(bright music) - [Announcer] This is Carolina Business Review.

Major support provided by Colonial Life, providing benefits to employees to help them protect their families, their finances, and their futures; High Point University, the Premier Life Skills University, focused on preparing students for the world as it is going to be; Sonoco, a global manufacturer of consumer and industrial packaging products and services with more than 300 operations in 35 countries.

- It is always fun to be number one, right?

A winner.

For the last two years, North Carolina has been the top state for business, according to a CNBC survey.

Recently though, it has dropped to number two.

Someone might call that a first class problem.

Welcome back to the program, and we will be welcoming back now the Chief Economic Development boss, the Honorable Secretary of Commerce, Machelle Sanders.

Stay with us.

- [Announcer] Major funding also by Truliant Federal Credit Union, proudly serving the Carolinas since 1952 by focusing on what truly matters, our members' financial success.

Welcome to brighter banking.

BlueCross BlueShield of South Carolina, an independent licensee of the BlueCross and BlueShield Association.

And Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

(bright music) On this edition of Carolina Business Review, an executive profile featuring Machelle Baker Sanders, North Carolina Secretary of Commerce.

(upbeat music) - Welcome to our program, Your Honor.

Welcome back to the program.

You are a delight to have on the program.

Just speaking before the show, and you've got a very upbeat, and I knew that about you, but thank you for taking time.

- Glad to do so.

Thank you.

- So big headlines recently, and I don't know how much it affects you, but how does it affect you that North Carolina, for a long time, at least the last two or three years, has been number one state for business according to CNBC?

It was a big thing.

It is a big thing, but now dropped to number two, right behind Virginia.

Does it make your job harder?

- Well, first, let me say, we are proud to be one of the top states in the nation to do business.

And it has been two consecutive years that North Carolina has been named the best state to do business.

Seeing that we are number two and realizing we're in the top, that is still a good feeling.

However, it does remind us we need to continue doing the things that we've been doing to be in the top and double down on that.

States that are in the top are laser focused on education, laser focused on infrastructure, and I believe must be laser focused on the quality of life that residents and businesses and employees and communities experience in the state.

And so, as you know, North Carolina has been on a, I would say a rocket of growth, a lot of economic growth, a lot of job announcements, a lot of migration of people to the state.

And so we are going to have to double down on those areas.

Now, the CNBC rating dinged us, if you will, on infrastructure, the utilities, water and electric.

I believe in the article, it mentioned that North Carolina, and this is a cite in by U.S. EPA, has billions of dollars of maintenance and repairs to the infrastructure, the water infrastructure.

And then we also saw a citing from U.S. Energy Administration that North Carolinians go about eight hours a year without the utilities.

And so those type of infrastructure challenges don't get easier with the growth that we have seen.

So we are gonna have to continue to invest, continue to be laser focused on infrastructure, on the quality of life, things like education, healthcare, housing, and also be mindful that growth is a good thing, but it does come with challenges.

We recognize that.

But you know what, Chris?

I believe that along this journey for North Carolina, if we continue to do that, if we're able to get to a point where we can be more proactive about that infrastructure, I believe that North Carolina will not only be recognized as a top state and the best place to do business as we have been, I think we are gonna be recognized as the best place to do business in the world.

We have global companies that come to us, not by chance, but for the assets that we have to offer.

And it won't happen before the end of my turn (laughs) with Governor Cooper.

But I believe it will happen.

- Well, and I'm gonna wanna get to that, because the Japanese delegation, the top of the house in Japan was in North Carolina.

I do wanna do that.

Before we do that, let me tease out the idea that you brought up, Madam Secretary, around the energy issue.

Your counterpart in Carolina, whom I know you know well, Secretary Harry Lightsey said that he believes, and he sees that there's a looming energy crisis.

That was his quote when we were talking about not just the cost in holding down the cost of electricity in North Carolina and South Carolina to be competitive around economic development, but he said there's a looming crisis.

And if that's been identified for North Carolina against Virginia in this case, do you share his sentiment that the energy part is maybe a bigger issue than just a passing grade that we didn't pass?

- I agree with Secretary Lightsey that it is an issue that we must address immediately.

I also believe that infrastructure in and of itself is a looming crisis with the growth that we've seen.

So that's one of the reasons that we have been so grateful for the Biden-Harris administration and the bipartisan law and the Infrastructure Reduction Act that was passed, because North Carolina has been the recipient of those funds.

And in infrastructure, I'd also wanna highlight that North Carolina has been a leader in the clean energy space.

So we have led the way on that.

Governor Cooper has put forward directives to not only move us to a cleaner economy, but for us to tap into that cleaner economy by creating more jobs, developing the workforce for it.

So Secretary Lightsey's comment about needing the attention and surely being focused on the infrastructure, whether that's water, utilities, energy, that's not only the smart thing to do, it's the most prudent thing we can do in the best interest of the state and the residents of the state.

So I agree.

We have to have investments, deep investments.

And I think that the engagement at the local level as well as the state level is important.

And then to also partner with the business community, this private-public partnership can come into play even in addressing the infrastructure challenges that we have today and that we know are gonna continue with the growth that we're seeing.

- I realize you're not an industrial engineer, Madam Secretary.

Can solar and can wind, offshore wind off North Carolina's coast or solar farms in North Carolina, can that make up a gap, enough of a gap, for energy use and consumption in North Carolina?

- I don't know if it can make up enough of a gap for energy use in North Carolina.

What I do know is that North Carolina can play a vital role in the clean energy economy.

It's a large supply chain.

We have the talent here for manufacturing.

And so whether we are manufacturing one of the 8,000 parts for a turbine, or whether we are actually in a position that we can have those offshore wind assets or not, we are surely in a position that we can be a main contributor to that space.

And so that's why we're working so hard with Offshore Wind to build the acumen as well as to build an ecosystem that we can participate in the supply chain and participate in the billions of dollars that's available for economic development.

We have a commission that was endorsed and enacted by Governor Cooper through his executive order called Towers.

That commission is solely focused on offshore wind, positioning North Carolina so that we can grow into that space and so that we can contribute.

But whether or not we are in a position or we'll get in a position, I'd say, in the next 5 to 10 years to be able to close that gap, I'm not sure about that, but I am sure that we can contribute and do our fair share to help North Carolina be a key player in the space.

- Secretary Sanders, the idea that, and I'm gonna take a little bit of a jog, lean left or right, however, what seemed to be a surprising win for people that maybe don't follow economic development as much as not just you, of course, you're at the center of it in many ways, but the idea that now North Carolina has entered into a big way into the EV battery belt.

Toyota, almost a $14 billion investment, thousands of jobs.

Toyota Battery.

We've had Sean Suggs on this program recently.

What were some of the internal dialogues that led us to become such a big, or let the Carolinas and specifically North Carolina, become such a big player in the manufacturing of those batteries?

- Yeah, so back to those investments, North Carolina has invested in our infrastructure for a long time.

Those investments have played well to the point where we have sites, we had sites, when Toyota looked at their sites, they felt that North Carolina was a site that they could get up and operational within the timeline needed because of previous investments.

We have the talent.

North Carolina has the largest manufacturing talent pool in the southeast.

We have well over half of a million manufacturing here.

So that is an attraction.

Back to the quality of life.

It's unparalleled and unmatched the quality of life that we can offer in North Carolina.

And so the ecosystem here is a place that not only companies like Toyota can be successful, but other sectors can be successful as well.

The other thing, I believe, that has been an attraction for EV companies is that through the governor's leadership, we have not only signaled that North Carolina is a player in the clean energy economy, that we want those type of good paying jobs here and that we can support that.

But we have shown that through bipartisan legislation in North Carolina around energy and a clean energy economy, reducing the emissions and going to zero neutral, if you will, environment.

And working towards that.

So, so much so that we are now recognized as the EV belt, I believe.

- [Chris] Right.

- EV battery belt.

And that is right here in the Carolina core region and right here in North Carolina.

And Chris, we are quite excited about it, not only for Toyota and Wolfspeed and those companies that come here in this space, the clean energy space, but they have that multiplier effect.

So their suppliers are locating here, their vendors and contractors are locating here, not only contributing to the economy and the tax space, but most importantly, adding good-paying, family-sustaining jobs for the residents in North Carolina.

- So how do you solve for jobs?

Because jobs and finding good talent has always been kind of that outlier.

When there's a new economic development announcement, then there's a bunch of jobs coming, but everybody knows there's a headwind to find talent.

Have you solved for jobs?

- It is a headwind to find talent.

What we have done, recognizing that workforce and labor supply is a global issue.

We're no different than any other place in the world.

But what North Carolina has done has doubled down on its efforts.

And when I was appointed to the role of Secretary of Commerce, we took a keen look at our strategic economic development plan, had conversations, incorporated stakeholder feedback from across the state.

And at the end of that, realized that our number one asset is our talent.

And that we needed to have a strategic development plan that's quite different than the traditional, which talks about infrastructure, yes, incentives, site selection, but we needed one that is based on the talent, the people in the state.

How do we bring the talent to meet the business needs?

How do we re-skill, how do we retool, how do we work in a way that we have a more inclusive economy?

And that was in the heat of the pandemic, and recognizing that we needed to pivot and do something new, different, more effective for the time that we were in.

So our focus has been and is talent in the strategic development, economic development plan.

It's called the First in Talent Plan.

- [Chris] First in Talent Plan.

That was the one you rolled out at the beginning.

- Yeah, so it includes strategies that stakeholders across the state have participated in and are involved in.

And fortunately, we have seen response.

Do we still have challenges with workforce development?

Yes.

One of the challenges is something that's near and dear to my heart as the daughter of retired educators and as a graduate of the public education system.

Public education is workforce development.

If you look at the ratings, the CNBC ratings, one thing that stood out to me about Virginia is that their education system was ranked highly.

- Higher than North Carolina's public system?

- Higher than North Carolina's.

Now, this is the year of public education and has been proclaimed that by the governor.

And the reason and the timing for that is important and is perfect.

We will not continue to be successful as a state without investment in public education.

Public education is workforce development.

Workforce development is economic development.

And you cannot have economic development without workforce development, the challenge we're dealing with right now.

So that's very important.

It's striking to me, and it also tells me we have a lot more work to do in this space, but North Carolina invests less of its GDP in public education than any other state in our nation.

We are 46th in beginning teacher pay in our nation.

Those data points matter when it comes to solving the gap and the crisis that we are seeing in North Carolina on our workforce development needs.

- When you couch what you just said in terms of economic development, is it more readily heard in the general assembly?

- I believe that priorities are reflected in our budgets.

The governor has put forward a budget and does, and then the legislature has a budget.

Hopefully, they're aligned, but usually, , there's some differences there.

And so if we look back over time at the investments in public education, it does not give me a level of comfort nor confidence that the legislative branch sees public education as a priority.

So I think that that is something that everyone can look at as public information and can kind of fact check that.

But where does North Carolina invest its funds?

And where are the investments today when it comes to education?

And how effective have those investments been?

Now, we can look at where we rank and we can look at test scores, and that tells us how effective and it gives a very good measure of our investments in public educations.

And I understand there's a lot of variables to that.

But the bottom line is, we must invest in public education.

We must advocate for that.

I believe we must vote for elected officials who want that.

And then we have to work with the community college system, the public education system.

As I have visited schools, there's a lot of great work going on in North Carolina public education, and we need to get more out of that return.

- Sorry to interrupt you.

- No worries.

- Closely related to that, which I know you're sensitive to, and how do you do this, not just as Secretary of Commerce, but as a leader in North Carolina education, what is called a childcare crisis and also what's called affordable housing and all these things play into talent.

And trying to get talent in the right places at the right time.

So how does commerce plug into a childcare crisis, and how does it plug into finding affordable homes?

- Right.

Those points that you mentioned are all required for a thriving economy.

How we plug into childcare, I have recently hired our first childcare liaison in commerce.

And the childcare liaison is responsible for working with companies as they are evaluating North Carolina.

And surely, once they move to North Carolina, to identify ways to make childcare more accessible to their employees who are the residents of this state.

Childcare is a crisis.

Look, I get it.

I understand it because I have twin daughters myself, and 30 years ago, my family made a decision that I would be a stay at home mom because the cost of childcare for two was gonna be more than- - [Chris] 30 years ago?

- 30 years ago.

The family income that we had at the time could manage and come out in the positive, I'd say.

So I understand that.

I understand the need for it, the importance of it, and how it enables you to go back to work or to be in the workplace when you have safe childcare.

So childcare is vitally important.

That's one of the things that we have done in commerce.

We are also advocating across the state with companies.

Toyota is a good example of one that's gonna offer childcare.

We are excited about being able to hold that up as a model.

- I was gonna say, could that be a model for us?

- Yeah.

We're really pleased about that.

We've also been working with and supportive, of course, of the work that the governor has put forward in his budget for childcare stabilization.

And over $300 million that he put forward, the legislature did pass legislation, and I believe the support for that was around 65 or 75 million.

So doesn't quite meet the mark of the request and it's the beginning.

But we are hopeful that the legislature will come back at some point and close that and put forward the other 230 million, because that money is gonna help families to subsidize childcare, it's gonna help offer training and stability for childcare workers who we know are needed and there's a shortage of.

And most importantly, it is gonna enable workers to go to work and go to work and rest assured, for the most part, that they have care for their children in a safe, quality place that can offer them workforce development, because those children in childcare will be filling a job.

So childcare is workforce development.

- I'm not laughing at you, ma'am.

I'm laughing 'cause you sound like you're running for governor.

Would you run for governor?

Would you ever think about that?

- Would I ever think about that?

You never know.

- Okay.

- You never know.

But right now, as a Secretary of Commerce and working for great governor like Governor Roy Cooper, what that has shown me and kind of reemphasized to me, having been in government, is that it is an opportunity to make a difference, to advocate for policies like childcare stabilization, and most importantly, to help the families in our state go to work and engage in the economy.

- We literally have about a minute and a half left.

You were one of the first, out of the gates, diversity, equity, and inclusion.

You included it in a major agency in a state.

You came out with that, and the trail on that has got a little cold, not yours, but momentum's been lost.

How do you keep DEI alive?

Do you keep it alive, or has it found some stabilization within the structure?

And you have about a minute and a half.

- Look, Chris, I will always keep diversity, equity, inclusion alive.

Diversity, equity and inclusion is the answer for innovative solutions.

Every company wants innovative solutions.

Every company wants to set themselves apart, and every company wants their bottom line positive.

You cannot get that without tapping into diverse perspectives, backgrounds, and people.

You cannot get that without having an inclusive economy that includes and works for everyone.

Whether those are people with previous justice records, people from urban or rural, black, white, Asian, whatever the diverse spectrums are, a diverse economy and an inclusive economy that works for everyone is not only gonna propel the state forward, it will propel the nation forward, and it will set us apart from any other location around the world.

Without it, we will fail.

Diversity, equity, and inclusion is non-negotiable.

- That'll be the last word.

Your Honor, thank you for taking time.

Thank you for your passion and your leadership around development and around community development.

We're grateful to have you here, and thanks for being on the program.

- Thank you for the opportunity.

- Thank you.

Just a final program note, and we've been trying to do this, but this is special.

Sonoco has been an underwriter for this program for many years.

Almost 30, actually.

And it was because of a guy named Charlie and his wife Joan Coker.

And that name certainly means something in South Carolina.

It's an important family, but they're important to Sonoco and Sonoco has been important for us.

So we wanna say, Charlie Coker recently passed, and certainly, our deepest sympathies to the family.

But thanks to Sonoco for underwriting this program, helping us bring dialogues like Secretary Sanders to this, and also dialogues over the years, thousands of them.

We're grateful to Sonoco for that and our other underwriters.

More to come.

Till next week, I'm Chris William.

Hope your weekend is good.

Goodnight.

- [Announcer] Gratefully acknowledging support by Martin Marietta, BlueCross BlueShield of South Carolina, Truliant Federal Credit Union, Sonoco, Colonial Life, High Point University, and by viewers like you.

Thank you.

(upbeat music)