The Transylvania Times -

Where Business Is Headed?

 

November 21, 2016



One topic that strikes home with many Americans, including those who lived and worked in this county 20 years ago, is the loss of traditional manufacturing jobs. Many Americans hope those jobs will return and their communities will be rejuvenated. But that all depends on where business is headed?

Gov. Pat McCrory’s office recently issued a press release entitled “One North Carolina Small Business Grants Go to 29 Companies.” The companies listed are indicative of the trends in business in North Carolina.

One trend is that most businesses are developing in the major metropolitan areas. Of the 29 companies that received grants, 27 of them are located in the metropolitan areas of Charlotte, the Research Triangle and Greensboro/Winston-Salem.

The second trend is that growing businesses are in innovative and technological fields. The products these companies are working to provide would be life-changing for certain populations. Some of the projects they are pursuing are new materials for human joints, a socket-suspension system for amputees, new forms of Omega 3 to treat cardiovascular disease, sensors to identify wounds that are unlikely to heal, reuse of human livers declined for transplant, a nasal drug to treat obesity, etc. Some of these ideas seem to border on science fiction, but in today’s world what was science fiction has become fact.

The third trend is that government will continue to support various industries and businesses financially. Grants, tax breaks and other incentives have been used to lure larger companies to move or expand their operations here, as well as to provide seed money for companies the state believes have potential for growth. Since the One North Carolina Small Business Grants were implemented in 2005, 85 percent of the grant recipients are still in business. That’s a pretty good record given that most small businesses fail. And it’s not just the state involved in providing these grants. These particular grants are matched with federal funding through the Small Business Innovation Research and Small Business Technology Transfer programs. It appears as if state and federal government are committed to financially supporting certain businesses.

What does this mean for residents, particularly those looking for work or about to enter the workforce?

First, people are going to have to go to the jobs; the jobs are not coming to them. This is a conservative philosophy most recently espoused by John Hood of the John Locke Foundation and now head of the John William Pope Foundation, which is funded by Art Pope, one of the leading Republicans in the state. Hood wrote in early September of this year that “Government shouldn’t try to move jobs to people. That usually fails.” Hood explained that historically Americans have moved about the country to pursue work and careers. But when people are reluctant to move, they tend to stay “unemployed and underemployed far longer” and their wage gains are “far smaller.”

Second, education is increasingly important. Manufacturing jobs that were done by people 20 and 30 years ago are now being done by robots. According to a recent study entitled “America’s Divided Recovery: College Haves and Have-Nots,” of the 11.6 million jobs that have been created since the Great Recession, 95 percent of them (11.5 million) went to people with some college education. And 8.4 million of those jobs went to people with a bachelor’s degree or higher. Only 80,000 jobs were created for people without some college education. As technology becomes even more prevalent and machines replace people, education will become even more important for those who want to have a good job.

Third, there is little reason to believe government officials will extricate themselves from trying to lure and expand businesses. Depressions and recessions create both economic and political instability. They go hand-in-hand. In order to provide their own stability, politicians do what they can to provide economic stability, at least to enough people to get them re-elected.

Rural Americans, particularly those without a college degree, may pine for those days when every town had a factory that paid a good wage. But the trend has been away from that toward urban areas where new companies require more highly educated employees. That is where business seems to be headed.

 
 

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