John W. Bardo, Chancellor
Rural Economic Development Conference
Public Policy Institute
Western Carolina University
Cullowhee, NC 28723
November 8, 2000
Welcome and thank you for being here today. Western Carolina's Public Policy Institute has made itself a presence in this region over its short history through sponsorship of conferences on issues that are critical to the people of western North Carolina. I would like to thank Gordon Mercer, his students, and the co-sponsors of this conference, the Asheville Citizens-Times, for convening us today. It is really a pleasure to have so many of you here.
I would like to spend a few minutes talking with you about the importance of this University for the future of economic and community development in the western region. I like to tie the two concepts-economic and community development-together so that we keep in mind that our real purpose for economic development is to improve the quality of life for the people of the region. In this way, there is continuity between the University's interests in education and in economic development: both involve core issues of improving the quality of life. Before delving into the community development focus of Western, I think it is important that we all share a sense of context within which the institution's policies have been developed.
Western Carolina is what is known in the higher education vernacular as a "comprehensive university." In 1990, I had the good fortune to be asked by the American Association of State Colleges and Universities to edit a book on the nature of these types of institutions. What became very clear from doing that work is that comprehensive universities generally offer a wide array of bachelors and masters degrees and they share in common a strong commitment to regional development. In almost all states, comprehensive universities have significant responsibility for supporting the improvement of the quality of life in their region through programs that directly support economic development.
This has historically been part of Western's mission as well. Chancellor H. F. Robinson took this issue very seriously. He worked tirelessly in supporting the development of the mountain communities and he founded the Center for Improving Mountain Living (CIML). Chancellor Coulter, who followed Chancellor Robinson, remains active in the development of this region through his continued participation in regional development organizations and his strong support for development in Cherokee. While I will not dwell on the details of this history, it is clear that this institution has taken its role in regional development very seriously. Why has this been such an issue to this University?
As you are all aware, Western is a state university and, as such, we have responsibility for implementing state policy. Currently, we might summarize our role as "we are to educate the state and serve the region." Our student body will, per force, be drawn from across the state of North Carolina. At the same time, we have responsibility for serving the people of western North Carolina. Generally, our "service region" is defined as the western-most 17 or 29 counties in the state (depending on the nature of the service). Although our region extends into the foothills and some western Piedmont counties, generally, the region is composed of counties that are mountainous and that contain indigenous populations that are culturally "Appalachian." This region has historically been poor, underdeveloped, undereducated, and primarily rural. It also is a region that has every reason to be proud of its indigenous cultures (both Native American and European) based in a respect for the individual, strong family ties, emphasis on local communities, and strong religious beliefs.
Because of the poverty of the region, however, life in these mountains has not always been easy. If one looks at the total Appalachian region from North Carolina to Kentucky and West Virginia, during the period of 1950 to 1980, more than three million Appalachian people out-migrated (Obermiller and Philliber, 1987). During that period, most of the out-migration was to cities in the mid-west including Cincinnati, Dayton, Detroit, and Chicago. It doesn't take a study to get a feel for the impact of this massive out-migration on the communities and families of the region. The sense of loss, the worry over one's children moving away and never coming back, the disruption to the families, communities, and churches of the region are all too apparent.
Today, this region is still suffering significant out-migration by its young people though the local population is experiencing some growth, especially among retirees and people who can afford second homes. The Asheville-Hendersonville corridor also is becoming a magnet for economic development especially due to its proximity to the strong economy in the upstate of South Carolina. Unfortunately, the rest of the region is not yet sharing this prosperity. As a result, young people of the region are moving to the new economic centers of Atlanta, the Triad, Triangle, or Charlotte. And, while their destinations are different than they were a generation ago, the impact of their leaving on the communities and families of this region is still the same.
This is the context within which we are acting. And, it is critical that we understand that, as the largest employer west of Asheville, and as the state's four year comprehensive university for this region, we have a particularly critical role to play in regional community development. As this talk continues, you will see that many of the actions of the University over the last several years have been directly positioning us to have an impact on the future. Moreover, external forces, probably for the first time in history, are poised to help with that development. The most critical of these is what is known as the "new economy."
In very quick summary, the "new economy" is based not so much on location as it is on "brain power." Businesses can locate in nearly any locale so long as that locale can provide high speed Internet service, a stream of educated and skilled workers, and basic utilities. New economy businesses tend to be clean, they pay well, and they are generally environmentally friendly. Other rural regions have taken advantage of the New Economy already (the "Four Corners" region of Colorado to name one).
Locally, in addition to the New Economy, we also have two economic trends that we in education have not yet attended to well. These are the rapid increases in the retirement population and the massive growth in cultural, adventure, and ecological tourism through the region. With the exception of UNCA and their Center for Creative Retirement, most colleges and universities in this region are only beginning to understand the importance of these two trends. Coupled with the new economy, these two trends have the potential to create a vibrant, diverse economic base that can sustain this region for generations to come. But, there is a caveat-tourism and retirement communities can take many forms, each of which produces different effects upon the local economy. If we wish to encourage retirement communities and promote types of tourism that contribute significantly to the local economy, we will need to be very thoughtful regarding the services and support systems we develop. Currently, on the North Carolina side of the mountains, there are very few "high end" tourist destinations that promote significant spending and higher incomes. Gatlinburg and Pigeon Forge have taken a "mass marketing" approach to tourism that has been very effective, but it is one that we do not need to reproduce in North Carolina. There are other approaches to tourism that produce high returns on investment and that do not have the same impact on the environment that we see in eastern Tennessee. We can create a unique destination in western North Carolina that values the region's traditions and its fragile environment.
It is very important to understand that there are some critical elements of economic and community development policies that can affect all three sectors (that is, the new economy, tourism, and retirement communities). Such issues as tax-free bonds, tax abatements, Internet service, workforce development, and adequate transportation affect all three. Strong educational systems are also especially critical to assure that the people of the region have the background, learning skills, and knowledge necessary to support these economic sectors. Another element that affects all three sectors-and one that is often overlooked-is the accessibility to cultural resources.
Several years ago, a colleague and I published a series of articles on how to attract and keep key personnel who are necessary for business development (Glaser and Bardo, 1994). The dominant theme of this research is that the quality of life is critical in the process. Quality of life generally was defined as involving the nature of the environment, the quality of schools, the availability of services and health care, and ready access to cultural events and activities. Cultural activities-music performances, plays, and similar activities-are a critical element that is often overlooked. Cultural activities clearly impact new economy businesses and their willingness to locate in an area while, at the same time, they can be a major draw for cultural tourists and higher-end retirement communities.
In this rural region, universities and colleges can be unique resources to support development of strong cultural events. These events are critical to the education of our own students and they support the development of the region. Asheville, of course, has a strong and vibrant arts community as do Brevard and Flat Rock. The Casino's shows obviously have added a dimension to the western counties, and Folkmoot in Waynesville and "Unto These Hills" in Cherokee are very important. But overall, cultural venues are limited.
I believe that this is a critical element in a regional economic and community development plan. This is much of the impetus for Western's continuing emphasis on developing performance disciplines and for the Fine and Performing Arts Building that now will be built with the passage of the bonds yesterday. We currently have two endowed professorships in the arts-one in commercial music and one in musical theater-and with the addition of the arts building we will press to make Western a "destination" for the performing and visual arts. In this region, it is critical that we recognize the importance of the arts as a core element of a strong regional economic development policy. They make the region more attractive to new economy businesses, they support cultural tourism, and they promote establishment of retirement communities of people with significant disposable incomes.
Most people who are interested in economic and community development recognize the critical nature of strong K - 12 education systems, excellent medical care facilities, and strong support for business development so I will not go into a great deal of detail here about these issues. Western will continue to place emphasis on direct support for education, the health care industry, and business. At the same time, we must increase our support for the hospitality and tourism industry in this region.
To this end, we have been expanding our services to the hospitality industry through incubation of a tourism call center for Smoky Mountain Host, development of a tourism research capacity in the Mountain Resource Center, and expansion of our hospitality management program. We also are working closely with Congressman Taylor to see if we can obtain federal funding for a hospitality management building for the campus. Tourism will remain a critical part of this region's economic base and we have to be an active player in the education, training and support of the tourism business.
There is so much going on in this arena that I cannot talk about all the initiatives and elements of the University that support community development. I want to focus for just a minute on the Millennial Campus and on the increasing importance of technical support and technical disciplines to the future of the region. These are two intertwined elements of Western's economic development initiatives. Both are complex and both will require us to think differently about the future.
In 1999, Western authored draft legislation for what was then termed the "Cornerstone Campus." This draft bill was reviewed and modified by the Board of Governors to include all UNC campuses except N.C. State and UNC-Chapel Hill (these schools already had been supported by equivalent legislation) and it was restyled "the millennial campus bill." This bill was considered by the 2000 legislative session and it passed unanimously through both houses. This legislation is a major milestone for UNC campuses in that it both recognizes the responsibility of public higher education to engage in economic and community development and it provides the authority for the universities to make their work effective.
Even though we at Western authored the legislation and we worked hard in the legislature to pass the bill, I think we are just beginning to appreciate its full implications. Fundamentally, the Millennial Campus legislation allows universities to take several critical actions to support economic development:
The university can purchase land, or use existing land, to promote the location of businesses.
Land leases can be developed to achieve the specific goals of the economic development program. This means that in areas such as western North Carolina we have tremendous flexibility regarding land lease charges.
In principle, a university can take direct action to promote economic development without reference to the Umstead non-competition act. Although in western North Carolina this should be a minimal concern, it allows the University to negotiate in good faith with businesses.
The University can provide direct services to businesses, including high-speed Internet connections, to promote their location or development in this area.
With permission of the Board of Governors, the University has authority to issue revenue bonds to support business development.
In addition, the University has authority to engage in public/private partnerships, development of joint use facilities, and co-operation with enterprises to promote economic development.
And, finally, we can incubate businesses even if those businesses have no relationship to current academic programs at the University.
As you can see, this legislation represents a watershed in the ability of Western to support this region and its development. I would be remiss also if I did not publicly thank Senator Dan Robinson and Representative Phil Haire. They carried Western's interests in the legislature to assure that this bill was passed. I also need to thank Jay Denton and the Jackson County Commissioners. Their support and understanding of the value of the bill helped us develop support in the legislature. Also, as the project progresses, it is likely that the county, the EDC, Western, Southwestern Community College, and private businesses will all be active partners in developing the campus. And, while we are at only the initial phases of developing the Millennial Campus, we are working with certain principles. We see these as critical to the future of the region.
Any business located on the Millennial Campus needs to have average wages that are appropriately higher than the average wage in the region; or, the business needs to provide direct support for other businesses with higher rates of pay.
The businesses need to be sustainable and produce minimal negative impact on the environment of the mountains.
And, whenever possible, traditional campus functions and business development should be mutually supportive.
The Millennial Campus is only one of the important developments in which Western is involved. Another is A-B Tech's development of the former BASF property at Enka. President Ray Bailey at A-B Tech has done a magnificent job of negotiating ownership of that property for development of a business incubator and education center. Chancellor Jim Mullen from UNCA and I are working closely with Ray on partnering to create a strong center for economic development at what is now the A-B Tech Enka Center. One proposal that I think is indicative of the importance of this cooperation will go to the Board of Governors for consideration in the current budgeting process. It involves biotechnology and genomics.
Several years ago, economic development studies of the Asheville-Hendersonville region suggested that information technology and biotechnology could be important businesses in the region, but that infrastructure and workforce development would be necessary if there were to be significant advancement in these economic sectors. This year, President Broad made biotechnology and genomics research a critical issue in the expansion budget request in that she recognizes that North Carolina has to remain an important player in this area. For those of you who are unfamiliar with biotechnology and genomics, they represent very important sectors of the new economy. Developments in these areas can affect everything from environmental reclamation to medicine. Many economists argue that the 1990s was the decade of electronics and that the 2000s will be the decade of biotechnology.
In response to that initiative, Western, UNCA, and A-B Tech have proposed to President Broad that an inter-institutional center for biotechnology and genomics be established at the BASF facility. The purpose of this center would be to:
Train community college students in the operations of biotechnology laboratories and manufacturing businesses.
Support education and research by faculty and students in the sciences at both Western and UNCA in biotechnology and genomics. At Western, this could include expansion of our graduate programs in the sciences and development of applied graduate programs in technology.
Promote development of biotechnology specializations in the technology programs at Western. This would include full articulation with the transfer curriculum of A-B Tech.
Provide education and training for health care professionals in western North Carolina and for students in health-related disciplines at A-B Tech and Western.
And, support applied research, and training to enhance development of biotechnology and genomics business in western North Carolina.
As you may be aware, Western has an abiding stake in the genomics field. Tony White, a Western graduate from Asheville is Chairman of the Board and Chief Executive Officer of Perkins-Elmer Corporation. P-E Corporation is the parent company of Celera Genomics, which was the private partner in decoding the human genome. I am very pleased to announce today that Tony White has agreed that P-E Corporation will be a business partner in developing the inter-institutional biotechnology center and that P-E Corporation is committed to providing many of the analytical devices necessary for the laboratory. I want to publicly thank Tony and P-E Corporation for their willingness to invest in the future of western North Carolina.
Both the Millennial Campus and the developments at BASF are important to the future of this region. However it is critical that we re-focus on what it will take this region to prosper in the new economy. I want to again return to the nature of the educated workforce. We know a great deal about what will be demanded. Of primary importance are such traditional educational skills as the ability to think critically, communicate effectively both orally and in writing, understand cultural and language differences, and the ability to work with numbers. Added to these traditional educational skills is a strong demand for the individual to be able to work in groups and to understand applications of technology.
It is important as we articulate our approach to economic and community development that we understand that the core educational skills inherent in a traditional arts and sciences-based education are more important today than at any time in history. The flexibility of mind, communications skills, and understanding of different ways of thinking inherent in this type of education provides the most important educational background that any student can have in this world economy that we are in the midst of creating. Western North Carolina is blessed with several institutions that have missions as liberal arts universities or colleges including UNCA, Montreat, Brevard, Warren Wilson, and Mars Hill. These institutions have a significant role to play in the region's future. At Western, the faculty has just taken a very bold step to reinvigorate our liberal arts and sciences core through development of the new Liberal Studies program. This action is critical to the future of our students, and the faculty should be congratulated on their initiative to assure that all students leave Western with a strong grounding in the arts and sciences.
At the same time, we are all facing enrollment pressures, especially in core programs. Because this region is so rich in liberal arts colleges, we need to take advantage of the situation and work together to strengthen our programs. It is time to explore how we can share faculty and curricula to assure that all our students receive the best education possible. While such cooperation will be much easier for the public institutions among themselves, we also need to examine how we can link to the private schools to leverage the assets of the region. There are just too many opportunities for us to ignore them.
While we must work to preserve our liberal arts core, we need to expand our region's ability to support technological development. As the area's regional comprehensive university, this must be a significant part of WCU's future. Applied technology, coupled with a strong liberal arts core, is the key to this region's future. Western has already taken several critical steps in this regard:
We were the first UNC campus to have all our residence halls wired to the Internet.
We have developed a strong campus network of electronic classrooms, distance education facilities, and open access laboratories. Included is a very high end Collaborative Advanced Technology Area based on RISC computing and a very high speed LAN.
You are all aware that Western became the first UNC campus to require entering freshmen to have a networkable computer as a condition of admission. You may not be aware that Western was the first university in the nation (according to Apple Computer Corporation) to base that requirement on Internet standards rather than on a specific computing platform.
Through the intervention of Congressman Taylor we have been able to begin construction of a Workforce Development Center which will include a high end television studio, a sound recording studio, plastics modeling laboratory, sales marketing center, CAD laboratory, and the like.
The College of Applied Sciences, under the strong leadership of Dean Dennis Depew, is creating a rapid prototyping laboratory.
The faculty of the College of Applied Sciences is proposing several new degrees that will directly affect economic development. Two of the most important are programs in telecommunications technology and construction management.
These are all very important initiatives, but we know that there are still some missing. I want to close with a brief discussion of two academic issues that directly affect this region's development. During the last several months I have reviewed the economic development literature especially as it relates to support for the new economy. This literature highlights the importance of two areas that western North Carolina is not yet positioned to support. First, there is the area of applied research and technology transfer. None of the universities in this region are in a position to effectively address this issue. We neither have sufficient physical nor faculty resources to effectively engage in this work. For us to support business development, we will need to examine closely what is possible for us to accomplish in this arena and for us to seek changes in state policy and assistance in funding for this development. The first major step in this regard was the Millennial Campus legislation; but this is only a first step-much more needs to be done.
Second, we need to effectively address issues of the location of technologically related disciplines. What we know from the literature is that business is interested in a supply of potential employees with technological skills-in such programs as engineering and applied sciences. But, while potential employees are important, what is even more critical is the ability of business to access local consultants, with whom they have a strong, on-going relationship. To offer courses at a distance is a partial solution, but it does not allow for the establishment of joint consulting and applied research programs between the universities and the businesses. This relationship has been shown in several studies to be critical to economic development. Moreover, lack of local faculty capacity in these fields represents an additional limit on developing the technology transfer capabilities of the region. These are major issues around which there should develop clear policy if this region is to prosper.
It should be noted that the literature in this field emphasizes the importance of understanding that an effective regional economic development policy focuses on attracting or growing "business clusters" rather than simply seeking individual businesses. The universities and community colleges in this region, because of their strong working relationships, can jointly support appropriate educational programs and disciplines that enhance development of business clusters in biotechnology and electronic business services. It will take, however, concerted effort of educational, business, and political leaders from this region to assure that state educational and economic development policy takes full account of the needs of this region.
In January of 1999, I spoke to a national conference on economic development at the U.S. Department of Commerce regarding the fact that North Carolina was becoming two states, one rich, one poor; one that was central and growing and one that was peripheral and stagnating. These themes were later echoed by the report of the Rural Prosperity Task Force that was appointed by Governor Hunt. Cecil Groves of Southwestern Community College ably represented this region on that task force and their general conclusions regarding rural North Carolina are profound. With all the pressures that will be facing the new legislature and the new governor, we must be sure that the needs of this region are not lost in the general din and noise of political change. It is, therefore, critical that we continue to work together to support the people of this region. This is a great people with strong traditions and sense of core values who believe in their families and their communities. Like all other North Carolinians, they should have the opportunity to live, rear their families, and work in the communities of their choosing. There is no reason, given the power of the new economy, that these beautiful mountains cannot become the prosperous jewel in North Carolina's crown. Thanks to all of you for being here today and thanks to the Public Policy Institute for sponsoring this conference.