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- In spirit, this summer season in the Carolinas is now squarely behind us.

No doubt, we are looking head to, well, maybe not, but looking ahead to school, football games, fall activities for sure, and in general, refocusing on things that reemerge for us as important to community.

Welcome, again, to the most widely watched and the longest running program on Carolina business, policy, and public affairs, broadcast every week across North and South Carolina for more than three decades.

We will be unpacking some of these most key issues with our panel.

And later it is a 65-year-old institution that was the anchor tenant when North Carolina's iconic Research Triangle Park was established.

RTI International is one of the largest research facilities that maybe you've never heard of.

We start right now.

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

(energetic music) On this edition of Carolina Business Review, Kit Kramer from the Asheville Area Chamber of Commerce.

Carl Blackstone from the Columbia Chamber, and special guest, Tim Gable, President and CEO of RTI International.

- Hello, welcome to again to our program.

So Carl, Kit, good to have you both here.

Kit's been a while, but thank you.

Thanks for making the trip.

- Well, I'm happy to do it.

- So here we are, and I'm gonna call it the shoulder season.

You know, just passed Labor Day.

We're heading into the fall now.

Carl, we had Dwayne Parrish from South Carolina Parks, Recreation, and Tourism on about the single largest industry in South Carolina, of course, is tourism.

Banner year so far in 2023.

Heading into the fall, it looks like you're gonna have momentum, and I know this is a little outside of your purview, but not far.

Would you expect, is there going to be flat next year?

Is tourism now because of prices and inflation and all that?

What's your forecast for next year?

- I think they're cautiously optimistic.

We've had great years post COVID on tourism.

Charleston still gets all these accolades, so everybody's flocking down there.

I think it's going to be another good year.

I know they're watching it carefully to see what the national economy is, but things are good right now in the southeast and I think still people will come and visit.

- And that doesn't worry you, that things continue to be good?

I mean, you waiting for another shoe to drop?

- That's our DNA, right?

To always worry.

But I feel really good.

- Yeah.

Okay.

And Kit, so shoulder season means fall, leaves in the mountains and along the spine of the Blue Ridge Parkway, obviously.

Are you expecting Q4's gonna be pretty good?

- Oh, I think it will be.

We've been a little soft this summer, which has been puzzling.

But I was telling Carl earlier that I think maybe we have pent up demand that has been going to Europe and to other countries.

We saw a lot of those people at the first blush of recovery from the pandemic.

And so I think we may be seeing some of that.

So, we know it's beautiful in Asheville.

If anybody is hot, they need to come our way.

It's beautiful.

- Yes, it is.

- So let's unpack the whole idea of an economy and go a little bit more broadly with this.

Are you hearing from your members, do you have discussions internally, that if there is a slowdown, if there is a recession, that there's a lot of concern about that?

Or is it a meh moment?

- They're pretty focused right now on producing product and working.

I mean, they- - Just keeping up?

- It's busy.

Obviously there's some pressure on trying to find a workforce and those type of things.

It has not slowed down in the midlands of South Carolina, in most parts of South Carolina it's not slowed down.

I do think other parts of the country are gonna feel it worse than we will.

I do think the regional idea, or maybe a industry-specific slowdown is more real than a overall slowdown.

There is pent up demand and a lot of work going on right now in the midlands of South Carolina.

So I don't think people are worry too much right now.

- Yeah.

Ms. Kramer, what do you think?

- I think people are making hay while the sun's shining.

And I also think that I don't hear as much about a slowdown as I hear about the need for a workforce, the need for affordable housing for that workforce.

The need for childcare for their kids and for the people that they recruit.

So that's where the focus has been from my members.

- Are these gonna be, that's a good question Kit.

So we have talked about what's called affordable housing, but workforce housing.

is that the Achilles heel, even in the Carolinas?

- Oh, it has been our problem for 40 years.

It's been exacerbated.

We had people during the pandemic buying houses, sight unseen and coming from markets that were much more expensive.

So they've exacerbated the situation for us.

We're happy to have them, happy to have their money, but it's exacerbated.

We just don't have enough inventory.

- So as, as Kit talks about this, Carl, it's been going on for 40 years in the mountains of North Carolina.

If it's been going on that long, is it really a crisis, or is it a challenge, or is it a crisis right now?

- I think it's been a problem and it's been exacerbated to a crisis, especially in the upstate low country of South Carolina.

Unbelievable growth.

Affordability.

What is the travel distance to get to work?

It's a big concern for the folks in the low country.

We're seeing that now in Columbia as well.

So affordability is an issue.

I will also piggyback, that childcare issue is significant.

We're seeing new industries now that are looking to locate in South Carolina are adding that to their portfolio, is adding childcare on sites because you're not seeing it.

In fact, childcare costs are double the inflation right now.

So it's really hitting those lower income, the manufacturer workers, blue collar workers harder than anybody else.

- So is the childcare addition, childcare service on site at an organization, and you gotta have some critical mass to do that, right?

You can't- - Exactly.

And I don't have that as much in Asheville because, I mean, we love being authentic and local and small in terms of business size.

There are downsides to that.

And one is that, so we've begun to talk with some of our larger entities about purchasing slots for children and in an effort to help the entire community afford childcare slots.

- Are there, just quickly.

But is there capacity to purchase slots for companies that don't have the infrastructure to do it?

Are there even facilities to do that with?

- There's not enough facilities.

More importantly, they can't find workers in the daycare facilities to offset it.

- So we're back to workers.

- That's the issue.

- It's workers.

- And so I think it's more going to be in the next few years, we've always looked to see what our employee benefits look like post-COVID, when you have remote workforce.

If you want people back in the office, you're going to have to make them feel like they have everything they need.

Childcare is gonna be part of that equation.

- Let's shift gears a little bit.

So Supreme Court of the United States over the summer ruled against affirmative action being in consideration for college admissions.

We got that.

There's been some actions around that.

But it looks like kind of the bell's been rung and you can't unring that bell.

We've heard anecdotal evidence, we haven't done a lot of research on it, but we have heard some stories that corporations now are using this, and I call the term cover, for them to consider how to modify some of their DEI considerations around equity hiring.

Among your members, are you seeing any of the for-profit, now considering what has been mandated from the Supreme Court to higher ed?

Is any of this bubbling up?

- We've not heard a bit.

I mean, obviously people taking notice of what the Supreme Court has done, but it's not reverberated down into my members at all.

I've at least I've not heard it.

If they're having those conversations, it's probably the national, the larger firms, larger corporations talking about it.

But it is not trickled down.

- We're not hearing it either.

Although it's a trend that I'm worried about, between now and the presidential election.

Political polarization has been a pattern that we've seen across the country.

I hope we don't get dragged into it.

We wanna focus on jobs.

- You mean we as being you in Asheville?

- We, in Asheville, wanna focus on jobs.

We wanna focus on workforce issues, childcare, affordable housing.

That's what we'd like some to hear about solutions for.

And I'm hoping that's the way it will go, but I fear it's not gonna be that way.

- So Carl, about 30 seconds.

South Carolina can't help but be on the front of this.

First primary in the Democrats for the Presidential election is going to be in South Carolina.

How can you not have this part?

- No, it's about to be the funny season.

And we've got two South Carolinians running for President.

We just had the former president last week in town to speak.

Let's just say heightened awareness of politics is right here.

- Who's polling better?

Haley or or Tim Scott.

- They're about the same within the state.

Trump is far ahead.

- Isn't that amazing, you know.

But there's more discussion with that one.

We're gonna leave it there.

Thank you.

Stay with us.

We're gonna meet our guests in a moment.

Before we do that, taking about South Carolina, we're gonna unpack some things around the Department of Education and Workforce with DE and South Carolina DEW's executive director William Floyd will be our guest on the show.

And also coming up on this program, it was highlighted as the single largest economic development project to date.

it is Wolfspeed's $5 billion project in North Carolina.

The CEO, Greg Lowe from Wolfspeed will also be joining us.

Our special guest is the CEO of what their website describes as, and I quote, "One of the world's leading nonprofit research institutes with 6,000 staff in more than 90 countries, working to improve the human condition," end quote.

That seems that they're fairly expansive and a meaningful organization.

Their core product is producing research in key areas like innovation, justice and policy, education, healthcare, to name a few.

The question is, to what end?

Joining us now is the President, Chief Executive Officer of RTI International, Tim Gable.

Mr. CEO welcome to the program.

- Thanks for having me.

It's great to be here.

- Yeah, so Tim, you've been with RTI, in all fairness, for four decades.

So you're part of the DNA.

You've seen this happen.

So back to the point of this very large contract research organization, you are producing research in all of these fields.

What's your end goal?

What are you doing?

- Well, as you said at the beginning, our mission statement is to improve the human condition by turning knowledge into practice.

And our role in the ecosystem of research and development is really about how do we take the innovations, the research that gets done, the new findings, and turn that into either policy change, or practice change, or best practices, that can really have a positive impact on people across the world.

- And let me ask you this question, and I think I know the answer to it, but I think it's worth asking.

How do you produce core, meaningful research that will impact policy without it becoming political?

- That is a great question.

(both laugh) We live in a very polarized world, as we know.

one of our core values in our organization is objectivity.

And we lead from the place of science.

We lead from the place of data.

This is what the data say.

About 80% of our funding comes from the US Federal Government in terms of underwriting the cost of the research that we do.

And so for us, in some ways, we're living in that political arena, but we stay away from the political arena.

We believe in the science, we believe in the data, and we believe in transparency of methods and the results, but shaping those in a way that can make a positive difference.

- Yeah, okay.

Carl?

- Hey, good to be with you today.

In this world of AI and everybody's starting to learn and hear more about artificial intelligence and what that has long-term ramifications.

What does that mean for you running a very large research organization?

What safeguards are you talking about as far as it relates to artificial intelligence?

- Yeah, it's a great question, Carl.

You know, for us, technology and innovation has been at our core for a long time.

And so in some ways it's just a continuation of what we've always tried to wrestle with.

I think the ethics of AI are going to be very different.

The ability to have transparency around the algorithms that are underneath and how do these results get developed, that's something that we've got our own taskforce looking at.

We've got researchers that are publishing on that area.

But there's great promise in our business to think about routine tasks that can be done more efficiently and more effectively by automation.

And also thinking about the problems of AI, misinformation in the communication world and so forth.

So we've got teams looking at that as well.

- [Chris] Good.

Thank you.

- Yeah, protect us from our robot overlords at least.

I wanted to ask about a trend that we've seen in Asheville.

During the pandemic we had over about 300 digital nomads that grew to 1800.

So by that term, I mean people who are bringing their own job, they're using the internet to communicate with wherever their headquarters happens to be.

And I wanna capture those people.

I want their civic engagement, I want their money, I want them to consider working for someone who is local if that opportunity arises.

Are y'all doing anything?

I know you're doing a lot of workforce research because you've done it with us and we really have appreciated that work.

- Yeah, we've certainly worked with you all out in the western part of the state to think about that intersection of workforce infrastructure, innovation, and the needs.

You know, what we've seen as an organization during the pandemic, we were all working remote, and many of our staff have moved on to other places in the country, or even in the world.

And so we've seen not a hit to our productivity.

We've seen not a hit to our morale.

Our employee engagement scores are very high.

And so I think that's a very viable model.

I think from a regional perspective and thinking about the regional economic development side of that, a lot of those people are showing up because of the quality of life in that area.

And so I think for those of you that work in that space, I think the more they kind of get, not indoctrinated, but brought in and assimilated into the community, the better.

We've got folks now that are living, I would say, of the 2,500 staff that we've always had in the Carolinas, vast majority pre-COVID were in Research Triangle Park.

Vast majority were working in our headquarters offices.

Now we've got people in probably two-thirds of the counties of the state of North Carolina, and many people in South Carolina.

And we bring 'em together when it makes sense to bring them together.

But that digital nomad kind of element of people being able to work from anywhere is here to stay.

- Yeah, and sorry to interrupt you, but Tim, taking that a little bit further, not everyone operates that way, obviously.

Kit, I appreciate what you're trying to do and it's smart.

What is the data, what has your research shown around more traditional organizations that want those bodies back in?

What is your research saying about what it will look like in five years, and how much will be hybrid, and how much will actually be on site?

- Well, here's what we are seeing in our data.

Our data suggests that bringing people back, mandating back, for the type of workers that we hire, And for the scientists knowledge worker, it's kind of a war for talent for us.

And so what we are seeing is, as I said earlier, our employee engagement scores are staying high.

We've got sort of organizational culture leading indicator variables that we're tracking.

I think there will be organizations that bring people back very successfully, have amenities on their campus and so forth.

But, you know, our workforce is global.

90 countries, as you said.

And so for us, that notion of bringing everyone together, we're thinking of it more about hubs of talent.

Where do we have hubs of talent today?

Where do we wanna have hubs of talent and bring people together for building community and culture?

- Has it changed at all?

And one quick follow up, I promise I'll let you get in here.

Has it changed at all, the scale for salaries, then, for talent?

In other words, okay, they're not coming in, they're not commuting so we can afford to offer them a little bit less, or does that even factor in anymore?

- What we've seen, and we try to track our salaries to the markets in which our workers live, right, and have market points that we use.

We've seen a spike in wage inflation that everyone saw.

It's come back down in line.

I think the merit increases that we saw last year will be lower this year.

But it's still higher than traditionally.

And I think it gets back to that scalability of war for talent, and this is an area where AI, actually, I think is gonna have a benefit.

If we can reduce the need for people hours for certain types of tasks and make maximum value of the hours that we get from folks, I think it's gonna be helpful.

- Okay.

Carl?

- Just from a, y'all have been around for a long time, have done a lot of research.

What do you see trends, obviously RTP, y'all were the first folks there, but when that started a hub of technology and thinking ahead, what do you see trends going forward?

Not only for Raleigh and the Carolina, but all the Carolinas, more importantly, what do you see?

We've gone away from traditional manufacturing, now advanced manufacturing.

What do you see the future of the Carolinas look like?

- I think the future of the Carolinas are all upside from my perspective.

I mean, you look at the combination of quality of life and the kind of organizations that we have in North and South Carolina, the quality of people that we have in North Carolina, I think the sky's the limit.

Thinking about the public education system, access to childcare, thinking about access to affordable housing, some of the things I heard you all talking about earlier, I think those are gonna be kind of the potential choke points that we better be thinking about because I think at some point... And transit.

I would say transit is the other one because the commutes between where we wanna get to and that sort of thing, I think is gonna be...

But to me, all the other variables in terms of higher education system, community college systems, existing manufacturing, I think the advanced manufacturing has enormous potential for our state.

- Well, it certainly has for us.

I mean, aeronautics has been just such a key factor to helping our wages increase.

We were lucky enough to land Pratt & Whitney during the pandemic as well.

Another area of science, though, that is really big in our area, I'm not sure people know it, is climate science because we're the repository of the country's climate data.

Do y'all end up interacting with those folks locally?

- We do.

This is the NOAA facility.

National Oceanographic Atmospheric Administration.

We do, in Asheville, interact with those folks.

We also have a whole team of meteorologists based in our Fort Collins, Colorado office.

And there's a lot of meteorology work that goes on there, but new forecasting models of weather patterns, weather trends.

Last time I talked to the team, we're thinking about not just average precipitation, but how do we forecast that maximum precipitation kind of event.

This is what leads to dam risk, that leads to flooding, and so forth.

And so in a time of climate, this is really gonna be one of the megatrend issues I think that will ripple into health- - I see infrastructure implications for sure.

Do you see private business looking for ways to take advantage of the commercialization of that data?

- I think absolutely.

We see data aggregators taking publicly available data.

We do some of this ourselves.

Building tools, building models, it can help the business community, it can help developers when they're thinking about, you know, floodplain maps may not be relevant anymore in terms of the new normal.

And so there's a lot of elements that publicly available data from places like NOAA and elsewhere become real assets.

- Yeah.

Before we move on, excellent job recruiting.

If you get an oceanic administration in the mountain communities- - Well, I'm telling you, it's a bunch of PhDs, some Nobel Prize winners and people don't realize it's in... Did you know it was Asheville?

- I didn't.

- Well now you do.

- Good job.

- Nicely done.

- Take the credit because you get the credit for the stuff.

Anyway, we got about four minutes.

Tim, let me go down this road of mental health, behavioral health.

We had Dr. Pat Cauley, CEO of MUSC on the program.

We had Cody Kinsley, South Carolina Department of Health... Or North Carolina HHS talking about job one is now become mental health.

Certainly opioids, certainly Medicaid expansion, all of those things.

But now mental health is squarely at least top three priorities.

How do you lean into that?

What is your research showing that, are we going to be able to get a handle on this very opaque challenge for employers?

- Well, the short answer is we've been in this business around behavioral and mental health for a long time.

And there is no question that the data show this increase in spike.

I think some of it is a little more, a little less stigma in the world.

I mean, we're living in a time where people accept that mental health is a real problem and we need to deal with it.

I think that company benefit plans are starting to turn more attention to that.

I know ours is.

Thinking about how do we help our employees deal with the stresses of everyday life.

We're living in this, you know, stressful world.

And so I think that programmatic introduction in insurance programs to make sure mental health services are covered, thinking about work-life balance issues, companies need to come to grips with how do we, it may not be a 9 to 5 or 8 to 5 world anymore.

How do we let employees work in the ways in which it works best for them to try to bring it down?

And then our children.

Our children in schools are really experiencing an increase.

We're working in the western part of North Carolina state in a couple of counties thinking about mental health services brought into the school setting because kids are having to cope with challenges there.

- Is the data show solutions to this.

- I think there are some innovative things that are happening.

I don't think anybody's cracked the nut at this point in terms of what would, you know, solve this problem.

There's certainly, you know, pharmaceutical treatments and life sciences industry is really taking this as a market issue, but also as a need.

And I don't think anybody has really solved that problem.

- Yeah, and we've got about a minute left, so we're not gonna have a chance to jump out here.

So the codex around mental health, you feel like we're getting closer to something that's gonna truly be meaningful?

- I hope we are.

I think that the problem is not going away.

And so I think the recognition of the problem is the first step and I think a lot of people working on it.

So I think we'll get there, I'm not sure when.

- Well thank you for being in the program.

I know, and not to be flippant, I know you've been there for 40 years.

But undergrad from Wyoming, so is Yellowstone one of your favorite shows?

- Yellowstone's my wife's favorite show.

(laughs) I would say there's a lot of reality and a little bit of fiction baked into that, from my experience in Wyoming, but- - Of course.

Well, Tim, thank you for being on the program.

- Thank you for having me.

I've enjoyed it a lot.

- Yeah, nice to see you.

Kit, too long since you've been on the program.

Please come back.

- We'll be happy to.

It's good to see you.

- Carl, always nice to see you.

Thanks for coming- - Likewise.

Thanks for having me.

- Yeah, thank you very much.

Thank you for watching our program.

If you have any questions or comments or you'd like to watch old programs, easy to do, carolinabusinessreview.org.

I know it's a long name, but take some time.

I think you'll enjoy some of the program, but also the comments.

Thank you for watching.

We certainly hope you have a good weekend, a good fall.

And until next week, I'm Chris William.

Goodnight.

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