Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, October 16, 1994 TAG: 9410180022
SECTION: HORIZON PAGE: G4 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: RALEIGH, N. C. LENGTH: Long
Talk to economic developers in the Raleigh-Durham region and one thing they all mention is the growing presence of the telecommunications industry.
Then they tick off a list of some of the companies involved in telecommunications research and development: IBM, Panasonic, Ericsson GE Mobile Communications, Sumitomo Electric, Alcatel, Northern Telecom, Cisco Systems - and NetEdge.
NetEdge Systems Inc. is a promising new company that jilted Roanoke for the Triangle.
The company was formed in December as a subsidiary of Roanoke-based FiberCom Inc. Its plan was to concentrate on commercial applications for the high-speed, computer-networking equipment that FiberCom had been producing primarily for the military and aerospace industry.
NetEdge's equipment allows simultaneous transmission of voice, video and data on a single cable system. The company remained independent when FiberCom was sold in July to Litton Industries Inc. to become part of Litton's Blacksburg-based Litton Poly-Scientific division.
Carolinians consider NetEdge an important conquest. A new brochure used to market the Research Triangle prominently displays the company's letterhead.
The Research Triangle, a research and development business park anchored at the corners by Raleigh, Durham and Chapel Hill, has credentials that make business and government leaders from other regions jealous. Raleigh-Durham is ranked No. 1 by Fortune magazine among U.S. cities for business-knowledge workers and is No. 1 on Money magazine's list of the country's most liveable places.
The Roanoke region has its share of technology-based businesses, would like to have more and most likely will. The Roanoke region, however, will probably never match the Research Triangle's appeal as a home for high-tech business.
For one thing there's the geography. The Roanoke region is mountainous and has a limited - though some say adequate - amount of land suited to industry. The Raleigh-Durham region, on the other hand, sits in the rolling North Carolina piedmont. By itself, the Research Triangle Park contains 6,800 acres. Thousands more easily developable acres are nearby.
The Roanoke region claims a major research university in Virginia Tech as well as Radford University, two private four-year colleges and two community colleges.
The Raleigh-Durham region, by contrast, boasts three nationally recognized universities in Duke at Durham, the University of North Carolina at Chapel Hill and North Carolina State in Raleigh, all within about 20 miles of each other. The nexus of these three universities gives the Research Triangle its name.
In addition to those schools, whose faculty maintain a close working relationship with the business community, the Raleigh-Durham region is home to seven other colleges and universities and two technical colleges. Although the region has a low 3 percent unemployment rate, those Carolina schools produce 11,000 graduates each year who help feed the business community's hunger for educated workers. The number enrolled in higher education in the Raleigh-Durham region is nearly double that of the Roanoke region.
The Roanoke region has a growing but medium-sized airport with jet service supplied by one carrier, financially troubled USAir. The Raleigh-Durham International Airport is a hub for American Airlines and has international service to London. It's a 10- to 15-minute drive from the airport to many of the businesses in the Triangle. When American Airlines threatened to pull its hub out of Raleigh, North Carolina's governor mobilized the community to persuade the airline to change its mind.
The six-county Raleigh-Durham region was home to 856,000 people when the 1990 census was taken. The nine-county, four-city Roanoke region had roughly 473,000 residents.
Raleigh-Durham is big but not too big. It lacks the night life that a major metropolis can provide, but it also doesn't have much of the crime and other problems of larger metro areas.
"You've got the best of both worlds," said Mike Rakouskas, director of corporate recruitment for the Greater Raleigh Chamber of Commerce. "You can have the amenities without the negatives that come with a large city."
Too much growth?
The fact that Raleigh is the state capital also means the region can offer cultural opportunities that a community its size might not otherwise be able to offer, such as a symphony and state-supported art, history and science museums.
New arrivals to the Research Triangle have their choice of four major areas in which to live. The fourth is the booming town of Carey, an upper-middle-class Raleigh suburb that recently jumped ahead of Chapel Hill in population. From 7,430 residents in 1970, Carey had grown to 56,584 in 1993.
During the mid-1980s the region's population grew at a rate of about 10 percent a year. That growth slowed during the last recession but was still around 4 percent to 6 percent yearly. Growth has recently shown signs of returning to mid-1980s levels, Rakouskas said.
Some have questioned if that kind of growth might be too much. A special report in the Raleigh News & Observer last year warned that the quality of life that had brought many people to the Triangle was threatened.
New roads, including a new outer beltway on the north and the eight-laning of existing Interstate 440, are under construction to accommodate increased traffic. Suburban sprawl is said to threaten the region's lakes and water supply. Opportunities abound for skilled well-educated workers, but those less well-educated natives are left behind.
"A lot of folks are real concerned about urban sprawl and transportation, in particular," said Jim Warren of Durham, executive director of North Carolina Warn, a consortium of the state's environmental groups.
Air quality is worsening, regional watersheds are threatened, sewer systems are strained and there's a Super Fund site by the Raleigh-Durham International Airport, Warren said. The region's communities are not working together on planning or showing much foresight, he said.
Not surprisingly, Rakouskas has a different view. Local officials, he said, have put zoning controls in place and developed long-range plans that will "result in a positive pattern of development for the area."
Rita Quinn, director of the 4-year-old Research Triangle Regional Partnership, said one of the group's biggest accomplishments has been getting various localities to work together to market the region for economic development. These are communities that in the past have fought for industry, needing the taxes to help pay for services that growth demands.
The Triangle is more attractive to outsiders when the region is seen as a whole rather than in its constituent parts, she said. It was the region as a whole that drew praise from Fortune, Money and many other publications as a good place to live and do business, she said.
Communities in the Triangle want to land industrial prospects because it's good for the tax base, Rakouskas agreed. But each community recognizes it will help the region as a whole if a company locates anywhere in the Triangle, he said.
Selling the positive
The Triangle's positive image is no accident.
The Triangle Partnership sends local economic developers to national trade shows and makes the best out of its opportunities to win free publicity for the region. The partnership has been financed by local chambers of commerce and the Research Triangle Park Foundation. It will soon expand its realm of responsibility from six to 14 counties and will get state funding.
Quinn's group doesn't have the money to advertise the region in major national publications. Until recently, the association's annual budget was $250,000.
Instead, the partnership works with a public relations firm to bring journalists from around the world to the Research Triangle and then goes all out to make sure they see the region's best side. This summer Quinn hosted four media tours, the last one for reporters from Japan and Germany. "We want to build on the exposure we've been getting in the past few years," she said.
"When the folks from Fortune and Money came to the area, we went out of our way to expose them to all the positive elements this area has to offer," Rakouskas said.
The Aug. 9 issue of Newsweek Japan ranked Raleigh-Durham among the top 10 "highly liveable" metropolitan areas in the world. There are 15 Japanese businesses in the Triangle and more nearby.
The Research Triangle Park was conceived and opened in the 1950s, when local leaders realized the region's best and brightest young people were leaving the area to find work. The park is one of the nation's oldest university-linked research and development parks. The park, operated by a nonprofit foundation, struggled at first. It signed on its first business, Chemstrand, in 1960, but really took off when IBM arrived in 1966.
Richard Daugherty, a former vice president of manufacturing for IBM's personal computer manufacturing and IBM's senior executive in North Carolina, said being near three major universities and several smaller schools is attractive for businesses looking to relocate. The universities, because of all the activity going on, make the region a highly desirable place to live, he said.
Seventy-one public and private research institutions as well as 48 other support organizations call the Triangle park home. The park provides employment for more than 34,000 scientists, technicians and other workers. By contrast, the Corporate Research Center at Virginia Tech is one-fiftieth the size of the Research Triangle Park, with roughly 650 employees spread among 30 companies.
Having a critical mass of certain types of businesses already located in an area is important to attracting similar businesses, Rakouskas said. Just last month, long-distance provider MCI opened one of two U.S. network management centers in Carey. It was not the case of economic developers wooing MCI to the Triangle, Rakouskas said: MCI came to the Triangle on its own.
The Triangle region has benefitted from political leadership. Former Gov. Luther Hodges supported and helped keep alive the Research Triangle Park in its early years. Current Gov. James Hunt was responsible for the establishment of government supported research centers in the park in 1982 for micro-electronics and bio-technology. More recently, Hunt has been the moving force behind the North Carolina Information Highway, an advanced broad-band communications network that came online in August, serving schools, government agencies, law enforcement and medical facilities. The high-speed network is capable of transmitting voice, data and video services simultaneously. Businesses will hook up next year.
The micro-electronics center, known as MCNC, helps marry the knowledge of university researchers with that of business. The nonprofit center concentrates on research and education in the fields of micro-electronics, communications and super-computing. It acts as a magnet to help draw technology-based companies to the region.
Another park-based nonprofit is the Research Triangle Institute, which is in the park's administration building and does contract technological research for government and the region's businesses in such areas as virtual reality.
Some manufacturing is allowed in the Research Triangle Park but only in conjunction with a company's research and development efforts. IBM, for instance, makes all of the company's personal computers for the western hemisphere at the park. IBM employs 10,000 people in the Raleigh-Durham area and soon will move 1,100 more to the area from Florida.
The park resembles a college campus more than an industrial park. Many of the buildings are architecturally distinct and they sit back in the pine woods away from the main roads. At lunch time those roads are flooded with park employees out walking or jogging.
The North Carolina legislature granted the park a special designation as a research and service district. It cannot be annexed by any of the surrounding communities, and businesses pay county taxes only.
The magic of the Research Triangle, said Gary Shope, vice president of the Research Triangle Park, "is the willingness of state government to work in genuine partnership with industry. Companies came to this park because they can build on the strengths of the universities," Shope said. "They can tap the faculty and future employees, in terms of graduate students."
by CNB