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Dana Schoewe & Blake Montieth
UNC DEPARTMENT OF CITY & REGIONAL PLANNING
PREPARED FOR CAPE FEAR COMMERCIAL
APRIL 20, 2016
Wilmington, NC ECONOMIC IMPACT ASSESSMENT
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1 Final Strategy Memo Throughout its history, Wilmington’s economic growth has been characterized by waves of catalysts that have defined its economy. From the Revolutionary War through the Civil War, Wilmington was a major port due to its strategic geographic location and specialized in exporting products like tar and turpentine. In the 1840s, the railroad was extended down to Wilmington, catalyzing growth as goods were transported from the North and distributed further south to Charleston from Wilmington via steamboats. In the 20th century, the manufacturing sector boomed in Wilmington as a major shipbuilding hub for warships during World War I and World War II. With the decline of manufacturing in the 1970s and 1980s, Wilmington continued to grow rapidly due to an increase in tourism and the film industry. The extension of Interstate 40 to the city led to an increase in tourism and tourism-related jobs. Additionally, cheap production costs and a diverse landscape in Wilmington led to a growing number of TV and movie productions in the 1990s and early 2000s and a boom in the film sector. This was partially due to the robust film tax incentive program offered by the state of North Carolina.
However, with changes in governance in 2014, $60 million of film tax credits were cut and replaced by a $10 million grant. Due to these changes, other states, such as Georgia, have become more attractive for filmmaking and the industry in Wilmington has been in a steady decline. This has created a substantial economic development problem for the city: the lack of a strong industry cluster with high quality jobs. Although the tourism sector is large in Wilmington, due to its proximity to many beach destinations and Interstate-40, tourism-related occupations are generally low-wage and low-skill service sector jobs that do not retain young, talented workers. Thus, Wilmington has a pressing need to optimize its assets in order to remain economically competitive with other regions in the state and nation.
Wilmington is not a city without assets: its proximity to the ocean and strong marine science programs at local universities have the potential to help grow Wilmington as a lead city in the emerging marine biotechnology sector. The construction of CREST Research Park has endowed the region with world-class facilities for shellfish aquaculture development and marine biotechnology startup companies, providing the space and expensive lab equipment needed for development of these industries. Although these marine programs have begun to develop with CREST, Wilmington is still slow in commercializing research and it has not extended away from CREST, which is geographically isolated, into the city as a whole. As pointed out by Dr. Pomponi, director of the Oceanic Institute in Florida, the marine environment provides a host of valuable natural resources, and marine biotechnology and aquaculture are powerful untapped industry sectors. Pomponi claims that, “the marine environment is a rich source of both biological and chemical diversity. This diversity has been the source of unique chemical compounds with the potential for industrial development as pharmaceuticals, cosmetics, nutritional supplements, molecular probes, enzymes,
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fine chemicals, and agrichemicals. Each of these classes of marine bioproducts has a potential multi-billion-dollar market value” (Pomponi). With its diverse applications, marine research has the potential to contribute to the growth of an innovative industrial cluster in Wilmington related to marine biotechnology and aquaculture.
This report makes three recommendations for the Wilmington region:
1. Pivot the regional economic growth strategy away from film and manufacturing. 2. Establish and foster a local industry network and brand for the combined marine
biotechnology and aquaculture industry. The North Carolina Biotechnology Center and the Institute for Industrial Promotion of Andalusia (IPIA) are potential precedents.
3. Work with state agencies to mandate higher wages & benefits for tourism-based industries because these industries are unlikely to decline in the near future.
2 Economic & Demographic Fundamentals
2.1 Introduction
The Cape Fear region is a metropolitan area in the tidewater region of North Carolina centered around Wilmington and geographically-limited by the Cape Fear Headland. The boundaries of this region are defined in many different ways. New Hanover County, fully containing the city of Wilmington, is included in every definition of the Cape Fear region extending to large portions of southern Pender County and northeastern Brunswick County as defined by the Wilmington Metropolitan Planning Organization. Historically, the U.S. Census Bureau has included all of Pender and Brunswick counties with New Hanover County, though Brunswick County recently became part of the Myrtle Beach Metropolitan Statistical Area. To maintain historical continuity, this study relies on the three-county definition of the metropolitan area. Some metrics in this study are limited to New Hanover County due to data suppression issues associated with low population sizes in Pender
and Brunswick counties. In these cases, please note that while these counties are similar, New Hanover County may not fully represent the economic conditions of all three counties. This study notes where these boundaries are altered and addresses possible distinctions between counties.
This study relies on multiple local sources to position findings within the region’s discourse on its economic health. This allows a verification of results and an opportunity to critique commonly-held assumptions. These sources include recent research by the Wilmington Planning Division and local
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partners for the Create Wilmington Comprehensive Plan in addition to news articles from the past decade.
Since its incorporation in 1739, Wilmington’s economy has been defined and redefined by four major catalysts of industry. The city’s first catalyst of economic development was spurred by the port city’s geographic monopoly on naval stores and lumber exports before and after the American Revolution. This first catalyst concentrated shipping industries on the river banks of the city’s historic downtown. Then, the completion of the Wilmington and Raleigh Railroad in 1835 intensified the city’s position as the state’s primary shipping and manufacturing hub. World War II shipbuilding efforts and the establishment of the State Ports Authority in 1945 again redefined the city’s economic base. Finally, as the city’s manufacturing economy slowly declined in the late 20th century, Wilmington’s connection to Interstate 40 opened in 1990 allowing the city to expand its presence as a major tourist destination in the Southeast. Economic development in the surrounding region has largely depended on development by the city of Wilmington, with some nearby communities only recently emerging as regional players. This study primarily focuses on the region’s recent economic trends since the completion of I-40 with no discernable major economic catalysts.
2.2 Long-Term Trends 2.2.1 Population
In 2013, Wilmington’s three-county metropolitan region had an estimated 384,000 residents. 56% of these residents lived in New Hanover County, 30% in Brunswick County, and 14% in Pender County. As the region’s historic center, New Hanover County offers the most accurate long-term population data. Since first recorded in 1790, the county has maintained steady population growth with one population decline following the Civil War. The county’s highest growth rate began in 1990 and continues today at 6.7% between 2010 and 2014 (Figure 2). Brunswick and Pender counties’ residential populations have largely emerged since 1990 with a 10.6% rate in Brunswick and a 7.8% rate in Pender between 2010 and 2014. Brunswick County is the second-fastest growing county in the state, behind Wake County, and doubled its population between 1990 and 2010 (U.S. Census Bureau). Both Brunswick and Pender counties are primarily attracting new residents from the Northeast who are middle-aged or retired seeking warmer weather and outdoor leisure activities (March 2015).
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2.2.2 Population Demographics
People who identify as White have maintained roughly an 80% share of the regional population since 1970. The remaining 20% of the region’s population has primarily consisted of people who identify as Black with growing proportions of people who identify as Asian and Hispanic since 2000 (Figure 3). It is important to note that before the Wilmington Massacre of 1898, a major race riot led by Whites, Wilmington was majority Black (Loewen 1998). Little evidence suggests that the region’s share of White residents will decrease in the near future; but shares of the remaining 20% are increasingly changing.
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Figure 1 - Source: Minnesota Population Center. National Historical Geographic Information System: Version 2.0. Minneapolis, MN: University of Minnesota 2011. https://data2.nhgis.org/main (accessed January 29, 2016).
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Figure 3 - Source: Minnesota Population Center. National Historical Geographic Information System: Version 2.0. Minneapolis, MN: University of Minnesota 2011. https://data2.nhgis.org/main (accessed January 29, 2016).
Figure 2 - Source: Minnesota Population Center. National Historical Geographic Information System: Version 2.0. Minneapolis, MN: University of Minnesota 2011. https://data2.nhgis.org/main (accessed January 29, 2016).
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The region’s share of rural population has decreased strikingly from 31% in 1970 to 2% in 2010 (Figure 4). This drastic shift from rural to urban can largely be explained by the region’s geographic and ecological conditions. The region’s geographic growth is constrained by the Atlantic coast to the east with dense forests and wetlands to the northwest that are expensive to develop on. Most of the region’s recent population growth has also primarily occurred along its coastlines where land is scarce and housing is increasingly dense.
2.2.3 Industries, Education, and Income
As noted in a brief history of industries earlier, the Cape Fear Region has experienced a gradual decline in its manufacturing sector since its mid-20th century peak. This trend is consistent with a national decline in manufacturing, but at a slower pace than many Rustbelt cities. Figure 5 reflects this decline by charting the share of manufacturing jobs since 1990 to jobs in professional and business services. Specifically, the region’s share of manufacturing jobs declined from almost 13% in 1990 to less than 5% in 2014. Conversely, professional and business services jobs have largely replaced manufacturing jobs rising from a 6% share in 1990 to nearly 12% in 2014. This transformation is clearly noticeable along Downtown Wilmington’s riverfront where former ship wharfs in the center of downtown are now five-star restaurants and large warehouses along the northern riverfront are being replaced by cultural attractions and luxury condominiums. However, it is unclear whether former manufacturing laborers have been able to find comparable employment in the region.
As Figure 6 suggests, residents of the Cape Fear region are increasingly attaining bachelor’s degrees and higher. This is consistent with trends across the state; but the Create Wilmington Comprehensive Plan notes that New Hanover County is 5-10% lower in Bachelor’s degree attainment than counties like Wake, Durham, and Mecklenburg counties. This could partially be explained by the region’s scarce offering of universities, with UNCW being the only university in Southeastern North Carolina. It must also be noted that these figures do not include the significant and increasingly influential presence of community colleges in the region.
In the 1970’s through the 1990’s, average income per capita in the Cape Fear region grew similar to the rise of professional and business services employment. Average income per capita has largely stagnated within an inflation-adjusted $5,000 range since the turn of the century (Figure 7). This is consistent with the share of professional and business services employment and suggests a possible relationship.
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Figure 4 - - Source: Bureau of Labor Statistics. “Metropolitan Area Occupational Employment and Wage Estimates, Wilmington, NC,” http://www.bls.gov/oes/current/oes_48900.htm (accessed January 30, 2016).
Figure 5 - Source: Minnesota Population Center. National Historical Geographic Information System: Version 2.0. Minneapolis, MN: University of Minnesota 2011. https://data2.nhgis.org/main (accessed January 29, 2016).
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2.3 Population Projection
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Figure 6 - Source: U.S. Bureau of Economic Analysis, “SA30 Economic Profile, Wilmington,” http://www.bea.gov/iTable/index_regional.cfm (accessed January 30, 2016).
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Figure 7 - Source: Center for Health Statistics. “Underlying Cause of Death 1999-2014” on CDC WONDER Online Database, released 2015.
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In order to determine a forecasted population for 2020, we gathered data by 10-year age cohorts from the Center for Disease Control (CDC) on birth and deaths for 2000 and 2010. Although we were interested in forecasting population changes for the entire Wilmington MSA, the CDC only provides birth and date data for counties with a population of over 100,000, which excludes Pender County to the North and Brunswick County to the West. Therefore, we were limited to New Hanover County, which includes the city of Wilmington, for the population forecast.
We looked at the number of deaths per age cohort in 2000 to forecast the 10-year survivors, and number of births in order to predict the first age cohort (0-4) for 2010. We then compared the forecasted 2010 population to real 2010 age cohort numbers to obtain the net migration factor for each age cohort. The migration factor revealed that overall New Hanover County is experiencing a net in-migration for all age groups under 75. The migration factor for males and females between ages 15-24 was especially large, over 1.5, which reveals that a large amount of population growth in New Hanover is due to in-migration as opposed to high birth rates. The migration rate for the over-75 population was less than 1, revealing that elderly are moving out of the county.
Potential sources of error in this method of forecasting population based on net migration is that it assumes the same rate of migration that occurred in the 2000-10 decade will apply for the 2010-20 decade. This does not take into account any external factors such as changes in preferences, construction, jobs, etc. that could result in changes in the migration rate. Additionally, using the net migration rate, instead of comparing the in- and out-migration rates for New Hanover County and the surrounding area, would inflate the total number of people moving between regions (Isserman 1993).
It is also important to reiterate that this projection does not account for trends occurring in Brunswick and Pender counties. Based on reports and trends in these counties, it is very possible that the projected out-migration in the 75+ cohorts from New Hanover County could be relocating within the region in one of these counties. It is also possible that Brunswick and Pender counties consist of enough people in the 35+ cohorts to regionally balance-out the large 15-24 cohort.
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2.4 Index of Economic Health
Figure 8 - Sources: U.S. Bureau of Economic Analysis, “SA30 Economic Profile, Wilmington,” http://www.bea.gov/iTable/index_regional.cfm (accessed January 30, 2016).
In order to evaluate the economic health of Wilmington more thoroughly, we gathered data on four different indicators from 2001-2014. These four indicators were: real GDP per capita, real income per capita, unemployment rate, and the number of business owners as a percentage of jobs. The base year for the index is 2001, with a base value of 100. GDP and real income are weighted at 40% each, while the unemployment rate and the number of business owners as a percentage of jobs are weighted at 20% each.
We define economic well-being as related to what is happening to labor in Wilmington, i.e. whether quality employment is developing alongside the growing population trend. We thought that GDP per capita was a proxy for productivity and competitiveness of the region in terms the output of its labor force, so it was weighted relatively highly. Income per capita, adjusted for 2014 dollars, was also given a higher weight because it reveals the competitiveness of the Wilmington labor force in terms of how well employees are being compensated. Ideally, we would use median income instead of average, but that data was not available to us. If Wilmington’s labor market has a high level of well being, we would expect both GDP and average incomes to rise overtime with increased population growth and urbanization. Additionally, we used unemployment rate as an inverse indicator to measure economic well-being, because with high unemployment there is a loss of productivity and a greater economic burden on the region. The final indicator, business owners as a percentage of jobs is also a proxy for economic well-being, because generally more business
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owners results in a greater diversity of businesses for the area and enhances competitiveness locally.
Wilmington results are compared to state-level results for reference. Based on this comparison, it is clear that Wilmington’s smaller sample size has caused significantly more extreme variation than what may be accurate. With this in mind, Wilmington does generally follow state-wide trends. It is possible that, as a vacation destination with more second homes; Wilmington was affected more by the housing bubble of the 2000’s than other parts of the state.
3 Analysis of Regional Industry Composition The goal of this analysis is to provide insight into changes in the industrial structure of the Wilmington MSA over time. In order to do so, we used industry data for the years of 1991, 2001 and 2012. The data was compiled based on the three-digit NAICS codes. The methods of analyzing changes in industry composition include location quotients, the index of specialization, the Herfindahl-Hirschman index, an index of diversification, and a shift share analysis compared to the state and nation.
The implications of this analysis are to inform where Wilmington as a region possesses economic strengths and weaknesses. This can then be used to identify opportunities for industry growth, and potential clusters that can contribute to quality job creation and vitality as the economy develops.
3.1 Location Quotients
Location quotients (LQs) reveal how concentrated employment in each industry is relative to the reference region of North Carolina. Generally, we considered industries with LQs under 0.75 to be underrepresented industries in Wilmington, whereas those with LQs over 1.25 are strongly represented, meaning the industry is likely an export base for the region. In the following tables, the top 10 specialized industries in Wilmington are displayed in reference to North Carolina.
Most Specialized Industries in Wilmington by Location Quotient, 1991
Fishing, hunting and trapping 8.88
Chemical manufacturing 5.13
Scenic and sightseeing transportation 4.12
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Motion picture and sound recording industries 3.17
Support activities for transportation 2.58
Nonmetallic mineral product manufacturing 2.12
Amusements, gambling, and recreation 1.96
Funds, trusts, and other financial vehicles 1.95
Heavy and civil engineering construction 1.95
Utilities 1.89
Most Specialized Industries in Wilmington by Location Quotient, 2001
Fishing, hunting and trapping 6.82
Scenic and sightseeing transportation 5.61
Chemical manufacturing 2.69
Motion picture and sound recording industries 2.67
Nonmetallic mineral product manufacturing 2.37
Broadcasting, except internet 2.32
Amusements, gambling, and recreation 2.07
Water transportation 1.94
Support activities for mining 1.91
Membership associations and organizations 1.77
Most Specialized Industries in Wilmington by Location Quotient, 2012
Water transportation 6.06
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Fishing, hunting and trapping 3.52
Chemical manufacturing 3.45
Scenic and sightseeing transportation 3.04
Broadcasting, except internet 2.49
Amusements, gambling, and recreation 2.04
Telecommunications 1.87
Management of companies and enterprises 1.49
Real estate 1.44
Ambulatory health care services 1.43
Overtime, the LQs for industries such as fishing, trapping, and hunting; water transportation; scenic and sightseeing transportation; chemical manufacturing; and amusements, gambling and recreation seem to be industries that are consistently specialized compared to the state.
Many of these industries allude to Wilmington’s tourist-based economy, especially the transportation-related and amusements industries. According to a collaborative report from several North Carolina universities on the economic impacts of for-hire fishing, for-hire passengers spend about $380 million annually in North Carolina, many of whom are visitors from other states. In the Wilmington MSA, 45-53% of for-hire passengers cited that charter fishing was primary reason for their visit, and 45% were visitors from other states. In total, the for-hire fishing fleet is made up of 754 vessels, 466 of which are located in the Wilmington MSA. Additionally, of the 1445 for-hire fishing captain and crew jobs in the state, 32% are located in Wilmington. Clearly, charter fishing and related industries are an important export base for Wilmington. However, the seasonality of charter fishing is important to point out---there are about five times more charter trips in the months of May-October than November-April (Dumas, Whitehead, Landry and Herstine). Regardless, charter fishing is a major export base for the region.
Wilmington also appears to be consistently specialized in the “fishing, trapping and hunting” industry. Given its location on the coast, we assume that the employment in this industry pertains to fishing. However, it is important to point out that although the LQs are high, the aggregate fishing employment is very small, hovering around 60-70 jobs. If the U.S. were the reference region, we would expect the industry to appear less specialized than it is in the comparison to North Carolina, because the U.S. commercial fishing industry is quite large.
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By comparing the motion picture and sound recording industry LQs overtime, it is clear that Wilmington is becoming less specialized in filmmaking. In 1991 the LQ was 3.17, but by 2012 it dropped to 1.17. It is likely that Wilmington will become decreasingly specialized in film given recent policy changes in NC. Historically, NC was one of the first states to offer film tax credits. In Wilmington, low labor costs and varied geography have made it a popular film location. However, in 2014, state legislators opted not to renew the program that gave production companies $61 million in tax credits in 2013. Instead, $10 million have been reserved for a grant program beginning in 2015 (Verrier). However, with the limited grant money in place of tax incentives, Wilmington will be forced to compete with other cities in North Carolina, such as Charlotte, for films. Additionally, many films are being lured by larger incentives in other states like Georgia (Binker).
It is possible that Real Estate is an emerging industry in Wilmington. Although the LQ in 2012 is only 1.44, it is higher than either of the previous years. Additionally, aggregate employment in real estate has almost doubled since 2001, up to about 7000 employed in the industry in 2012. After housing prices peaked in Wilmington in 2007, they have come down 25%, which makes people apt to buy and build homes if the lower price trend continues. Marcello Caliva of Intracoastal realtor, contended that “a lot of commercial real estate is back with national retailers wanting to be in this area again and signing leases” (Dees). A report released in 2013 cited Wilmington as one of the cities with the predicted top housing markets in the nation from 2012-2017, with an annual expected growth rate of 7.1% (Badkar).
3.2 Index of Specialization
Index of Specialization
1991 0.218
2001 0.203
2012 0.152
The index of specialization for Wilmington is a measure of industry diversity over time, relative to the reference region of the state of North Carolina. The range of the index is from 0 to 1, where 0 signifies no specialization relative to the state and 1 signifies complete specialization. Because the index values are decreasing, it is evident that Wilmington has experienced a decrease in specialization over the past 25 years relative to the state. Compared to many other major North Carolina cities, Wilmington generally attracts fewer large corporations. This could explain Wilmington’s relative increase in diversity over time.
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3.3 Herfindahl-Hirschman Index
Herfindahl-Hirschman Index
1991 0.0343
2001 0.0353
2012 0.0392
The Herfindahl-Hirschman Index (HHI) measures the industry concentration in Wilmington over time. The HHI data reveals that economic growth in Wilmington has become more concentrated in certain industries, but marginally so.
3.4 Diversification Index: Lorenz Curve
The Lorenz Curve as displayed graphically measures the inequality of jobs across all industries at one point in time. We chose to display the index for 2012 since the most recent data on distribution of industries is the most relevant.
Generally, the greater the difference between the “Perfect Density” line and the plotted Lorenz curve, the greater the degree of specialization in the region. This graph suggests that both Wilmington and North Carolina were characterized by high degrees of specialization in 2012. However, when Wilmington is compared to North Carolina using an index of diversification,
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Wilmington is highly diverse. More specifically Wilmington’s index of diversity was .95, .90, and 1.0 in 1991, 2001, and 2012 respectively.
3.5 Shift Share Analysis
Shift share analysis is a means of decomposing industry change in Wilmington into three unique factors. In our shift share analysis, economic change is measured as a factor of national growth, industry mix (IM), and the regional competitive component (CC). We chose to compare Wilmington data to the state of North Carolina and the U.S. in order to create a more complete picture of where Wilmington stands as a part of the state and national economy. We used data from 1991-2012 to get a comprehensive picture of industry change over the past 20 years. This is important because the smaller reference region of the state (smaller level of aggregation) would tend to show Wilmington as having a larger competitive component in some industries that aren't particularly growing in North Carolina, but are growing nationally.
3.5.1 Industries of Strength
We would like to highlight the industries that have a positive industry mix and a positive competitive component as industries that Wilmington shows strong growth and should continue to invest in. In a comparison of Wilmington to both North Carolina and the U.S., we find similar industries present the largest local shift. Additionally, many of these same industries had the largest location quotients, which further supports their importance in the Wilmington MSA.
IndustriesofStrengthIndustry Local Shift Reference IM CC Local Shift Reference IM CCPostalservice 9260% 50% 226% 8984% 463 3 11 449Dataprocessing,hostingandrelatedservices 3989% 50% 41% 3898% 359 5 4 351Securities,commoditycontracts,investments 909% 50% 344% 515% 1382 76 523 783Performingartsandspectatorsports 670% 50% 147% 473% 791 59 174 558Telecommunications 653% 50% 28% 575% 1908 146 83 1679Managementofcompaniesandenterprises 535% 50% 271% 213% 604 57 307 241Ambulatoryhealthcareservices 437% 50% 117% 270% 10690 1228 2862 6600Administrativeandsupportservices 352% 50% 265% 37% 14143 2015 10625 1503Professionalandtechnicalservices 263% 50% 73% 140% 10340 1972 2857 5511Realestate 208% 50% 95% 63% 4483 1080 2044 1359Socialassistance 198% 50% 88% 60% 2368 599 1053 716Healthandpersonalcarestores 184% 50% 61% 72% 1134 309 378 447Buildingmaterialandgardensupplystores 169% 50% 40% 79% 1475 437 351 686Generalmerchandisestores 163% 50% 37% 76% 3014 929 686 1399Foodandbeveragestores 154% 50% 20% 83% 3236 1057 419 1760Amusements,gambling,andrecreation 141% 50% 27% 64% 1931 687 372 872
Shift Share: Wilmington v. NC (% Change) Shift Share: Wilmington v. NC (Aggregate Jobs)
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IndustriesofStrengthNationallyIndustry LocalShift Reference IM CC LocalShift Reference IM CCPostalservice 9260% 24% 45% 9191% 463 113 210 43013Securities,commoditycontracts,investments 909% 24% 46% 839% 1382 372 699 12876Managementofcompaniesandenterprises 535% 24% 31% 479% 604 174 226 3433Ambulatoryhealthcareservices 437% 24% 76% 337% 10690 3186 9919 44285Animalproductionandaquaculture 393% 24% 29% 339% 216 66 79 920Administrativeandsupportservices 352% 24% 59% 269% 14143 4404 10693 48841Professionalandtechnicalservices 263% 24% 40% 199% 10340 3461 5687 28390Socialassistance 198% 24% 103% 71% 2368 864 3670 2531Buildingmaterialandgardensupplystores 169% 24% 8% 137% 1475 569 194 3207Generalmerchandisestores 163% 24% 1% 138% 3014 1180 33 6706Foodservicesanddrinkingplaces 89% 24% 34% 30% 5191 2680 3795 3312Electronicsandappliancestores 80% 24% 7% 49% 356 194 59 389Wastemanagementandremediationservices 80% 24% 12% 44% 242 132 63 239Nursingandresidentialcarefacilities 76% 24% 35% 17% 1088 610 882 426Motionpictureandsoundrecordingindustries 52% 24% 1% 27% 127 90 3 101Hospitals 51% 24% 13% 14% 1834 1309 708 762
Shift Share: Wilmington v. US (% Change) Shift Share: Wilmington v. US (Aggregate Jobs)
3.5.2 Industries of Opportunity
The opportune industries where Wilmington has potential to invest more going forward are those that are growing at a faster rate than the economy of the reference region, but currently have a negative competitive component. These are promising industries where Wilmington has an absence of jobs due to local assets and resources, and should invest more.
When we compared Wilmington to North Carolina, industries that related to tourism and transportation would support the local economy and other industries that are already strong in Wilmington. Additionally, film is historically strong in Wilmington, and although policy changes are perhaps one reason for the negative competitive component, this would be a good industry to invest in in the future, because it has a positive industry mix on the national scale as well.
Generally, industries with a positive industry mix and negative competitive component in Wilmington compared to the national reference region are not opportunities for growth. These industries include mining activities, forestry activities and rail transport; Wilmington does not have the regional assets to support growth in them, nor should it invest in those resources. Instead, the reference region of North Carolina is much more relevant for this portion of the shift share analysis because there are some industries with a positive industry mix where Wilmington could build on its assets and development them further as part of regional clusters.
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3.5.3 Industries of Potential Decline
Interestingly, many of the industries where Wilmington has a strong competitive component are industries with a negative industry mix, when compared to the state of North Carolina. This means that these industries are shrinking compared to the state, so Wilmington appears to have a very large competitive component, or local advantage, in these industries. Because these are declining industries without much growth potential, it may be worthwhile for the region to focus on different industries going forward.
4 Industrial Targeting & Cluster Identification
4.1 Changing Wages
In order to characterize regional employment-change in terms of average wages, we used our shift share analysis to compare the top 20 industries with the most growth in Wilmington from 1991-2012, and the 20 industries that are declining the most from 1991-2012. The top growing industries were defined as having both a positive industry mix and competitive shift, meaning they possess a high local shift, or percentage change in jobs added to Wilmington in the past 20 years. We ranked the industries according to the biggest percentage change in local shift as a proxy for industry growth. We then examined the average annual pay for workers in each of these industries in North Carolina and the US, and compared the average wage to the median household wage in 2012 in North Carolina, which was $46,555 (Department of Numbers).
Industry Average Annual Pay in NC (2012)
Securities, commodity contracts, investments $ 120,921
Management of companies and enterprises $ 92,109
Professional and technical services $ 81,009
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Ambulatory health care services $ 79,363
Hospitals $ 69,071
Postal service $ 56,666
Museums, historical sites, zoos, and parks $ 49,021
Waste management and remediation services $ 40,615
Electronics and appliance stores $ 39,250
Nursing and residential care facilities $ 39,110
Administrative and support services $ 35,046
Animal production and aquaculture $ 33,270
Membership associations and organizations $ 32,271
Building material and garden supply stores $ 29,431
Transit and ground passenger transportation $ 28,790
Amusements, gambling, and recreation $ 28,421
Social assistance $ 26,591
General merchandise stores $ 24,339
Motion picture and sound recording industries $ 23,014
Food services and drinking places $ 18,483
Generally, the average annual pay for industries in North Carolina was comparable to U.S. levels. The one major difference was in the film industry; in Wilmington average annual pay was only $23,000, whereas the U.S. average annual pay was close to $64,000 in 2012. This difference is likely due to the types of jobs found in Wilmington in contrast with the rest of the U.S. For example, places like Los Angeles that are highly specialized in film and have a number of higher-paid producers that make over $136,000 annually, bringing up the average annual pay in the U.S. (Roos). Wilmington has fewer of these very high wage jobs in the film industry. Furthermore, because our data is from 2012, the loss of film tax credits is not reflected in the industry. Since 2014, it is likely that the film industry aggregate jobs and wage levels has begun to decline, with many producers relocating to Georgia. After the loss of tax credits in 2013, “many film workers express shock over how quickly Wilmington changed from being “Hollywood East” and ‘Wilmywood’ to a film desert” (Kaiser).
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In Wilmington, only 7 out of the top 20 industries with the most growth had average wages above the median wage. Many of the top growing industries are service-oriented. Several of these top industries, such as ambulatory health care, hospitals, nursing/residential care, and social assistance services, are related to the larger health care services industry. The New Hanover Regional Medical Center and Cape Fear Hospital are assets to the region and anchors for clusters of healthcare services in the region.
Additionally, many of the top growing industries are related to tourism services including museums, historical sites, zoos and parks, transit, amusements, and food services. This is consistent with Wilmington’s seasonal, tourist-based economy. However, all of the service jobs that relate to tourism have annual wages well below the median wage. This is problematic because wages are one of the best indicators of job quality, and in order to create a vibrant and sustainable economy, the region needs high quality jobs. This points to a larger problem of economic development in the region: the need to build up its regional assets and create a culture that will retain workers.
The top declining industries were identified based on our shift share analysis and comprised of industries with a strong negative industry mix, often with a negative competitive component as well, resulting in a high percentage change in loss of jobs from 1991-2012. In contrast to the top growing industries, 11 of these industries have jobs with average annual wages above the median wage. This means that employment is changing in Wilmington in a way that more industries with low wages are growing and more industries with high wages are declining. Of the top declining industries, over half of them represent some type of manufacturing.
This supports the general trend of deindustrialization that the U.S. has been experiencing since the 1970s. It also is an example of employment shifts away from manufacturing jobs to an expanding service sector. For example, the decline in apparel and textile manufacturing in the face of global competition and lower profit margins is not unique to Wilmington. In the U.S., apparel manufacturing production peaked in 1987, and both labor and wages have continued to decline since (Murray). In terms of wage distribution, there seems to be an increase in wage disparity, with many high-growth service jobs having average annual wages well below the median wage.
Industry Average Annual Pay in NC (2012)
Computer and electronic product manufacturing $ 106,750
Insurance carriers and related activities $ 93,597
Utilities $ 83,142
Chemical manufacturing $ 77,076
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Publishing industries, except internet $ 67,286
Transportation equipment manufacturing $ 58,453
Machinery manufacturing $ 58,374
Primary metal manufacturing $ 56,577
Paper manufacturing $ 56,414
Merchant wholesalers, nondurable goods $ 53,069
Nonmetallic mineral product manufacturing $ 48,421
Heavy and civil engineering construction $ 46,174
Wood product manufacturing $ 36,855
Nonstore retailers $ 35,944
Food manufacturing $ 34,289
Furniture and related product manufacturing $ 34,277
Forestry and logging $ 33,414
Textile product mills $ 33,068
Apparel manufacturing $ 25,805
Clothing and clothing accessories stores $ 16,675
4.2 Industry Targeting
In order to select industries for targeting, we examined several criteria that indicate economic progress in Wilmington. Ideally, industries that Wilmington should invest in to create future job growth are those with:
1. An average annual wage above the median wage ($46,555 in 2012), which is an indicator of high job quality.
2. A location quotient above 1.25, meaning that Wilmington is already somewhat specialized in the industry.
3. A positive industry mix and competitive component compared to the nation, meaning that jobs are being added to the industry because it is growing at a faster rate than the nation as a whole, and jobs are also being added due to local conditions or assets.
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4. A significant number of aggregate people employed in the industry in Wilmington, so that investments and growth in the industry have wide-reaching effects.
5. High projected compound annual growth rates in the U.S., so that job creation and investment in the industry are somewhat sustainable.
After careful examination, three industries fit these criteria accurately: management of companies and enterprises, ambulatory health care services, and professional/technical services. Additionally, we chose to look at animal production and aquaculture, with an emphasis on aquaculture due to the regional and institutional assets Wilmington possesses.
Management of companies and enterprises
Ambulatory health care services
Professional and technical services
Animal production and aquaculture**
Local Shift 535% 437% 263% 393%
Reference Shift 24% 24% 24% 24%
Industry Mix 31% 76% 40% 29%
Competitive Component 479% 337% 199% 339%
Aggregate Wilmington Employment, 2012
717 13,137 14,271 271
Location Quotient 1.49 1.43 1.16 0.55
Average Annual Wage in NC
$92,109 $79,363 $81,009 $33,270
Average Annual Wage in the US
$108,201 $55,995 $83,368 $37676
Forecasted CAGR in the US, 2014-2024
2.2% 3.4% 2.4% --
Both ambulatory healthcare services and professional and technical services were listed in the Bureau of Labor Statistics’ “Industries with the fastest growing wage and salaried employment” forecast from 2014-2024 (Bureau of Labor Statistics). Although it was not one of the fastest growing industries by employment, management of companies also has a relatively high projected compound annual growth rate.
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Due to the local assets of the two large medical centers in the city of Wilmington, jobs related to healthcare, such as ambulatory services, are a promising industry to invest in. Additionally, professional and technical services and management can also relate to healthcare because these industries are broadly defined. Ideally, targeting these industries would bring more high quality jobs to the Wilmington MSA, resulting in high worker retention and quality of life.
However, these industries are not ideal for clustering. Historically, the film industry has been a cluster and anchor industry in Wilmington. However, the loss of film tax credits has created an economic development gap that needs to be addressed. Wilmington is currently a very sprawling city with a lack of clustered industries that the film industry once provided (Kaiser). Although some healthcare jobs are high-paying and worth targeting, the expansion of healthcare and high skill service jobs are accompanied by low paying service jobs, such as social assistance and residential care, in the same industry. The tourism industry jobs that continue to expand are low-wage jobs that are seasonal and low-skill as well.
Although animal production and aquaculture does not exactly fit the criteria outlined above, we believe it is still an important industry to examine for targeting. Despite the low location quotient of 0.55 in 2012 and moderate annual wages, the competitive component is very strong, with an increase of 339% from 1991 to 2012.
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4.3 Quasi-cluster Identification Sub-Prof IndustryName Value 2012LQ*
0.03$ 1.16
0.04$ 1.87
0.04$ 1.44TargetInd.
0.20$ 3.45
0.17$ 3.45
0.16$ 3.45
0.04$ 0.71
0.05$ 3.45
0.05$ 1.44TargetInd.
0.022$ 0.68 A
0.003$ 1.16
0.001$ N/A**
Scienc.&Dev. Allotheradministrativeandsupportservices 0.05$ 1.24
Comp.Sys. Telecommunications 0.05$ 1.87
LegalServ. Realestate 0.06$ 1.44TargetInd.
Arch&Eng. Newnonresidentialconstruction 0.08$ NP*** B
Arch&Eng. Supportactivitiesformining 0.07$ 0.84 C
Scienc.&Dev. Otherchem.product&preparationmanufacturing 0.06$ 3.45
0.09$ NP*** D
0.22$ 0.25
0.23$ 0.59TargetInd.
0.26$ 0.25
0.06$ 0.41
0.04$ 0.40
Upstream
Downstream
Otherchemicalproductandpreparationmanufacturing
Paint,coating,andadhesivemanufacturing
Pharmaceuticalandmedicinemanufacturing
Manag.,scientific,&technicalconsultingservices
Telecommunications
RealestateManagementofcompaniesandenterprises
Hospitals
Otherprofessional,scientific,andtechnicalservices
GeneralFederalnondefensegovernmentservices
Professional,scientific,andtechnicalservices
Upstream
Downstream
Upstream
Insurancecarriersandrelatedactivities
Pharmaceuticalandmedicinemanufacturing
RealestateAmbulatoryhealthcareservices
E
F
Downstream
Upstream
Downstream
AnimalProduction****
Wholesaletrade
Foodmanufacturing
Cropproduction
Foodmanufacturing
Leatherandalliedproductmanufacturing
Supportactivitiesforagricultureandforestry
An industry-occupations matrix indicates the amount of output needed in a potential cluster industry to produce a $1.00 value the targeted industry. Therefore, the higher the value of output, the more each potential secondary industry will support the targeted industry. Because most industries are generally similar across the country, this data refers to national industries to make
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local assumptions. In Figure 4, each of our four targeted industries are indicated in dark blue with related upstream industries above and downstream industries below. Upstream industries add value to production chains before the targeted industry while downstream industries add value to the production chain after the targeted industry. For example, crop production is used to feed animal production (the targeted industry) then those animals are used in leather and allied products manufacturing.
The first three industries in Figure 4 were identified using multiple criteria described in the “Industry Targeting” section above. Our cluster analysis shows that these three targeted industries do not support significant industry clusters nationally. In addition to this finding, location quotients compared to NC suggest that the industries that are most highly associated with each targeted industry are already local export-base industries with strong support resources. For the Cape Fear region to maintain its competitive advantage, the region should focus on developing its urban centers and cultural resources to retain these higher-educated employees. While secondary industries associated with these target industries are relatively strong, the “hospitals” (A) and “new nonresidential construction” (B) industries merit some local investments. The Cape Fear region has a very strong network of hospitals, but these hospitals may be outsourcing more specialized treatments to the UNC and Duke hospitals. Therefore, the region should invest in its ability to offer more specialized treatments locally, perhaps by adding a medical school to UNCW. Additionally, the Cape Fear region does not seem to have any local nonresidential construction establishments; the region could be importing this service from other regions. It’s possible that the region will need to reach a certain population threshold before it can attract this type of firm. Until then, the region should support local residential construction firms in diversifying their services.
In addition to the three aforementioned industries, we also looked for potential secondary industries related to aquaculture. The broad “Animal Production” three-digit industry classification is the most detailed representation of aquaculture available. Compared to the three previously-identified target industries, the Animal Production industries indicate strong opportunities upstream and downstream. When considering upstream industries that could support animal production, crop production (E) and wholesale trade (D) are strong candidates for investment. The Cape Fear region is surrounded by some of the state’s highest agricultural producers (i.e. Duplin and Sampson counties) and should strengthen connections with these counties’ expertise and networks. Based on our data, wholesale trade establishments are non-existent in the region. Therefore, the region should consider establishing a food trade center to support growing agricultural and animal production industries. Organizations like Feast Down East have already established a network of local food distribution hubs to connect more farmers in outlying counties with restaurants and grocers in Wilmington (Maurer 2016). The region should also focus downstream on developing its food manufacturing industry (F) related to aquaculture. Similar to
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crop production, the region is surrounded by one of the most productive pork processing regions in the world and could readily connect with their expertise.
4.4 Conclusion
Compared to other cities across the country, Wilmington offers a very strong portfolio of resources that could support a vibrant aquaculture cluster. More specifically, UNC Wilmington has one of the highest-ranked marine biology programs in the country with the nationally-renowned Center for Marine Science. The Center for Marine Science is a marine biology research center that offers resources to startups, but not currently to any aquaculture firms. In addition to UNCW’s resources, Brunswick Community College and Cape Fear Community College offer technical programs in aquaculture. This raises an important question: if Wilmington offers such strong resources that should theoretically support a highly-competitive aquaculture industry, why does this industry not already exist? We have two theories. First, these resources are isolated and not readily accessible for people outside existing networks. This may require a marketing campaign or locating new aquaculture centers downtown. Second, the aquaculture industry is still relatively unproven and risky. Therefore, public financing options for new aquaculture firms may be required. Further empirical research will be required to better diagnose this problem.
5 Labor Market & Job Quality Analysis
5.1 Labor Market Profile
In 2013, 188,200 people (16 years and older) people who lived in the Wilmington, NC MSA participated in the labor force. This represents about 50% of the region’s total population and is proportionally consistent with state and national proportions. Of the total labor force, 11% were unemployed in 2013 (Figure 1); this is consistent with North Carolina but is slightly higher than the national unemployment level (U.S. Census Bureau, 2013). This suggests that there may be issues at the state level that are preventing Wilmington from reducing its unemployment further.
In the same year, the American Community Survey estimates that Wilmington area residents have generally achieved higher levels of educational attainment than state and national proportions (Figure 2). Specifically, higher proportions of Wilmington area residents have attained a high school diploma, some college, a bachelor’s degree, and a professional degree. This indicates that Wilmington’s labor force offers a larger supply of highly-skilled labor. This is especially true in New Hanover County where over 36% of its residents have at least a bachelor’s degree (U.S. Census Bureau, 2013). While these numbers are encouraging, the 2010 U.S. Census indicates that New Hanover County lags behind some of the state’s denser counties (i.e. Wake, Durham, and Mecklenburg) in educational attainment (U.S. Census, 2010).
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Wilmington’s existing employment by occupation group in 2014 (Table 1) indicates that the region is generally similar to state and national proportions with some slight exceptions. For example, the, “Educational services, and health care and social assistance,” occupation group holds the highest share of employment across all three geographies. The, “Retail trade,” and, “Professional, scientific, and management, and administrative and waste management services,” groups similarly hold large shares, over 10% each, across all three geographies. But the, “Manufacturing,” occupational group maintains a much lower share of the total labor force than state and national levels. In its place, the, “Arts, entertainment, and recreation, and accommodation and food services,” and, “Construction,” occupational groups maintain higher shares of the local labor force (U.S. Census Bureau, 2013). This is likely due to the region’s dual trends of de-industrialization and growing tourism over the past half-century.
Figure 9 - Labor Force Unemployment Share (16 years & older) - 2013. Source: U.S. Census Bureau. Social Explorer - ACS 2013 (3-Year Estimates). Prepared by Social Explorer. (accessed Mar 20, 2010).
11% 11% 9%
0%
20%
40%
60%
80%
100%
Wilmington MSA North Carolina United States
% Employed % Unemployed
12%15% 14%
88%85% 86%
63%58% 58%
31%28% 29%
10% 10% 11%
3% 3% 3%1% 1% 1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Wilmington MSA North Carolina United States
< High School Grad
High School Grad
Some College
Bachelor's Degree
Master's Degree
Professional Degree
Doctorate Degree
Figure 10 - Figure 2: Labor Supply by Education Level (25 years & older) - 2013. Source: U.S. Census Bureau. Social Explorer - ACS 2013 (3-Year Estimates). Prepared by Social Explorer. (accessed Mar 20, 2010).
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Occupation Wilmington MSA North Carolina USA
Educational services, and health care and social assistance
22% 24% 23%
Arts, entertainment, and recreation, and accommodation and food services
13% 9% 10%
Retail trade 13% 12% 12%
Professional, scientific, and management, and administrative and waste management services
11% 10% 11%
Construction 9% 7% 6%
Manufacturing 8% 13% 11%
Other services, except public administration
6% 5% 5%
Finance and insurance, and real estate and rental and leasing
5% 6% 7%
Transportation and warehousing, and utilities
5% 4% 5%
Public administration 5% 5% 5%
Wholesale trade 3% 3% 3%
Information 2% 2% 2%
Agriculture, forestry, fishing and hunting, and mining
1% 1% 2%
5.2 Largest Occupations
In order to look at occupational data for Wilmington more closely, we analyzed the largest 10 occupations by number of people employed and by location quotients. These two different methods reveal large differences in wages and skill-level for the largest occupations and occupations that are specialized in Wilmington compared to the U.S. as a whole. For this analysis,
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we used the base year of 2012, which includes the three counties of Pender, Brunswick and New Hanover. This area is consistent with our past analyses (Table 2).
Almost all of the largest occupations in Wilmington are service-related jobs. Only two of the top 10 largest occupations require an education beyond high school (registered nurses and managers), and these are also the highest paying jobs in terms of median hourly wage, mean hourly wage and average annual wage. This data demonstrates the nature of Wilmington’s tourism-dependent economy and relates to the region’s larger “problem of economic development” i.e. the need to build up its regional assets and create a culture that will retain workers by providing higher-paying, higher-skilled jobs.
Table 1 - Top 10 Occupations by Number of People Employed
Occupation Employment LQ Median hourly wage
Mean hourly wage
Mean annual wage
Education Work Experience
Typical Training
Retail Salespersons
5980 1.34 $ 9.63 $11.40 $ 23,720 Less than high school
None Short-term on-the-job training
Combined Food Preparation and Serving Workers
5040 1.67 $ 8.52 $ 8.38 $ 17,430 Less than high school
None Short-term on-the-job training
Cashiers 4300 1.26 $ 8.81 $ 9.11 $ 18,940 Less than high school
None Short-term on-the-job training
Waiters and Waitresses
3960 1.65 $ 8.84 $ 9.33 $ 19,410 Less than high school
None Short-term on-the-job training
Registered Nurses
3080 1.14 $ 27.94 $27.85 $ 57,940 Associate's degree
1 to 5 years Moderate-term on-the-job training
Secretaries and Administrative Assistants
2390 1.12 $ 14.50 $14.82 $ 30,820 High school diploma or equivalent
None Short-term on-the-job training
Office Clerks, General
2240 0.78 $ 11.74 $12.32 $ 25,620 High school diploma or equivalent
None Short-term on-the-job training
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Nursing Assistants
2010 1.38 $ 10.38 $10.57 $ 21,990 High school diploma or equivalent
None Short-term on-the-job training
First-Line Supervisors of Retail Sales Workers
1950 1.57 $ 17.47 $20.19 $ 41,990 High school diploma or equivalent
1 to 5 years None
General and Operations Managers
1940 0.99 $ 46.45 $57.96 $120,560 Associate's degree
1 to 5 years None
Total Average 3289 1.29 $ 16.43 $18.19 $ 37,842
Occupation Employment LQ Median hourly wage
Mean hourly wage
Mean annual wage
Education Work
Experience
Typical Training
Multiple Machine Tool Setters, Operators, Tenders
770 8.86 $ 33.04 $ 32.16
$66,890
High school diploma or equivalent
None Moderate-term on-the-job training
Riggers 110 7.02 $ 14.11 $ 14.94 $ 31,070
High school diploma or equivalent
None Short-term on-the-job training
Real Estate Brokers
240 6.24 $ 20.54 $ 37.53 $78,050
High school diploma or equivalent
1 to 5 years None
Captains, Mates, and Pilots of Water Vessels
160 4.93 $ 18.04 $ 22.63 $ 47,061
Bachelor's degree
None None
Chemical Engineers
150 4.45 $ 47.13 $ 44.90
$ 93,401
Bachelor's degree
None None
Motorboat Mechanics and Service Technicians
80 4.43 $ 18.23 $ 20.31
$42,240
High school diploma or equivalent
None Long-term on-the-job training
Cartographers and Photo-
40 3.41 $ 29.44 $ 28.25
$ 58,750
Bachelor's degree
None None
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grammetrists
Chemical Plant and System Operators
130 3.31 $ 20.87 $ 21.01 $ 43,710
High school diploma or equivalent
None Long-term on-the-job training
First-Line Supervisors of Landscaping, and Lawn Service Workers
330 3.28 $ 18.39 $ 20.45
$ 42,540
High school diploma or equivalent
1 to 5 years None
Chemists 280 3.16 $ 20.96 $ 25.03
$52,060
Bachelor's degree
None None
Total Average 229 4.91 $ 24.08 $ 26.72
$ 55,577
In terms of the top occupations by location quotient, many of these jobs require more technical skills and a higher level of education, such as a Bachelor’s Degree. These occupations also make up a much smaller share of Wilmington’s workforce as a whole, with an average employment of 229 people per occupation in contrast with the average employment of 3289 people for the largest occupations Table 3). Because these top occupations by location quotient require more skills, the median hourly pay is 46% higher than the top 10 largest occupations by employment.
5.3 Labor Market Demand
In order to analyze labor market demand, we looked at the largest occupations in three targeted industries in Wilmington. These targeted industries were chosen previously, based on the following criteria:
1. An average annual wage above the median wage ($46,555 in 2012), which is an indicator of high job quality.
2. A location quotient above 1.25, meaning that Wilmington is already somewhat specialized in the industry.
3. A positive industry mix and competitive component compared to the nation, meaning that jobs are being added to the industry because it is growing at a faster rate than the nation as a whole, and jobs are also being added due to local conditions or assets.
4. A significant number of aggregate people employed in the industry in Wilmington, so that investments and growth in the industry have wide-reaching effects.
5. High projected compound annual growth rates in the U.S., so that job creation and investment in the industry are somewhat sustainable.
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Although in the past we also examined the aquaculture industry as a promising industry for occupational growth, aquaculture occupation data was unavailable. Therefore, our labor market demand analysis is limited to the three industries that met our targeting criteria; these are: 1) management of companies and enterprises, 2) ambulatory health care services, and 3) professional/technical services.
Table 4 indicates the top-ten industries for each of our three targeted industries. Each industry is given a short identifier for brevity. This information helps us understand what type of labor each industry demands. Industry 1 generally demands labor with higher levels of education than other industries. For example, four of the industry’s top ten occupations require at least a bachelor’s degree with some demand for employees with associate’s degrees and high school diplomas. None of these occupations demand employees who have not attained at least a high school diploma. Further, Industries 2 and 3 require at least a high school diploma-equivalent for all top occupations. To ensure that the region’s labor force is meeting the needs of all three industries’ primary occupations, the region must maintain and improve its GED, associate’s degree, and continuing education programs. The region should also ensure that residents have a reliable way to transfer credits at community colleges to four-year universities.
With a per-capita income of $27,694 in 2013, occupations with annual wages below this threshold are highlighted in blue. Almost all of the top-ten occupations in industries 1 and 2 offer annual wages above this threshold. Yet four of the top-ten occupations in Industry 3 offer annual wages below this threshold. This indicates that targeting “Ambulatory Health Care Services” may be unwise.
Table 2 - Table 4: Top Occupations by Number of Employees per Industry
Mean hourly wage
Annual mean wage
Median hourly wage
Typical Education Work Experience
Occupation Employment 2012
Occupation Title
Industry 1: Professional, Scientific, and Technical Services
$44.48 $92,530 $40.33 Doctoral or professional degree
None 722 Lawyers
$31.42 $65,360 $27.30 Bachelor's degree None 694 Accountants and Auditors
$12.32 $25,620 $11.74 High school diploma or equivalent
None 445 Office Clerks, General
$40.90 $85,080 $40.07 Bachelor's degree None 441 Software Developers, Applications
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$14.82 $30,820 $14.50 High school diploma or equivalent
None 396 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive
$41.17 $85,630 $40.10 Bachelor's degree 1 to 5 years 395 Management Analysts
$16.19 $33,680 $15.80 High school diploma or equivalent
None 390 Bookkeeping, Accounting, and Auditing Clerks
$18.88 $39,280 $18.44 High school diploma or equivalent
None 364 Legal Secretaries
$57.96 $120,560 $46.45 Associate's degree
1 to 5 years 357 General and Operations Managers
$16.42 $34,160 $14.34 Associate's degree
None 353 Paralegals and Legal Assistants*
Industry 2: Management of Companies and Enterprises
$15.22 $31,660 $14.26 High school diploma or equivalent
None 31 Customer Service Representatives
$31.42 $65,360 $27.30 Bachelor's degree None 30 Accountants and Auditors
$16.19 $33,680 $15.80 High school diploma or equivalent
None 29 Bookkeeping, Accounting, and Auditing Clerks
$57.96 $120,560 $46.45 Associate's degree
1 to 5 years 28 General and Operations Managers
$31.26 $65,020 $29.39 High school diploma or equivalent
Less than 1 year
22 Business Operations Specialists, All Other*
$12.32 $25,620 $11.74 High school diploma or equivalent
None 19 Office Clerks, General
$22.98 $47,810 $22.36 High school diploma or equivalent
1 to 5 years 17 First-Line Supervisors of Office and Administrative Support Workers
$20.81 $43,280 $19.91 High school diploma or equivalent
1 to 5 years 16 Executive Secretaries and Executive Administrative Assistants
$31.98 $66,520 $30.53 Bachelor's degree None 15 Computer Systems Analysts
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$14.82 $30,820 $14.50 High school diploma or equivalent
None 14 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive
Industry 3: Ambulatory Health Care Services
$14.69 $30,560.00 $14.35 High school diploma or equivalent
None 918 Medical Assistants
$9.69 $20,160.00 $9.41 Less than high school
None 744 Home Health Aides
$14.28 $29,690.00 $14.05 High school diploma or equivalent
None 724 Medical Secretaries
$12.19 $25,350.00 $12.22 High school diploma or equivalent
None 714 Receptionists and Information Clerks
$17.67 $36,760.00 $17.60 Postsecondary non-degree award
None 609 Dental Assistants
$10.33 $21,480.00 $10.25 Less than high school
None 560 Personal Care Aides
$12.32 $25,620.00 $11.74 High school diploma or equivalent
None 414 Office Clerks, General
$19.10 $39,730.00 $19.29 Postsecondary non-degree award
None 405 Licensed Practical and Licensed Vocational Nurses
$30.84 $64,150.00 $31.62 Associate's degree
None 388 Dental Hygienists
$16.16 $33,610.00 $16.27 High school diploma or equivalent
None 311 Billing and Posting Clerks
5.4 Job Quality Analysis
In order to analyze job quality, we looked at both the largest occupations by employment in Wilmington1 and five of the largest occupations in each of our three targeted industries: 1) management of companies and enterprises, 2) ambulatory health care services, and 3)
1Data for three of the top 10 occupations by employment was unavailable; these were cashiers, nursing assistants and secretaries.
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professional/technical services. Our measures for examining job quality were demographic analysis, including gender breakdown, race breakdown, and average age for each occupation. Additionally, we looked at the percentage of employees with employer-sponsored health care, and average hours employees in each occupation work per week. Our data was gathered from IPUMS USA and combines data for the years 2008-2011 in order to get a more information and therefore, a more accurate picture of job quality.
5.5 Largest Occupations in Wilmington
Figure 11 - Largest Occupations by Gender
Table 3 - Top 10 Occupations by Number of People Employed
Occupation % White % Black
% Asian % Other Race or Multiple Races
Average Age
General and Operations Managers 90% 2% 7% 1% 50
First-Line Supervisors of Retail Sales Workers
89% 6% 0% 5% 44
Retail Salespersons 86% 11% 2% 1% 41
Waiters and Waitresses 90% 7% 1% 2% 27
0% 20% 40% 60% 80% 100%
General and Operations Managers
First-Line Supervisors of Retail Sales Workers
Retail Salespersons
Waiters and Waitresses
Office Clerks, General
Registered Nurses
Combined Food Preparation and Serving Workers, Including Fast Food
Percent Employed
Occ
upat
ion
% Male
% Female
37
Office Clerks, General 83% 12% 0% 5% 40
Registered Nurses 94% 5% 0% 1% 46
Combined Food Preparation and Serving Workers, Including Fast Food
81% 3% 3% 13% 37
The overwhelming majority of workers in Wilmington’s largest occupations are white, with all of them having a percentage of the workforce that is 80% white or higher. This is reflective of the overall demographics of the Wilmington MSA. Additionally, more workers in these jobs are female than male. Jobs related to food services have the lowest average age of employees.
Figure 12 - Health Insurance for the Largest Occupations in Wilmington
Not surprisingly, of the largest occupations by employment, the two with the highest percentage of employees provided with employer-sponsored health insurance were also the two occupations that required the most education and had the highest measures of wages. The indicator of employer-provided health insurance supports the idea that nurses and managers are higher quality jobs,
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Registered Nurses
General and Operations Managers
Retail Salespersons
First-Line Supervisors of
Retail Sales Workers
Office Clerks, General
Combined Food
Preparation and Serving
Workers, Including Fast
Food
Waiters and Waitresses
Perc
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Occupation
Insurance through employer No insurance provided through employer
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especially compared to retail and restaurant workers, which have a much lower percentage of employer-provided insurance.
Table 4 - Largest Occupations, Average Hours Worked per Week
Occupation Average Hours Worked per Week
Waiters and Waitresses 26
Retail Salespersons 27
Combined Food Preparation and Serving Workers, Including Fast Food
28
Registered Nurses 31
Office Clerks, General 32
First-Line Supervisors of Retail Sales Workers 38
General and Operations Managers 41
The part-time nature of service-oriented occupations is evident by the average hours worked per week. This supports the idea that these jobs are not sustainable occupations in the long term, and some workers are not consistently employed.
5.5.1 Professional and Technical Services
Figure 13 - Professional and Technical Services, Occupations by Gender
0% 20% 40% 60% 80% 100%
Paralegals and Legal Assistants
Accountants and Auditors
Office Clerks, General
Software Developers
Management Analysts
Percent Employed
Occ
upat
ion
% Male % Female
39
Table 5 - Professional and Technical Services, Race and Age
Occupation % White % Black % Asian % Other Race or Multiple Races
Average Age
Paralegals and Legal Assistants
87% 11% 2% 0% 43
Accountants and Auditors 91% 3% 6% 0% 52
Office Clerks, General 83% 12% 0% 5% 40
Software Developers 100% 0% 0% 0% 45
Management Analysts 94% 3% 0% 3% 58
As figure 5 and table 7 indicate, he professional and technical services jobs are less diverse than the largest occupations. Again, they are predominantly white with more females employed than males.
Figure 14 - Health Insurance for Professional Services Occupations
In this case, Figure 6 shows that the jobs that require higher skills, namely software developers, accountants and auditors and lawyers have higher rates of employer-sponsored insurance.
Table 6 - Professional and Technical Services, Average Hours Worked per Week
Occupation Average Hours Worked per Week
Management Analysts 25
0%10%20%30%40%50%60%70%80%90%
100%
Software Developers, Applications
Accountants and Auditors
Lawyers Management Analysts
Office Clerks, General
Perc
enta
ge o
f tho
se e
mpl
oyed
Professional Services Occupations
Health insurance through employer No health insurance provided by employer
40
Office Clerks, General 32
Paralegals and Legal Assistants 34
Accountants and Auditors 36
Software Developers 38
The jobs with the most average hours worked are also the jobs with higher health insurance rates by the employer. This makes sense because most likely, more full-time jobs will offer more benefits, such as higher pay and health insurance in order to retain employees.
5.5.2 Management Occupations
Figure 15 - Management Occupations by Gender
Table 7 - Management Occupations, Race and Age
Occupation % White % Black % Asian % Other Race or Multiple Races
Average Age
General and Operations Managers 90% 2% 7% 1% 50
Accountants and Auditors 91% 3% 6% 0% 52
Customer Service Representatives 76% 20% 0% 4% 41
Office Clerks, General 83% 12% 0% 5% 40
0% 20% 40% 60% 80% 100%
General and Operations Managers
Accountants and Auditors
Customer Service Representatives
Office Clerks, General
Bookkeeping, Accounting, and Auditing Clerks
Percent Employed
Occ
upat
ion
% Male % Female
41
Bookkeeping, Accounting, and Auditing Clerks
95% 3% 1% 1% 49
For these management occupations, which are dominated by white workers, it is interesting to note that out of the five largest occupations in this industry (see: Figure 7), the male dominated-jobs are also higher paying. General managers had an annual salary of about $120,000 and accountants came in around $65,000 (see: Table 4). In contrast, the other three occupations that are largely female dominated had annual salaries closer to $30,000.
Figure 16 - Health Insurance for Management Occupations
The higher-paying, male dominated jobs also had higher rates of health insurance coverage by the employer.
Table 8 - Management Occupations, Average Hours Worked per Week
Occupation Average Hours Worked per Week
Bookkeeping, Accounting, and Auditing Clerks 30
Customer Service Representatives 31
Office Clerks, General 32
Accountants and Auditors 36
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Accountants and Auditors
General and Operations Managers
Customer Service
Representatives
Bookkeeping, Accounting, and Auditing Clerks
Office Clerks, General
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Management Occupations
Health insurance through employer No health insurance provided by employer
42
General and Operations Managers 41
The highest paying, male-dominated jobs also were the occupations with the most average hours worked per week, with the lowest standard deviations. This points to these occupations as more sustainable, full-time jobs.
Figure 17 - Ambulatory Health Care Services by Gender
For ambulatory health care services, very few of the largest professions had many male employees. Traditionally, these occupations, such as personal aides and medical assistants are female-oriented professions. It would be interesting to investigate further to see if there is a gender bias in these jobs.
Table 9 - Ambulatory Health Care Services: Race and Age
Occupation % White % Black % Asian % Other Race or Multiple Races
Average Age
Office Clerks, General 83% 12% 0% 5% 40
Receptionists and Information Clerks
85% 6% 2% 8% 43
Personal Care Aides 78% 19% 0% 3% 47
Medical Assistants 93% 7% 0% 0% 40
Dental Assistants 100% 0% 0% 0% 44
0% 20% 40% 60% 80% 100%
Office Clerks, General
Receptionists and Information Clerks
Personal Care Aides
Medical Assistants
Dental Assistants
Percent Employed
Occ
upat
ion
% Male % Female
43
Again, these jobs are dominated by white employees, which is reflective of Wilmington’s predominantly white labor force.
Figure 18 - Health Insurance for Ambulatory Health Care Services Occupations
Table 10 - Ambulatory Health Care Services, Average Hours Worked per Week
Occupation Average Hours Worked per Week
Receptionists and Information Clerks 24
Personal Care Aides 26
Office Clerks, General 32
Dental Assistants 32
Medical Assistants 38
Interestingly, medical assistants and dental assistants not only had the highest average hours worked per week, but also the smallest standard deviations of hours worked, around 7 and 9, respectively. These were also jobs that require high skill levels and education, and also have the
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Medical Assistants
Dental Assistants Receptionists and Information
Clerks
Office Clerks, General
Personal Care Aides
Perc
enta
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f tho
se e
mpl
oyed
Ambulatory Health Care Services Occupations
Health insurance through employer No health insurance provided by employer
44
highest percentages of employer-sponsored health care. This contrasts with jobs like receptionists and personal aides, which are lower-skilled and therefore have much more varied hours worked per week, with standard deviations around 20 (table 12).
5.6 Conclusion
As evident by our extensive analysis of occupation data in the Wilmington MSA, there is a large gap in terms of skills, education, and measures of job quality between the largest occupations by aggregate employment, and occupations that are more specialized or within our targeted industries. The fact that the largest occupations are low-skill service sector jobs is tied to the large tourism sector in Wilmington. The expansion of these types of jobs are not ideal for Wilmington’s economic development for two reasons; first, they do not offer benefits such as health insurance and high wages that are sustainable for employees, and second, they do not increase the number of talented professionals in Wilmington that can expand technology and provide high-skilled labor to build up the economy and create information spillovers in the long-run. Ideally, Wilmington should work to expand the jobs that have high location quotients and also the professions within our targeted industries that require higher skill and education levels. These kinds of jobs will attract and keep talent in the area because the measures of job quality are much higher in comparison.
6 Case: The Center for Marine Science 6.1.1 Description
The UNCW CREST Research Park, also called the Center for Marine Science (CMS), is a public-private economic development initiative operated by the University of North Carolina in Wilmington. The park covers 60 acres and include the existing CMS building, the Marine Biotechnology (MARBIONC) Building, a shellfish research hatchery and space for future development. The CREST Research Park focuses on accelerating academic research to commercial markets, with an emphasis on marine science. The park offers flexible commercial research laboratories to established firms, entrepreneurial start-ups, government agencies and university researchers who work with biotechnology, analytical services, environmental sciences, translational science, early stage pharmaceutical research and development, aquaculture, and marine science.
6.1.2 Location
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The CREST Research Park is located on a secure 60-acre site bordered by wooded areas and the Intracoastal Waterway. The facilities offer 24/7 physical and IT security as well as full power backup. In addition to being a research facility designed by scientists for scientists, the structure has also been designed to withstand hurricane force winds up to and including a Category 3 storm (UNCW 2015). The park is located in New Hanover County, south of Wilmington’s southern boundary, and is west of Masonboro Island, an island protected as a component of the North Carolina National Estuarine Reserve.
6.1.3 Facilities
The original $17.5 million UNCW Center for Marine Science (CMS) was completed in 2000 with a total of 75,000 square feet of net indoor space including: • Teaching auditorium for up to 150 individuals • Classrooms and marine science labs • Running seawater system, which provides raw unfiltered and purified seawater at flow rates
up to 600 liters/min. • Greenhouse with running seawater • Aquarium room and outdoor tanks with running seawater • 900-foot pier with docking facilities
In the spring of 2008, the 24,000 square foot, $6,520,000 addition was completed (Girardot 2008). This one-story addition with a second floor mechanical loft added: • 37 individual offices • Five shops (Dive, Oceanographic Instrumentation with 7,000 gallon seawater test tank,
Aquaculture and Boat Repair) • Four labs (Instrument Fabrication, Biotechnology and NCNERR)
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• A dive compressor room • Conference room with full voice and data capabilities
In the summer of 2010, the $4.3 million 11,000 square foot Shellfish Research Hatchery was completed (Center for Marine Science 2015). In 2013, the 70,000 square foot Marine Biotechnology building (MARBIONC) opened. The building cost a total of $30 million to construct, with $15 million provided by the American Recovery and Reinvestment Act and $15 million from state and additional federal grants (Baird 2013).
6.2 Methods
In order to estimate the economic impact of the entire CREST campus, we used IMPLAN Online software. We broke our analysis into two parts: construction of facilities, and the ongoing operations phase. In order to keep the impact of our results relatively local, we defined our impact region as New Hanover County because the park is located in a fairly isolated part of the county; so including Brunswick or Pender counties may exaggerate the park’s economic impact.
The park’s four phases were constructed over a range of thirteen years, from the CMS’s original construction in 2000 to the completion of the MARBIONC in 2013. For simplicity, we calculated the net present value of four different construction projects, modeling them in 2014 dollars.
6.2.1 Construction Costs
We chose to classify the CMS and Addition phases as “Construction of new educational and vocational structures” because these facilities are primarily used wet classrooms and offices. The hatchery and MARBIONC were more specialized construction projects due to advanced lab facilities, so we used a
proxy of “Construction of new healthcare facilities” in our model to capture this distinction. It is possible that construction of healthcare facilities would have a greater economic impact than a hypothetical “construction of lab facilities” category; yet the difference is likely small.
6.2.2 Operating Costs
Building Year Cost NPV (2014)
CMS 2000 $17,500,000 $24,060,000
Addition 2008 $6,520,000 $7,170,000
Hatchery 2010 $4,300,000 $4,670,000
MARBIONC 2013 $30,000,000 $30,490,000
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In terms of operations, we estimated the number of different types of occupations at the CMS, based on a phone call with a current researcher at the hatchery, and secondary online research. This research led to the following direct employment inputs and their most closely-associated industries:
• 8 in Office administrative services • 80 in Junior colleges, colleges, universities, and professional schools • 8 in Management of companies and enterprises • 45 in Scientific research and development services • 4 in Investigation and security services
Additionally, the MARBIONC Center also generates revenue from renting its 13 900-foot lab spaces to startup companies for $33/square foot. According to Daniel Baden, the director of the Center, they aim to be at 75% capacity. This results in an annual revenue stream of $ 289,575 from leasing lab space.
6.3 IMPLAN Results
Impact Type Employment Labor Income Value Added Output
Direct Effect 508.1519825 $26,812,868.23 $36,860,134.30 $89,975,625.89
Indirect Effect 201.6777212 $9,101,854.89 $15,790,221.11 $28,751,043.94
Induced Effect 181.9371933 $7,105,072.54 $13,144,441.66 $22,551,732.37
Total Effect 891.77 $43,019,796.00 $65,794,797.00 $141,278,402.00
The Type II employment multiplier for the combined construction and operations of the four buildings of the CREST Research Park is 1.75. This includes the effects of household spending. However, it is important to note that we assumed 100% of spending would stay within the county. This is fairly reasonable, given that many of the employees at CREST work with UNCW and are likely to live and spend in the county.
6.3.1 Other Effected Industries
Description Employment Labor Income Value Added Output
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Junior colleges, colleges, universities, etc.
80.40 $2,495,368.24 $3,246,145.79 6,950,645.9
Scientific research and development
47.37 $5,038,388.87 $8,408,234.05
14,805,932.7
Real estate 41.85 $579,879.74 $4,267,548.12 6,608,069.0
Wholesale trade 28.53 $1,951,324.30 $3,638,831.90
6,038,857.3
Full-service restaurants 17.18 $333,440.66 $336,031.61 699,889.1
Limited-service restaurants 13.52 $236,125.74 $509,537.10 1,005,891.5
Employment services 11.87 $372,690.98 $531,531.33 675,975.9
Office administrative services 11.19 $513,803.36 $524,857.68 693,312.7
Architectural, engineering, and design
11.06 $791,350.07 $775,439.70 1,586,055.9
Management of companies and enterprises
10.56 $900,366.65 $1,147,455.94 2,135,849.8
CREST’s construction and operation has made a significant impact on many other sectors. As expected, the industries that were capture in our model’s inputs were some of the most significantly impacted industries. Interestingly, we would expect to see aquaculture as a top impacted industry due to the research hatchery building in the complex. The hatchery works to promote local NC oyster farming to farmers throughout the state. Researchers have been working on improving efficiency in raising local oysters so they can be raised and brought to the market in less time. According to Ami Wilbur, a marine biologist, “Now, 60 percent of market-size oysters can be ready in 15 months. Otherwise, it would only be 10 percent” (Snow 2013). Aquaculture was not captured in our model because neither our construction or operations inputs are commonly associated with the aquaculture industry. For example, the center’s four researchers in the “Aquaculture” department are professors with doctorate degrees; therefore, classifying these as positions in the aquaculture industry would likely devalue their earnings. Properly accounting for the center’s impact on the local aquaculture industry would require more in-depth interviews with members of the center and associated companies.
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6.4 Effects not captured by IMPLAN
One of the pitfalls of using IMPLAN to model economic impact is that it does not capture all of the dynamic effects of CREST. The project has been described as “a collaboration among researchers and corporate entities that has the potential to stir up some local economic growth” (Snow 2013). This refers to the idea that six different science departments actually use the facilities, including chemistry, geology, neuroscience and others. The potential collaboration between these different departments is not counted in our economic model.
Additionally, the economic impacts of entirely new technologies that result from the focus on bringing research to the market is not captured. As the director of the center, Daniel Baden, points out, “what began about a decade ago as the university’s marine science center has developed into a powerhouse of scientific innovation. With the recent addition of the Marine Biotechnology in N.C. (MARBIONC) building–a facility that brings academics and business leaders together–CREST has taken the next step toward its ultimate goal of turning research into products” (Snow 2013). The innovations that occur in this center many generate entirely new spinoff ideas that are hard to capture. In the shellfish hatchery, for example, new best practices for aquaculture could result in a revolution in local shellfish farming for aquaculture farmers across the state. An increase in local farming instead of imports from abroad would be a large uptick in final demand.
6.5 Cost-Benefit Commentary
Because UNCW is a state institution, almost all of CREST’s funding for construction and operations came from state sources, with some funding sourced from federal grants and the university’s donations-funded endowment. In total, this project required over $66 million to build and operate. The following indicators are used to evaluate whether investments in this project were sound.
• Economic Rate of Return (ERR) = 72%; measures the profitability of investments. A strong ERR is greater than about 15%.
• Subsidy Dollars per Job (SDJ) = $74,428; a value below median wages would be ideal.
These indicators suggest that investments in CREST’s construction and operations activities were highly impactful on the county’s overall economy, but were somewhat pricey in terms of the total number of jobs produced. Again, this model does not capture emerging industries or innovations spurred by the center.
6.6 Conclusion
CREST has created a number of high-paying, quality jobs. These include jobs that tie the park to the local university, UNCW. In the future it could be beneficial for CREST to expand and collaborate with Cape Fear Community College and Brunswick Community College to capture lower-skilled
50
segments of the local labor force. The research park has also generated high-quality jobs apart from research, such as lab technicians who have specialized skills in operating the advanced marine technology, such as regulating the running seawater system. CREST is also beneficial in terms of its ability to be used for different purposes. Over the summer, educational summer camps are held there, which generates seasonal jobs for students and teachers who have a background in marine biology. Overall, for New Hanover County, this incentive deal was very beneficial to the economy, given that a large amount of the construction money was sourced from state and federal grants, representing a change in final demand.
Further interview-based research with the center will be required to build a more accurate model of the center’s impact on the local economy. Specifically, this will require a more accurate understanding of the wages of the center’s employees, of the unique companies associated with the center, and of the impacts of the center’s many innovations.
7 Innovation & Entrepreneurship
7.1 Innovation Assets
Map of assets that relate to innovation in Wilmington
Source: Created by Dana Schoewe. 2016. Tableau Public.
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7.1.1 Business Development Assets
• Wilmington Business Development: Recruits business and industry, and also assists with business expansion/relocation efforts.
• Wilmington Chamber of Commerce: Member organization that works to strengthen the regional economy and enhance quality of life in the community by harnessing the collective vision and power of local businesses.
• Wilmington Downtown, Inc: Non-profit organization that promotes economic growth and development in downtown Wilmington.
• Division of Employment Security: Promotes and sustains the economic well-being of North Carolinians in the world marketplace by providing high quality and accessible workforce-related services. The division provides employment services, unemployment insurance and labor market information to workers, employers and the public.
• SCORE: The Service Corps of Retired Executives (SCORE) Nonprofit association dedicated to the education, formation, growth and success of small business nationwide. SCORE offers free and confidential advice and mentoring from experienced volunteer business counselors.
• Small Business Technology Development Center: The SBTDC is a business development service of the University of North Carolina system, operated in partnership with the US Small Business Administration. It helps established firms, high-growth companies, and start-up businesses meet today's challenges, manage change, and plan for the future by offering free one-on-one counseling and workshops.
7.1.2 Education Assets
• UNCW: Wilmington’s public university, which enrolls over 14,000 undergraduate, graduate and doctoral students annually. Offers very strong undergraduate degrees in marine biology, with more marine biology majors receiving National Oceanic and Atmospheric Association (NOAA) grants than any other university in the U.S., many of which are used for aquaculture research (Lee 2015).
• Cape Fear Community College: Offers classes for Associate’s and Bachelor’s degrees. Partners with several local businesses and also offers free classes and counseling for small businesses.
• Brunswick Community College: Offers classes towards Associate’s and Bachelor’s degrees and also has many skills-specific training programs. It is the only community college to offer Bachelor’s degrees in Marine Biotechnology.
7.1.3 Innovation Assets
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• CREST Research Park: Open and collaborative research community. Public-private partnerships. Flexible lab space designed by scientists for scientists. UNCW CREST Research Park is one of the most advanced biotechnology research centers on the East Coast of the United States. Operated by the University of North Carolina Wilmington, the park offers leasable research space for established firms, entrepreneurial start-ups, government agencies and universities focusing on biotechnology, analytical and environmental sciences.
• Tek Mountain: For-profit business incubator and accelerator financed by Castle Branch, provides co-working and office space to startup companies.
• UNCW Center for Innovation and Entrepreneurship: The mission of the UNCW Center for Innovation and Entrepreneurship is to be a catalyst for entrepreneurial growth in Southeastern North Carolina by linking together emerging and high-growth ventures, entrepreneurs, and relevant support organizations to create business growth, jobs, and innovation
7.2 Innovation Metrics
One measure of innovation growth is Wilmington can be gathered by looked at patents granted in the area over the past 30 years. Generally, there is an upward trend in the number of patents issued in Wilmington, meaning that there is innovation occurring in the area. However, it is difficult to determine exactly which industries have the most innovation from patents because the category with the post patents issued is “Miscellaneous.” However, there have also been a significant number of “Drugs” patents issued (see Figure 2). This is likely coming from Pharmaceutical companies that are located in the area, such as PPD, Inc.
Figure 19 - Utility Patents Issued in Wilmington, 1980-2006. Source: Patent data provided by Bill Lester on Sakai, analyzed in Stata.
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ents
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Table 11 - Number of Patents Issued by Subcategory in Wilmington, 1980-2006
Patent Category Number of Patents Granted
Miscellaneous 48
Drugs 20
Nuclear & X-rays 14
Resins 12
Material Processing & Handling 11
Surgery & Medical Instruments 10
Motors & Engines & Parts 10
Gas 9
Furniture & House Fixtures 9
Receptacles 6
Transportation 5
Metal Working 4
Measuring & Testing 3
Power Systems 3
Computer Hardware & Software 2
Electronic business methods & software 2
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Electrical Lighting 2
Coating 1
Communications 1
Semiconductor Devices 1
Optics 1
Apparel & Textile 1
Heating 1
7.2.1 Business Establishment Growth
Although ideally we would have liked to look at establishment growth and innovation related to marine-specific companies in Wilmington, this data was too microscopic to be available. Therefore, we looked at financial and firm data trends for startup companies in general. However, from firsthand research, we were able to gather that there are 9 marine biotechnology startup companies located at CREST Research Park in the MARBIONC building (see Figure 3 below). Currently, the MARBIONC incubator is only at about 50% capacity, so there is room for more startups to enter the space.
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Figure 20 - Current Companies at MARBIONC, as of April 23, 2016. Source: Dana Schoewe.
In terms of innovation in Wilmington in general, we looked data from 1995-2012 on different types of indicators for business establishments, including whether firms in Wilmington are generally growing or contracting, moving in or out of the region, and what sales are like for firms. Figure 4 shows the average annual rates for each of the criteria listed. To summarize, in Wilmington, many firms have closed down or moved away from the area since 1995. However, the average annual increase in startups is 5.9%, meaning that about 936 startups are added to the region on an annual basis. This is larger than the state average of 4.1% annually (Your Economy 2016).
Figure 21 - Business Establishment Activity in Wilmington, 1995-2014
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Source: Youreconomy.org
In terms of sales data for companies in Wilmington, the average annual sales of new startups have decreased by about $86,321,137 annually since 1995. Expanding startup sales have decreased even more on average, by about $160,634,700 annually. This is not atypical for startup firms, given that new companies often have to make large upfront investments before they start generating revenue. In fact, these numbers are on par with the state of North Carolina as a whole (see Figure 5).
Figure 22 - Business Establishment Sales in Wilmington, 1995-2014
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Source: Youreconomy.org
Ideally, over the next few years, the establishment of CREST and MARBIONC will lead to more available data on innovation in industries specifically related to marine biotechnology and aquaculture. If the sector expands with the help of continued grant support from state and federal sources, it could become a significant industry cluster in the area.
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