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