The success of the North Carolina Triangle business model is now under consideration in other states to help overcome their current economic problems, despite what may seem like a stagnant economy. However, according to Mitch Renkow , professor of agricultural and resource economics, this model is not easy to replicate.
The Triangle owes its success to a “confluence,” of sources, according to Renkow . He said the proximity of the University to the Research Triangle Park and the foresight and ability of former Governor Hunt to make investments in infrastructure of the state built a solid foundation for economic stability and success in the region.
“[These changes] came at time when these resources could make a significant contribution towards the economic development,” Renkow said. “Recreating a model like this needs identifying ideas that will work, having a sound knowledge base for a diverse set of industries.”
There have been many efforts to achieve the same level of economic progress, according to Renkow , on the heels of the great success with RTP , also known as the ‘Silicon Valley of the east,’ many even as close as in the eastern part of North Carolina. Although similar sorts of investments were made in resources to organize transportation and infrastructure, the program did not take off and the pay offs did not reflect those of RTP .
The origins of this model date back to the 1950s , according to Thomas Miller, professor of entrepreneurship.
“At that time, North Carolina had an agriculture based economy, with very low per capita income,” Miller said. “In fact, it ranked at the bottom of the country economically. It was at that time the government had the bright idea to turn the land situated in the middle of three of the most vibrant research Universities of the country, which was anyway no good for farming and had only wild pine trees growing in it, into an industrial area.”
With a high concentration of educated people, it seemed to be the natural place for high tech companies to locate.
But this required a large commitment by the government to make the correct investments to attract a large number of national and international companies.
Another reason contributing to the success of this model may be the unique blend of public and private sector industries in the area, according to Miller. There is wide range of diversity in the type of industries in the area, ranging from computer technology to pharmaceuticals. This provides a natural back-up to the economic model, because if one sector gets hit hard, others will still provide income.
This Renkow echoed this thought and he said he thinks this led to a broad shift away from conventional industries—from textiles, which, if it went out of profit, would lead to collapse of the whole economic setup.
A significant portion of RTP consists of knowledge based industries, the main reason for this being its proximity to three Universities which supply well trained PhD’s to the area.
The Research Triangle houses many established global companies such as IBM and Cisco, but still has a long way to go for encouraging start-up businesses, according to Miller.
“There is a huge creative class of people in the area, which can very readily spawn entrepreneurial activity,” Miller said. “Dr. Walsh, who leads the Engineering Entrepreneurs program at N.C . State is an example, who used to work at IBM. During his time there he worked on a project which IBM didn’t pursue, and he obtained permission to follow up on the idea. The result was a company called BOPS, which succeeded in raising millions of dollars worth of profit.”
Universities in the area are a huge source of new graduates who can go into the work force, and encouraging start-ups would lead to an even bigger job creation. According to Miller, companies born here would be more attached to the area and more involved in civic responsibility.
