“If you’re out on your own you have nothing. If you’re working together and sharing things then everybody has something and everybody wins.”
—Nand Thaper, Action Sports, participant in the Carolina Textile District
Western North Carolina is home to an array of skilled textile workers. Successful pairing of demand for American-made textiles with the work of small firms in western North Carolina and regions in the surrounding states is making the region’s economy more resilient. These businesses provide not just jobs for the region’s residents, but opportunities to build wealth and control of business decisions through employee ownership.
Capitalizing on assets. Western North Carolina is home to an array of skilled textile workers. Textile suppliers, cutters, pattern makers, sewers, and more live in the region. Some have been there for decades, or longer, and have a background working in the regional textile industry that declined due to offshoring and automation beginning in the 1990s. Many are immigrants who brought rich textile skills with them when they moved to the region.
Opportunity for new perspectives. Many small textile businesses of 5 – 50 employees exist in the region, but they may not have enough marketing or connections to ensure that they have consistent work. In addition, business owners are often individuals approaching retirement, and there may not be a succession plan that is easy to put in place to ensure that these businesses and jobs remain in the region.
Strengthening the Economy. Successful pairing of demand for American-made textiles with the work of small firms in western North Carolina and regions in the surrounding states is making the region’s economy more resilient. These businesses provide not just jobs for the region’s residents, but opportunities to build wealth and control of business decisions through employee ownership.
Partners in the Western Piedmont region of North Carolina recognized an opportunity to revive the sewn goods industry by connecting the existing assets with real market demand. In 2013, worker-owned textile business Opportunity Threads turned to Burke Development, Inc. (BDI) and the Manufacturing Solutions Center (MSC) in Conover, NC to look for ways to collaborate with other businesses in the region to manage an increase in demand that had outpaced the firm’s capacity. Opportunity Threads made a deliberate decision to share its commercial success rather than scale the business up and down as demand changed over time, since this strategy might help to stabilize jobs in its own enterprise as well as in businesses that could use more work. MSC was a natural partner, as it supports technology transfer, commercialization and research and development (R&D) among manufacturing firms. BDI is public/private nonprofit economic development agency for Burke County, North Carolina that expanded its past activities in recruitment to also promote local ownership of firms.
The partners formed the Carolina Textile District (CTD), which is structured as an LLC and co-directed by Opportunity Threads Founder Molly Hemstreet and Sara Chester of Burke Development, Inc. Working in “coopetition,” value chain partners recognize that their competitive advantages over other forms of production are greater when competing firms work together cooperatively. Sara Chester, co-director of CTD, says, “Coopetition engenders a sense of community and collaboration. Members call each other with problems. They’re working together on shared projects and acquiring shared equipment.”
CTD coordinates demand for sewn goods with production capability, with a focus on a growing market segment called “crafted production.” In crafted production, clients desire small runs, short turn-around for products, customized products with quality production, and direct-to-consumer distribution such as through websites, Etsy shops, and other methods. These companies may be small social enterprises, and some are businesses that are scaling up beyond the capacity of home production. This type of production is evolving to meet consumer demand. Similar to increasing consumer interest in local or organic foods, a growing number of customers are asking where clothing and other sewn products come from and if working conditions are safe and fair, says Chester. The profile of entrepreneurs working with CTD are mostly young (67 percent are under 40 years old) and hold common values including supporting U.S. jobs and working with manufacturers who pay living wages. Many of these are start-up companies with little previous experience working in textiles.
CTD recognized that this demand existed, but also realized that this kind of demand is different from large orders with established companies that many area businesses had been accustomed to. CTD has an application process for clients wishing to have their concept for sewn goods produced. The application helps CTD staff to gauge clients’ knowledge of textile production, sustainability of business, and readiness for production. Clients who move forward have a paid consultation with CTD’s network coordinator and are matched with partners in the network who can provide the needed pieces of supply chain and production. Several members of CTD often fulfill orders, filling gaps at various points in the supply chain or sharing a large contract.
The Carolina Textile District is a manufacturing value chain network with a simply stated goal: revitalize the textile industry in a sustainable way.
To aid in the matching process, CTD maintains a database of textile-related companies, along with key characteristics such as products, services, capabilities, minimum order size, and pricing. To build capacity, CTD seeks grants for equipment and conducts outreach to build the workforce. Thirteen paid member firms (who collectively employ 400 people in North Carolina, South Carolina, Virginia, and Tennessee) form the core of the CTD membership and benefit from enhanced social and political capital that come from cooperation, as well as access to shared equipment and legal support. However, nearly 400 firms across the U.S. are part of the full network that can be matched up with clients. As of 2018, nearly 1,500 entrepreneurs have applied, received information and these types of support, and nearly 150 entrepreneurs or scaling companies have already completed a production run.
Value opportunities: expanding existing businesses and establishing new ones directly tied the textile industry.
Photo courtesy CTD.
By 2015, CTD’s initial partners recognized opportunities to work across industry sectors in the region, beyond textiles, and formed the nonprofit The Industrial Commons to provide resources and support to more firms. CTD functions as one social enterprise program of The Industrial Commons to bring textile partners together in a network. The Industrial Commons operates other social enterprises that solve industrial problems in the related manufacturing sectors of wood products, furniture, metal working, fiber, hosiery, and craft beverages. One area of expertise that has been beneficial to rooting economic success locally is worker ownership.
Interest in employee ownership and other bottom-up business strategies has increased in western North Carolina and surrounding areas. Opportunity Threads is a success story that provides a model for employee ownership within the region. Founded in 2008 by a native of Morganton, North Carolina, Molly Hemstreet, Opportunity Threads employs about two dozen individuals, many of whom are Mayan immigrants to the region from Guatemala. Workers are hired on with the opportunity to become a worker-owner after a 12 – 18-month vetting process. As owners of the firm, the workers make decisions together and share the successes of the company by focusing on profit, growth, and productivity, alongside democratic workplace principles. For Opportunity Threads, worker ownership has provided a pathway to economic success for the employees and their households by offering stable jobs with fair pay.
The need for new approaches to business ownership is critical for the region’s economic resilience. Nearly half of privately held businesses with employees in western North Carolina are estimated to be owned by baby boomers. This accounts for over 132,000 jobs, with a payroll of $4 billion and sales of $26 billion, according to research conducted by Project Equity, a partner from outside the region. This has the potential for significant economic impact, and potential displacement of workers, as the region’s business owners age. These firms have longstanding capabilities and connections with partners, and they offer employment for the regions’ residents. Transitioning ownership of existing businesses to employees may be a mechanism to preserve firms with aging owners as productive assets in the region. Worker-owned cooperatives and employee stock ownership plans (ESOPs) are ways to structure businesses to connect workers’ productivity to profitability and decision-making.
Worker-owners at Opportunity Threads, like Eulalia Francisco, are building stable livelihoods for their families.
Photo courtesy Opportunity Threads
In addition to operating several social enterprises, The Industrial Commons offers support to businesses interested in learning more about worker ownership and democratic workplaces more generally. Over 25 businesses have received training and consultation on worker ownership structures; of these, four are actively converting to worker ownership while five more are considering it. In addition, several public sector entities supporting private enterprise have received training, including Small Business and Technology Development Centers and regional councils of governments (which often also serve as U.S. Economic Development Administration-designated Economic Development Districts to support the building blocks of regional economic resilience). These public sector partners can amplify and extend the work of The Industrial Commons to root economic resilience locally.
CTD participants in Crafted Production Week in September 2018.
Photo courtesy CTD.
The Carolina Textile District has become a proven success model of connecting demand with production and building community capital. By establishing The Industrial Commons, these value chain partners are beginning to work with more firms in more sectors that share the same goals of being more competitive, more profitable, and stronger. This could ultimately lead to new value chains in wood products, metal working and more emerging from the Carolina Textile District model. Other economic development partners in the region are also supporting emerging value chains.
The Industrial Commons has already recognized an opportunity to capture economic value from underutilized resources through its newest enterprise, Material Return. Material Return identifies the waste streams from textile and furniture companies as potentially valuable inputs for new products. Material Return is a much newer value chain, but it has already had interest from early adopters in finding profitable ways to reuse waste materials. This new enterprise has the potential to create benefits for partners from multiple economic sectors that share the same opportunity of producing waste that can be reused.
Grants have provided valuable seed funding for both The Industrial Commons and its enterprises. Initial grant funding in 2013 from the North Carolina Rural Economic Development Center and U.S. Department of Commerce Investing in Manufacturing Communities Partnership supported personnel to begin to work with textile clients and provided resources to develop the sector as a regional cluster. Additional grant support for The Industrial Commons has come from the Appalachian Regional Commission, J.M.K. Prize for Innovation from the J.M. Kaplan Fund, One Foundation of West Virginia, Catholic Campaign for Human Development, and the Communities Thrive Challenge, a program of The Rockefeller Foundation and the Chan-Zuckerberg Initiative.
Shared textile manufacturing equipment enables value chain partners to access specialized equipment and improve their productivity. For example, an advanced cutter was supported through a grant from the Appalachian Regional Commission.
CTD generates income to cover staffing by offering fee-for-service opportunities that are in demand among entrepreneurs looking to produce domestically. CTD offers targeted technical assistance to businesses on an hourly rate for services such as sourcing materials and fabrics and finding a qualified contractor who can take on needed aspects of textile production, such as design, pattern-making, printing, or cut and sew. Paid workshops for entrepreneurs and others include Crafted Production and Democratic Workplaces, Interactive Sewn Goods Webinars (a five-part series) and Sewn Goods 101 Workshop. The development of the workshops that CTD offers to businesses was funded by grants, although offering the workshops and fee-for-service consultations for clients now makes CTD nearly self-sufficient. New revenues over time will offer the opportunity to continue to grow networks and programming.
Worker-owners at CTD and Opportunity Threads, like Juan, are building stable livelihoods for their families.
Photo courtesy Opportunity Threads
Molly Hemstreet, Sara Chester, and Paul Castelloe (2017). Rooting Economic Change: Harnessing Industry Knowledge, Value Chain Networks, and Worker Ownership in Manufacturing to Bring Real Benefits to People and Communities. Morganton, NC: Opportunity Threads, The Carolina Textile District, and The Industrial Commons
Burke Development, Inc. (2013). “BDI, Partners Receive “IMCP” Grant”
Personal communication with Sara Chester
This case study was produced under contract to the Region Five Development Commission through a cooperative agreement with the United States Department of Agriculture Rural Development. Any opinions, findings and conclusions, or recommendations expressed in this publication do not necessarily reflect the views of USDA. This case study was authored primarily by NADO Associate Director Carrie Kissel. Thanks are extended to all who provided information, editorial guidance, and images.
The Carolina Textile District is tracking its impact in the region by watching far more than just the financial bottom line. Here are a set of actual and anticipated results they keep in their sights as they design their work—and sew their value chain network together!
Banner photo courtesy Catherine Moore and Appalachian Transition Fellowship via Creative Commons license
Specialties: Local Food, Placemaking, Renewable Energy
States served: Minnesota
Additional details: Enhancing the vitality and quality of life in Cass, Crow Wing, Morrison, Todd and Wadena counties is the mission of Region Five Development Commission. Resiliency, inclusion and collaboration are guiding concepts in achieving mutually shared goals that continue to evolve with local municipalities, state, federal, philanthropic, non-profit and social advocacy agencies.
Contact: Cheryal Lee Hills, 218-894-3233
200 1st Street NE, Suite 2
Staples, MN 56479
Alternative contact: Dawn Espe, 218-894-3233
Specialties: Food, Forestry/wood products, Tourism
States served: Idaho, Oregon, Washington
Additional details: RDI was formed in 1991 in response to the timber industry crisis facing the Pacific Northwest. Our nationally recognized programs and services help communities help themselves with effective and results-oriented training and resources necessary for individuals living in rural communities to build and sustain a better future in their communities. Our work is based upon our genuine commitment to build rural capacity through Leadership Development programs and strengthen Rural Economic Vitality through moving capacity into action.
Contact: Amy Hause, (541) 255-9590
Rural Development Initiatives
91017 S Willamette St
Coburg, Oregon 97408
Alternative contact: Heidi Khokhar, (541) 684-9077 ext. 7011
Specialties: Food, Forestry/wood products, Housing, Tourism
States served: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming
Region details: RCAC serves 13 western states including: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. We also work in the U.S. territories of the Marianas Islands, Marshall Islands and the U.S. Virgin Islands.
Additional details: RCAC Value Chains, economic development and Wealth Works are embedded in RCAC’s Building Rural Economies program. With over 10 years of experience in these arenas we technically assist communities who wish to envision and create their future.
Carol Cohen, 435-671-7068
3120 Freeboard Drive
West Sacramento, CA 95691
Alternative contact: Ellen Drew, (575) 421-0261
Specialties: Energy efficiency
States served: Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wyoming
Additional details: Midwest Assistance Program (MAP) has been helping communities and tribal nations find solutions to their infrastructure and development needs through information, resource management, expertise, and technical assistance since 1979.
Contact: Chris Fierrros, 660-562-2575
303 N Market Street, Suite 2
Maryville, MO 64468
Specialties: Bio-energy, Food
States served: Arkansas, Louisiana, Mississippi, Oklahoma, Tennessee, Texas
Region details: Communities Unlimited serves seven southern states: Arkansas, Mississippi, Tennessee. Texas, Oklahoma, Louisiana and Alabama. This is an area that includes 60% of this country’s persistently poor counties, including large percentages of African Americans, Hispanics, and Native Americans.
Additional details: Communities Unlimited has 40 years of community economic development experience in the South. It seeks to move rural and under-resourced places toward prosperity by identifying a community’s assets and the market demand for the products or services created from those. We then build value chain collaboratives based on WealthWorks principles to create new economic opportunities. Since 2013, we are demonstrating the success of this approach through a farm-to-fuel value chain in the Arkansas Delta.
Martha Claire Bullen, 479-443-2700
3 East Colt Square Drive
Fayetteville, AR 72703
Alternative contact: Debbie Luther, 870-509-1331
Specialties: Arts, Food, Forestry/wood products, Tourism
States served: Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont
Additional details: Community Roots, LLC is a Vermont firm specializing in rural community and economic development consulting. Melissa Levy of Community Roots, LLC has been working with the WealthWorks framework over the past several years. She’s been a trainer, coach, workshop facilitator, and presenter in the WealthWorks community.
Contact: Melissa Levy, 802-318-1720
Location: Hinesburg, VT
Specialties: Arts, Energy efficiency, Food, Forestry/wood products, Manufacturing, Tourism
States served: Kentucky, North Carolina, Ohio, Tennessee, Virginia, West Virginia
Additional details: The Central Appalachian Network is a regional network of six anchor organizations that pursue collective sustainable economic development strategies across the Appalachian region of Ohio, West Virginia, Kentucky, Virginia, and Tennessee. CAN builds regional partnerships and also works deeply at the sub-regional level around sectors and opportunities including local food value chains, forestry, new energy, small business development, social enterprise, recycling/upcycling, implementation-focused research, advocacy, and organizational capacity-building. CAN’s members are Appalachian Center for Economic Networks (ACEnet), Appalachian Sustainable Development (ASD), Coalfield Development Corporation, Community Farm Alliance (CFA), Mountain Association for Community Economic Development (MACED), Natural Capital Investment Fund (NCIF), and Rural Action.
Contact: Leslie Schaller, 740-592-3854
1456 C Patton Avenue
Asheville, NC 28806