RALEIGH – North Carolina, the ninth largest state in terms if population, still has a long way to go when it comes to innovation, according to a new report.
The Har Heel state now ranks 21st, up two spots from 2017, says the North Carolina Board of Science, Technology & Innovation which is part of the North Carolina Department of Commerce.
However, the state’s economy also falls below its population, ranking 12th despite a wide range of improvements since 2000 when the first such report known as “Tracking Innovation” was published.
“Since the early 2000s, North Carolina’s innovation economy has, on balance, advanced—on 28 measures it improved, on eight it declined, and on four it stayed the same or could not be measured over time,” the report notes.
Three measures show the positive and the negative of those measures:
- North Carolina ranks third nationall for university related research and development – its highest rank in any metric
- Notes the report: “Since 2003, North Carolina’s academic R&D intensity has been growing at a rate more than three times faster than the U.S. rate, further increasing the gap between the two.”
- The state ranks seventh in share of state tax funds going to higher education
- But NC ranks 49th in share of state gross domestic product spent on elementary and secondary education, the state’s lowest score
Two charts from the report provide more specifics:
Much work remains to be done, acknowledge Secretary of Commerce Anthony Copeland and Michael Cunningham, the chair of the NC Board of
“To continue to increase the level of prosperity throughout the state, a larger share of the state’s economy must transition to include and drive innovation,” they write in the report’s introduction.
“As this report illustrates, this transition will happen only if a broader cross section of the state’s population has the education, training, resources, and infrastructure needed to start, grow, attract, participate in, and sustain companies and organizations that are innovative, entrepreneurial, and able to compete with the best in the world.”
Dr. Mike Walden, an economist at N.C. State, says the board’s findings are not surprising.
“This report confirms similar findings from other analyses.,” Walden tells WRAL TechWire.
“NC’s high ranking is a function of two main factors – the concentration of research oriented universities – mainly in the Triangle but also in other state regions – as well as the continuing attractiveness of the state to individuals relocating from other states.
“For example, United Van Lines just reported NC ranked ninth among states in 2019 in households moving into the state from other states. There’s also research suggesting that lower state income tax rates – which NC has enacted in recent years – can be a factor in attracting higher-income households. Often these are the households who are innovators.”
A key growth factor has been a growth in high-paying science, engineering and technolgy (SET) jobs that are primarily going to the state’s big metro areas, the report says.
“The number of innovation-oriented establishments in North Carolina increased by twice the national rate and that the state has seen impressive gains in the number of people engaged in engineering and other innovation-oriented occupations,” the report notes.
Urban vs. rural
But the concnetration of jobs going to the Triangle, Triad and Charlotte areas along with the concentration of univerisities in this areas also points to the challenge of trying to spread economic benefits more geographically.
A chart in the report points out how dominant these metro areas are:
“At the county level, 15 key measures reveal differences important for further understanding North Carolina’s performance overall and by local levels within the state,” the report explains.
“Specifically, among North Carolina’s 100 counties, that are highly populated and/or are home to major research universities (Mecklenburg, Wake, Guilford, Forsyth, Durham, Buncombe, New Hanover, and Orange) represent just 7 percent of the state’s land area but account for disproportionally larger shares of the state’s population, economy, and innovation assets and activities.
“In terms of general population, those 8 counties represent 39 percent of the state’s current population and 55 percent of the state’s population growth between 2000 and 2018.
“In terms of the general economy, those 8 counties represent larger shares—they hold 38 percent of the state’s manufacturing companies, 47 percent of the state’s total income, 49 percent of the state’s companies, 52 percent of its jobs, and 58 percent of its GDP. And in terms of the innovation economy, those 8 counties represent even larger shares—54 percent of the state’s.”
NCSU’s Walden says the urban-rural challenge is not new – ando not easily solvable.
“On the downside, the report does cite the concentration of innovation in North Carolina’s large metro regions, thereby leaving-out rural areas.,” Walden says.
“This is a well-known dichotomy which exists in most states. It will be a continuing challenge to address in coming years.”
The Department of Commerce notes several positive findings in the report:
- “Since 2003, the number of business establishments engaged in high science, engineering and technology (SET) increased by 24.4 percent in North Carolina, a rate almost twice the rate for the U.S.
- “North Carolina’s academic research & development intensity has grown at a rate of 25.4 percent since 2003, three times faster than the national average (8.4 percent).
- “The percentage of North Carolina’s employment in high SET employment establishments has increased by 6.1 percent since 2003, higher than the 1.0 percent rate of increase for the U.S.
- “From 2003 to 2017, the percentage of the state’s workforce in science and engineering occupations increased significantly, by 34.8 percent, faster than the rate of increase for the U.S. overall (24.1 percent).From 2003 to 2018, the percentage of trained engineers in the state’s workforce increased by 24.1 percent, higher than the rate of increase for the U.S. overall (8.7 percent).”