North Carolina is one of the fastest-growing states in the country, experiencing robust economic growth through both an increasing population and the attraction of new businesses. Between 2020 and 2023 alone, the state’s population grew by 3.8%, outpacing both the national (1.0%) and the South’s (3.1%) rates of population growth (see Figure 1).¹ As the state evolves politically and demographically, the November election will address several critical issues that will shape its future. Jim Johnson, director of the Urban Investment Strategies Center and William R. Kenan Jr. Distinguished Professor of Strategy and Entrepreneurship at UNC Kenan-Flagler Business School, discusses in this interview how his research sheds light on these key issues and offers insights into the challenges and opportunities facing North Carolina.

Your research spans a variety of topics, from demographic shifts to economic development. What overarching patterns or themes have emerged, and why are they critically important in North Carolina today?

For two consecutive years, North Carolina ranked as America’s top state for business. However, we recently dropped to No. 2 in CNBC’s rankings, and there has been a notable slowdown in the rate of in-migration alongside an increase in out-migration. Between 2022 and 2023, the state's net migration rate dropped from 317 newcomers daily to 220, signaling that some key factors – like affordability, infrastructure and inclusiveness – might be slipping.³

While North Carolina remains attractive as a place to live and do business, the state may be losing some of its shine because of changes in quality of life metrics, including crime, childcare, healthcare, environmental quality and inclusiveness. For instance, childcare shortages have led to increased costs, with the average cost of infant care now exceeding $9,100 annually in the state.⁴ This strains working families and poses challenges for retaining talent.

Moreover, recent migration-induced growth has masked profound changes in the state's population composition, affecting our ability to produce the workforce required for economic development. Our growth is largely driven by people of color, who contributed to 69% of the state’s net population increase between 2020 and 2023 (see Figure 3).⁵ Yet, we are pushing back on diversity, equity and inclusion precisely when we need all hands on deck to remain innovative and competitive.

North Carolina’s population is also aging. Between 2020 and 2023, the state's senior population grew by 11.2%, outpacing the total (3.8%), preschool age (1.1%), school age (0.5%) and working-age (2.9%) population growth rates (see Figure 4).⁶ This demographic shift, coupled with normal age-related mortality, deaths of despair among prime working-age males, and declining male college enrollment, is creating a demographic depression in our labor market. For example, the state has seen a 20% increase in deaths of despair – particularly opioid overdoses – since 2018, which has disproportionately affected men ages 25-44.⁷ These deaths represent a long-term economic loss, as each of these individuals could have contributed decades of productivity to the state’s economy.

The collective impact of these disruptive demographic trends have far-ranging and geographically expansive implications for the state’s ability to create and maintain a competitive workforce, especially when viewed in conjunction with below-replacement-level fertility – another long-standing trend affecting  the size and composition of the population of our nation and the state.  Emblematic of both the scope and magnitude of the impact of these combined forces, deaths exceeded births in 80 of North Carolina’s 100 counties between 2020 and 2023 (see Figure 5).

Your work on the nursing profession emphasizes the importance of understanding "iceberg demographics." Can you discuss how these hidden demographic trends also influence North Carolina’s attractiveness as a migration destination?

These "iceberg demographics" are the invisible attributes that shape individuals' lives but are not readily apparent. For example, over 60% of women ages 45-54 in the workforce are managing menopausal symptoms, but very few companies have policies or resources in place to accommodate them.⁸ Understanding these hidden factors is crucial for successfully recruiting and retaining workers today. People analytics will become the norm, as companies will need to modify workplace policies, practices and procedures to accommodate the diverse needs of their employees. In a state like North Carolina, where net migration has been a significant driver of growth, these invisible demographics could greatly influence whether people choose to move here or take their talent elsewhere.

Given demographic headwinds such as an aging population and below-replacement-level fertility, what strategies should North Carolina adopt to maintain its economic vitality?

Additionally, we should invest in age-friendly infrastructure and the longevity economy. North Carolina’s senior population will exceed 2.8 million by 2035, presenting enormous business and job opportunities in fields like healthcare, housing and elder care services.¹⁰ Age-friendly cities are also key for retaining older residents, ensuring they remain active participants in the economy.

Embracing a "bring back our own population" strategy can help rebuild dying counties and those experiencing biological decline. Currently, 80 counties in North Carolina have more deaths than births.¹¹ By incentivizing young and middle-aged talent – particularly those with remote work opportunities – to return to their hometowns where they have location-specific capital in the form of aging parents, grandparents and other relatives, we can begin reversing these trends.

How do you see the future of North Carolina’s demographic trends affecting the state’s education system and workforce readiness?

Additionally, deaths of despair are concentrated among prime working-age males, ages 25-44, whose premature deaths rob the state of critical labor force contributions.¹⁴ For example, opioid-related deaths have increased by 35% since the pandemic began, contributing to the loss of nearly 14,000 potential workers over the past decade.¹⁵ These trends will affect our ability to cultivate a workforce that is competitive on a national and global scale.

Your coming research suggests that anti-DEI policies could hinder North Carolina's growth. Can you explain how these policies might affect the state's ability to attract and/or retain a diverse talent pool?

Pushing an anti-DEI agenda hampers our ability to develop and retain the talent needed to move our state forward. It’s not just a moral issue – it’s an economic imperative.

Based on your findings, what are the most critical actions that North Carolina must take to ensure it remains a top destination for business, innovation and quality of life?

Developing an affordable workforce housing strategy for public school teachers and civil servants is crucial. Right now, over 50% of North Carolina’s teachers report struggling to find affordable housing near their schools.¹⁹ Demonstrating a commitment to climate and environmental justice will also enhance our state’s appeal, as extreme weather events and environmental degradation increasingly affect where people choose to live and work.

Investing in R&D in the business of aging and creating age-friendly infrastructure will capitalize on opportunities presented by an aging population. Finally, rebranding North Carolina as a place where empathy and compassion are core operating principles will help attract and retain talent. Prioritizing these actions will ensure that North Carolina remains a top destination for business, innovation and quality of life.

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• Keyword(s):
• DEI 10
• demographics 10
• economic development 40
• north carolina 60
• workforce development 66