North Carolina at the Forefront of the Coalition-based Economic Development Movement

Innovation, entrepreneurship, and advanced industries often thrive in clusters and regions where closely located companies, universities, and other organizations can co-locate and form collaborative relationships. Until recently, most talk of innovation clusters referred to highly dense and technology-centric locations, like Silicon Valley, Seattle, or the Boston tech corridor. 

However, new federal programs are revealing the potential for high growth in advanced industry clusters nationwide. These investments are designed to generate good jobs, promote U.S. competitiveness in key industrial sectors, and advance solutions to key societal problems. The EDA Build Back Better Regional Challenge and the NSF Regional Innovation Engines both held nation-wide competitions to fund coalition-based development initiatives, many in areas that have not traditionally been thought of as technology hubs or vibrant innovation ecosystems. 

Recent research by RTI describes how North Carolina coalitions organized to embrace these opportunities for innovation-driven growth and reveals how leaders across North Carolina are at the forefront of embracing these economic development strategies. 

These exciting strategies join the efforts of different organizations to combine organizations representing workforce development, research and technology development, business and industry, community, and targeted public investment. Coalitions like these are working in new combinations to address the multi-faceted challenges and opportunities for economic development today. Furthermore, coalitions are demonstrating the potential for regions outside of major cities to compete and thrive in advanced sectors. 

What does this look like more specifically in North Carolina? We analyzed 39 proposals submitted by coalitions of universities, non-profits, local governments or Councils of Governments, and private companies from across North Carolina and found a diverse array of coalition types representing opportunities for growth in a broad range of industries. 

North Carolina’s 39 coalitions are distributed across the state. The Triad region of Winston-Salem, Greensboro, and High Point had the most coalition-leading organizations in the state, even more than the Triangle and the Charlotte metro area. Most proposals included partners that spanned multiple regions within the state. 

Compared to its population share, North Carolina-based coalitions are overrepresented among national winners. Especially striking, North Carolina is home to two of 16 coalitions named as finalists for the Type-2 NSF Engine awards—one focused on regenerative medicine led by Wake Forest Medical School and one centered around advanced textile manufacturing and the circular economy led by the Industrial Commons in Morganton. Both are currently competing for awards of up to $160 million over the next decade. Furthermore, North Carolina was one of 21 winners of the Phase 2 Build Back Better Regional Challenge. Led by the North Carolina Biotechnology Center, $25 million was awarded in September 2022 to extend growth in the biomanufacturing sector across the state. 

Through this analysis, we saw a vision of economic development rooted in North Carolina’s historic strengths. Coalitions developed strategies to support the reemergence of manufacturing in industries like smart textiles, biotechnology, automotive and aerospace. Other proposals sought to develop food systems to leverage regional strengths in agriculture. These proposals tie legacy industries, existing assets, and cutting-edge technology to promote North Carolina as an evolving leader. 

Proposals were also forward-looking, proposing economic and technology development strategies to mitigate some of the state’s formidable challenges. Seven of the 39 analyzed proposals focused on climate and clean technology, paving the way for North Carolina to be an economic leader in the response to climate change. Other coalitions prioritized making entrepreneurship and leadership opportunities more accessible to historically underrepresented workers. These applicants, whether funded or not, help to articulate sustainable and inclusive models for development investments in North Carolina.

For regions, the process of creating a plan or application can be a powerful tool for forging connections, partnerships, and getting leaders to think outside the box. Applicants who did not win federal dollars are nonetheless well positioned to continue exploring partnership and investment opportunities. Two North Carolina awardees received a Type-1 NSF Engine award, which provides a $1 million  to create action plans and apply for a larger grant in the future. In Eastern North Carolina, the NC Ecosystem Technology coalition (NCET) is using this grant to craft regional strategies for promoting counties east of I-95 as a corridor for sustainable aquaculture and coastal infrastructure that will boost the regional economy and address environmental sustainability. The Clean Carolinas coalition led by UNC Charlotte is working towards a carbon-neutral energy grid with partners in both North Carolina and South Carolina. 

It is not easy to create innovation-driven economies. These regions face barriers to realizing their visions such as seeking ongoing investment, securing  sustained partnerships, and building organizational capacity to deliver on these visions over years and often decades. Furthermore, this work is often layered onto existing job responsibilities and the  day to day work of the champions representing the organizations and coalitions involved. The vision, determination, and perseverance of these economic development leaders, as reflected in the concepts presented in the EDA and NSF proposals offer inspiration and ideas for the potential of the economic future of the state. 

Read RTI’s white paper “What federal funding applications in innovation tell us about the future of economic development in North Carolina” to learn more.