RALEIGH – This afternoon, Tom Snyder, executive director of RIoT, a growing users group focusing on economic development by capturing emerging markets and accelerating startups, hosts the annual “State of the Region” address at Raleigh Founded’s monthly happy hour (you can join Thursday at 4p at this link). Once again embracing the State of the Union theme, Tom will discuss the economy and environment, jobs, domestic and foreign affairs and North Carolina’s opportunities and threats.

2020 was a hard year

The subtitle is probably the understatement of the decade.  The year most of us would like to forget included record-breaking environmental disasters, civil, social and political unrest, a rapid acceleration of the wealth gap and to top things off – a global pandemic.

A fallacy often covered by the media during the year was that these challenges have shut down the economy.  The reality is that an economy never stops.  Markets and regulations continually change; this year dramatically so.  Rapid change is extremely disruptive to established business models, giving the feeling of a shutdown.

At RIoT, we work with startups and large enterprises, helping them to maintain focus on market-driven needs that continually evolve.  Often this requires a company to “pivot”, dramatically changing their business to keep up with market demand.  A clear recent example is restaurants pivoting from in-building dining to delivery-based commerce.  The market for expert-prepared meals did not disappear, but rather changed dramatically, and for many businesses, painfully.

As a whole, was North Carolina able to pivot successfully in 2020?  Let’s look at the major challenges in turn.

The Environment

This year set numerous records for damage from environmental disasters.  Wildfires raged for months in several states.  We saw nearly 3 times more heat stroke related emergency room visits in eastern NC compared to average years.  But while summers are getting hotter and drier, in 2020 we also saw 12 hurricane force storms hit the US coast, shattering the prior record of 9.  These caused $65B in damage nationwide, including a significant amount in North Carolina.

We are seeing a positive response to climate change in the NC entrepreneurial community.  Natrx is deploying 3D printed reefs and wetland structures to protect the nearly $4B in coastal property that is in continuous flood risk.  VitalFlo does continuous air quality analytics to warn when conditions for an asthma attack are highest, enabling preventive action.

Green Stream Technologies is deploying wetland, creek and stormwater sensors across the state, using AI to warn when streets and neighborhoods will flood in advance of dangerous conditions.  A partnership between the NC Emergency Management team and leaders in Cary, Raleigh, Wake County, Cisco, Green Stream and others won the top national smart water project award from IDC.

The biggest archive of weather and climate data in the world resides at the Collider in Asheville, available for entrepreneurs in our state to build solutions to the market opportunities that climate change has created. North Carolina is already a leader in clean energy with the 3rd largest deployment of grid-scale solar in the US. But 2020 saw NC drop from the #2 ranking, as new solar deployments declined for the 4th straight year and by more than 50% (through Q3 2020) compared to 2019.

Climate related business is one of the biggest new market opportunities.  North Carolina is extremely well positioned to be a national leader in environmental technologies, particularly if we also reinvigorate investment in clean energy.

The Pandemic

It goes without saying that the biggest force behind numerous market changes in the past year was COVID-19.  The pandemic caused abrupt changes in regulations, in social behaviors and in consumer patterns.  Once people understood that this was not going to be a short-term challenge, entrepreneurship-driven solutions began to emerge everywhere.

RIoT ran project sprints in the spring and summer under the MISSION-R initiative that launched new startups like Socialize, a novel online event and networking platform.  In the Triangle we saw Bandwidth, Klarrio, Aeva Labs and other companies partner together to 3D print and deliver thousands of face shields and ear savers to NC VA hospitals.  Distilleries pivoted alcohol production to hand sanitizer.  Creativity has abounded in solving the health and business challenges that COVID presented.

Going forward, the latent impacts of COVID-19 will continue to push market changes, which most often will be addressed through deployment of new technologies.  North Carolina has the requisite ingredients to be a global leader in new post-COVID solutions.  We have one of the strongest university systems in the US.  Perhaps the two strongest data analytics companies in the world – SAS & IBM – headquarter their analytics efforts in our state, and IBM is advancing quantum computing right on Centennial Campus.

If we accelerate support of entrepreneurship and collaboration between startups and established tech companies in the state, we will come out the back side of the pandemic stronger and more profitable.

The Economy

After severe uncertainty in Q2, global markets have largely recovered and capital for entrepreneurs has likewise been strong.  North Carolina ranked 6th in the nation in startup investment, capturing $3.6B in new investment.  North Carolina set a record with 43,152 new high propensity business filings in 2020.

Entrepreneurship programs are growing and coworking spaces are sprouting in communities beyond our urban hubs, including Wilson (Gig East Exchange), Wake Forest (Loading Dock), Asheboro (Venture Asheboro) and Yanceyville (CoSquare).  These spaces will house not only early stage ventures, but remote workers as more and more people stop commuting to a corporate campus to work.

We see exciting companies growing rapidly in future energy, computing, operations and healthcare markets.  MicroGrid Labs is helping municipalities across the country prepare for mass vehicle electrification.  EDJX has raised millions to develop planet-scale edge computing capabilities.  Trilliott has developed a platform capable of handling asset management at a scale of trillions of things.  OpiAID technologies improve addiction treatment outcomes for those afflicted by the national opioid crisis.

Established tech companies in the Triangle are planting deep roots.  Pendo is building one of the many new downtown Raleigh high rises.  Bandwidth is building an entire new corporate campus.  Epic Games just bought a shopping mall for their new headquarters.  Unicorn companies in Charlotte and Wilmington continue to grow.  New residents are flowing into the state in record numbers to fill jobs these companies are creating.

The future of the economy, when viewed from the lenses above, looks very strong.

But not all stories are so positive.  Just 7% of the North Carolina population controls 53% of the wealth.  We do not yet have an economy that is working for everyone.

Diversity, Equity and Inclusion

Political and social debate is front page news in any election year, but were at much higher levels in 2020.  The terrible injustice exemplified by the deaths of George Floyd, Breonna Taylor and too many others brought racial justice to the forefront of public discourse. The pandemic has rapidly accelerated the wealth gap with healthy stock market growth filling the pockets of institutional investors in parallel with thousands of small businesses closing their doors. The percentage of women seeking computer science degrees continues to decline yearly.

As a society, we are simply not doing enough to create genuine opportunity for every resident.

We have underutilized assets.  More than 10% of the HBCU’s in the US are in North Carolina, and we have more HBCU students enrolled than any other state.  HBCU’s graduate 70% of students within 6 years, compared to only a 49.5% graduation rate for Black students in non-HBCU institutions.  Yet we are not funding these institutions enough or taking full advantage of that talent pipeline.

We are seeing signs of progress.  NC IDEA demonstrated national leadership through the establishment of the Black Entrepreneurship Council and dedicated funding for Black founders and ecosystem builders.  Durham has recently been ranked the 7th best US city for female entrepreneurs (Fundera) and Charlotte and Raleigh rank the 8th and 12th strongest cities for women-owned businesses (SmartAsset). Convening organizations across the state, RIoT included, have held panel discussions and webinars on creating more inclusive cultures and increasing diversity in tech.

These steps are not enough.


The biggest opportunity for North Carolina to create equity and grow the economy is through statewide deployment of broadband.

In today’s society – everything relies on internet connectivity.  Even traditional utilities and public infrastructure like water, electricity and roads are dependent on smart meters, sensors and data analytics to operate efficiently.  Broadband connectivity is a super-utility that must be provided to every resident. Too many communities, even in urban centers, lack access due to the high cost of service.  And in our rural communities, many lack deployed broadband infrastructure at all.

The challenge in the private sector is that the cost of deploying and maintaining broadband infrastructure and offering services on that infrastructure is often more costly than the revenue that can reasonably be collected from business and residential customers.  The math becomes particularly challenging in areas with low population density and difficult geography.

The solution to this problem is to re-think broadband not as an internet service, but rather as a fundamental utility.  The cost of broadband is lower than the cost to society that results from lack of connectivity.  When the math is broadened to include the value created by remote work, improved education, access to healthcare, growth of commerce and more, then it makes clear financial sense to connect every NC resident to high speed broadband.

COVID-19 put a spotlight on how much it hurts people who lack reliable, high-speed internet access.  The monetary cost has been enormous and the social impact even greater.

Since 2011, in North Carolina, it has been legislated that broadband must be provided by the private sector as a service, rather than by the government as a utility.  This legislation constrains the broadband cost-benefit analysis to the oversimplified formula of cost to deploy versus internet service revenues. This narrow view of the value proposition has resulted in a decade with minimal broadband service expansion outside our urban hubs.

Delivering broadband to every structure, business and resident in North Carolina cannot rely on a one-size-fits all approach.  We must be open to a variety of fiber optic, wireless and low earth orbit satellite technology options.  We must enable new municipal-driven solutions and creative public-private partnerships.  A model that has promise is for local government or independent nonprofits to own and maintain broadband infrastructure while private industry provides services to residents.  Models analogous to electric cooperatives also have strong merit.

Most of all, we need a change of mindset that enables new and creative business models based on the societal cost-benefit calculation for providing broadband.  If we do, we can become a state where children can receive high quality education regardless of where they live.  Where people in every town can gain access to job training, e-commerce and remote healthcare.  When we do this — markets multiply and wealth spreads more evenly across the whole population independently of geography or demographic.

North Carolina can be the first fully inclusive state, built on a foundation of the most critical utility of today and the future.  We have the technology and talent to do this.  Let’s get started together.