Faindango: Jim Fain thinks commerce can do the fancy footwork to balance the needs of the new economy and the old.

• Author: Martin, Edward
• Position: Outlook - Interview

Talk about bad timing. Two months after taking office, Gov. Mike Easley picked Jim Fain as his secretary of commerce. The former banker had been the department's assistant secretary for economic development since mid-1999. The month Fain arrived, March, has since been declared by economists as the beginning of the recession. And not only did Fain get the top job when the bottom dropped out of the longest expansion in American history, but he took it amid a state budget crisis. A Hendersonville native, Fain, 57, earned his undergraduate and MBA degrees from UNC Chapel Hill and spent 25 years with First Union, rising to president of its Triangle market.

BNC: How is our economy faring?

Fain: We'd been losing jobs in our traditional manufacturing base for some time, but our overall economy continued to generate jobs at a healthy rate. More recently, though, the slowdown has had a larger impact on us because of our predominance in manufacturing -- we're the fifth most-industrialized state, with 19% of our non-farm employment in manufacturing. We've had a recession afoot in North Carolina for several months. The tragedy of 9/11 just exacerbated it.

Wasn't diversification supposed to make us recession-proof?

We have a significant confluence of challenges in the traditional manufacturing segment and the information-technology and telecommunications segments. We have a concentration of industries that have been impacted in a big way. But I still believe we have a diversified economy, and many segments will come back. We have a healthy travel industry, although it was impacted by the events of 9/11.

Corning, one of our biggest manufacturers, temporarily closed its two North Carolina optical-fiber plants last fall. Clearly the depth of cuts in manufacturing has surprised me. But most of our companies are taking steps to position themselves for the future. I believe Coming is one. It's hard to say when the turn will begin, but middle of this year would be my guess.

Your goal is to accelerate growth in technology and services. But Hickory -- Telecom Valley -- has the nation's second fastest-growing unemployment rate.

More precisely, I've said we need to facilitate a balanced economy and position ourselves to succeed in service and technology industries. If you look at U.S. Department of Labor data, some of the fastest-growing segments are service industries.

Aren't they typically minimum-wage jobs? Yes. But there are all kinds of service jobs.

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