Monday, April 7, 2014
Monday, March 3, 2014
In 2013, South Carolina’s TDL industry saw several important milestones. The inland port in Greer opened in October, expanding the economic ties between the Upstate and the Lowcountry and increasing the state’s competitiveness as a leader in moving freight. The SC Department of Transportation has continued to make strides in the development of the 25-year multimodal plan that will provide the roadmap for moving freight throughout the state and guide future infrastructure projects. Many TDL-related businesses have announced new business or expansion in the Palmetto State. We’re on the right track.
But what’s on the horizon? The widening of the Panama Canal, expected to be completed in 2015, is putting pressure on East Coast ports - Charleston included - to dredge harbors in order to accommodate post-Panamax ships around the clock. Tourists and residents alike bemoan driving on I-26, I-95, or I-85, especially during peak hours. Logistics analysts are always trying to shave off a few hours of transit time. TDL supports practically our entire economy; naturally, TDL needs constant investment and fine-tuning to maintain vibrancy and have the ability to grow and compete.
The TDL Council is a collaborative effort between public and private sector leaders to boost South Carolina’s economy, create jobs, and attract investment that will position the state as a national and global leader in the TDL industry. One way the Council seeks to bring South Carolina to the forefront of the TDL industry is by hosting the TDL Summit each year. In the spirit of partnership and collaboration, the Summit provides a forum for public leaders to provide their perspective on the industry, private industry leaders to share best practices, educational partners to share new innovations and projects, and attendees to learn, network and celebrate the industry’s successes. The 4th Annual TDL Summit will be held in Columbia on February 12.
The TDL Council has put together an exciting program and speaker line-up for the 2014 TDL Summit, with presentations that touch on all areas of freight transport, logistics, and distribution. The day will be opened by Governor Nikki Haley, and we’ll hear updates from Secretary of Commerce Bobby Hitt, and Ports Authority CEO Jim Newsome later in the day. A panel of South Carolina cluster leaders will offer their perspectives of freight infrastructure needs, and SCE&G will cover the logistics behind construction at V.C. Summer. Nephron’s Lou Kennedy, former Port of New Orleans President & CEO Ron Brinson, Senator Paul Campbell, and Clemson’s Dr. Scott Mason will round out the program, each offering their own unique perspective on a certain aspect of the industry. A networking reception will follow the event.
As we celebrate TDL successes we must also stay focused on working collaboratively to identify solutions that will help us reach our multimodal transportation goals. Decision-makers from the business sector, elected officials, government agencies, higher education partners, community advocates and interested citizens must come together to put the vision of the TDL Council into action.
We look forward to thought-provoking dialogue, knowledge exchange, and insights into revolutionary innovations at the TDL Summit on April 24th. Please join us for this exciting event. For more information, click here.
Friday, December 16, 2011
The rankings are based on such factors as job growth, growth in wages and salaries, and growth in gross domestic product in high tech industries. Arbitrary, but interesting. You can see the complete list of 200 cities at http://bestcities.milkeninstitute.org/bestcities2011.taf?rankyear=2011&type=rank200
Wednesday, December 14, 2011
The two day session ended with a review of Harvard’s US Competitiveness project. This project will be detailed in a series of articles in the March issue of the Harvard Business Review. The project surveyed some 10,000 graduates of the Harvard Business School. There were also 12 faculty members who addressed specific issues. The conclusions of the study were pretty grim.
Since 1980, America has experienced:
• Globalization of competition
• Countries with effective economic strategies
• Shortened time horizons
• Intense pressure on the middle class in terms of job loss and stagnation of wages
• Significant percentage in the upper .5% (5 % in 1977 to 18% in 2006)
• The cost of two wars
As a consequence, there have been unsustainable benefits that were primarily, but not exclusively, directed to the middle class:
o Badly thought out housing policy
o Retirement benefits
o Health care (Medicare and Medicaid)
o Cheap products from China, who is not competing on a level playing field
The problems are the result of choice, but not unstoppable forces. However, the federal government can’t seem to make even no brainer decisions.
Michael Porter said “Just do the math on the budget. We are a few years away from a real catastrophe.”
More on this subject in future blogs.
Wednesday, December 7, 2011
The SmartState Program with its Centers of Excellence and Endowed Chairs is woefully under under-appreciated around the State. The program was established by the legislature in 1992. It was originally funded with $30 million/year from the SC Educational Lottery, to be matched dollar for dollar with money from other sources. The money was to be used to recruit world class talent to the State's research universities.
There are currently 49 Centers of Excellence with 41 endowed chairs. These Centers have resulted in over $1.2 billion dollars of outside investment and 7000 employees. There has been a six to one return on investment for the State. There are another 40 Chairs that have been approved, but State funds have been unavailable for the match.
SmartState put together an excellent conference program, with experts in commercializing research and the knowledge economy participating. Speakers included Saul Singer, one of the author's of Start-Up Nation, Peter Beattie, former Prime Minister of Queensland, William Symonds, Director of the Pathways to Prosperity Project at Harvard and many others. Thanks to Drs. Richard Swaja (MUSC) and Dr. Tom Kurfess (ICAR)and the SmartState staff for pulling together an excellent program. Thanks as well to the entire SmartState program for what they are contributing to the State.
Sunday, November 20, 2011
The US is still the most innovative country on earth. I saw significant potential collaborations between SC researchers and Israeli researchers in nanotechnology, neurology and other areas. There were at least two dozen Israeli companies that can potentially establish some kind of partnership with SC.
The population of the US is a little over 312 million. Israel is 7.5 million. SC is 4.5 million. We can not import culture. We can work to rebuild elements of the Israeli culture that are so successful. Let's look at the success factors and see what can be adopted.
1. Risk Taking. Outside of Silicon Valley and a handful of other entrepreneurial hotbeds, there is still a fear of failure when it comes to entrepreneurship. The Israeli economy suggests to American entrepreneurs, "why not?"
2. Immigration. In my opinion, we are going the wrong direction on this one. Most of the graduate students in engineering at USC are from outside the United States. We should staple a green card to their diploma, but that is not happening.
3. Ability to question authority. That is more in the culture of individual companies, but it should be encouraged.
4. Universal military service. It won't happen, but I for one would vote for two years. It think it would give the government a labor source, and would better prepare young people for college.
5. Government policy. SC has tried to become a business friendly state and for the most part has succeeded. I think that SC Launch can be every bit as effective as the Israeli incubators. We need to consider adding some support services to the effort. Russ Keller from SCRA/SC Launch was on the Mission and all over this idea.
6. Education. Don Herriott and Jim Reynolds, Co-Chairs of the New Carolina Education Task Force, have been exploring ways of improving the education ethos in SC. This should be among our highest priorities, but it is difficult to change someone who doesn't value education.
A great first step in connecting SC with Israel are the collaborations that I have idscussed over the last seven days. A speaker at Technion had a slide with a 2500 year old quote from Confucious. "Tell me and I will forget. Show me and I may remember. Involve me and I will understand."
Thanks again to all of the organizers, trip participants and Israeli hosts. It was a great trip.
So why is Israel so innovative? Experts such as the authors of Start-up Nation and venture capitalist Jon Medved cite the following reasons:
1. Risk. As a people, the families of Israelis have survived the holocaust, fought eight wars since 1948, and still have heads of nations calling for their extermination. What kind of threat is a business failure? Israelis are very willing to take risks.
2. Immigration. The Israelis opened their doors to Jews from everywhere in 1948. Even though the Jewish immigrants had a common language and common historical memory, they brought the motivation and the cultural interplay that have made first generation immigrants among the most successful entrepreneurs in the US. Shortly after the Israeli Declaration of Independence in 1948, some 687,000 Jews from around the world came to Israel. THEY CAME KNOWING THAT THE ISRAELIS WERE AT WAR WITH THE ARABS. Between 1989 and 2000, more than 950,000 Russian Jews immigrated to Israel. Many of the latter were well educated in science and medicine and immediately contributed to the country's intellectual horsepower.
3. Ability to Question Authority. It is probably not an accident that three of the world's five major religions started in Jerusalem. Jews have been questioning the reigning authority for a long time, and not without consequence. Today, according to venture capitalist Jon Medved, it is not uncommon for 19 year old employees to question a CEO about a decision. It is not uncommon for military privates to question officers. Why not? The junior employee or soldier may know more about a given situation than the Officer or CEO. In Israel, the culture encourages them to speak up without fear of retribution. It is an inherent part of the innovation culture.
4. Universal Military Service. Every 18 year old (both men and women) have required military service. It provides a common experience and a common understanding of the importance of defense for all young Israelis. The best and brightest are selected for elite units. One of the best units requires eight years of participation. In the first year, recruits spend three months rotating and learning about each branch of service. They then spend two years getting the equivalent of a BS in computers or physics. The next five years are spent working on weapon systems, defense strategies and advanced security, while completing other course work. When they leave the military at the ripe old age of 26, the venture capitalists are lined up to grab them as start-up CEOs.
5. Government Policy.
Stan Fisher is the current Governor of the Bank of Israel, a post equivalent to the Chairman of the US Federal Reserve. Fisher is an American born in Northern Rhodesia. He has Bachelor and Masters Degrees from the London School of Economics and a Ph.D in Econonmics from MIT. Before coming to Israel, he was Chief Economist of the World Bank. Fisher recognized that low interest rates were a key to investment, and like the US, he lowered interest rates in 2006 to encourage investment. Unlike the US, he did not lower the requirements for home mortgages. Israel still required up to 50% money to get a home loan. (For that matter, government grants generally require a 50% private match.) As a consequence, Israel did not have the meltdown that affected the US economy.
The questioning of authority makes Israeli government fairly contentious. We heard three speakers with three widely different views on the Palestinian issue. However, on the issue of promoting innovation and start-up companies, of building infrastructure, and in supporting research and the university system, the government seems to be of one accord.
6. Education. There is a culture in Israel that values education. I hope I am not generalizing too much to say that this is a part of the Jewish DNA. It was clearly reflected in the visits we had.
So can it be sustained?
In December, 2005, after only six months in this job, Bill Ward, a Clemson Professor in International Business and a former World Bank economist, invited me to join him to look at the Celtic Tiger in Ireland. Ireland and SC are almost the identical population and identical land area. Ireland was the poster child for the new economy. Bill knew most of the leadership of the major Irish economic development agencies from his tenure at the World Bank, and as a consequence, we met with the heads of all of them. I came away very impressed with what they had done, but I did not see much direct translation to South Carolina. We could not implement a 12% corporate tax rate. We could not provide free four year degrees to those that wanted it. We could not be the English speaking interface between high tech companies in America and the European market. As it turned out, perhaps Ireland could not do that either.
My sense from leaving Israel is different. They are not just hosting American companies like Intel, Google, etc. They are innovating for them. They are not just relying on American superstars, but they are spinning out companies on their own, in fact some 700 per year. They have their own venture capital infrastructure. They have first class educational institutions that are largely focusing on scientific innovations. Those insitutions are providing significant research and development with an ey towards commercialization. I did not have that sense in Ireland.
There was a T-Shirt in a street shop in old Jerusalem that said "We Have Your Back America."
Short of the Iranians lobbing a nuclear device towards Israel, I believe that what they are doing is sustainable.
On the flight from Tel Aviv to New York, I sat next to a man with a craggy face and a pony tail to mid back. He was reading an old book on mathematics (I did not write down the title.) I struck up a conversation. Turns out that he was a Doctor at the Hadassah in Jerusalem, former Department Head and still practicing medicine at 75. He was flying to New York to visit one of his four sons. Two were physicians, one was working on his post doc in physics and one was a banker. A picture of Dr. London Mordechai will be on the blog pictures.
There will be one more blog on what can we learn from Israel.