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North Carolina Competitiveness NC

200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 The Punch Job Change 1990 to 2012 182,905 30,685 The loss of about 80% of our traditional manufacturing jobs 16,530 6,119 92,531 8,338 86,962 Textiles Tobacco App/Cut Sew Furniture 30,229 1990 2012 Source: NCESC.com

NC Employment Changes By Sector 2000-2012 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% 1% Total -9% Agriculture -30% Mining -14% Utilities -26% Construction -42% Manufacturing 3% Wholesale 0% Retail -13% -18% Trans/Ware Info 18% Finance/Ins 1% Real Estate 35% 27% 40% Prof/Tech Education Health 28% 28% Art/Enter Accom/Food Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted Source: QCEW County Sector Data

60% 40% NC and Prosperity Zone 8 Employment Changes By Sector 55% 2000-2012 35% 34% 30% 18% 28% 20% 0% -20% -40% 6% -23% -21% -25% -2% 5% -12% -3% -2% 1% -60% Accom/Food Art/Enter Health Education Prof/Tech Real Estate Finance/Ins Info Trans/Ware Retail Wholesale Manufacturing Construction Utilities Agriculture Total Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted Source: QCEW County Sector Data

15% 10% 5% Prosperity Zone Comparisons Total Job Growth 2000-2012 9.2% 5.4% 6.4% 0% -5% -1.8% -2.6% -0.9% -10% -15% -20% -25% -21.4% -9.9% Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Source: QCEW County Sector Data

Prosperity Zone Comparisons Total Manufacturing Growth 2000-2012 0% -10% -20% -30% -25.4% -40% -33.8% -36.4% -50% -46.7% -41.4% -46.1% -42.6% -60% -53.1% Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Source: QCEW County Sector Data

2013 Economic Strength Ranking for NC Metropolitan and Micropolitan Statistical Areas Of 366 Metropolitan Areas Top Third (7) Middle Third (3) Bottom Third (4) Of 576 Micropolitan Areas Top Third (8) Middle Third (4) Bottom Third (14) Source: Policom.com, 2013

NC Employment Growth 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Jan Annual Employment Source:NCESC.com

3.0% Southern States 1-Year Employment Changes July 2012 to July 2013 2.8% 2.7% 2.5% 2.0% 1.5% 1.0% 0.5% 0.9% 1.2% 1.9% 2.2% 2.0% 1.8% 1.7% 1.5% 1.2% 1.2% 1.0% 0.6% 1.4% 0.8% 0.0% AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV Source: U.S. BLS, Dec, Measured July 2012- July 2013

300,000 250,000 200,000 Southern States 1-Year Employment Changes 293,000 150,000 100,000 50,000 0 17,800 13,600 143,700 112,100 39,000 46,800 24,200 18,900 23,400 69,200 9,700 36,800 32,300 51,600 6,400 AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV Source: U.S. BLS, Dec, Measured May 2012 to May 2013

NC Real GDP By Industry 2010 25% 20% 18% 22% 20% 15% 10% 5% 0% 1% 5% 4% 3% 13% 11% 11% 3% 5% 4% 4% 11% 10% 1% 1% 7% 7% 15% 3% 3% 2% 2% 14% NC South Source: Georgetown Public Policy Institute, Carnevale and Smith, July 2012

Southern States Per Capita Income 1990-2012 (% Different from Nation Change) 50% 40% 30% 20% 10% 0% 7.5% 20.5% 7.5% 39.2% 8.5% 1.5% U.S. Change 120.6% Inflation 73% 31.5% 22.0% 6.7% 19.7% 11.2% 18.2% -10% -20% -5.1% -4.3% -13.0% -10.7% AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV Source: bber, University of New Mexico

NC Per Capita Income Compared to $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 U.S. 1990-2012 2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 United States NC Source: bber, University of New Mexico

5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 1.6% Southern States Real Personal Income Change 2011 U.S. Change 2.7% 2.6% 2.2% 3.0% 2.6% 2.5% 2.7% 2.1% 1.7% 1.3% 4.1% 1.9% 2.1% 4.3% 2.9% 2.2% AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV Source: BLS, June 2013

25.0% Southern States Percentage of People Living Below the Poverty Rate 22.6% 20.0% 15.0% 15.9% 19.0% 19.5% 17.0% 20.4% 19.1% 19.1% 15.8% 18.3% 18.9% 17.9% 17.2% 18.5% 18.6% 10.0% 10.1% 11.5% 5.0% 0.0% USA AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV PERCENT OF PEOPLE BELOW POVERTY LEVEL IN THE PAST 12 MONTHS (FOR WHOM POVERTY STATUS IS DETERMINED Source: US Census, American Fact Finder, July 2013

GDP/Capita Changes in the NC $50,000 1997-2011 $45,000 $40,000 $35,000 $30,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 NC USA Source: BEA, Oct 2012

Major Global Trends Impacting Competitiveness

Urbanization We Are Becoming A World Where People Live in Urban Regions

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% U.S. Population Concentration Metro-Non-Metro Almost 60% of US population lives in Cities of 1 million or more In 2012 over 90% of GDP and 86% of all jobs are in metropolitan areas 80% 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Metro Non-Metro Source: Census

Southern States % of Population Rural 2010 60% 50% 40% 30% 41% 44% 25% 42% 27% 30% 51% 34% 34% 34% 34% 25% 51% 20% 10% 9% 13% 15% 0% AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV Source: U.S. Census 2010

NC Gross State Product 2011 Other Metros 6% Non-Metro 19% Charlotte 25% Fayetteville 4% Asheville 3% Hickory 3% Wilmington 3% Piedmont Triad 14% Research Triangle 23% Source: IHS Global Insight, 2013

The Talent Bar

US Adults Years School Completed 80% 70% 60% 50% 76% In 1980, 32% had some college & 17% BA In 2010, 56% some college & 30% BA 1940 1950 1960 40% 30% 20% 10% 31% 14% 13% 37% 31% 26% 15% 5% 5% 17% 30% 1970 1980 1990 2000 2010 0% Less than HS HS Grad Some College BA plus

Degree attainment Rate By Southern 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 32% 28% 37% 36% State 2010 30% 28% 45% 36% 38% 35% 34% 32% 30% 32% 44% AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV 26% Source: Lumina Foundation, March 2012

Technology

Energy McKinsey & Company Disruptive Technologies: May 2013 Mobile Internet Advanced Materials Next Generation Genomics Robotics, Cloud, Digital-intelligence, 3D Printing

Global Interdependence

Today s Persistent New Reality The economy changed The competition changed Locational factors changed The U.S. workforce has changed The talent demands changed Life cycles have changed Tools have changed Customer (talent & companies) demands/expectations changed The pace of change and everything else changed

A society grows great when old men plant trees whose shade they know they will never sit in. Greek Proverb

Listening Tour Recap

Listening Tour Recap By the numbers: 8 events 11 weeks 150+ social media mentions 1,000+ assessment surveys 1,000+ participants 1,920 miles traveled

Survey Recap Top 3 What are you hearing about quality of workforce? 1. Employers have trouble finding the right technical skills 2. Employers have trouble finding people with soft skills 3. Employees have good skills but need retraining for specific job requirements

Survey Recap Top 3 What is reason for skills gap between workers and available jobs? 1. Mismatch between what is being taught in K-12 and skills that employers say are necessary 2. Mismatch between what is being taught in higher ed and skills that employers say are necessary 3. Demographics aging population with lack of new skills

Survey Recap Top 5 What can the state do to help businesses in your region? 1. Invest more in local infrastructure 2. Invest more in education 3. Invest more in job training 4. Reduce government regulations 5. Provide more access to capital

Survey Recap Top 5 What is most important role of state govt. to grow economy and create jobs? 1. Train and retrain workers 2. Provide incentives to attract companies 3. Aggressive marketing and branding 4. Provide technical assistance to help existing businesses grow 5. Provide capital to small businesses to help them grow

JOBS NORTH CAROLINA North Carolina Economic Development Board Recommended Strategies for Economic Growth 2014-2024 Identify key growth industries & develop a brand strategy to maximize statewide growth for high quality, sustainable jobs. Create a competitive business climate that drives job growth, retention & attraction in every sector of the economy statewide. Promote innovation, attract early-stage investment and support entrepreneurs. Attract the creative class and retiree population to North Carolina.

JOBS NORTH CAROLINA North Carolina Economic Development Board Recommended Strategies for Economic Growth 2014-2024 Develop and retain a globally competitive workforce with the knowledge and skills for high quality, sustainable North Carolina jobs. Spread prosperity, jobs and investment to the rural areas of the state. Develop programs that provide local communities with the opportunity to thrive. Streamline economic, workforce and community development functions and measure the effectiveness of state development activities.

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