Raleigh, North Carolina. -- At what price, jobs? Is there an alternative to states and cities rushing to open their treasuries to land footloose airlines and mega-industries in search of public subsidies?
North Carolina has developed a much cheaper, more thoughtful strategy. It is focusing on one of its most pressing problems: seriously lagging rural areas, where residents on average earn 25 percent less than their counterparts in the state's bustling metropolises.
The strategy is to help people launch their own ''micro-enterprises'' and increase their work skills for specialized manufacturing and other jobs likely to show staying power in the '90s. The model could hold promise for urban as well as rural areas nationwide.
North Carolina's Rural Economic Development Center was created in 1987 to help rural areas catch up. But for a change, the formula wasn't pork-barrel rural roads or infusions of ''smokestack-chasing'' tax giveaways to lure low-wage factories.
Instead, the center set out to identify new strategies and to give them a try if they showed promise of increasing people's productivity and wealth. Each experiment was adapted for North Carolina conditions.
There is a special appeal to helping rural America -- communities attached to the land, solid anchors of home and church and social cohesion.
But there's more than sentiment when North Carolina talks of giving a hand to the people who work the fishing boats of eastern North Carolina, cultivate orchards on the slopes of Appalachia, run furniture factories or grow Christmas trees across dozens of rural counties.
A simple truth is that farm and small factory towns can drag down the rest of a state if disdain for education continues and rural incomes lag far behind metropolitan areas. The development drag pushes up taxes statewide and scares off advanced industries in search of trainable and skilled work forces.
''Why has it been easier for people to go to Peru to study economic development when we have the Third World right here in North Carolina?'' asks Billy Ray Hall, the man with the down-home name and razor-sharp mind who helped design and now directs the North Carolina Rural Economic Development Center.
Getting entrepreneurs up and running in their own businesses is the focus of Mr. Hall's micro-enterprise loan program. It targets tiny but critical infusions of capital into start-ups, borrowing unconventional banking ideas developed in part by Chicago's successful, community-oriented South Shore Bank.
Kay Ponder got a $750 loan from the Mountain Microenterprise Fund, backed by the Rural Center. She used it to buy a business license and tax number and set up a line of credit at two lumber yards so she could start her own construction business.
With the $8,500 loan they received, Jim and Roxanne Boyd bought a van, equipment and supplies needed to start their own janitorial service.
Repayments on the micro-enterprise loans, so small most banks would spurn them, are 90 percent on or ahead of schedule.
In Richmond County, the Rural Center discovered a promising ''tech prep'' approach for high school kids not bound for four-year college. The students are steered toward more demanding courses (algebra, for example) so they'll have the option of community college and more technologically demanding jobs.
The center liked the ''tech prep'' idea, funded it in four counties and came up with dramatic results: 50 percent reduction in dropouts, 60 percent increase in kids performing at grade level.
''Now it's spread to half of North Carolina and will go statewide in two years,'' says Mr. Hall. ''We sprouted it, watered it and it's grown.''
The Rural Center has so far run on $8 million from the legislature, plus $1.5 million from foundations and corporations. It's officially independent of the state government and operates with a diverse board including not just economic whizzes but a smattering of rural folk.
ZTC ''We needed somebody with chicken manure on his feet so we'll know it when we step in it,'' Mr. Hall says.
Sadly, groups like the Rural Center can be politically fragile. A similar experiment, the Michigan Strategic Fund, got stamped out this year by that state's new Republican governor.
Even in North Carolina, there's a move afoot to forget ''small is beautiful,'' and to invest megabucks in a huge cargo airport in the boondocks. Visions of 45,000 jobs are dancing in backers' and politicians' heads, without any proof of the airport's cost efficiency.
The Rural Center, by contrast, meets rigorous standards: modest expenditure, consistent testing, imaginative outreach and stress on human development, instead of floating raw numbers of new jobs for which the locals may or may not qualify.
More states need to start thinking this smart.
Neal R. Peirce is a syndicated columnist.