Economic growth facilitates industry opportunitiesJan 03, 2024 12:50PM ● By Randee Brown
For the first time in a long time, the number of people employed in the business and professional services industry was higher than those in manufacturing in late 2023, which the Asheville Area Chamber of Commerce’s Senior Vice President of Economic Development Clark Duncan said is indicative of growth across all sectors of the metro economy.
The growth rate is outpacing the area’s other large sectors like healthcare, retail, and tourism, as the overall growth of all economic sectors creates a need for more and more sophisticated professional services.
“You’ll see this organically in any growing economy,” Duncan said. “These types of businesses come into the market in response to growth; we look at it like an economic indicator.”
While larger companies and corporations may be able to handle every aspect of their own business, small- to medium-sized businesses must outsource some of their tasks.
“Local companies of a certain size are still leaning on outside council,” Duncan said. “Many companies in this industry have been in Asheville for years and always offered world-class services, but the growth in the local economy is demanding more access to these services.”
Since the beginning of Venture Asheville 10 years ago, there has been an increase in the number of services needed in the venture community. While there is an inflection point at which businesses have the ability to hire out these tasks, there are increasing benefits to having experts perform professional services.
Startup businesses working in proprietary information or technology need intellectual property attorneys, growing companies need employment attorneys, and many complex legal agreements are needed during the process of fundraising with venture equity and capital. Firms dealing with contracts for business acquisitions are also doing well, as Duncan said it is important to make sure those types of things are done correctly.
The increase in hybrid and remote working models seems to be bringing more talent in this industry to the area. AVL Digital Nomads’ Founder Ric Pratte said approximately one-third of the group works in business and professional services, which may help fill the increasing demand for these services as they build relationships within the local community.
“We should be championing the growth of that sector,” Duncan said. “Employees in this sector earn higher average wages, so increasing employment in this sector means increasing the average wage for the region. We anticipate these individuals becoming engaged in local employment, and there’s no downside to adding to the number of talented, educated people living in our community. It’s an influx of the future workforce to our area.”
During COVID shutdowns, the workforce saw more significant job loss in other areas, as many workers in this industry just took their jobs with them. They’re portable, and didn’t show up on job loss graphs.
With economic uncertainty continuing into 2024, Duncan said this sector is in no way recession-proof, but these businesses will likely remain resilient in the face of uncertainty. Service providers such as accountants may be very busy as businesses may need to restructure in order to mitigate risks, though services requiring investments and other assets for development may shift somewhat.
Other shifts are possible with the rise in popularity and availability of artificial intelligence. Decadal changes in manufacturing, for example, shifted from a higher number of jobs to a fewer number of jobs but a greater required skill level, resulting in increased higher-wage opportunities.
“What we’ve seen is that disruptive technologies create different types of jobs and new opportunities,” Duncan said. “It will be interesting to see how we are leaning on AI and where it creates new opportunities for skills and employment in this sector in the future.”