Services Innovation in Ireland - Options for ... - Europe INNOVA

experienced a fairly significant and rapid shift of focus from financial products aimed at the
manufacturing industry to the IT industry. However, NC based financial services tend to be ‘fast
followers’ rather than developers of innovations. 133 Innovation within financial services is also
increasingly concerned with wealth management, for instance retail consumption; the management
of retirement accounts; and the international movement of capital. These customers demand
tailor made services. Smaller financial firms are often more likely to take risks and tend to be more
innovative introducing new service concepts focused on specialised market segments. In addition to
risk aversion, other barriers to innovation include rigid regulation, interest rate volatility, off-shoring
and skills shortages.
The economic development strategy for NC places a strong emphasis upon an attractive business
climate (e.g. fair taxes and regulation), a globally competitive workforce and science and technology,
university outreach and the commercialisation of research. Direct and indirect NC financial incentives
that seek to promote innovation and growth encompass: tax breaks, grants and loans; infrastructure
expansion or improvement; human capital training and attraction; and tax credit rewards for job
creation, investment, worker training, and research & development activity. 134
Summary
The success of the NC financial services cluster is based on a number of factors including a critical
mass of strong locally based businesses that have pursued a range of aggressive development
strategies aided by deregulation and ICT. This cluster effect has attracted new financial business in
the area assisted by an effective policy portfolio and use of financial incentives that are tailored to
local conditions. Additional environmental attributes of the North Carolina financial services sector
include: favourable infrastructure, a skilled labour supply, and the systematic development of high
quality living environment, specific attention attractions that appeal professional work force. The
attractiveness of the sector to financial services is reflected in the decision of corporations to retain
their corporate headquarters in Charlotte.
5. Memphis Supply Chain and Logistics Sector
Brief Description of the Memphis Supply Chain and Logistics Sector
Memphis is one of the world’s leading distribution, logistics and transportation centres and it offers
companies an important point of connection with the global economy. The development of the
Memphis distribution centre has been heavily influenced by the region’s supporting infrastructure
and strategic position within the US economy. The sector boasts a variety of important infrastructural
assets including: the world’s busiest cargo airport (Memphis International); the third largest rail hub
in the US; the fourth largest US inland port; and the 1-40 and 1-55 interstate highways. Historically
Memphis has been characterised as an east-west crossroads but growing economic integration
between the US, Canada and Mexico, in particular, integration of the continental transportation grid
has provided Memphis with the opportunity to become an important player in the Canada to Mexico
NAFTA highway.
The growth of the Memphis distribution sector during the period 1995-2003 was demonstrated by
an increase in investment levels of over $2,676 million, the expansion of 153 companies already
operating in the Memphis region and the attraction of 96 relocated companies 135 . A key factor
in Memphis’ evolution into a world-class transportation, distribution and logistics hub is the rapid
growth of the FedEx "Express SuperHub", which is based at Memphis International Airport. The
scale of the FedEx hub is demonstrated by its transportation of over one million packages each night
133 Nordan, C. 2005. Triangle Capital Partners, Raleigh, NC, interview 12.07.2005.
134
Duke University. 2005. North Carolina in the Global Economy project – Banks and Finance, http://www.soc.duke.edu/NC_GlobalEconomy/
about.php, accessed 17.09.2005.
135
There was also a substantial expansion in workspace by more than 56 million square feet.
95