The same economic anchor that propelled North Carolina’s Research Triangle into one of America’s most thriving economies now risks becoming a liability.
Major academic institutions in the community have helped lure businesses of all sizes — and the jobs that come with them — to Raleigh, Durham and Chapel Hill, transforming an economy once reliant on industries like tobacco and textilesinto a leading science and technology .
But the area’s decades-long bet on those industries for growth and investment makes the region particularly vulnerable to the Trump administration’s efforts to government spending. The fallout also shows how abrupt policy changes in Washington are stoking in US communities that have been flourishing.
Local universities are at risk of losing millions of dollars in federal funding. One nonprofit alone has shed about 360 North Carolina-based workers, and Durham has already seen five major development projects halted as economic anxiety grows.
“We’re a cool town where everyone wants to be a part of,” said Durham’s Mayor . It’s still “affordable to live here, compared to other places, where you can find a really good paying job.”
“Now, all of that is in jeopardy,” he said.
The Research Triangle is one of the many places across the US that has doubled down on higher education and health care institutions — often dubbed the “eds and meds” approach — as a way to drive economic growth. Established in the 1950s, Research Triangle Park is one of the in North America and home to a variety of businesses, government agencies and nonprofits.
By 2019, hospitals and higher education accounted for roughly 20% of Durham-Chapel Hill’s economic activity, to the Federal Reserve Bank of Philadelphia. Some places, like Ithaca, New York and State College, Pennsylvania, are even more reliant on those industries.
The North Carolina hub over 142,000 jobs in the state and generates more than $25 billion in economic value every year, according to the nonprofit Research Triangle Foundation of North Carolina.
But the area’s economic model is now showing cracks.
Under Pressure
Duke University, which between its university and health system employs , is the second largest private-sector employer in the state. It’s seeking to in spending to prepare for federal funding cuts, the threat of fewer international students and a potential endowment tax.
“We will, for the foreseeable future, have to be smaller — and do our work with fewer people,” Duke President Vincent Price said in a June 5, adding that layoffs are likely on the horizon for the university.
As of early June, the University of North Carolina at Chapel Hill has received about $83 million less in federal research dollars so far this fiscal year compared to the same period in 2024, a university spokesperson said. Impacts have included reallocating some staff and shortening other contracts.
It’s paused plans for a science research facility, and UNC’s vice chancellor for finance and operations told trustees on that 77 full time employees had been cut.
“We are currently evaluating our research infrastructure, including our research facilities, and will continue to monitor funding trends,” a spokesperson for the university said in an emailed statement.
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The White House said in a statement that the Trump administration is “cutting waste” and “realigning federal research funding away from DEI and pet projects of ideological activists. These commonsense reforms will strengthen America’s healthcare and research apparatus to better address America’s chronic disease epidemic with cutting edge innovation.”
The job cuts announced in and around the Research Triangle related to federal funding so far aren’t large enough to throw the region’s economy off course, said , a regional executive at the Richmond Fed.
Unemployment, for example, remains below the national average in the area, and companies are still announcing investments in the state. Merck & Co. earlier opened a $1 billion vaccine manufacturing facility in Durham. And Johnson & Johnson is building a in Wilson, located about 50 miles from Raleigh, that the company estimates will bring thousands of jobs to North Carolina.
But he said it remains an open question whether government policy changes will lead to funding shortfalls and research disruptions that erode productivity and a generation of new ideas at private-sector companies.
, president of North Carolina Biotechnology Center, an organization that focuses on life science economic development for North Carolina, agreed, adding local universities are likely to give birth to fewer startups amid funding cuts. The group has seen a rush of applications from researchers seeking to plug what they lost in federal funds.
“You may not feel the direct impact of it today, but you’re going to see less companies come out,” Edgeton said.
Budget cuts for public research and development could “significantly hurt” the US economy in the long run, American University researchers in April. A 25% cut to such spending would reduce gross domestic product by an amount comparable to the drop seen during the Great Recession, they said.
Nonprofit Fallout
Some nonprofits are already reeling from the cuts, particularly those caught in the fallout of the Trump administration’s dismantling of the US Agency for International Development.
The nonprofit FHI 360, which is headquartered in Durham and conducts clinical research and supports programs overseas focused primarily on global health, 144 North Carolina residents because of terminations and suspensions of federally funded projects.
Government payments for work FHI 360 has already completed have also become highly unpredictable, said Chief Executive Officer . To conserve cash, she has taken an almost 50% pay reduction and asked other workers to take cuts ranging from 5% to 30%. The State Department, which is absorbing the remaining parts of USAID, did not respond to a request for comment.
RTI International, an independent scientific research institute headquartered in the Research Triangle, has reduced its overall workforce about 35% this year, according to a company spokesperson, citing “funding shifts and new client priorities.”
was one of the some 360 North Carolina-based RTI workers who departed. Draper, an Army veteran who worked as a project coordinator, said he’s encountering an over-saturated labor market as more workers in his industry get laid off.
“Do I just get a job so that I can get healthcare for the family?” he said. “Or do I hold out and try to find something that I actually want to do?”
Angst is also growing at the Environmental Protection Agency’s campus in Research Triangle Park, home to . While an EPA spokesperson said there had been no cuts from the office as of May 14, the federal agency hasn’t been renewing its contracts with contractors in the area either, according to NC State University’s .
Frey, a professor and former deputy assistant administrator for science policy at the EPA under the Biden administration, worries the area is now at risk of “brain drain” and that the cuts will give China an advantage on science and technology research. FHI 360’s San Martin expressed a similar concern.
The area’s richness in biopharmaceuticals, global health, research “didn’t happen by accident,” San Martin said. “That was the result of decades of consistent investment by the US government in these important areas.”
Bloomberg’s Amara Omeokwe and Amanda Albright contributed to this report.
Topics Mergers & Acquisitions
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