Sunday, April 21, 2024

Commentary: the Triangle is an economic powerhouse


By Dan Barkin

I keep a 19-year-old pack of L&M cigarettes on my desk, one of the last packs manufactured in Durham, a town built by tobacco.

When I came to the Triangle in the mid-1990s, Liggett & Myers was still cranking out smokes in the Chesterfield building in downtown Durham. Today, that factory, closed in 1999, has been transformed into an innovation hub by Wexford Science & Technology LLC, a Baltimore firm that specializes in research workspaces. A massive atrium dominates the interior, with suites housing technology companies, labs and several floors of Duke faculty and students working on proteomics and metabolomics. Yeah, I don’t know what that means, either.

I was business editor of The News & Observer in Raleigh when the factory became the latest empty building in a mostly blue-collar town. A reporter got a pack of L&Ms and tossed it to me back at the office. It now reminds me of how much the Raleigh, Durham and Chapel Hill region — North Carolina’s Research Triangle — has changed over the last two decades.

When I came here, downtown Raleigh and Durham were dead. Today, both urban centers have made startling comebacks, thanks to public and private investment.

Several visionaries were crucial, such as Capitol Broadcasting CEO Jim Goodmon, whose American Tobacco complex and Durham Bulls Athletic Park helped spur Durham’s comeback; Charles Meeker, who, as Raleigh mayor, pushed for a new convention center; Greg Hatem, who built a restaurant empire
in Raleigh and renovated dozens of buildings; and developer John Kane, whose energy brought life back to the Warehouse District on the west side of Raleigh’s downtown and North Hills in midtown.

Meeker’s successor, Mayor Nancy McFarlane, clinched the deal aiming to turn the Dorothea Dix Hospital property into a world-class park south of downtown.

Two decades ago, Red Hat Inc. was a startup trying to market a free operating system. Now the company’s signature logo sits atop a 19-story tower, and its name is on Raleigh’s downtown amphitheater. The venue is next to the convention center and near The Dillon, Kane’s 18-story mixed-use office complex in the Warehouse District.

When I arrived, Dillon Supply Co. had departed the warehouses for a new location. There was hope that someone would have a vision for the abandoned space, just as something might be done with empty tobacco factories and warehouses in Durham.

And what do you know? It all happened.

It shouldn’t have been surprising. This area was well-positioned for a new economy that rewards innovation, with three research universities — Duke, N.C. State and UNC Chapel Hill. You can draw a line from them to the growth that, in recent decades, has been built atop an earlier boost from Research Triangle Park, now pushing 60.

Entrepreneurship has become institutionalized. Consider startup incubators such as the Chesterfield and American Underground in Durham and HQ Raleigh, one of whose founders, Jesse Lipson, sold startup ShareFile to Citrix Systems for $54 million. Now, there’s a new Citrix building in the Warehouse District.

Former Raleigh Councilwoman Mary-Ann Baldwin didn’t find such an entrepreneurial culture when she arrived 30 years ago. “I went to work for a company with 60 employees. When I left, there were 400. We didn’t realize we were working for a startup. It wasn’t like it was a cool thing to do,” she says. “There’s a different mindset now.”

A report by the N.C. Office of Science, Technology & Innovation explains in graphs and charts what we see with our own eyes, i.e., why cranes swing over the Durham skyline and a giant red hat marks Raleigh’s:

• More than 60% of North Carolina patents come from the Research Triangle.

• 88% of R&D by North Carolina universities is in the Research Triangle.

• More than 70% of venture-capital investment in North Carolina goes to startups in Wake and Durham counties.

One of our growth sectors is the life sciences, not surprising since that is one of the strengths of our universities. In addition to incubators, it’s evident in one of the largest manufacturing projects in state history, the $2 billion expansion of Novo Nordisk’s diabetes-medication facility in Clayton, a Johnston County town southeast of Raleigh.

Johnston symbolizes the two North Carolinas, with the Raleigh side of the county in the new economy represented by Novo, and the eastern side predominantly rural. Drive 45 minutes from Raleigh to Sampson County, and the prosperity of the Research Triangle fades; median household income drops nearly in half.

Closing that gap is a key challenge. “Widespread success will take time,” John Hardin, executive director of the state’s Office of Science, Technology & Innovation, wrote in an email, “but more communities are taking steps to enhance their education, training, resources, focus and infrastructure so that they can unlock their innovative potential and compete with the best of the world.”

Clayton is lucky to lie just within the outer perimeter of the Research Triangle. So it is not astonishing that it houses a life-sciences cluster. Grifols’ plasma plant, which is also expanding, sits around the corner from Novo. No more improbable than an abandoned Durham tobacco factory helping to rebrand the Bull City.

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