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A somewhat civil war

New Englanders, Tarheels face off on many fronts

Forget the Panthers and the Patriots. Forget John Kerry and John Edwards. The real competition between New England and North Carolina may not be in football and politics, but in business, biotechnology, and banking.

That the Carolina Panthers are in the Super Bowl and US Senator John Edwards is riding high in the presidential campaign are two more signs that North Carolina is emphatically in the big leagues -- and competing with New England on many fronts.

Not that anyone in Boston's financial-services industry needs reminding. With the expected acquisition of FleetBoston Financial Corp., Bank of America Corp. of Charlotte could become the third-largest bank in the country. It already has its name on the stadium where the Panthers play, and it could also have its name on the FleetCenter, home of the Bruins and Celtics.

The two regions don't just compete in financial services; there's also a bake-off of sorts when it comes to hand-held breakfast cuisine. Astounding as it seems, some gourmets claim that the most sublime of doughnut experiences is provided by North Carolina-based Krispy Kreme and not by homegrown Dunkin' Donuts. And what Krispy Kreme is to doughnuts, the North Carolina Fraser fir is to Christmas trees; thanks to a longer growing season, a Fraser is superior to anything chopped down by a New England lumberjack -- or so boosters of the Tarheel State claim.

As these data points suggest, New Englanders accustomed to looking to the West Coast for competitive threats must now look south -- as hockey fans did in 1997 when the Hartford Whalers became the Carolina Hurricanes.

The Whalers weren't the first regional entity to leave home. During the 19th century, New England dominated the textile industry. But many mills moved south. Could history repeat itself with big chunks of the Bay State's innovation economy also deciding to relocate? That's a possibility. Billing itself as "the state of minds," North Carolina seems to harbor ambitions of eclipsing Massachusetts as the East Coast's answer to Silicon Valley.

Evidence can be seen in recent ads by a North Carolina trade group urging Massachusetts biotech companies to think about a change of scenery. The sales pitch: With its "Research Triangle" (encompassing Raleigh, Durham, and Chapel Hill) and such well regarded schools as Duke University, the University of North Carolina, and North Carolina State, the state has emerged as an ideal incubator of innovation. Among the attributes it promotes are an abundance of brainpower, lower land and labor costs, affordable housing, and a state government with a can-do attitude.

Such a concentration of assets might add up to what Harvard Business School professor Michael E. Porter calls a "cluster," a location with a critical mass of related businesses, schools, and institutions that forms a favorable environment for a specific industry.

The Tarheel threat hasn't gone unnoticed by Governor Mitt Romney. In a fall speech, he noted that a biotech plant can be built in North Carolina in half the time it takes in Massachusetts. That must change, he said, promising initiatives to make that happen.

One of the Bay State's greatest vulnerabilities may be its high housing costs, which makes many workers with young families receptive to moving out of the state. And comparatively low-cost housing is one reason companies find Tarheel territory so attractive. Also, Site Selection magazine has picked North Carolina as the state with the country's best business climate for three years running.

Sean Witty is the kind of person Massachusetts had hoped would stick around.

After graduating from Harvard Business School in 2000, he assumed he would stay in the Boston area. Either that, or move to California. Instead, he took a job as a product marketing manager at the Raleigh, N.C., headquarters of Red Hat Inc., a developer and provider of open-source software and services, including the Red Hat Linux operating system.

"The work is compelling," said Witty, 30, giving his primary reason for his move, but he added, "North Carolina has an impeccable quality of life."

For the most part, his present lifestyle compares favorably with what he had in Cambridge.

"If you love eating in trendy restaurants or going to the latest clubs, you're not going to like Raleigh," he said.

But if you like weekend trips to the mountains or the beach, or golfing in shorts in November, and if you're not keen on stressful commutes or stalking the elusive parking space, then Raleigh scores high, Witty said. When he lived in Cambridge, the rent on his 850-square-foot apartment was $1,400 a month. That's roughly his mortgage payment on a house he bought with twice the space and a two-car garage. Better yet, his house is near a greenway that has bike paths and jogging trails weaving through the city.

"After living in Raleigh for 3 1/2 years, I'm not in a hurry to leave," Witty said.

Massachusetts hopes that its local biotech firms are in no hurry to leave either and that they will resist relocation entreaties, not just from North Carolina, but from Virginia, Texas, and Florida -- other Southern states that also covet the intellectual capital that local universities such as Harvard and the Massachusetts Institute of Technology churn out.

"What we have to do in Massachusetts is to keep what we already have," said senior vice president Scott Sarazen of MassDevelopment, a quasi-public agency. "Our goal is retention first."

In its competition with North Carolina, Massachusetts still has many advantages.

"No one has the breadth and depth of intellectual capital of Massachusetts," Sarazen said. "The intellectual capital is here, and if you're a CEO, it's all about capital, capital, capital. What we have is an incredible innovation economy, one of the best in the country and the world. Great products come out of our laboratories. We have the companies that everyone else wants."

Samuel Taylor would heartily agree with the last part of that statement, and he's already doing something about it. He's an executive vice president with the North Carolina Biosciences Organization, the trade group that took out recent newspaper ads urging Hub biotech firms to move south and augment the biotech presence North Carolina already has.

Referring to Massachusetts, Taylor said, "We want what you have, and we're prepared to invest in it."

Besides head-to-head competition, one other possibility is that the two states continue to coexist and feed off each other.

Red Hat, for example, is hedging its bets, opening an office in Massachusetts to complement its North Carolina headquarters, in part to get access to MIT talent.

Said Matthew J. Szulik, the Massachusetts native who is Red Hat's chairman and chief executive, "We've placed bets on both red and black."

Chris Reidy can be reached at

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