Friday, April 8, 2011

Entrepreneurship Conversation Leads to High Impact Recommendations

By Garry Powers

Director of Economic Development Initiatives
CTC Public Benefit Corporation

New Carolina’s High Impact Entrepreneurship conference was held on April 7.  About 125 participants from both urban and rural counties throughout the state met to have a conversation on how we can work together to build a stronger base of homegrown firms.

Our goals for the conference were to:
  • Learn more about the types of homegrown firms that are creating most of the jobs and wealth in the state.
  • Understand the factors that can help high impact firms expand in our state.
  • Obtain information about the entrepreneurship strategies that work in other regions of the country.
  • Discuss some specific steps that we can take in South Carolina to promote high impact entrepreneurship.
1. Who is Creating Jobs?
Research presented by USC professor Dr. Doug Woodward indicated that:
  • Small businesses with fewer than 20 employees are creating a disproportionately large share of South Carolina’s jobs.
  • In any four-year period during the last 10 years, 2.5 percent of all South Carolina-based “high impact” firms created almost all of the net new jobs in the state.
  • “High impact” firms are spread across industry sectors. 
  • High-impact firms are highly urban. 
  • About half are in traded sectors of the economy. 
  • South Carolina is not growing as many small firms into big firms as our neighboring states.
2. What are the Needs of High Impact Companies?
Based on interviews with South Carolina’s high growth firms and economic developers in the state, six of the most critical constraints to growth fall into the following categories:
  •  Lack of Access to Affordable Financing
  • Lack of High-level Management Talent 
  • High Business-related Taxes in Some Areas 
  • Need for more Collaboration Related to Innovation 
  • A Less than Robust Entrepreneurial Culture 
  • Difficulties in Attracting and Retaining High-level Professional and Technical Workers.
3. What Strategies Work in Other Regions?
Kurt Dassell with the Monitor Group, a global economic development consulting firm, indicated that many regions have difficulties implementing entrepreneurship strategies because: (1) they try and fail to become the next Silicon Valley, and (2) they do not understand their particular region’s strengths and weaknesses and - consequently - they do not pursue solutions that are tailored to their regions.  He recommended that South Carolina should focus on a small number of initiatives designed to increase the base of management talent and to improve access to financing.  

4. What are the Next Steps?
In collaboration with the economic development community and the organizations that provide services to entrepreneurs, New Carolina has pledged to identify three or four recommendations on strategies that can help to build a stronger base of homegrown firms.   Stay tuned.  We are still digesting the information from the conference.  
There was one clear message from conference participants, though.  They identified a strong need for a highly visible statewide “portal” that is recognized as the one place that entrepreneurs and service providers can go to find resources and information.  That is an idea that will be explored further.

5. One Other Success Story
During the conference, representatives from the organizations that currently operate or plan to open an incubator met to form the South Carolina Incubator Association.  Thanks to Joel Stevenson, the Executive Director of the USC/Columbia Technology Incubator, for taking the lead on this initiative. 

    Wednesday, April 6, 2011

    How do we gain more ground, faster

    By C. Grant Jackson

    Senior Vice President/Community Development
    The Greater Columbia Chamber of Commerce and New Carolina Partner

    Per Capita Income in South Carolina continues to head in the right direction. That was part of the story out of the data released late last month by the U.S. Bureau of Economic Analysis. Just not fast enough. That was the rest of the story hidden in the mass of BEA data.

    South Carolina’s per capita income, a metric that has been tied to New Carolina since its beginning nearly 10 years ago as South Carolina’s Council on Competitiveness, is now $33,163. That compares to $26,132 in 2003 when Harvard professor Michael Porter came to South Carolina to present his economic analysis and recommended South Carolina form a public-private partnership to tackle a cluster strategy for moving the state’s economy forward. That led to New Carolina.

    Since Porter’s study and the creation of New Carolina, per capita income has increased, just not enough and just not quickly enough. It has continued to hover around 81-82% of the national average – $33,163 is 81.7% of the current national average of $40,584. We also currently rank 45 in per capita income among the states. Those lower than us: Arkansas 46 at $33,150, West Virginia 47 at $32,641, Utah 48 at $32,595, Idaho 49 at $32,257, and (I won’t say it) Mississippi 50 at $31,186. By the way, we’ve actually ranked higher – in 2003 we were 42nd at $33,041 and 83% of the national average of $31,632.

    If you notice that 2003 national average is actually less than our state’s current per capita income. And that is the problem: as we gain ground, others are gaining a lot more. That is the real message: if we want South Carolina to break out of the 81-82% of the national average, we’ve got to find a way to grow quicker. 
    We often quote Michael Porter as saying, “It’s a marathon, not a sprint.” But to win a marathon at some point you’ve got to run faster and overtake the other guy. So as New Carolina moves toward closing its first decade I’d like to start a race strategy conversation: how do we move up in the pack?