.
Coastal regions are unique in that they must be both economically and environmentally resilient.
Returning to the local case, if each New Hanover County business under 100 employees hired one new employee, the county’s annual employment growth would then double.
And if we can help the businesses expand their footprint and grow, they’re more likely to build capital, diversify their customer base and improve the region’s economic and environmental resiliency.
While the theory of how to help grow our businesses and economy is straightforward, the execution is much more difficult. On the human capital side, efforts include increasing professional networks through the Business Journal and chamber’s events, staying up to date with current trends through outlook events, etc., and building personal capacity through professional – and especially leadership – development.
We also need to encourage venture capital, angel investors, traditional funding sources and personal financial literacy to create opportunities for personal investment.
And from a policy perspective, we need to make sure the regulatory process is easily navigable and maybe even encourage local participation in the governmental bid process to build experience and capacity.
As always, the execution is the difficult part, but the momentum is building locally.
If you’re still reading then you’re probably hoping to find details on how to make an extra $100,000 a year, and the answer is incremental improvements.
Starting out at age 22 making $33K a year and getting a 4% raise each year means you’ll earn a little over $100,000 more at age 65 than if you got a 2% raise.
An extra 2% growth in the region over 10 years means an additional $3 billion in the local economy, or $11,000 per person.
A little bit, over a long time, equals a lot.
Adam Jones is a regional economist with UNCW’s Swain Center and an associate professor of economics in UNCW’s Cameron School of Business.