Hard Truths: Q&A With Rick Weddle

Michigan and Metro Detroit's current economic problems aren't really problems in Rick Weddle's eyes. They're opportunities. Opportunities that can force us out of our current rut and onto the road to prosperity.

"If anything I say today makes you uncomfortable, good. Maybe we need to move out of our comfort zone," said Weddle, the president and CEO of North Carolina's Research Triangle Park (RTP) during a speech at the headquarters of NextEnergy in Detroit's TechTown.

Leaders Without Borders, a consortium of local leadership development organizations in Metro Detroit and Windsor, brought in Weddle to talk about RTP's journey to prominence and how southeast Michigan could create something similar here.

Drawing analogies to Detroit's current woes, Weddle emphasized how North Carolina leaders created RTP in the late 1950s when the economy was tanking; brilliant young minds were leaving and the three main industries -- tobacco, textiles and furniture – were no longer "horses we could ride into the future."

The state's leaders set aside 4,400 acres of unwanted agricultural land strategically placed between the state's three main research universities – Duke, North Carolina State and North Carolina at Chapel Hill – to create a world class stable for the horses that North Carolina rode into the 21^st Century.

After nearly 50 years of political arm-twisting, regional cooperation and steady financial support, RTP is now one of world's most envied technological centers. It has expanded to nearly 7,000 acres employing 39,000 people who earn an average of $56,000 a year for big name tech leaders like IBM, Cisco and DuPont.

But RTP also specializes in cultivating young businesses. More than 1,500 start-ups have been nurtured along, creating 69,000 jobs since 1970. Nearly 52 percent of the companies in the Triangle have fewer than 10 employees and 86 percent have less than 250.

"We've become the goose that lays the golden eggs in our region," Weddle said during his speech. And he thinks the same thing can happen in Metro Detroit, pointing out that, "you guys have a lot of opportunities that maybe you haven't been fully exploring. … Its shameful how well endowed you all are and how under performing you all are."

Weddle's assessments were bitter medicine for locals who offer up excuses for Michigan's current struggles. While commending the region's superb universities and enviable access to the Great Lakes he also sounded off on local issues like mass transit, warning: "In the next 20 years if you don't have it, game over."

He also bluntly debunked complaints about the impact of local weather. "It also gets cold in Stockholm," he reminded, "and in Helsinki, Minneapolis, Cambridge, Mass., and Chicago. Make the most of your opportunities and the weather will take care of itself."

Weddle believes that Michigan must commit to investing in itself, ending his talk with, "The most costly investment ahead of you is the one you don't make. You're a big place with a human capital potential that is incredible. Your people are your greatest assets and you've got some pretty great folks. … You're not broke. You’re not out of money. It's not time to turn out the lights. You still have opportunity."

Metromode sat down with Rick Weddle for a lengthy interview in a spacious corner booth of the Traffic Jam & Snug restaurant in Midtown Detroit, continuing the conversation about how southeast Michigan can turn its economic woes around and get on a better path.

metromode:  RTP is often held up as the example of how a state's research universities can create new economy businesses and jobs. Is this strategy really exportable to other states such as Michigan?

Weddle:  Absolutely. It is not easy or simple work and has to be collaboratively pursued over a long period of time, but absolutely, that has been the record in other areas of the U.S. Two areas that come to mind is the growth of life science sector in San Diego, which didn't exist. It was completely manufactured. The other one is the growth of the IT cluster in Austin, Texas. RTP, Austin and San Diego are three of the best examples of completely manufactured high-technology sectors. But it took resources, it took commitment, it took time and patience.

mm: What elements have to be present and which ones stand in the way?

Weddle: More collaboration. Our three universities… I wouldn't say they work hand in glove but they are considered to be best practice examples of university-to-university collaboration. Universities by themselves don't collaborate very well either. They're like fiefdoms, because it's all about their own superstars. So you have to have the catalytic agents to bring about that collaboration. Today it's different than when it was in 1959 when our universities started working together so closely. Everything was much more social and personable then in those areas.

What stands in the way? I think you have to really think, act and function more like a region and less like an embedded set of political jurisdictions that work together only when it's convenient. They say that character is when you do the right thing when no one is watching. Cooperative character is the same thing. It's working together even when it doesn't feel like it's the right thing to do. In an area like Detroit Metro, we probably expect our political leaders to work together despite the fact that almost all of the incentives or the rewards or returns are heavily weighted toward not working together. They don't tax share. It's all about I need mine as opposed to us and ours. You would have to change some fundamental and institutional infrastructure to create more reasons for people to work together.

mm:  RTP is famous for bringing together government, university and business leaders from across the state. How did North Carolina's leaders get so many competing factions on the same page?

Weddle:   First, they were really in the tank and they realized they had to do something differently. They realized the existing industrial base was failing, was not sustainable and wouldn't be creating the kind of jobs they needed going forward.

Second, and I think this is relevant to Detroit, in the North Carolina model some argue that industrialists replaced the plantations as the leaders of the community after the Civil War so citizens were pretty much hardwired to follow paternalistic leadership. Detroiters and Michiganders are similar because the big companies have been such drivers. In North Carolina they were able to get the captains of industry to support and call for support for these research universities and the collaborative aspects of the park. We were capitalized in 1959 by private fund drives. More money was raised from Forsyth County near Winston-Salem than in the Triangle. That is fascinating when you think about it. Money was raised all across the state and more money was raised outside of our region to capitalize the RTP. And that was the richest region at the time. Now it's the poorest region because they hung onto their industrialism. Interestingly enough those captains of industry found it easier to do RTP in another region while they still milked their cash cow in their home area.

Another thing that is probably unique to North Carolina -- I don't know if it could be similar in Michigan— is that it has an extraordinary legacy of support for its higher education institutions. You'll find farmers in bib overalls that have never thought of going to college themselves but will support a tax increase to fund higher education. The University of North Carolina is the oldest public university in the United States, so there is a deep, imbedded, institutional pride. The 'I might not go to the university but I'm sure glad we have one and I want my kids to go' kind of deal. One way it was evidenced is during the 2001 downturn we had the largest multi-billion-dollar bond issue in the state's history for funding new facilities in the universities. Partially, it's realizing that if we're going to grow our way out of this trouble we're going to on the high end of the curve.

mm:  If North Carolina were to recreate the RTP today, what if anything would you suggest it do differently?

Weddle:  We would take a different look at the land-use patterns. We would certainly build mass transit into the fabric of the land-use structure from the beginning. I can't fault those guys. Fifty years ago, there weren't even roads. People say how smart they were. How did they find all of this land on Interstate 40? Interstate 40 wasn't there. RTP started in 1959. Interstate 40 wasn't completed by RTP until the mid 1980s. It looks really smart now but it was actually pretty much serendipitous. Today we would have a different land-use pattern and we would build transit systems and transit oriented development into the footprint from the very beginning. We would probably try to figure out how to build stronger in-park connection to the universities.

mm:  What do you think is a legitimate time line to expect to see some real critical mass build up in today's standards?

Weddle:  The real question is, 'Are you trying to just make an impact or are you trying to change the game?'

Game changing strategies are probably a decade long. Farming and milking the existing flows of opportunities maybe could be five-year plan. Business today has a three-to-five-year mindset. They'll say its quarterly but their main strategic moves are three- to five-years to do this kind of stuff. It's probably 10 years in terms of game changing. But there are competing time horizons here. Political time horizons are one to two election cycles. Economic development time horizons are probably one to two decades. What's wrong with that picture? We're not on the same train. That's a huge disconnect.

What helped us is that private leadership said we're going to do the right thing even if it takes longer. If we had been driven solely by a governor or political leadership it would have zigged and zagged. Our game plan was steady at the helm. It was, 'OK, this is the right thing to do.' It's like eating oatmeal. You're going to do it. It's going to take a while but it’s going to show that it was a good idea. And they stuck to that.

The historical average in the park was about 1,000 jobs a year, about 50 acres of development. But it didn’t happen every year. So there would be huge periods when nothing really happened. You might not sell any land for a couple of three years. Who's going to let you do that? Tell me a governor that's going to say, 'Well, we're going to kick back and let this pot simmer here for a little while.' There going to say, 'No, no, no, we gotta be…' because these business guys are beating them up, saying 'We gotta be…' Sometimes that's just not the right thing to do.

mm:  What advice would you give to the leaders of Michigan, a state that is painfully transitioning from a brawn-based economy to a brain-based one?

Weddle:  There are going to be winners and losers and you got to mitigate the adverse affects on the losers. The loser has got to have something other than losing or they're not going to go along with it. I think that is one of the mistakes we make in American public policy today. We don't spend enough time thinking about how we are going to mitigate the adverse affects of the losers.

What does it mean? It means the winners have to win a little less because we're going to have to somehow split up some of that pie. Pure free market capitalism doesn't account for losers, and so we have to find a way to compensate. It's the right thing to do.