Enhancing the Competitiveness of North Carolina Communities

6 p o p u l a r g ov e r n m e n t

Enhancing the Competitiveness of North Carolina CommunitiesJames H. Johnson, Jr.

COVE R ART IC LE

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Several recent socioeconomic anddemographic trends threaten thefuture health and competitiveness

of North Carolina and other states.1

Despite enormous economic growthand wealth generation, the gap betweenthe haves and the have-nots in NorthCarolina widened during the 1990s.This continues a three-decade nationaltrend of growing inequality.2

Preliminary analyses of the 2000census results reveal that this trend isundergirded by an increasing “balkan-ization” of the U.S. population (that is,an increasing division of Americans intosmaller groups).3 Over the past decade,the state and the nation have bothbecome racially and ethnically morediverse, but only as a whole. Confirmingthe findings of earlier research, the 2000 census indicates that non-Hispanicwhites are increasingly concentrated ineconomically prosperous communities,while blacks and other people of colorare clustered for the most part indeclining or economically marginalcommunities.4

These two developments—growinginequality and population balkanization—have had a devastating impact on the youth of North Carolina and thenation. Segregation along racial lines inthe public schools has worsened duringthe 1990s, paralleling growing disparitiesin black-white achievement.5

The two developments also haveexacerbated race relations in the nationand the state. Throughout the 1990s—especially in U.S. cities that were leftbehind in the economic boom butexperienced population growth fueledby immigration—tensions, conflicts,and confrontations with racial or ethnic

overtones have triggered protest demon-strations and civil unrest.6 In NorthCarolina, which became a major magnetfor immigration during the 1990s, theschisms to date have been limited toisolated incidents of violence againstimmigrant newcomers and hostileverbal exchanges between them and the state’s long-term white and blackresidents over access to housing, jobs,and other scarce resources. However, ifhistory serves as an accurate barometer,the situation might worsen in thecurrent statewide economic downturn.7

To thrive and prosper in the neweconomy, North Carolina municipalities,particularly those with substantialpopulations in economic distress, willhave to adapt to the federal government’srecent policy shift toward letting freeenterprise solve pressing urban andrural problems.8 They also will have to adjust to the philanthropic commu-nity’s increasing preference for fundingentrepreneurship and socially respon-sible undertakings.9

In view of these dramatic policy shifts,I propose in this article a conceptualmodel for understanding, evaluating,and enhancing community health andcompetitiveness in the twenty-firstcentury’s knowledge-based economy.The model identifies six types of “com-munity capital”—polity, physical, finan-

P O P U L A R G O V E R N M E N T

The author is William Rand Kenan, Jr.,Distinguished Professor of Management,Kenan-Flagler Business School, anddirector, Urban Investment StrategiesCenter, Frank Hawkins Kenan Institute ofPrivate Enterprise, The University ofNorth Carolina at Chapel Hill. Contacthim at [email protected].

To thrive and prosper in the neweconomy, North Carolina municipalities

will have to adapt to the federal government’s recent policy shift toward

letting free enterprise solve pressingurban and rural problems.

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Providing businesses with access to high-speed communication links like fiber

optic cable is key to communitiescompeting successfully in the economy

of the twenty-first century.


When asked to identify themost important barriers tosuccess for the technologycommunity in Philadelphia,68 percent of 100 peoplesurveyed at a technologyconference in that city “mentioned city taxes, twiceas many as the next factor.”15

More specifically, the con-ference attendees indicatedthat the city’s taxes onwages, stock options, andgross receipts were deterringcompanies from locating inthe city.16

To secure the resourcesneeded to compete, new-economy communities havemoved toward a “networkgovernance model—acoalition of business, gover-nment, and communityleaders who skillfully blendnew business models of ven-ture capital and networkingwith the job of solving publicproblems.”17 In such citiesthe local government activelyand aggressively pursuesstrategic alliances withbusinesses and nonprofits—

domestically and internationally—thatwill lead to the development of culturalties and profit-centered activities. Theseties and activities will, in turn, generaterevenue, create jobs, and enhance thecities’ overall image and attractivenessas places to live and do business.18

In such strategic alliances, the gov-ernment employs sound and sociallyresponsible business principles toenhance the efficiency and the effective-ness of its operations, while creatingpolicies that encourage others to actresponsibly.19 For-profit entities act in asocially and environmentally responsiblemanner while continuing to operate inthe best interest of shareholders. Non-profits strive to create social-purposeventures that address pressing localneeds and the financial needs of theirorganizations.20

Communities and organizations thatembrace such approaches are engagingin “civic entrepreneurship.”21 That is,they have attempted to transform theirgovernment culture from a social

cial, human, cultural, andsocial—that North Carolinacommunities will have todevelop in order to thrivelocally in the global economy.10

In the following sections, I describe the six sources ofcapital and present manifes-tations of each in selectedhighly competitive commu-nities of the new economy. I also discuss what NorthCarolina municipalities mustdo to develop the fullcomplement of capital assetsthat are known to exist inhighly competitive commu-nities. Finally, I outline athree-step action plan thatNorth Carolina municipalleaders can pursue to improvethe health and the competi-tiveness of their communities in the marketplace of the neweconomy.

Description of the Model

The proposed model forenhancing communities’ healthand competitiveness (seeFigure 1) is predicated on theability of municipal government leadersto leverage their polity capital to forgemutually beneficial entrepreneurialrelationships with for-profit (business)and nonprofit institutions. From thatbasis they can aggregate the other fivesources of community capital to fosterstrategies for reducing poverty, creatingjobs, and developing a healthy andeconomically competitive community. I discuss each component of the modelin detail in the following sections.

Polity CapitalTo compete in the new economy, NorthCarolina communities, especially thosethat are severely distressed, may need to re-engineer how they go about devel-oping their polity capital. For presentpurposes, “polity capital” is the resourcesand the tools that local governmentsand other institutions have at their dis-posal to improve or enhance the health,the socioeconomic well-being, and theoverall competitiveness of their com-munity in the global marketplace.11

In many communities, especiallythose that have been left behind in thecurrent economic boom, two elementsof polity capital, the business climate andregulatory structures, often deter commu-nity stakeholders from pursuing innova-tive strategic alliances and entrepreneurialor business-oriented approaches thatcan generate revenue. Such approachescan, in turn, be used to resolve thosecommunities’ seemingly intractablesocial and economic problems.12

For example, Philadelphia’s tax struc-ture is driving high-tech entrepreneurs to the suburbs.13 Commenting on theproblem, the president of a Philadelphiae-commerce business organization said,

[T]he tax structure, I think, hascaused a lot of business owners tothink more seriously about wherethey locate, and a lot have moved to the suburbs. . . . [I]nformationtechnology in general is all intellec-tual capital. And intellectual capitalhas feet—it’s easy to move.14

Polity Capital

Government

For- Profits

Non- profits

Civic Entrepreneurship

HumanCapital

CulturalCapital

SocialCapital

PhysicalCapital

FinancialCapital

Poverty Alleviation

Job Creation

Community Development

Healthy/Competitive Community

Figure 1. A Civic Entrepreneurship Model for Enhancing Community Health and Competitiveness

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welfare–oriented model of operation toa business-oriented one, with an eye to-ward enhancing the community’s stockof financial, physical, human, cultural, and social capital. In turn, these assetsare deployed in innovative ventures designed to alleviate poverty, create jobs,and foster community development.22

Financial CapitalHow do highly competitive communitiescreate the financial capital needed topromote their growth and development?Such communities have a strong entre-preneurial spirit and orientation, as well as a can-do attitude towardresolving their own problems.23 Also,their economic development policiesencourage innovation and adaptation,with an eye toward shaping the“evolution and ongoing change in away that maintains [the] essentialcharacter and values [of the commu-nity].” “Unless a society and a commu-nity [are] open to the development ofnew ideas, they are unlikely to see muchdevelopment.”24

In a highly competitive community,the “government does not treat businesswith hostility or suspicion, but like apartner where both sides are expectedto keep their part of the bargain.” Further, highly competitive communitiesexemplify an “openness-to-new-ideasattitude, that is, a try-it-and-see if-it-works rather than a let’s-go-check-with-the-authorities” attitude.25

These communities also have ahealthy attitude toward failure. InNashville, Tennessee,

[f]ailure . . . is an important part ofthe learning process; it sorts suc-cessful approaches from losing ones.Failure also makes change possible.Without failure, established com-panies are not forced to accept thepainful processes of improvement.

. . . .

In an entrepreneurial culture, busi-ness failure is not a kiss of death, asit can be in more rigid economies. . . .[I]n a highly competitive community,investors, bankers, lawyers, andaccountants expect some new ven-tures to fail, and also expect thatfailure to be followed by new efforts.26

Silicon Valley’s success relative tothat of other high-tech nodes “stemmedfrom much more receptive attitudesabout entrepreneurship and risk takingand a much greater tolerance and lowersocial stigma for business failure.”27 Thekey to the economic revival of Dallas,Texas, following the collapse of itsenergy and banking sectors in the 1980swas “a powerful, extremely aggressivebusiness culture”:

[A]t each stage of its development theprimary impetus for growth . . . hascome not from outsiders like NewYork bankers or Silicon Valleyventure capitalists, but from local

folks captivated by the restless,sometimes relentless entrepreneurialspirit that seems indigenous to thecommunity.

. . . .

[T]he seemingly laid back demeanorand the slow, southern drawls ofDallasites are deceiving. . . . Dallas is a very sophisticated place. . . .[T]here’s just this tremendous “cando” spirit here. You are judged onyour character, and capable peoplecan have a real effect.28

For the foregoing reasons, a wealthof both traditional and nontraditional

An aggressivebusiness culturefinds the neces-sary financialcapital to gener-ate growth andcreate jobs.


sources of financial capital is availableto foster business and communitydevelopment in highly competitivecommunities. Typically, such commun-ities “have strong traditional financialsectors that advise and nourish youngcompanies, long before they havebecome profitable and can win a stan-dard bank loan.”29

Nashville, known for decades as the Wall Street of the South, epitomizesthis spirit:

Ten venture capital firms with a com-bined investment portfolio worthhundreds of millions are based inNashville. Since 1990, J. C. Bradfordand Company, Nashville’s mostprominent investment banking firm,has helped entrepreneurs raise over$12 billion in initial public stockofferings, as well as more than $3 billion in private investments.30

Reflective of the healthy attitude thatinvestors have about risk in highlycompetitive communities, in Nashville,

[r]ich people . . . are willing to spinthe big wheel a few more times,rather than clip coupons. . . . Inves-tors here understand that most start-ups will go under. Perhaps six out of ten fail—and another three limpalong. But the tenth one will blaze tothe top, leaving fantastic earnings inits wake. Meanwhile, in some cities,investors are looking for guarantees,a sure thing.31

In highly competitive communities,community development venture capitalfunds (CDVCFs) and other nontradi-tional sources of financial capital alsoare typically available. Traditionalventure capital funds are professionallymanaged pools of equity capital typi-cally sought for growth and expansion.CDVCFs are modeled after them butallow managers to seek a doublebottom line—that is, both social andfinancial returns.32

Finally, in highly competitive com-munities, nonprofit organizations tendto be very enterprising. For example,some engage private-sector companiesin mutually beneficial strategic partner-ships that generate revenue:

• Cause-related marketing alliances—

say, BMW donating money to theSusan G. Komen Breast CancerFoundation each time a person test-drives one of its cars

• Affinity programs—alliances forgedbetween major corporations andtrade and professional associations

• Exclusive agreements—for instance,Huntington Beach, California,recently giving Coca-Cola exclusive“pouring rights” in all city-ownedfacilities, which will generate $6.7million in new revenue for the city

• Selling of space—communitiesmarketing a wide array of publicspaces, including airports, transitsystems, and sports venues, toprivate-sector companies to generatesorely needed revenue

Others operate for-profit arms, oftenreferred to as “social-purpose ventures,”that generate revenue. Still others pursuesome combination of these strategies.33

The revenue accumulated via theseefforts is called “community wealth,” as opposed to personal or corporatewealth. This terminology is used becausethe revenue supports a wide range ofactivities designed to improve the overallhealth and well-being of communitiesand the people who live in them. Theactivities include improvements ininfrastructure, within- and after-schoolprograms for socially and economicallydisadvantaged youth, employment andtraining programs, and more.34

Physical CapitalTo maintain and enhance their compar-ative advantage in the new-economymarketplace, highly competitive com-munities invest heavily in their physicalcapital—what is referred to as their“logistical infrastructure.” This includesthe network of highways, railways, airports, and telecommunications systems (telephone, Internet, etc.) con-necting them to the regional, national,and global economy.35 A community’sphysical capital also includes vacant and abandoned parcels of land that canbe developed or redeveloped to makethe community more attractive as aplace to live and do business.

To attract entrepreneurs and new-economy businesses as well as to

maintain connections to the regional,national, and global economy, a city’sbridges, tunnels, rail lines, ports, andhighways must be modern and in goodrepair. Nashville has consciously andpurposefully invested in its transpor-tation infrastructure so that it canbenefit economically from its strategiclocation at the geographic crossroads ofthe country, a point where three inter-state highway systems converge.36

Half the U.S. population lives within600 miles of Nashville, and thosepeople can be reached by a spider’sweb of rail lines, river routes, andhighways that emanate out of Nash-ville. Small wonder that strategicallylocated Nashville is a major shippingand distribution center for books,Bibles, and manufactured goods—it is the perfect home for a manu-facturer’s shipping center. That is one reason Ingram Inc., the world’slargest distributor of books, has longbeen based in Nashville. Across town is Thomas Nelson, the world’slargest publisher of Bibles. Nashvilleis also home to the world’s largestsheet music publishers.37

Dallas has pursued a similar strategy.After the collapse of its banking andenergy sectors, it attempted to shed itsdetested “middle of nowhere” image byaggressively pursuing federal funding todevelop I-35. This interstate highwaynow serves as the “main conduit be-tween the American industrial heartlandand Mexico’s northern manufacturingcenters.” In part because of this inves-tment in ground transportation, Dallasis known in some circles as the “capitalof capitalism,” a city where, in the1990s, the growth of high-tech industrywas greater than it was in SiliconValley.38

However, strategic investments inairport facilities and broadband tech-nology probably have been the mostimportant factors in positioning new-economy cities to compete in the twenty-first century marketplace. For example,“‘[l]ike the seaport, river and canal,train, and highway systems before them,air travel networks, particularly for aircargo, are now the leading logisticalfactor behind urban growth.’”39 Nowherehas this been more apparent than in

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Dallas, where leaders made a consciousdecision to invest in three airports:Dallas–Fort Worth International, whichranks with Chicago’sO’Hare as one of thenation’s busiest aircenters; Love Field,conveniently locatednear downtown; and Alliance Airport,developed andfinanced by RossPerot as an industrialairport—the world’slargest.40

Broadband technology is an equallyimportant element of infrastructure:

[A]s cities of the past were built alongrailroads, waterways and interstatehighways, cities of the future will bebuilt along information highways—broadband communication links tohomes, schools and offices, hospitalsand cultural centers, and through theWorld Wide Web to millions of otherlocations all over the world.41

However, when it comes to attractingnew-economy businesses and jobs, thefuture is now for municipalities, since“access to broadband technology—T1,

DSL, cable and the like—is key to com-petitiveness.”42 Today, in making decisionsabout location, businesses are asking

three critical ques-tions: How wired isyour community? Canyou get high-speedaccess to the Internet?What will it cost?43

The actions ofTacoma, Washington,illustrate the impactthat wiring a com-munity can have on alocal economy:

In Tacoma, Washington, long a step-sister of glamorous Seattle, themunicipally owned electric utilityinstalled a fiber-optic network thatcovers 180 square miles and in theprocess brought new businesses and economic vitality to a place thatwas once bleakly described as“postapocalyptic.”44

Elaborating on the role of broadbandtechnology in competitiveness, one business official noted, “We will soon beat a point where tenants expect band-width just as they do air conditioning.”45

That municipalities cannot compete

for new-economy business without thelogistical infrastructure of highways,railways, airports, and telecommunica-tion systems is best captured in theobservation that “‘the Web cannotmove a box.’”46 The problems that e-commerce businesses faced during the1999 Christmas season illustrate thepoint.47 Because of their failure to establish a network of distributioncenters and a strategy for deliveringproducts to customers in a cost-efficientand timely manner, many e-tailers had a disastrous 1999 holiday season. In the absence of such a logistical infra-structure, Toysrus.com and a host ofother e-tailers accepted orders forproducts that already were out of stock.This meant that the purchased itemscould not arrive in time for Christmas.Angry parents filed lawsuits, and someof the e-tailers were eventually fined$1.5 million each by the U.S. FederalTrade Commission. An attorney whofiled one of the lawsuits said,

There are lots of things in life thatare excusable, but ruining Christmasfor thousands of children isn’t one ofthem. The thought that Toysrus.comhad full knowledge they couldn’t

To maintain and enhance their comparative advantage in the new-economy market-place, highly competitive communities invest heavily intheir physical capital.

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Transportationsystems, such as railways, that link acommunity to the worldaround it constitute itsphysical capital.


keep the Christmas Eve date butcontinued to accept orders makes iteven worse. To thousands of kids,Toysrus.com is the e-grinch that stoleChristmas.48

In preparation for the 2000 holidayseason, e-tailers invested large sums of money in logistical support andcustomer-service systems.49 Municipali-ties with the necessary physical capitalwere the primary beneficiaries of theseinvestments.

For communities that are striving tobe more competitive in the emerging e-commerce economy, success will hingeon their ability to develop a bulletprooflogistical infrastructure:

[T]he most important part of anonline transaction occurs not incyberspace, but rather at the custo-mers’ door. . . . [D]espite all thediscussion about pure-play [cybers-pace shopping “malls”] versus brick-and-mortar [traditional shoppingmalls], it is steel and rubber—in theform of vans, trucks and the occa-sional bicycle—that ultimately rules.50

In addition to ensuring that new-economy businesses have the logistical

infrastructure that they will need tocompete, highly competitive communitiesemploy the new technologies to enhancetheir own polity capital.51 That is, theystrive to make government more cost-efficient and -effective by bringing awide array of services online. As thedirector of IBM’s Institute for ElectronicGovernment points out, in the fiercecompetition for new-economy employers,

[g]overnment has to move at thespeed of business. . . . If it takes 12weeks to get a permit to renovateoffice space, and a venture capitalistsays the business needs to be up andrunning in 90 days, you lose out.That business is going to go wherethe process is timely.52

By proactively and aggressivelymaking the transition to e-government,or “smart government” as it is called,highly competitive communities send a signal to both start-up companies and established ones looking for a place to locate or relocate that theirlocal business climate is highly suppor-tive. Making this transition alsosubstantially reduces the cost of doingthe business of government. In highlycompetitive communities, the resulting

cost savings are being channeled intoefforts that address pressing social andeconomic needs that otherwise wouldgo unmet.

Human CapitalAlthough a state-of-the-art logisticalinfrastructure is necessary, it is notsufficient to enhance community competitiveness in the new economy.“[W]hat brings about transformation isthe people who can create in innovativeand creative ways.”53

Thus, in terms of a community’shuman capital, there are two keys tosuccess in the new economy. The first iscutting-edge research facilities and top-notch education institutions.54 However,their mere existence is not enough.Within these institutions the climatemust allow scientists to translate re-search into viable commercial uses that will enable high-tech businesses,their supplier networks, and the localeconomy to grow and thrive. To facili-tate this type of economic activity,Indiana has established a 21st CenturyResearch and Technology Fund, whichprovides $50 million for research forthe state’s universities and private com-panies. Ohio State University reportedly

Customers maypurchase itemsin cyberspace,but trucks and

like vehicles arenecessary to

deliver the items.

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is considering using asmall percentage of its$1.3 billion endow-ment as seed money tohelp small companiesin Ohio grow.55

The second key islarge-scale investmentsin the local educationsystem (K–12, com-munity college, andfour-year institutions)to ensure the availabil-ity of education andtraining programs that will enablecitizens to compete for new-economyjobs. For example, in Hundred, WestVirginia, to strengthen the technologicalskills of the student population, businessand government jointly developed aprogram that provided laptops to stu-dents. “[A]fter distributing 144 laptopsto students for both home and schooluse, West Virginia has jumped from 33rdto 11th place on national achievementtests.”56 Such investments enhance acommunity’s attractiveness to businesses.57

Cultural CapitalTo ensure that the full benefits of astrong education and training system

materialize, a highlycompetitive communityinvests heavily in itscultural capital—that is,in policies and proce-dures that undergird itscitizens’ values, attitudes,and beliefs about theircurrent life chances andtheir future opportunitiesin the local community.58

More specifically, ahighly competitive com-munity strives to manage

its population diversity effectively, notsolely for social or moral reasons (thatis, because it is the right thing to do),but also as a form of enlightened self-interest (that is, because it is good forbusiness). Communities that valuerather than tolerate their cultural capitalcreate a climate in which all citizens,regardless of race, ethnicity, gender, andso on, are fully able to maximize theirpotential to participate in the neweconomy and benefit from the fruits oftheir labor.

Dallas has long recognized thestrategic importance of managing itscultural capital. Although its minoritieshave not benefited fully from the city’s

pro-business climate, Dallas has viewedracial strife as bad for business. In the1920s, the city “waged a war againstthe Ku Klux Klan, noting that the Klan’spresence deterred growth.” “The kindof racial strife that decimated othercities, north and south, for the mostpart skirted Dallas. Largely, because itwas bad for business.”59

In a March 2000 speech, FederalReserve Chairman Alan Greenspan putforth the same argument: “‘Discrimina-tion is against the interests of business. . . . Yet business people often practice it.In the end, the costs are higher, less realoutput is produced, and the nation’swealth accumulation is slowed.’” Also,as Massachusetts economist CynthiaLatta notes, “‘Bias toward women,minorities, and the disabled is counter-productive[,] . . . a bit like shootingyourself in the foot.’”60

Discrimination often results in biassuits, and these create the impressionthat the environment does not toleratediversity. Creating such an impression isunwise and counterproductive in thecontemporary period, when internationalmigration and interregional populationshifts within the United States aredramatically changing the racial and

Discrimination oftenresults in bias suits,and these create theimpression that theenvironment does not tolerate diversity.Creating such an im-pression is unwise andcounterproductive.

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In a WestVirginiacommunity,providing laptopcomputers tostudents—aninvestment inhuman capital—dramaticallyimproved the state’sperformance on nationalachievementtests.


ethnic composition and complexion ofcommunities.61 Moreover, new-economyentrepreneurs and workers are them-selves a diverse group in terms of raceand ethnicity, immigration status, andlifestyle.62

Examples of cities that have noteffectively managed their culturalcapital abound. Because of their inabil-ity to manage their growing populationdiversity and its accompanying challen-ges, several cities, Los Angeles, Miami,and New York among them, have been sites of major civil disturbances,which have destroyed existing jobs anddeterred new business development(including tourism).63 For instance,nearly 100,000 jobs were lost in LosAngeles as a consequence of the 1992civil unrest, and two years later, only26,000 jobs had been created in therebuilding process, resulting in a net lossof 74,000 jobs. The job loss was con-centrated among people of color, andthe newly created jobs mainly benefitednon-Hispanic whites, so the rebuildingeffort served to exacerbate racial andethnic divisions in the city. This, in turn,further tarnished Los Angeles’s image.64

In other instances, local officials’cultural or racial insensitivity hastriggered the exodus of businesses. Forexample, on March 31, 2001, DeltaAirlines discontinued its Asia PacificGateway services at the Portland(Oregon) International Airport afterrepeated instances of foreign visitors onits flights from Japan being mistreatedby Immigration and NaturalizationService officials (for example, beingsubjected to strip searches without justcause). In terms of economic impact,local officials estimate that this insensi-tive and inappropriate behavior, whichstrongly influenced Delta’s decision todiscontinue the services, could cost thestate $900 million a year in lost revenue.It also has tarnished the city’s image,especially among foreign travelers from Asia, and earned it a new name,DePortland (a play on the word“deportation”).65

Social CapitalHighly competitive communities alsoinvest in their stock of social capital.For present purposes, “social capital” isthe contacts through which people main-

tain their social identity and receiveemotional support, material aid andservices, information, and new socialcontacts.66 Such support can beobtained from individuals (for example,immediate and extended family mem-bers, friends, and fellow members ofone’s ethnic group) and institutions (forexample, churches and community-based organizations). Highly competi-tive communities make substantialinvestments in an array of “bridging”institutions, such as the YMCA, theYWCA, and the Boys and Girls Club,which seek to knit a communitytogether and provide links to social

capital for residents, especially thosewho are socially and economicallydisadvantaged.

Highly competitive communities seekto build or rebuild social capital in aneffort to reverse the growing inequalityin U.S. society.67 Most of their effortsare designed to overcome the social andpersonal isolation that undergirds thisinequality.68

How do they do this? The govern-ment funds local institutions whoseresponsibility is to boost communityinvolvement. Also, along with private-sector employers, it advocates policiesthat promote civic engagement and

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Churches andother places ofworship arepart of acommunity’ssocial capital,offering socialidentity, emo-tional support,and humancontact.

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enable citizens to balance work, family,and community life better.69

In addition, highly competitive com-munities that use theirpolity capital to promoteand facilitate strategicalliances among gov-ernment, industry, anduniversities create aspecial kind of socialcapital. Such alliancesfacilitate the sharing ofknowledge across organ-izational boundaries andpromote the formation of trustingrelationships, which, in turn, lead totransorganizational “communities ofinnovation.”70

Discussion and Proposed Action Plan

The absence of any one of the six types ofcommunity capital discussed earlier canseriously encumber the ability of a mu-nicipality to compete in the new economy.Philadelphia has many of the necessaryingredients. On the positive side,

[t]here are thousands of highlyskilled workers, many first-class

universities and secondary schools,and large reservoirs of wealth tofinance a growing class of entrepre-

neurs. The region is,moreover, thick withsmall and medium-sizedbusinesses, enterprisesof practically everyclassification, withuntold opportunities foradditional growth. Andthere is capital—billionsof dollars held by banks,venture firms, pension

funds and others, available to financegood ideas.71

However, most of the Internet busi-ness “winds up in Philadelphia’s suburbs.”Why? Because, as noted earlier, “Phila-delphia’s taxes and business climate sendmost entrepreneurs across the city line.”72

Even where there are empowerment oropportunity zones, in which tax breaksare offered to lure new firms, those taxbreaks are offset by high rents for space.

Thus, to ensure that the full complement of capital is present, amunicipality’s polity capital has to bedynamic and flexible, not static orbureaucratic. To foster and enhance

community competitiveness, the localgovernment must assume the role ofmanaging partner. It must be prepared—almost on an ad hoc basis—to fosternetworks among key community stake-holders to address both long-term andemerging issues that affect the healthand the competitiveness of the com-munity in the economic marketplace.

Depending on the nature of the prob-lem, these networks may be industry- orsector-specific, ethnic based, or regionalin composition.73 In some instances theymay involve business leaders who arestaunch competitors in the local market-place. In highly competitive communities,leaders of competing businesses oftenwork together to solve local problemsbecause they recognize that their “co-opetition” or “competitive collabo-ration” will ultimately redound to thebenefit of their respective companies.74

In other words, it is a form of enlight-ened self-interest.

This type of collaboration has beenmost clearly manifested in Charlotte,North Carolina. The former chiefexecutive officers of Bank of America(Hugh McColl) and First UnionNational Bank (Ed Crutchfield), whowere otherwise fierce competitors in the

A community’stax structuresignificantlyaffects itsattractiveness toentrepreneurs.

To ensure that the full complement of capital ispresent, a municipality’s polity capital has to be dynamic and flexible, not static or bureaucratic.


financial services industry, over theyears worked together to improve thehealth of the city and the quality of lifeof its people. In large part because oftheir collaborative efforts, Charlotte hasbeen a magnet for people and jobs. Ofcourse, both banks have benefitedenormously from this growth.75

For North Carolina municipalities,developing their full complement ofcommunity capital is no longer anoption; it is a strategic imperative. Onthe basis of the successful application ofthe model presented in this article intwo locations (Gary, Indiana, andGrand Forks, North Dakota), I believethat North Carolina municipalities canprofitably pursue the following three-pronged action plan.76

First, they must critically assess thestrengths, the weaknesses, the oppor-tunities, and the threats (SWOT)inherent in their existing stocks of polity,financial, physical, human, cultural, andsocial capital. On the basis of the resultsof these community-level SWOTanalyses, they can develop coherentstrategies to enhance the attractivenessof their communities as places to liveand do business.

Second, since inadequate financialassets will be major obstacles to imple-menting the recommendations likely to have the greatest impact on theirfuture competitiveness, local govern-ment and community leaders will haveto acquire training and skills in civicentrepreneurship. Such training willequip them with the tools to pursue a wide range of entrepreneurialapproaches (cause-related marketingalliances, affinity programs, and so on)that might generate new streams ofrevenue. They then can use this revenueto implement the recommendations that emanate from the community-level SWOT analyses.77

Third, to level the playing field forcommunity and economic development,North Carolina municipalities mustdevelop and implement strategic plansthat will allow them to take betteradvantage of the emergence of informa-tion technology. Specifically, they muststrive to develop a state-of-the-art tech-nology infrastructure and viable plansand processes for creating knowledgeworkers, for making the transition to

smart government, and for forgingstrategic electronic partnerships thatlink them to the regional, national, andglobal economy.

To launch this threefold action plansuccessfully, North Carolina municipali-ties, particularly the most economicallydistressed communities, will needfinancial support from both state and national foundations. They alsowill need managerial and technicalassistance. The Institute of Governmentand the Kenan-Flagler Business Schoolat The University of North Carolina at Chapel Hill, and the North CarolinaRural Internet Access Authority, can

help provide the necessary technicalsupport. If the necessary resources arestrategically mobilized, this three-pronged action plan might serve as anational prototype for assessing andenhancing community competitivenessin the twenty-first century’s knowledge-based economy.

Notes1. Anne Adams Lang, Behind the

Prosperity, Working People in Trouble, THE

NEW YORK TIMES ON THE WEB, Nov. 20,2000, available at www.nytimes.com; TheProsperity Gap, BUSINESS WEEK, Sept. 27,1999, p. 162.

2. THE ATLANTA PARADOX (David L.Sjoquist ed., New York: Russell SageFoundation, 2000); BARRY BLUESTONE &MARY HUFF STEVENSON, THE BOSTON

RENAISSANCE: RACE, SPACE, AND ECONOMIC

CHANGE IN AN AMERICAN METROPOLIS (New

York: Russell Sage Foundation, 2000);LAWRENCE BOBO ET AL., PRISMATIC METROP-OLIS: INEQUALITY IN LOS ANGELES (New York:Russell Sage Foundation, 2000); ROBERT

CHERRY & WILLIAM M. RODGERS III,PROSPERITY FOR ALL? THE ECONOMIC BOOM

AND AFRICAN AMERICANS (New York: RussellSage Foundation, 2000); REYNOLDS FARLEY

ET AL., DETROIT DIVIDED (New York: RussellSage Foundation, 2000); THE INEQUALITY

PARADOX: GROWTH OF INCOME DISPARITY

(James A. Auerbach & Richard S. Belos eds.,Washington, D.C.: Nat’l Policy Ass’n, 1998).

3. Scott Martelle & Daniel Yi, DiversityComes with Division, LOS ANGELES TIMES,Apr. 15, 2001, p. B1.

4. Ben Fenton, Whites a Minority in about Half of Big Cities, CHICAGO SUN TIMES,May 1, 2001, p. 20; William Frey, The NewGeography of Population Shifts: Trendstoward Balkanization, in STATE OF THE

UNION: AMERICA IN THE 1990S, vol. 2 (R. Farley ed., New York: Russell SageFoundation, 1995); JOEL KOTKIN, THE NEW

GEOGRAPHY: HOW THE DIGITAL REVOLUTION

IS RESHAPING THE AMERICAN LANDSCAPE

(New York: Random House, 2000); JoelKotkin & Fred Siegel, DIGITAL GEOGRAPHY:THE REMAKING OF CITY AND COUNTRYSIDE IN

THE NEW ECONOMY (Washington, D.C.:Hudson Inst., 2000); Eric Schmitt, MostCities in U.S. Expanded Rapidly over LastDecade, THE NEW YORK TIMES, May 7,2001, p. A1; Eric Schmitt, The New UrbanMinority, THE NEW YORK TIMES, May 6,2001, § 4, p. 2.

5. Christopher Jencks & Meredith Phillips,America’s Next Achievement Test: Closingthe Black-White Test Score Gap, in THE

AMERICAN PROSPECT, No. 40, pp. 44–53(Sept.–Oct. 1998); Eric Schmitt, SegregationGrowing among U.S. Children, THE NEW

YORK TIMES, May 6, 2001, § 1, p. 20.6. Cincinnati, Ohio, and Irvington, New

York, where white police officers have beenaccused of killing unarmed African-Americanmales, serve as the most recent examples, butLos Angeles, Miami, and New York have allbeen tinderboxes of racial and ethnic strifeduring the past decade. Angered by Shooting,200 March in Irvington, THE NEW YORK

TIMES ON THE WEB, May 6, 2001, available atwww.nytimes.com; James H. Johnson, Jr., &Walter C. Farrell, Jr., The Fire This Time: TheGenesis of the Los Angeles Rebellion of1992, 47 NORTH CAROLINA LAW REVIEW

1403 (1993); James H. Johnson, Jr., et al.,Immigration Reform and the Browning ofAmerica: Tensions, Conflict, and CommunityInstability, 31 INTERNATIONAL MIGRATION

REVIEW 1055 (1997); James H. Johnson, Jr.,et al., The Los Angeles Rebellion of 1992: A Retrospective View, 6 ECONOMIC DEVELOP-MENT QUARTERLY 356 (1992); Eric Schmitt,Finding Embers in the Ashes, THE NEW YORK

TIMES, May 6, 2001, § 1, p. 20.

W ith support from the Golden Leaf Foundation, the Institute of Government

and UNC–Chapel Hill’s Kenan-FlaglerBusiness School are creating a modelof economic development that ruralcommunities can use to enhance theircompetitiveness. The model followsthe steps outlined in the accompanyingarticle. For more information, contactAnita Brown-Graham at (919) 962-0595 or [email protected].

MODEL FOR RURALCOMMUNITIES

w i n t e r 2 0 0 2 17

7. James H. Johnson, Jr., et al., NewlyEmerging Hispanic Communities: A SpatialAnalysis of In-Migration Fields, SettlementPatterns, and Social Receptivity, in IMMIGRA-TION AND OPPORTUNITY 263 (F. Bean & S. Bell-Rose eds., New York: Russell SageFoundation, 2000); James H. Johnson, Jr., et al., A Profile of Hispanic Newcomers inNorth Carolina, 65 POPULAR GOVERNMENT,Fall 1999, at 2.

8. ANDREW CUOMO, NEW MARKETS: THE UNTAPPED RETAIL BUYING POWER IN

AMERICA’S INNER CITIES (Washington, D.C.: U.S. Dep’t of Hous. and Urban Dev.,July 1999).

9. Mario Morino, Venture Philanthropy:Leveraging Compassion with Capacity in theNational Capital Region, Address to theWashington Reg’l Ass’n of GrantmakersAnnual Meeting (June 21, 2000); Bill Shore,The Other Lost World, WHO CARES: THE

TOOL KIT FOR SOCIAL CHANGE, Sept.–Oct.1997, p. 16.10. Donn Esmonde, Hard to Fathom Why

Cuomo Tour of Woe Leaves Out Buffalo,BUFFALO NEWS, Mar. 23, 1999, p. 1B;Abraham McLaughlin, Cities Prosperity HasPassed By, CHRISTIAN SCIENCE MONITOR,May 18, 1999, p. 1; Aaron Steelman, TheCity the Boom Left Behind, INVESTOR’S BUSI-NESS DAILY, May 14, 1999, p. A1; Bob VonSternberg, Booming Economy of the ’90sPasses Many Smaller Cities By, STAR TRIBUNE

(Minneapolis), June 20, 1999, p. 22A.11. L. SCOTT MILLER, AN AMERICAN

IMPERATIVE: ACCELERATING MINORITY

EDUCATIONAL ADVANCEMENT (New Haven,Conn.: Yale Univ. Press, 1995).12. Esmonde, Hard to Fathom; McLaughlin,

Cities Prosperity Has Passed By; Steelman,The City the Boom Left Behind; Von Sternberg,Booming Economy.13. Bob Warner, Trouble? Spell it T-A-X:

Philadelphia Structure Driving Entrepreneursto the Suburbs, PHILADELPHIA ONLINE, Feb. 29, 2000; Bob Warner, Taxes Are Notthe Only Reason for Flight Out of the City,PHILADELPHIA ONLINE, Feb. 29, 2000; bothavailable at www.philly.com.14. Warner, Trouble?15. Id.16. A Wharton Business School finance

professor estimated that the city’s wage taxwas responsible for “the loss of more than10,000 jobs between 1966 and 1986.”Warner, Taxes Are Not the Only Reason.17. Bill Bishop, Austin’s New Economy

Outpacing Its Old Government, AUSTIN

AMERICAN-STATESMAN, Feb. 26, 2000, pp. A1,A1. Examples of new-economy cities areAustin and Dallas, Texas; Nashville, Tennes-see; Chapel Hill, Durham, and Raleigh, NorthCarolina; and San Jose, California. AnneFisher, The Best Cities for Business, FORTUNE,Dec. 20, 1999, p. 214; KOTKIN, THE NEW

GEOGRAPHY.

18. Duluth, Minnesota, is an excellentexample of a city that has transformed aprogram designed to promote culturalexchanges—the Sister Cities Program, whichwas inspired by President Dwight D. Eisen-hower in 1956—into opportunities forbusiness development. Duluth has four sister-cities partnerships (with Thunder Bay, Ontario,Canada; Ohara, Japan; Petrozavodsk, Russia;and Vaxjo, Sweden), which reportedlygenerated $10 million “in direct revenue overthe last few years.” William H. Honan, SisterCities of the World Find a Common Cause,THE NEW YORK TIMES ON THE WEB, July 8,2000, available at www.nytimes.com.19. Stephen Goldsmith, Can Business Really

Do Business with Government? HARVARD

BUSINESS REVIEW, May–June 1997, p. 110.20. Carl M. Cannon, Charity for Profit:

How the New Social Entrepreneurs AreCreating Good by Creating Wealth,NATIONAL JOURNAL, June 17, 2000, p. 1898.21. James H. Johnson, Jr., & Keenya Toney,

Fostering Entrepreneurship, Job Creationand Community Development, 5 CAREERS

AND THE MINORITY MBA 54 (1997).22. JAMES H. JOHNSON, JR., ET AL.,

ENTREPRENEURIAL APPROACHES TO POVERTY

ALLEVIATION, JOB CREATION, AND

COMMUNITY DEVELOPMENT. FINAL REPORT

PREPARED FOR THE ANNIE E. CASEY

FOUNDATION (Chapel Hill: Urban Inv.Strategies Ctr., Frank Hawkins Kenan Inst. ofPrivate Enter., The Univ. of N.C. at ChapelHill, 2001).23. Joel Kotkin, Cities Need Leaders . . .

and Businessmen Are Indispensable, AMERI-CAN ENTERPRISE, Sept./Oct. 1998, p. 24;Philip Langdon, Nashville Rides a Wave andWonders Where It’s Heading, AMERICAN

ENTERPRISE, Mar./Apr. 1998, p. 34; RichardMinter, Why Do Boom Towns Boom?AMERICAN ENTERPRISE, Mar./Apr. 1998, p. 40.24. Joseph Cortright, The Economic Impor-

tance of Being Different: Regional Identity,Increasing Returns, and the Dynamics ofGrowth 11, 5 (unpublished manuscript,undated, Impresa, Portland, Ore.).25. Minter, Why Do Boom Towns Boom?

at 44.26. Id. at 45.27. Cortright, The Economic Importance,

at 5.28. Joel Kotkin, Capital of Capitalism,

AMERICAN ENTERPRISE, Oct./Nov. 2000, p. 2.29. Minter, Why Do Boom Towns Boom?

at 43.30. Id. at 42.31. Id. at 44.32. Social goals may include targeting

minority-owned companies, creating jobs forand providing training to people living in dis-tressed geographic areas, supporting environ-mentally friendly products, and meetingother socially conscious missions. Financialgoals may range from earning enough money

to support a particular program to achievinga market rate of return on investment.CDVCFs typically expect less return thantraditional venture capital funds do.33. JOHNSON ET AL., ENTREPRENEURIAL

APPROACHES TO POVERTY ALLEVIATION.34. Shore, The Other Lost World; Morino,

Venture Philanthropy.35. John D. Kasarda, Transportation

Infrastructure for Competitive Success, 50TRANSPORTATION QUARTERLY 35 (Winter1996); Aerotropolis: Airport-Driven UrbanDevelopment, in ULI [URBAN LAND

INSTITUTE] ON THE FUTURE: CITIES IN THE 21ST

CENTURY 32 (Jo Allen Gause ed.,Washington, D.C.: Urban Land Inst., 2000).36. Minter, Why Do Boom Towns Boom?37. Id. at 42.38. Kotkin, Capital of Capitalism, at 4. In

contrast to Dallas and Nashville, Boston,New York, Philadelphia, and Washington,D.C., have uneven highways, aging andcrime-ridden ports, and railroad tracks insuch poor repair that freight trains musttravel at half speed. Minter, Why Do BoomTowns Boom?39. John D. Kasarda as quoted in Kotkin,

Capital of Capitalism, at 4; see also Kasarda,Transportation Infrastructure andAerotropolis.40. Kotkin, Capital of Capitalism.41. John M. Eger, Cities: Smart Growth and

the Urban Future, SAN DIEGO UNION-TRIBUNE, Feb. 13, 2000, pp. G1, G1.42. Elaine Appleton, E-Town, USA, INC.

TECH 2000, No. 3 (2000), pp. 58, 58.43. Id.44. Id. at 61.45. Michael Hinkleman, For the People, on

the Net, PHILADELPHIA ONLINE, Feb. 29,2000, available at www.philly.com.46. As quoted in Kotkin, Capital of Capi-

talism, at 4; see also Kasarda, Aerotropolis.47. Mick Brady, The Dot-Com Delivery

Challenge, E-COMMERCE TIMES, Aug. 7,2000; Dan Gebler, Avoiding E-HolidayHeartaches, E-COMMERCE TIMES, Sept. 11,2000; Paul Greenberg, The DeliveryDilemma, E-COMMERCE TIMES, Dec. 23,1999; James M. Morrow, Holiday E-Commerce Growth Slowing, E-COMMERCE

TIMES, Sept. 18, 2000; Keith Regan, On theRoad with E-Commerce, E-COMMERCE

TIMES, Sept. 15, 2000; all available at www.e-commercetimes.com.48. Brady, The Dot-Com Delivery

Challenge.49. Brady, The Dot-Com Delivery

Challenge; Regan, On the Road.50. Regan, On the Road.51. Drew Robb, Plugging in to Electric

Procurement, GOVERNMENT TECHNOLOGY,Sept. 2000, available at www.govtech.net;Mark Roberti, Government: The StealthMarket, THE STANDARD.COM, June 12, 2000,available at www.thestandard.com.


financially as Japanese tourists literallystopped visiting Los Angeles.65. Chris Barnett, Portland Forwarders

Upset by Delta Termination of Japan Service,JOURNAL OF COMMERCE ONLINE, Mar. 30,2001, available through LEXIS-NEXIS;Florangela Davila, Hard-Line INS under Fire in “Deportland,” SEATTLE TIMES, Sept. 11, 2000, p. B5; DELTA AIR LINES

INC/DE/ (DAL), QUARTERLY REPORT (SECForm 10-Q), Nov. 14, 2000, available athttp://sg.us.biz.yahoo.com/; Nancy Fonti,Delta Disbanding Gateway to Asia fromPortland, Ore.; Japan Flights to End: WestCoast City Will Become a Destination Servedfrom U.S. Hubs, ATLANTA JOURNAL AND

CONSTITUTION, Sept. 7, 2000, p. 3G; SamHowe Verhovek, Portland ImmigrationOfficial Resigns amid Furor, THE NEW YORK

TIMES ON THE WEB, Sept. 20, 2000, availableat www.nytimes.com.66. Walter Kiechel, The New New Capital

Thing, HARVARD BUSINESS REVIEW, July–Aug.,2000, p. 149; David Moberg, Not QuiteBowled Over, IN THESE TIMES, Jan. 22, 2001,p. 27; ROBERT PUTNAM, THE COLLAPSE AND

REVIVAL OF AMERICAN COMMUNITY (NewYork: Simon & Schuster, 2000).67. James H. Johnson, Jr., & Walter C.

Farrell, Jr., Growing Income Inequality inAmerican Society: A Political EconomyPerspective, in THE INEQUALITY PARADOX:GROWTH OF INCOME DISPARITY (J. A. Auer-bach & R. S. Belous eds., Washington, D.C.:Nat’l Policy Ass’n, 1998); BOBO ET AL.,PRISMATIC METROPOLIS.68. Sue Pleming, Isolated Society Called a

Blow to Community, HOUSTON CHRONICLE,Dec. 24, 2000, p. A1.69. Id.70. Elias G. Caragyannis et al., Leveraging

Knowledge, Learning, and Innovation inForming Strategic Government-University-Industry R&D Partnerships in the U.S.,Germany, and France, 20 TECHNOVATION,No. 9 (2000), available through LEXIS-NEXIS. David Leonhardt states that, owingto Minneapolis’s development of suchalliances, if any American city can reverse thegrowing wage inequality of the past twodecades, Minneapolis can. He goes on todescribe training programs that the city hasdeveloped via university/private-sectorpartnerships, that are designed to enablepeople to get better jobs that pay higherwages—to reduce the gap between the havesand the have-nots. Minneapolis Shows theWay, BUSINESS WEEK, Sept. 1, 1997, availableat www.businessweek.com.71. Andrew Cassel, The Philadelphia

Inquirer Andrew Cassell Column,PHILADELPHIA INQUIRER, Mar. 6, 2000,available through LEXIS-NEXIS.72. Id.73. Kotkin, Cities Need Leaders.74. JOHN K. CONLON & MELESSA

GIOVAGNOLI, THE POWER OF TWO: HOW

COMPANIES OF ALL SIZES CAN BUILD ALLIANCE

NETWORKS THAT GENERATE BUSINESS

OPPORTUNITIES (San Francisco: Jossey-Bass,1998).75. In a recent CHARLOTTE OBSERVER article

announcing the retirement of a senior vice-president who headed Bank of America’sCommunity Development Corporation,another bank official reaffirmed the bank’scommitment to the local community bymaking the following observation about the new chief executive officer, Ken Lewis:“Ken is dedicated to building our citiesthroughout our franchises. . . . He under-stands that Bank of America grows best when we grow along with the communitiesthat we serve.” David Perlmutt, Bank ofAmerica Executive to Retire after 23 Years,CHARLOTTE OBSERVER, Jan. 31, 2001,available at www.charlotte.com. The newchief executive officer of First Union has made similar statements about its commit-ment to the local communities in which itdoes business. Both banks, for example, aremajor investors in a new CDVCF, the Eco-nomic Opportunities Fund, which has beenestablished to foster rural economicdevelopment in North Carolina.76. JAMES H. JOHNSON, JR., ASSESSING

COMMUNITY COMPETITIVENESS IN GRAND

FORKS, NORTH DAKOTA. REPORT PREPARED

FOR THE JOHN S. AND JAMES L. KNIGHT

FOUNDATION (Chapel Hill: Urban Inv.Strategies Ctr., Frank Hawkins Kenan Inst. of Private Enter., The Univ. of N.C. at Chapel Hill, June 2001); JAMES H. JOHNSON,JR., & WALTER C. FARRELL, JR., ASSESSING

COMMUNITY COMPETITIVENESS IN GARY,INDIANA. FINAL DRAFT REPORT PREPARED

FOR THE JOHN S. AND JAMES L. KNIGHT

FOUNDATION (Chapel Hill: Urban Inv.Strategies Ctr., Frank Hawkins Kenan Inst. of Private Enter., The Univ. of N.C. at Chapel Hill, Feb. 2001).77. The University of North Carolina at

Chapel Hill currently offers such a trainingprogram, the Management Academy forPublic Health. A joint venture of the Schoolof Public Health and the Kenan-FlaglerBusiness School, it trains hundreds of stateand local public health managers in fourstates (Georgia, North Carolina, SouthCarolina, and Virginia) in the core functionalareas of business (for more information, visit the program’s Web site, www.maph.unc.edu). This program can easily be adapted to train local government andnonprofit officials throughout the state. For example, recognizing that there are state-imposed constraints on local govern-ments’ ability to be entrepreneurial, theprogram could be revised to address thoseconstraints and identify the areas in whichlocal governments have substantial leeway to be entrepreneurial.

52. Warner, Trouble?53. Appleton, E-Town, USA, at 61.54. Building Regional High-Tech Industry

Clusters Requires Top Research FacilitiesNearby, Milliken Institute Study Finds,BUSINESS WIRE, Aug. 10, 2000, available atwww.businesswire.com.55. Mike Pramik, Tech Sweepstakes:

Midwestern Cities Compete to Be the NextSilicon Valley, COLUMBUS DISPATCH, Apr. 30,2000, available through LEXIS-NEXIS. Howdo communities that do not have cutting-edgeresearch facilities and top-notch educationinstitutions enhance their competitiveness?The National Commission on Entrepreneur-ship advocates “enterprise facilitation,” apeople-based approach that seeks to build onthe passion that exists in these communitiesfor building new businesses (see EnterpriseFacilitation: Bringing Entrepreneurship to theHeartland? NCOE UPDATE, No. 36, Aug. 6,2001, available at [email protected]). I advocate a parallel approach for NorthCarolina municipal leaders, especially thosein communities that lack research facilitiesand higher education institutions: that theybe trained in civic entrepreneurship, which isdesigned to enhance their entrepreneurialacumen and business skills.56. James M. Morrow, Study: “Net

Illiteracy” to Plague U.S., E-COMMERCE

TIMES, Oct. 2, 2000, available at www.e-commercetimes.com.57. Michael Elliot, The Big Test, NEWSWEEK,

Sept. 6, 1999, p. 54.58. WILLIAM J. BENNETT ET AL., BODY

COUNT: MORAL POVERTY . . . AND HOW TO

WIN AMERICA’S WAR AGAINST CRIME AND

DRUGS (New York: Simon & Schuster, 1996); LAWRENCE E. HARRISON, WHO PROSPERS?HOW CULTURAL VALUES SHAPE ECONOMIC

AND POLITICAL SUCCESS (New York: BasicBooks, 1992); THOMAS SOWELL, RACE AND

CULTURE: A WORLD VIEW (New York: BasicBooks, 1994).59. Kotkin, Capital of Capitalism, at 3.60. Greenspan and Latta as quoted in

Diane E. Lewis, Stop Bias, BOSTON GLOBE,Mar. 23, 2000, pp. D2, D2.61. Johnson et al., Newly Emerging

Hispanic Communities; Frey, The NewGeography of Population Shifts.62. KOTKIN, THE NEW GEOGRAPHY.63. Johnson et al., Immigration Reform.64. James H. Johnson, Jr., et al., Assessing

the Employment Impacts of the Los AngelesCivil Unrest of 1992: Further RacialDivision, 11 ECONOMIC DEVELOPMENT

QUARTERLY 225 (1997). Another Los Angelesincident illustrates the impact of a commu-nity’s failure to manage its cultural capitaleffectively: Following the brutal murder oftwo Japanese students in a grocery storeparking lot, shopkeepers on Rodeo Drive inBeverly Hills—twenty-odd miles away fromthe scene of the crime—were affected

Documents

Enhancing the Competitiveness of North Carolina Communities