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Can UNC and local community colleges lift a North Carolina region

  By Jane S. Shaw
November 28, 2010

In 2007, the University of North Carolina issued its “UNC Tomorrow” report, designed as a blueprint for the university system. The expansionist document envisioned a growing role for the university in such areas as K-12 education, environmental protection, and applied research. And it recommended that UNC be more active in “enhancing the economic transformation and community development” of North Carolina.

Economic prospects for the state and the university have changed dramatically since then, but that hasn’t stopped UNC. Earlier this month, representatives of businesses, higher education, and government got together at Catawba Valley Community College in Hickory, largely as a result of the UNC Tomorrow initiative.

The meeting in the college gymnasium, called “Innovation 2010,” brought together 200 people for five hours of networking, self-promotion, and strategizing about how higher education can contribute to growth, especially in Catawba, Burke, Caldwell, and Alexander counties. That “Unifour” area, with Hickory its biggest city, is a long-time home to textiles and furniture manufacture. It experienced decades of decline in its manufacturing base—and then its high-tech replacement industry, fiber optics, fell on hard times, too. Unemployment in the Hickory metropolitan area is over 11 percent.

Sponsored by a coalition of universities and community colleges, the November 10 meeting featured a pep talk by former governor James Hunt (by video). He urged the group to develop home-grown industries—rather than use state funds to bring in big outside companies (some of those “investments” have soured). And Leslie Boney, associate vice president for economic development and engagement for UNC, offered a list of regional development strategies, such as welcoming college students for internships, being the place for faculty to do their applied research,* *and persuading regional alumni aged 35-55 to bring their businesses home.

The keynote speech was an impressive talk by Andrew Hargadon, a professor of innovation and technology management at the University of California, Davis. Using examples from Thomas Edison’s Menlo Park laboratory to the Barbie doll, he explained that “it’s not the idea, it’s the network.” Hargadon’s point was that ideas abound, but few people know how to bring them together into a new product or service.

Hargadon showed that Ford did not invent the assembly line de novo; rather, he put together existing tools to produce cars in a way that had never been done before. (Swift meatpacking plants had flow operations; Ford applied them to cars.) Hargadon, who as an engineer at Apple had designed a computer power supply, noted that when Apple tried to design all its components from scratch, it nearly went under; its rebirth came about with the IPod, which combined parts created by others into a revolutionary new product.

While Hargadon’s speech placed invention in a broader framework, the day was primarily devoted to marketing higher education services. Along the gym’s walls, colorful booths showcased the services of such groups as Appalachian State’s Greater Hickory Partnership (composed of centers at three community colleges and the North Carolina Center of Engineering Technologies); Appalachian State’s Center for Entrepreneurship; UNC-Charlotte’s Urban Institute; the Charlotte Research Institute; Western Carolina’s Center for Rapid Product Realization; North Carolina Cooperative Extension; the Manufacturing Solutions Center at Catawba Valley College—and even more. Some local businesses also had tables.

So, can the university system and its community college partners revive the “Unifour” area? A case can certainly be made for a university role, and that case was offered at the meeting.

Ten representatives of regional companies, from old-line Hickory Chair Company to high-tech ECR Software, shared ways in which they had worked with universities. Jay Reardon, president of Hickory—a century-old company hard hit by overseas competition—transformed the company in the 1990s by helping employees create customized furniture more quickly. He consulted with NC State’s Industrial Extension Service, and the Catawba Valley Community College provided simulation training for his employees. Peter Catoe of ECR Software, which streamlines operations for retailers, praised the industrial design program at Appalachian State, which has offered design concepts for the company. The distinctive perspective of young people “energized the whole group,” he said.

These and other representatives showed that universities can serve businesses. Enoch Moeller, representing Google’s data center, located in the region, said that higher education can take some of the cost burden off business. Another speaker said, “I don’t understand why business doesn’t just reach out. There are all these resources around here.”

But how much can these resources, paid for by taxpayers, actually contribute to economic prosperity? The Pope Center’s Jay Schalin has been exploring this question, most recently interviewing an innovator <http://popecenter.org/commentaries/article.html?id=2439> with more than 70 patents to his name. Richard Cheston, the chief technical architect of a business unit at Lenovo in Research Triangle Park, is skeptical. He says that university faculty aren’t close to customers, they don’t recognize the critical role of low costs, and they don’t need the money. “There’s a very slim possibility that what’s done in a pure research and development environment will ever become a successful product,” he told Schalin.

That may be true, but Sid Connor, professor of technology at Appalachian State and one of the Catawba Valley event organizers, is confident that businesses can tap into a rich reservoir of supportive resources at universities. The problem is that universities find it difficult to reach out—market—to business. “There’s a great deal that we can do, but the hard part is finding that conduit to make it happen,” he says. He concedes that the impetus has to come from industry.

As the university system braces for cuts this year and next, Connor says, this service component may decline, as faculty concentrate on their core mission, teaching and research. For some centers, such as NC State’s Industrial Extension Service, outreach is a key part of their mission and may remain robust. Budget cuts, however, would make it more difficult to offer their services at below-market prices—as they do now.

Bryan Toney, director of Appalachian State’s Center for Entrepreneurship, which had a booth at the conference, agrees that there are no easy answers to economic development. His center is working on a project funded by the Z. Smith Reynolds Foundation in the region around Appalachian State (an area larger and to the northwest of the “Unifour” counties). Trying to figure out how to help local industries expand, Toney is building case histories of regional businesses (like ECR Software) that began small but become national in scope. He is also looking at obstacles to the region’s development that might be addressed.

Finally, one cannot talk to Dan St. Louis, who heads the Manufacturing Solutions Center of Catawba Valley Community College, without being struck by his enthusiasm and willingness to go to extreme lengths to make his region more prosperous. MSC concentrates on testing and training, but it has also provided international marketing of local products. Yet the fact that his organization is 40 percent subsidized raises questions about its ability to keep the momentum going in the new budget environment. And large government subsidies tend to diminish efficiency, whatever the environment.

As Jay Schalin revealed in a Pope Center paper <http://popecenter.org/inquiry_papers/article.html?id=2366>, very little is known about the mechanisms by which universities spur growth—or even if they do spur growth. The factors that lead to economic growth are far more complex than are usually assumed. Right now, though, talented and energetic people in and around the Catawba River Valley are doing their darndest to bring it about.