Rural N.C. seeks economic hope – Big factories’ era over, leaders seek success in small steps

Once, rural North Carolina found hope in factories and fields, imagined its future rolling off assembly lines and sprouting from fertile soil.

But as factories move across the ocean and small farms disappear, North Carolina’s textile and tobacco country is in search of new hope. It is looking, for the first time, to its own people.

By KRISTIN COLLINS, Staff Writer

http://www.newsobserver.com/news/nc/economy/series/story/1292384p-7414261c.html

(Thanks to Ed Morrison and Dave Bayless for bringing this to our attention. Russ)

The homegrown revival is taking root, many say, in places such as Willie Earl Jones’ office: a room in a rented house in Farmville with scuffed floors and stained walls, yellowed football curtains on the windows from the days when it was a boy’s bedroom. Jones is sitting in the corner, his basketball-player’s legs too long to fit under the table that holds his aging computer, trying to sell a dream.

At 50, Jones wants to leave behind the textile factories where he worked for 15 years. He is trying to build a career around an invention that came to him in his sleep: a basketball goal cover dubbed the Hoop Hood, which protects hoops from the elements the way grill covers prolong the lives of Webers.

It is a long shot, but he has decided — along with many in his region — that rural North Carolina must stop waiting for the next big factory to shape the future.

"Who’s going to do this for us?" Jones asks. "You got to reach down, depend on yourself."

Self-reliance can mean two things in rural North Carolina: using natural resources to draw tourists and start small businesses, or helping workers tap their creativity to produce jobs.

Eastern counties are marketing their vast acreage of open land to hunters and sportsmen. A handful of mountain communities say that tourism dollars have made pottery and other crafts their fastest-growing industries.

Farmers are giving up tobacco and growing corn mazes to lure travelers off highways. And economic developers are encouraging entrepreneurs as never before.

So far, the encouragement consists mostly of discussion and not much money, but even the talk is a big change in an economy built around cheap manufacturing labor.

People such as Jones — factory worker turned inventor — are the seedlings that might once have been ignored. Now, rural leaders see them as vital to building a new economy in these days when good ideas are worth more than willing hands.

Old jobs disappear

North Carolina has lost about 160,000 manufacturing jobs in the past three years, more than twice the loss during the 1990s. In towns all over the state, textile and furniture plants that were once the backbone of the rural economy have shut down.

At the same time, farmers are losing their cash crop as cigarette companies buy more cheap foreign tobacco.

Tens of thousands more jobs are vulnerable, particularly those in textiles and furniture. At the end of 2003, 165,000 North Carolinians, most in rural areas, still worked in those industries.

Factories once took care of North Carolina’s rural workers, building them housing and providing tedious work to nearly all who applied. In many mill towns, people dropped out of high school to begin careers in the plants.

In rural counties, high school dropouts outnumber college graduates. These workers are left with few options, except to take lower-paying service jobs such as nursing assistants or retail clerks.

Wal-Mart is among the top 10 private employers in 58 of North Carolina’s 100 counties.

Service jobs are the fastest-growing slice of the state’s economy, but they don’t promise a bright future. In rural North Carolina, the average wage for service jobs is $23,400 a year, according to the N.C. Rural Economic Development Center, a nonprofit group that advocates for rural communities. That’s about $5,000 lower than for manufacturing.

Rural economic developers say it’s time to stop the drop in wages, and they can’t depend on the next big factory to do it.

"Talk to economic developers in small rural counties and ask them, ‘When was the last time you had a real good industrial prospect?’ They haven’t had any," said Deborah Markley, co-director of the national Center for Rural Entrepreneurship, a research institute with offices in Lincoln, Neb., and Chapel Hill.

Entrepreneurship and "asset inventories," projects to catalog a community’s existing resources and determine which can be used to build homegrown jobs, are the hot topics at rural economic conferences. But the bulk of the state’s economic development dollars are still going to lure big business.

For now, the untested idea of taking economic development in tiny steps is supported largely by the community college system and by grants from the state’s tobacco settlement money.

"For some rural communities, this may be their best hope," Markley said. "It may be a long-term, incremental approach, but it’s better than a long-term, incremental decline."

Dream of a better life

The divide between the old and new economies is easy to see in Jones’ hometown of Farmville.

The seven tobacco warehouses and two leaf processing plants are gone, vast empty tracts of land left in their places. A sewing plant has closed, and the two remaining textile plants have shrunk. Sitting just 11 miles down the road from growing Greenville, Farmville lost 114 people during the 1990s.

The Pitt County town of about 4,500 still relies on textile plants and tobacco for more than 1,300 jobs. But leaders know the danger of relying on fading industries.

So, when Willie Jones showed up at the Farmville Development Partnership in 1999 with a drawing of a basketball goal cover that had come to him in a dream, director Judith Ruggie saw a poster child for the new economy.

"I could just see this in the Neiman Marcus catalog," Ruggie said. "Your own personal basketball goal with a monogrammed cover."

Jones was one of 11 children raised by a single mother in Harlem. He moved as a teenager to Farmville — the place where his grandfather had eked out a living plowing gardens with a bull. His father had left as a young man in search of the opportunity a tiny tobacco town couldn’t offer.

Jones married a local woman, gave up his dreams of playing professional basketball and, like many of his neighbors, settled into a factory job. The factories where Jones, his wife and eventually his daughter worked started cutting jobs, and Jones struggled to pay his bills.

By 1999, Jones had been laid off after 13 years at one textile plant and fired from another. He was working as a machine operator at another factory when he had the dream. It was simply a vision of a basketball goal, standing on its own, wearing a cover.

Even before he woke up, Jones knew what it meant: This was his way out of the factory.

"That’s how the Lord bless you," Jones says. "He give you something to start out with."

A place to start

That is the new thinking in rural economics: Every place has something to start with.

A county with a swamp can build an industry growing water plants. A neighborhood barbecue master can open a catering business.

A nonprofit agency in Robeson County, where 8,700 manufacturing jobs have disappeared in the past decade, is pushing to build tourism along the Lumber River. The Center for Community Action in Lumberton is building a

$1 million river adventure and learning center with arboretum, camping facilities and boat rentals.

In Halifax County, leaders in Scotland Neck are marketing the area’s woods and streams to hunters, fishermen and bicyclists.

Most of all, rural North Carolina is searching for hidden talent: offering free classes to would-be entrepreneurs and opening incubators where new businesses can rent low-cost offices.

Even the wildest ideas are finding support. The Small Business Center at Pitt Community College is working with a couple who created a seat cushion that absorbs the smell of flatulence. The company, dubbed GasBGon, has a growing business on the Internet.

"There are so many people who have these ideas, and they slip right through their fingers," said Greg Hannibal, who teaches small business courses at Wayne Community College. "We can’t let that happen anymore."

A 2001 study published in Economic Development Quarterly ranks North Carolina 23rd nationally for its climate of seeding and growing businesses. The Center for Rural Entrepreneurship calls this a weak ranking, considering the reputation of Research Triangle Park and the state’s universities.

The state ranks below the national median in its college graduation rates and its innovation, based on patents and research grants, according to the study. It ranks 18th for the amount of venture capital available.

The state is gradually devoting more money to seeding business.

The community college system spends about $3.8 million a year on 60 small business centers that provide classes and counseling to entrepreneurs. The University of North Carolina system spends

$1.7 million a year on 17 small business and technology centers that provide similar assistance to small business owners. And the Golden LEAF Foundation is using tobacco settlement money to help governments with creative ideas for economic development.

But in a state that offers hundreds of millions of dollars to prospective industries, there is still very little money for people such as Willie Jones, with big ideas and no capital. A loan program at the N.C. Rural Economic Development Center, which loaned about $326,000 last year, is one of the few sources of startup cash for small businesses other than private investors.

Most of the state’s big money still goes to big business.

The state has spent $53 million on runway improvements at the Global TransPark in Kinston, hoping to create an air cargo hub that would employ 55,000. About 200 jobs have been created.

The state spends $6.8 million a year on seven regional partnerships focused on recruiting large companies. Large industries that set up shop in poor counties get tax breaks and free training.

Individual counties and towns have spent untold millions on shell buildings, betting that large employers will come to fill them.

Yet the last large manufacturer to land in rural North Carolina was Nucor Steel, which created 600 jobs in Hertford County more than five years ago. This year, the state offered a record $534 million in incentives to lure a 1,200-worker Boeing plant to the Global TransPark, but the company stayed in Washington state.

Unable to find good jobs, people are leaving rural North Carolina. Since 2000, 18 rural counties lost population while urban areas grew. Ten counties have fewer people than in 1950.

"We are beginning to get the message," said Billy Ray Hall, head of the Rural Economic Development Center. "If you don’t save your existing jobs and grow your own, industrial recruitment is not going to save your economy."

Jobs after the factory

Advocates point to Mayberry Embroidery, a custom embroidery shop started by two laid-off textile workers, as proof that old economy workers without college degrees can save themselves.

Pat Littleton, 55, and Amy Heath, 43, opened the shop in Mount Airy in 2002. They embroider hats, shirts and jackets on machines they bought from the closed Cross Creek Apparel plant, where both had worked for more than a decade.

When they rented their first storefront, neither had run a business before. They put up $500 each toward the security deposit and renovated the place with the cheapest paint and tools they could find.

They searched for months for the $50,000 it would take to get started. A local bank finally agreed to a loan, but only after Heath offered her mother’s home as collateral for part of it.

Today, their business is growing, and they have hired two employees. They each made $22,000 last year, up from $10,000 the year before.

"We have wondered if we were going to get paid a couple times, but it always came through," Littleton says. "We may be small, but we are three people that never had to go on the unemployment rolls."

The pair’s success is touted by the community college system’s Small Business Center Network, which gave them a free business course. Their testimonial tells new students that there is hope after a factory closes.

From worker to boss

Willie Jones was tired of being poor and feeling expendable. In 2002, he lost another job, this one after a dispute with the manager of a group home for children where he was a supervisor.

After a few months of searching for work, and some encouragement from local leaders, he decided to go full time with the Hoop Hood.

George Sappenfield, who runs the Small Business Center at Pitt Community College, invented the game of Frisbee Golf and worked for several years for Wham-O, maker of the Frisbee. He says the Hoop Hood has potential in the snowy North, protecting expensive goals from snow and ice. And it could help schools deter unauthorized use of outdoor courts.

"You’d have to educate people on why they would need it and how easy it is to take on and off," Sappenfield said. "But I wouldn’t have encouraged him if I didn’t think the idea had potential."

One of Jones’ friends, along with a few members of his church, believed so much in Jones’ idea that they invested $9,000 in the company. Jones incorporated and paid a lawyer $4,000 to get him a 14-year patent on his design. Letters started pouring in from national marketing companies that wanted to buy his idea.

After years of following orders, Jones was the man with the ideas. And he decided not to give them away to a marketing company.

But Jones soon realized that the transition from factory worker to entrepreneur is not so simple. He walked into a bank looking for a loan to get started, but there were no loans available for a man with poor credit and no business plan. "A business plan?" Jones remembers thinking. He hadn’t typed since high school.

He faces the hurdles that so many in his region face: lack of education, lack of money and virtually no business experience. His struggles provide a window into the difficulty of building a locally based economy in rural North Carolina.

Jones has gone so long without a paycheck that his car has been repossessed. He relies on his wife, who works in a group home, and his adult daughter, who works in a textile plant, to pay the bills. He could afford the shiny black Florsheim shoes he wears to business meetings only because he found them for $20 at a flea market.

He produces brochures, often peppered with grammatical mistakes, on his home computer. His copier malfunctions, so he sometimes asks potential clients to copy documents themselves.

But he presses on.

He took a job managing a basketball team in a fledgling league called the Urban Basketball Association, hoping to make contacts in the sports world. He went to the Small Business and Technology Development Center in Greenville for help with market research. He took a 10-week course at Wayne Community College, where he learned to write a business plan and improve his credit.

In March, he received a $1,500 small-business loan from the Rural Economic Development Center.

So far, the help hasn’t been enough to jump-start the business. But it has kept his dream alive.

He borrows his daughter’s car and drives the rural roads nearly every day, trying to sell the Hoop Hood to potential investors.

"It’s something that’s never existed, like electricity," Jones says. "Somebody’s got to have vision."

Hunger to believe

Most economic developers say that entrepreneurs such as Jones are only part of the solution.

Many say there is still hope in large industry. A factory, the theory goes, creates six ancillary jobs for every job inside the plant.

By contrast, a study by the Small Business and Technology Development Center found that only about 2 percent of the state’s small businesses — those with fewer than 100 employees — are growing faster than 20 percent a year. Many homegrown businesses are hair salons, retail shops and lawn services, the types of enterprises that will never employ more than one or two people.

"Most small businesses start small, they provide local services, and they stay small," said Rick Carlisle, manager of Dogwood Equities, a private fund that invests in midsized rural businesses. "It’s kind of shortsighted to say they can turn the economy around on their own."

Carlisle says rural North Carolina should scout manufacturers likely to stay in the United States: specialty textile companies, food processors, auto parts makers.

Gov. Mike Easley talks of a future in which biotech companies, relying on crops such as corn and tobacco, move to rural regions.

But many rural leaders like the idea of reshaping their own futures with homegrown jobs. These days, they value loyalty, and a 1998 East Carolina University study found that when local businesses do succeed, more than 85 percent stay in the community where they were founded.

Using the Internet, advocates say, global businesses can sprout in the state’s most remote areas.

They point to a company in Chatham County that sells fruitcakes worldwide as proof that entrepreneurship has potential. They talk of a couple in the mountains who sell more than 15,000 Buddhist meditation cushions a year over the Internet.

"There is a real hunger to want to believe," says J. Phillip Horne, head of Foundation of Renewal for Eastern North Carolina, a private economic development group.

Jones feels it every day, as he trades a paycheck for a chance to chase his dream. In five years, he has sold only a handful of Hoop Hoods at $109 each. But he believes success is near.

It’s just a matter of getting the word out, meeting the right people, finding the money to pay for a national advertising campaign.

He has something to start with, and he is thankful for it.

Staff writer Kristin Collins can be reached at 829-4881 or [email protected].
News researchers David Raynor and Toby Lyles contributed to this report.