The New South Carolina: Part II - The Economy
By Phil Noble
This the second of a three-part series on how new demographics, economic and political trends are rapidly changing South Carolina.
I’m convinced that there is a New South Carolina being born. This New South Carolina is a very different state from our traditional past and it holds great promise for us and our children for generations to come if, and it’s a big if, if we are smart enough and bold enough to seize this unique opportunity.
We can create a New South Carolina that can be globally competitive in the 21st Century and benefit all South Carolinians.
The question is will we?
Last week’s column in this space focused on the people of this New South Carolina. It was sparked by a special issue of Time Magazine’s 100 Most Influential People that included four South Carolinians: Sen. Lindsay Graham, Jennifer Pinckney wife of Rev. Clementa Pinckney, Gov. Nikki Haley and comedian, writer and TV star Aziz Ansari. Graham and Pinckney both have deep South Carolina roots and represent ‘traditional’ South Carolina – black and white. Haley and Ansari are ‘new’ South Carolinas – both first generation children of Indian immigrants, smart, media savvy and driven to succeed in a new more culturally diverse environment.
And just as these people represent a New South Carolina, so too is our economy going through dramatic changes – we now have an economy that would have been unrecognizable to most South Carolinians less than a generation ago.
Today, there are three big changes that have/are transforming our state’s economy: foreign investment, digital innovation and new economic leadership.
First the foreign investment. South Carolina leads the nation in per capita direct foreign investment. There are over 1,200 international business facilities in our state – more than there are public schools. We are now home to major global companies such as BWW, Volvo, Daimler Benz, Michelin, Haier, Giti Tire and countless others. This foreign investment in South Carolina employs more people per capita than in any state in the country.
Where once the biggest impact on our economy was the change in cotton prices on the commodity exchanges in Memphis or Chicago; today, it’s the fluctuations on the global currency exchanges in Hong Kong and London – and the rising demand for consumer imports by China and India.
The second big economic change is the impact of the digital economy. One simple statistic: in Charleston alone there are over 300 digital businesses and the growth rate of these new digital companies is 26% faster than the national average. The average wage in these new digital businesses is nearly three times that of the traditional tourism and hospitality industry.
This new digital economy demands smart people, with high levels of creativity, gender and cultural diversity and a world view unbounded by state or even national boundaries. This is not traditional South Carolina.
The third big change is in the demographics of our economic leadership. One astute observer recently noted that a few years ago the state’s economic leadership was essentially the ten whitest men in the ten biggest corner offices on the top floor of the ten tallest buildings in the state. And, when these men decided what they thought ought to be done, they called in the (white male) governor and the legislative leaders and told them what to do … and they largely did it.
Now, our state’s economic leadership is found in 250+ low rise office parks; there are lots of women, people of color and folks who did not go to USC or Clemson. They look different, think different and are different – and this is a good thing.
The huge challenge we face in the New South Carolina is: 1) providing our people with the skills they need to be competitive in this new global economy and 2) overcoming the provincial political leadership that is holding back the changes required to be competitive.
In a recent conversation with one of our state’s top economic development leaders, he estimated that as many as 80% of the new jobs being created by the new global businesses locating in our state are being filled by people who move to our state – simply because there are not enough skilled South Carolinians to do these jobs.
Think about that for a moment – more than 80% of these new jobs are beyond the current skill levels of South Carolinians … and it’s only going to get worse as the trend toward increasingly tech based jobs escalates.
And the other great barrier is our current political leadership that simply does not realize – or does not care – about making the changes that need to be made to make our state competitive.
If one were to devise a legislative agenda to stifle economic progress it would be: 1) neglect education so our people won’t have the job skills required, 2) ignore our crumbling roads and other infrastructure so that SC businesses were placed at a competitive disadvantage and 3) perpetuate a corrupt political system based on personal greed and special interest lobbyists – instead of a comon agenda based on doing what needs to be done to make our economy competitive.
The struggle of the old and the new – this pretty much describes the economy in South Carolina today.
The birth of ‘the new’ is often – if not usually – difficult and painful.
Our transition to a New Economy and a New South Carolina is no different.