Challenges of business recruitment in the great recession.

• Author: Jolley, G. Jason
• Position: Report

1. INTRODUCTION

   In 2008 the University of North Carolina at Chapel Hill's Center for Competitive Economies (the Center) contracted with Chatham County, North Carolina to create an economic development strategic plan (Jolley, Lane, and Brun, 2008). This plan included indentifying regional industry clusters where Chatham County might have a competitive advantage in attracting new businesses. The plan utilized an industry cluster identification process developed by Professor Edward Feser (Feser, 2004), which was modified to include community participation in selecting the desired industry clusters (Brun and Jolley, 2011). Feser's cluster methodology identifies clusters by their shared value chain linkages and/or shared technologies.

   The Chatham County plan identified seven industry clusters where the county should focus their attraction efforts and four industry clusters where they should continue their efforts at business retention. This paper describes our efforts, in 2009-2010, to recruit businesses in these clusters to relocate or expand in Chatham County and outlines how the Great Recession has impacted these previously growing businesses as reported during the interview process. The paper also reports our follow-up efforts to identify a new set of growth companies in the retention industry clusters, and the impacts of the Great Recession on those companies' expansion prospects.

2. BACKGROUND

   Chatham County is a growing county located just south and west of the Research Triangle Park area in North Carolina. It is bordered to the north and east by Orange County (home to The University of North Carolina at Chapel Hill), Durham County (home to Duke University), and Wake County (home to North Carolina State University). The northeastern portion of the county has seen tremendous population growth from residents who commute to Research Triangle Park or other employment centers in the Research Triangle Region, such as the major universities and large hospitals. Western and southern Chatham County are more rural in nature and the employment in those areas is more indicative of traditional manufacturing such as wood and food processing. Siler City (estimated population 8,700) is the largest municipality in the County and is located in western Chatham County. The town has struggled economically with the loss of a chicken processing facility (a major employer), economic stagnation, and lower wage employment opportunities.

   As part of the Chatham County Economic Development Strategic Plan (Jolley, Lane, and Brun, 2008) seven industry clusters were identified for recruitment activities. Six of these clusters (1) architectural and engineering services, 2) technical and research services, 3) basic health services, 4) pharmaceuticals, 5) information services, and 6) higher education and hospitals were derived from the Feser methodology. A seventh cluster, renewable energy, was identified through various consulting reports and was requested by the community given the county's small biofuel's processing facility and strong environmental commitment from elected and community leaders. Four industry clusters (1) packaged food products, 2) concrete, brick building products, 3) nonresidential building products, and 4) wood processing were identified as clusters where the county should focus its retention efforts. The county has several large employers in the brick, wood processing, and food processing industries.

3. RESEARCH METHODOLOGY

   Utilizing 2006 data from Dun & Bradstreet's proprietary database, the 1,400 "growth companies" in the attraction industry clusters...