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Draft 1.1— For Discussion Only, Not for Citation Growing the Cabarrus Economy from the Inside Out: Part I By Michael H. Shuman' Overview By any standard, Cabarrus County is economically struggling. A once - thriving manufacturing region has seen some of its biggest employers, like Pillowtex and Philip Morris, shut down plants over the past decade and lay off thousands of workers. Unemployment in the county now is 9.7%, well above the national average. According to state data released in September 2011, about 8,000 of the official workforce of 83,117 are unemployed. For these residents, who have had to endure the most extreme economic hardships since the Great Depression, a fresh approach is clearly needed. The economic - development practices and policies in the County by themselves, which have largely focused on outside business attraction, have proven insufficient. More must be done to put residents back to work. According to the Economic Development Council of Cabarrus County, its recruitment initiatives between 2004 and 2011 yielded 2,711 jobs—or 339 jobs per year. At that rate, under the assumption that there's no worsening of j ob- creation challenges with new residents moving in, existing practices would end unemployment in about 24 years. The challenge is greater still, however, because a number of questions must be answered before the County can have high confidence that EDC initiatives actually created 2,711 jobs. For example, because Cabarrus County has many attractive features for global companies – among them, low -cost land, an educated workforce, and excellent access to transportation links and nearby markets – it may turn out that some of these companies would have come here anyway even if the EDC has done nothing. This paper doesn't argue, however, that traditional corporate attraction practices should be abandoned. Rather, government -led industrial policy should be supplemented with private- sector -led entrepreneurship policy. The County should consider taking a more balanced approach that split public money and civil servants' time evenly between attracting outside businesses and nurturing local businesses. The case for increasing Cabarrus County investment in local businesses rests on the following observations (all elaborated in this report): • Local businesses are currently the only significant producers of jobs in the United States. ' Michael H. Shuman is Director of Research for Cutting Edge Capital, based in Oakland, California. He is a Stanford- educated economist, attorney, and author. His latest book is The Small -Mart Revolution: How Local Businesses Are Beating the Global Competition (Berrett- Koehler, 2006), and is available at www.small- mart.org For comments on this paper or to conduct similar analysis of another community, contact Michael H. Shuman by phone (202- 669- 1220), e -mail ( shuman @igc.orj) or mail (2203 Quinton Rd., Silver Spring, MD 20910). Attachment number 1 1 -4 Page 303