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BIRTH OF AN IDEA: THE CREATION OF
RESEARCH TRIANGLE PARK AND ITS
SUSTAINED ECONOMIC IMPACT ON THE
RESEARCH TRIANGLE AREA
Christopher M. Cirillo
ECON 345 – Urban Economics
Duke University
April 26, 2013
INTRODUCTION
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After World War II, the economy in the state of North Carolina
had stagnated and was starting to decline
In response, key local and state leaders developed an idea for
the establishment of a research and development driven park to
stimulate the state’s economic growth
From the mid-to-late1950’s the park grew from an idea to a
physical entity, Research Triangle Park
Today, Research Triangle Park is one of the world’s most
successful science and technology-based parks
The growth of Research Triangle Park has directly impacted the
economic growth of the Research Triangle area (Durham,
Chapel Hill, Raleigh, and Cary) in an extremely positive
manner
BASIS FOR NEED: THE 1950S ECONOMY OF NORTH
CAROLINA
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For most of the twentieth century, the economy of North Carolina
was driven by agriculture & three industries
 Tobacco manufacturing
 Furniture manufacturing
 Textile manufacturing
By the 1950s, international & domestic competition resulted in a
severe decline in the North Carolina economic base
In 1952, per capita income1 was:
 U.S. - $1,639
 South - $1,121
 NC - $1,049*
As a result, the state was not retaining its best and brightest university
graduates
*only two states, Arkansas and Mississippi had a lower per capita income in 1952 than NC2
FROM IDEA TO BIRTH
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In 1954, three individuals were responsible for initially proposing
the idea of creating a research park to be located in North
Carolina
Brandon Hodges, Treasurer of the State of North Carolina
 Robert Hanes, President of Wachovia Bank and Trust
 Romeo Guest, local Greensboro builder
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The main idea was to leverage the science, research, and
engineering expertise located at the three world-class universities
located in close proximity to each other, so as to attract
technology and development firms to the area:
Duke University, Durham
 The University of North Carolina at Chapel Hill (UNC-CH)
 North Carolina State University (NCSU), Raleigh
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FROM IDEA TO BIRTH (CONCLUDED)
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After securing support in 1955
from Governor Luther Hodges,
the first official entity associated
with the park was established, the
Research Triangle Development
Council was established
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Later this entity became the
Research Triangle Committee
under the leadership of UNC-CH
sociology professor George
Simpson
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In 1958 a turning point occurred
in the success of establishing the
park when Archibald Davis
proposed making the park a
public, as opposed to private,
entity
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In just two short month’s at the
end of 1958, the newly formed
Research Triangle Foundation
of North Carolina raised $1.425
million dollars to acquire the land
for the park and construct the
Research Triangle Institute2
Prof George Simpson shown third from left3
GROWTH OF THE PARK
The first major firm to
locate in the Park was
Chemstrand Corp. in
May 1959
 Growth was slow over the
next 6 years until the U.S.
Department of Health,
Education, and Welfare
announced the
construction of the $70
million National
Environmental Health
Sciences Center
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Three months later, IBM
announced that it would
build a 600,000-square
foot research facility
spread over 400 acres2
Source: Hammer, Siler, George Associates 1999 study
and HR&A analysis of RTF data
<http://www.rtp.org/about-rtp/rtp-companies>
RESEARCH TRIANGLE PARK GROWTH
Number of Jobs, Number of Projected Jobs, and Number of Research & Development Firms
Located in Research Triangle Park since 1960 through a 2016 projection. Source: Weddle, Rick L.,
“Research Triangle Park: Past Success and the Global Challenge”, Understanding Research, Science
and Technology Parks: Global Best Practices. <
http://www.nap.edu/openbook.php?record_id=12546&page=127>
RESEARCH TRIANGLE PARK TODAY
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One of the top research parks
in U.S.
7,000 acre campus located
between the “tri-cities” of
Durham, Chapel Hill & Raleigh
170 companies
39,000 full-time researchers
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Creation of RTP was based
on establishing “New-line”
industries in North Carolina
Electronics
Communications
Chemicals
Engineering & Management
Services
 Business & Education
Services
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% New-line in Triangle area:
Pre-RTP
 <15%
 With RTP
 By 1966 – 30%
 By 2005 – 51%
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Source: cableinch.com
<http://cableinch.com/NCHeartland.html>
RESEARCH TRIANGLE PARK TODAY (CONCLUDED)
Key RTP Business Sectors
•Agricultural Biotechnology
•Biotechnology/Lifesciences
•Clean and Green Technologies
•Information Technology
•Material Sciences and Engineering
•Scientific Associations, Foundations, and
Institutes
•Financial and Insurance Activities
Map of Research Triangle Park and list of associated companies by industry sector. Source: Research Triangle
Foundation of North Carolina.
<http://rtp.org/sites/default/files/Map%20info%40rtp%202012%20industry_final_0.pdf>
UNIVERSITY PARTNERSHIP - TUCASI
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Central to the creation of RTP was
the importance of establishing a
more permanent working
relationship with the area’s three
world-class universities
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This relationship was cemented
with the creation of the Triangle
Universities Center for Advances
Studies, Inc. (TUCASI)
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Permanent capability to enable
interaction between university &
industry researchers and engineers
Established in 1975 on a 120-acre
“park within the park”
Home to world-class organizations
including:
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The Research Triangle Park
<http://www.rtp.org/tucasi>
Microelectronics Center of North
Carolina
North Carolina Biotechnology
Center (NCBC)
National Institute for Statistical
Sciences (NISS)
Statistical and Applied
Mathematical Sciences Institute
(SAMSI)
Borroughs-Wellcome Fund
Sigma Xi Center
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH
– DATA CHARACTERIZATION
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Economic impact on the
Research Triangle area is
measured and displayed
relative to the area’s two
Metropolitan Statistical
Areas (MSAs)
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Durham-Chapel Hill
Raleigh-Cary
Definition of MSAs
established by the U.S.
Office of Management
and Budget (OMB)
Metropolitan Statistics Area
Durham-Chapel Hill, NC
County
Chatham County, NC
Durham County, NC
Orange County, NC
Person County, NC
Population
501,000
65,000
270,000
129,000
38,000
Metropolitan Statistics Area
Raleigh-Cary, NC
County
Franklin County, NC
Johnston County, NC
Wake County, NC
Population
1,126,000
60,000
169,000
897,000
Population Data for the Durham-Chapel Hill, NC & RaleighCary, NC MSAs. Source: U.S. Census Bureau’s Statistical
Abstract of the United States: 2011 – Appendix II.
<http://www.census.gov/prod/2011pubs/11statab/app2.pdf>
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH
– POPULATION AND INCOME GROWTH
Population
Raleigh-Cary MSA
Durham-Chapel Hill MSA
Year
Per Capita Personal Income growth (Dollars)
Per Capita Personal Income (Dollars)
Population Growth
Great Recession Period
Raleigh-Cary MSA
Durham-Chapel Hill MSA
Year
Both the Population growth (left chart) and the Per Capita Personal Income (Dollar)
growth (right chart) since 1969 in the two area MSAs (Durham-Chapel Hill & RaleighCary) correspond with the growth experienced by Research Triangle Park and the creation
of 39,000 RTP high technology researcher jobs during the same timeframe. Source: U.S.
Department of Commerce’s Bureau of Economic Analysis.
<http://www.bea.gov/iTable/iTable.cfm?ReqID=70&step=1>
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH
– GROSS DOMESTIC PRODUCT
Gross Domestic Product (GDP) in Millions of Dollars
Gross Domestic Product (GDP) in Millions of Dollars
Raleigh-Cary MSA
Durham-Chapel Hill MSA
Year
Since 2001, the Gross Domestic Product (GDP) in millions of dollars in the two area MSAs (DurhamChapel Hill & Raleigh-Cary) continued to grow in spite of the global Great Recession. Source: U.S.
Department of Commerce’s Bureau of Economic Analysis.
<http://www.bea.gov/iTable/iTable.cfm?ReqID=70&step=1>
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH
– INCOME GROWTH
Per Capita Income Growth
The Research Triangle area, North Carolina and Select Metropolitan Areas
Percent
Above/
Below
the
National
Average
A Comparison of change in Per Capita Personal Income as measured by percentage comparison to the
National Average from 1970 through 2005 for the state of North Carolina and select cities. Source:
Weddle, Rick L., “Research Triangle Park: Past Success and the Global Challenge”, Understanding
Research, Science and Technology Parks: Global Best Practices.
<http://www.nap.edu/openbook.php?record_id=12546&page=127>
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH
– POPULATED AREA GROWTH
Physical growth in Populated Area since 1950 in the two area MSAs (Durham-Chapel Hill &
Raleigh-Cary) corresponds with the growth experienced by Research Triangle Park and the
creation of 39,000 RTP high technology researcher jobs during the same period of time. Source:
UNC-CH Department of Public Policy – Circling the Research Triangle.
<http://publicpolicy.unc.edu/research/reasarch-triangle-park-database>
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH
– GLOBAL ECONOMIC RECOVERY
In 2010, the Brookings Institute developed the Global
Metro Monitor to allow for a more visual understanding
of the economic recovery of major MSAs from the Great
Recession
 Although the recession was given an official end date of
June 2009, the U.S. has three million less jobs today than
when the recession began toward the end of 20074
 Global Metro Monitor ranks each of the top 300 global
metropolitan areas in terms of economic growth data,
including real GDP and employment change
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RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH –
GLOBAL ECONOMIC RECOVERY – DURHAM-CHAPEL HILL MSA
Global Metro Monitor 2012 Generated Economic Performance Ranking for the Durham-Chapel Hill, NC
Metropolitan Statistical Area out of 300 metropolitan economies worldwide. Source: the Brookings Institution’s
Metro Monitor. <http://www.brookings.edu/research/interactives/global-metro-monitor-3>
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH –
GLOBAL ECONOMIC RECOVERY – RALEIGH-CARY MSA
Global Metro Monitor 2012 Generated Economic Performance Ranking for the Durham-Chapel Hill, NC
Metropolitan Statistical Area out of 300 metropolitan economies worldwide. Source: the Brookings Institution’s
Metro Monitor. <http://www.brookings.edu/research/interactives/global-metro-monitor-3>
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH –
GLOBAL ECONOMIC RECOVERY
Raleigh
Durham
Over the period 2011-2012 both MSAs (Durham-Chapel Hill & Raleigh-Cary) experienced
positive GDP Per Capita change and Employment change giving them a favorable world-ranking
relative to the 300 largest global MSAs Source: the Brookings Institution’s Global Metro Monitor.
<http://www.brookings.edu/research/interactives/global-metro-monitor-3>
PATENT TRENDING
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As argue by urban economist Edward Glaeser, the true importance of the
existence of cities, the “dense agglomerations that dot the globe,” is that they
have served as the “engines of innovation” since they were first formed
February 2013 report by the Metropolitan Policy Program at the Brookings
Institute conducted a comprehensive, first of its kind analysis of patenting
activity and trends on a national scale5
Major findings include:
 The rate of patenting in the United States is at a historically high level
and has been increasing over the last several decades;
 The issuing of patents tends to occur in a small number of metropolitan
areas. 92% of all U.S. patents are issued in just 100 metropolitan areas,
while 63% are developed by individuals living in only 20 metropolitan
areas;
 High quality patents are found to be long-term stimulators of
economic growth;
 Metropolitan areas with a significant rate of patenting most often contain
research oriented universities with graduate programs in the sciences;
 Patents produced under U.S. government funded research activities tend to
be of very high quality.
PATENT TRENDING – PATENTS PER MILLION
RESIDENTS NATIONAL RANKING
If taken together (as could be argued) then the Research
Triangle area would rank 5th nationally with 2,284 patents
per million residents
Both MSAs rank in the Top 20 nationally – Raleigh-Cary 12th and
Durham-Chapel Hill 14th
Over the period 2007-2011 both MSAs (Durham-Chapel Hill & Raleigh-Cary) ranked in the Top 20
nationally for Patents per Million Residents indicating a very high level of innovation & creativity which
typically indicated a strong economic foundation & potential for economic growth5
<http://www.brookings.edu/~/media/research/files/reports/2013/02/patenting%20prosperity%20rot
hwell/patenting%20prosperity%20rothwell>
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH
– SUMMARY
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The creation of Research Triangle Park
has directly benefited the economy
of the two associated MSAs (DurhamChapel Hill & Raleigh-Cary)
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This economic impact did not occur at
RTPs inception, but rather started to
pay noticeable dividends in the
early-to-mid-1980s
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The growth in the areas population,
per capita income, and Gross
Domestic Product is a direct byproduct of the establishment of RTP
RTPs and the area’s economic growth is
most likely linked to the “new-line”
nature of the industries that moved into
the area beginning in 1959, with a surge
in the early-to-mid-1980s
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In addition to the 39,000 research
related jobs created in RTP, studies
show that >1,500 additional
companies have come into the area
because of RTP
Other direct economic benefits
associated with RTP include:
Construction jobs
 Real estate tax yields
 Sales tax yields
 Income tax yields
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RTP and its associated universities are
an incubator for creativity and
innovation as measure by recent
Patent trends analysis with both
MSAs ranked in the Top 20
nationally for Patents per Million
Residents
RTP’S IMPACT ON THE AREA’S ECONOMIC GROWTH
– SUMMARY (BASED ON ADDITIONAL RESEARCH)
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Professor Michael Luger is currently Director of the Manchester
Business School at the University of Manchester. Prior to this
appointment, he was Professor of Public Policy, Business and Planning
at the University of North Carolina at Chapel Hill specializing in the
study of the economic behavior of the Research Triangle area:
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The failure to create RTP would most likely have resulted in the reduction
of 2/3 of the 32,000 jobs in the park (circa 1988) (Luger, 97) 6
Luger credits RTP with creating 12.1 percent of the total number of
jobs in the region in 1988, with the total regional employment growth
linked to the park to be about 52,000 (Luger, 97) 6
In 1988, Luger's research indicated that 21 of the research and
development facilities in RTP would not have located in North Carolina if
RTP had not been created. Also, “16 percent of the high tech companies
in the region, not in the park, wouldn't have come here if RTP didn't
exist”. 3
In 1999, on top of the research jobs in RTP, Luger calculated that
approximately “25,500 jobs have been generated by companies locating in
the region, near RTP”. 3
In a 2001 speech, Luger credits RTP during the period from 1959 to 1990,
with directly and indirectly generating ¼ of all jobs in the region 7
SUMMARY
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From its humble beginnings in the mid-1950s to today, Research Triangle Park
has become a world-class research park that has had an extremely positive
impact on the economic growth and success of the area’s economy
Most of this success can be attributed to four primary factors:
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Timing: the idea for the Park occurred during a period in which both private industry and state
and local government saw the immense potential for significant investments in advanced
research and development;
University Partnerships: the linkage with the three surrounding world-class universities
allowed the RTP to build excellent working relationships with the school’s scientists and
engineers and also employ the best and brightest graduates of these universities. The formal
establishment of a permanent academic entity, the TUCASI, also helped to play a significant
role in cementing this relationship;
Clustering: the critical mass of diversified businesses with their highly skilled scientists and
engineers has enabled RTP to form a knowledge-based cluster that has demonstrated the ability
to leverage these skills in innovative and creative ways to sustain long-term economic
sustainability and growth;
Commitment: there has been a long-term commitment on the part of both state and regional
leadership that has allowed RTP to flourish.
As argue by urban economist Edward Glaeser, the true importance of the
existence of cities, the “dense agglomerations that dot the globe,” is that they
have served as the “engines of innovation” since they were first formed
WORKS CITED
Cover Images: “The Research Triangle Park – Media Resources”. Research Triangle Foundation of North. 2011. Web. 13
April 2013. <Carolina http://www.rtp.org/about-rtp/media-resources>
1
Weddle, Rick L., Elizabeth Rooks, and Tina Valdecanas, “Research Triangle Park: Evolution and Renaissance”. The
Research Triangle Foundation of North Carolina. June 2006. Web. 26 March 2013.
<http://www.rtp.org/sites/default/files/RTP_History_0.pdf>
2
Link, Albert N., and John T. Scott. “The Growth of Research Triangle Park”. Department of Economics Dartmouth
College. 2000. Web. 14 April 2013. <http://www.dartmouth.edu/~jtscott/Papers/00-22.pdf>
3
Rogoski, Richard R.. “State's future hinged on RTP success”. Triangle Business Journal. 18 January 1999. Web. 24 April
2013. <http://www.bizjournals.com/triangle/stories/1999/01/18/focus1.html?s=print>
4
Friedhoff, Alec, and Siddharth Kulkarni. “Metro Monitor – March 2013”. The Brookings Institution – Metropolitan
Policy Program. 28 March 2013. Web. 14 April 2013.
< http://www.brookings.edu/research/interactives/metromonitor#M39580-recovery-overall-nv>
5
Rothwell, Jonathan, Mark Muro, and José Lobo. “Patenting Prosperity: Invention and Economic Performance in the
United States and its Metropolitan Areas”. Metropolitan Policy Program, the Brookings Institute. 1 February 2013.
Web. 20 April 2013.
<http://www.brookings.edu/~/media/research/files/reports/2013/02/patenting%20prosperity%20rothwell/patenti
ng%20prosperity%20rothwell>
6
Luger, Michael I., and Harvey A. Goldstein. Technology in the Garden: Research Parks & Regional Economic Development. Chapel
Hill: The University of North Carolina Press, 1991. Print.
7
Luger, Michael. “Technology-led development”. Invited speech at National Economic Development Forum, Washington,
DC, 31 May 31 2001.