Monday, December 13, 2010

2010 Economic Outlook Conference, by guest blogger and New Carolina Intern, William Raffety

The 2010 Annual Economic Outlook Conference was a great success. Dr. Douglas Woodward, Dr. Joseph Von Nessen, and Zoltan J. Acs gave insightful presentations on the current status of the United States and South Carolinian economy, as well as predictions for this upcoming year and beyond. After giving an informative overview of the current fiscal and monetary policy, Dr. Woodward concluded that the United States will continue to slowly recover from the recession using both these policies as temporary crutches. However, he also reassured the conference that the fear of hyper-inflation is misguided and the long term cost of the bailouts is misinterpreted.
Relative to other historical United States recessions, the recent recession has seen a slow improvement in the recovering employment rates. The conference took an interesting approach to a possible solution to this problem: entrepreneurship and small businesses. A three member panel, consisting of Garry Powers, John Denise, and George Fletcher, discussed the issue of small businesses and the economic recovery in South Carolina. Zoltan J. Acs expanded on their thoughts by presenting on Entrepreneurship and “gazelle” firms. He believes these quickly growing firms are largely created by entrepreneurs fueled by innovation, improved efficiency, and re-allocated factors. In order to create these strong entrepreneurial firms, Mr. Acs suggested we focus on the 3 A’s: the attitude of the population, the activity of the entrepreneurs, and the aspirations of the few. With those ingredients, new companies can create jobs and opportunities while expanding and improving markets.
As I have learned while working with the New Carolina clusters, this entrepreneurial energy truly is the fuel for growth and expansion. However, it is not possible if the population, government, and markets do not support the proposed ideas. It is also not possible without setting long term goals. New Carolina’s clusters are working to do just that; focusing on possibilities and narrowing their vision to expanding firms’ strategies, creating a sustainable market for innovative ideas and investments, and setting achievable goals that will provide results and significant accomplishments.
The final consensus of the conference was that the economy will continue to recover at a steady, but slow, pace in 2011. Dr. Von Nessen predicted the state unemployment rate to decrease about 1.2% in 2011. If that rate remains constant, allowing for some fluctuation, it will take 3-6 years to get South Carolina back to normal rates. In my opinion, the short term key to increasing the rate of unemployment reduction is entrepreneurship and a focus on fast growing firms. I believe the recession brought out the flaws of some companies while highlighting efficient strategies of others. It also provided a sobering realization of corrections that need to be made in certain industries as well as the potential found in underrepresented, expanding industries. Now that the recession is over and recovery is under way, opportunities are opening up once again, and innovative ideas are being demanded. New Carolina’s cluster initiative is working to focus on these expanding industries and help their expansion while providing a catalyst for innovative ideas to branch out throughout an entire industry. By connecting ideas from growing firms to struggling firms, New Carolina is providing a support system that allows the state to grow as a whole without leaving certain distressed areas behind or underrepresented.

William Raffety
student, University of South Carolina Honors College
major, International Business and Economics

Friday, December 3, 2010

Dr. Patrick Moore

Dr. Patrick Moore was in the Upstate during the week beginning November 28.  Dr. Moore was one of the founders of Greenpeace, and is now a Co-Founded with former EPA Administrator and former Governor of New Jersey, Christie Todd Whitman.  Their organization is CASE, Clean and Safe Energy.  It is a nuclear power advocate.

Dr. Moore spoke to a group in the Fluor cafeteria in Greenville.  He said that nuclear power is the only safe and clean renewable that can provide carbonless baseload power for the next 1000 years.  Its safety record is unmatched in almost any industry.  He called solar power and wind power "pipe dreams."  Their intermittant nature and inherent cost will not make them competitive.  He said that future technologies for nuclear power will reduce the capital costs and the consume the waste in the reactor itself. 

Dr. Moore has recently written a book called "Confessions of a Greenpeace Dropout."  It can be pre-ordered on the website

Liberty Fellows Summit

One of the most dynamic programs in SC is the Liberty Fellows.  Founded by Hayne Hipp, the Liberty Fellows take 20 to 25 of the best and brightest young South Carolinians (ages 30 to 45) each year, and put them through an intensive two year leadership program.  Partners include the Aspen Institute and Wofford College.  I am happy to say that Amy Love was selected for the Class of 2012, the 7th class of Fellows.

On November 30, the Liberty Fellows held their first summit.  It was in Columbia and 750 people attended.  The keynote speaker was Dan Heath, co-author of the book "Switch."  The book provides a method of implementing change.  After his lecture, each table of 10 was asked to apply the methodology to specific problems in one of four areas:  Economic Development, Health and Environment, Public Policy and Education. 

My table discussed Economic Development, and specific the structure for Economic Development in the State.  The major conclusion was that we need a Comprehensive Economic Development Strategy in SC.  Governor Haley talked about a 10 year plan during her campaign.  Milliken CEO Joe Salley (also a Liberty Fellow) has called for a comprehensive strategy. 

The Monitor Group in 2005 produced a document called "A Strategic Plan for South Carolina."  It was built around clusters and task forces.  The problem with the plan was that it did not recognize the major economic development effort in the state which has been and is recruiting new industry.  SC has been very good at this for a long time.  It also did not recognize the role of the other partners such as Regional Alliances, the Power Team, SCRA, technical colleges, public utilities, local economic developers and others.  It did, however, recognize that Education and Workforce, Research, Distressed Areas and Entrepreneurhsip should be included in such a plan.

I hope the Liberty Fellows and the new Governor will take the opportunity to organize a way to produce one overall long term comprehensive economic development strategy for the State.

SC Rural Development Council Strategic Plan

The Annual Meeting of the SC Rural Development Council was to identify elements of existing strategic plans that the group might wish to pursue.  An intern at Clemson reviewed plans from the I-95 Corridor Study, New Carolina, the Palmetto Institute, the Palmetto Agribusiness Council, the Forestry Commission, the McNulty Strategic Plan for Tourism and the I05 Rejuvenation Paper by SCRA.  Co-Chairs David Hughes and Vernita Dore believed that direction could be obtained from existing plans.  The group subsequently identified some 26 issues from the reports. 

After much discussion, the group identified two areas:  Entreprenuership and Education/Workforce.  Entrpeneurship would include a borad range of issues, including various funding models, public policy, renewable energy and entrepreneurship education.  Education and workforce will work with existing groups to identify problems and seek solutions for the lack of trained workforce in rural areas.

The Council recognized and thanked Walter Harris for his service as coordinator of the Rural Development Council.  Walter was retiring on November 23 after many years of service to Clemson and the State of SC.

Harvard Business School

On November 17, the project team for the EDA Cluster Mapping project assembled at the Harvard Business School.  The team members are Harvard's Institute for Strategy and Competitiveness (Michael Porter), MIT, Temple, the Monitor Group and the states of Massachusetts, Minnesota, Oregon and SC.  The meeting began with Michael Porter summarizing the last 10 years of his work with Regional Innovation Clusters.  He contends that the data is overwhelming that robust clusters are the best way to generate innovation and entreprenuership within regions.  The federal government has adopted his approach, and this $3.5 million grant will be the way to get those ideas into the mainstream of economic development thinking. 

We also had a presentation from the MIT Entrepreneurship Center.  This organization spits out 200 to 400 technology companies a year.  Their ways of identifying technologies arfe fairly unique, and I will try to get the Head, Bill Aulet, to come as a speaker for our High Impact Entreprenuership Conference on April 7th, 2011

Wednesday, October 20, 2010

Dr. Peter Beattie, Queensland "Smart State" Model

Dr. Peter Beattie, former Premier of Queensland, Australia, gave the first of four lectures around the State on the Queensland "Smart State" Model.  In a relatively short period of time, Queensland went from (to quote John Warner) "rocks, crops and tourism" to a world class biotechnology center.

Dr. Beattie does not believe that SC should try to compete in life sciences beyond several niches like medical devices.  (The consultants that are updating Charleston clusters agree with this assesssment.)  However, he thinks we have a competitive advantage in areas like biofuels.

He said that the United States has the best universities in the world, but we must continue to invest in research and innovation and then hold the institutions accountable for commercializing the technology.  This will be the only way that we can compete with China, which can commit to long term technology objectives without the inconvenience of election cycles.  As Dr. Beattie said, "if China develops a cure for lung cancer, and I have lung cancer, I am going to China for the cure."

The next three lectures will be in Charleston on October 27, Clemson Sandhill on November 3 and the Strom Thurmond Institute in Clemson on November 16th.  Details, as well as the full text of Dr. Beattie's speech to the SC Commission on Higher Education, are available on the following Swamp Fox link:

SCEDA Mid Year Meeting

Milliken CEO Joe Salley gave the luncheon speech at the SCEDA Mid Year Meeting on October 15.  He listed the various (all good) commitments of the gubnatorial candidates, but asked the question "What is our strategy?"  "What differentiates SC from other states?"  "What are our unique and valuable resources?"  "What role does the sense of place play in our overall strategy?"

Dr. Salley specifically mentioned Michael Porter and the cluster strategy.  This is not a complete strategy, but where there are robust clusters (Silicon Valley, for example), economic development takes care of itself.

He said that we need an overal  strategy that 1) addresses the above questions, and 2) outlasts the term of any one Governor.

I hope that whoever is elected Governor would ask Dr. Salley to play a role in crafting such a strategy. 

Monday, October 11, 2010

Ambassador of the Year

On September 29, the Columbia Chamber recognized Ed Sellers as Ambassador of the Year.  This award was in recognition of the incredible civic role that Ed and Blue Cross Blue Shield have played over the his tenure as CEO.  He retired from Blue Cross on August 1st, where he added 8000 jobs during his18 years as CEO.  As part of the presentation, four former Ambassadors talked about the need for a long sustained effort to achieve success.  Joel Smith talked about the challenges of creating a positive relationship with the University and the City of Columbia.  John Lumpkin talked about the knowledge economy and the need to sustain support for Innovista and the waterfront.  Lee Bussell talked about the decade long challenge to build a homeless shelter. 

In accepting the award, Ed said that it is a dangerous time.  Many people are angry at the economy and government and many individual and community actions will be threatened.  It is important to sustain these long term efforts. 

We are thrilled that Ed has maintained his own commitment by remaining as Chairman of New Carolina.

Wednesday, September 15, 2010

Inaugural Blog

One of the great things about this job is that Amy Love and I routinely have chances to interact with the thought leaders of the State.  In this blog, we will share some of their ideas and stories.
My initial blog will come from a speech that Otis Rawl, CEO of the State Chamber of Commerce, gave to the South Carolina Economic Developers Association. Membership meeting on August 26th.  He quoted Dow Chemical CEO Andrew Liveris who has called for an "Advanced Manufacturing Plan" to rejuvenate the US Economy.  The strategies are 1) New infrastructure investment, 2) Cutting edge R&D, 3) Education that leads the world, 4) Fair trade policies, 5) Alternate energy, 6) Regulatory reform, 7) Fair taxation and 8) Civil justice reform.

Otis expressed concern that the current debate in Washington is over issues like "card check" and "cap and trade" that will make Southern manufacturing less competitive. 

He then outlined some legislative steps that the state chamber will pursue to mirror these strategies at the State level. 

South Carolina's economy is strongly dependent on manufacturing and we applaud the idea of an Advanced Manufacturing Plan at both the federal and state level.