The opening session of the Municipal Association’s Annual Meeting laid out the landscape for South Carolina in the new economy and focused on several elements specific to the role of cities.
The session spotlighted how cities must take a leadership role in the new economy South Carolina must develop to compete nationally and internationally. While the term “new economy” has been batted around for a number of years, its definition can vary from source to source. (Watch streaming video of the Annual Meeting session about the new economy.)
Simply put, the new economy is based on the exchange of knowledge and ideas and not just the creation and sale of a product. Job creation and higher individual income will result from innovative ideas and technology advances that are embedded into existing (and new) services and manufactured products.
This definition might initially lead some to think new economy jobs are only those involving high-tech business or hydrogen development. In reality, success in the new economy results from new and traditional types of business creating new ways of using technology and working together to compete globally, not just locally. Traditional businesses don’t go away, they reinvent themselves to thrive in this new economy.
Keynote speaker Ed Sellers drove home the role of strong cities in this new economy. Sellers is the chairman and CEO of Blue Cross Blue Shield of SC and chairman of New Carolina. (Watch streaming video of Sellers' speech)
He opened his remarks by noting the importance of the idea of a fundamental city-centric society. “I stand in amazement as I watch folks wax eloquently about how building our state is like building a bridge. They can produce the vision of the bridge but refuse to invest in the pilings that hold up the bridge.” Those pilings, he said, are our state’s cities and towns.
He stressed, “I’m on your side as you try to hold your place in this strange world we live in. The structure of politics of the state can allow one voice inside a state legislature to pursue a single agenda that can undermine the building of the bridge to get us to a better future.”
Sellers said New Carolina was established to make South Carolina’s economy stronger and more competitive in a new global environment. One key measurement in gauging South Carolina’s success is individual, or per capita, income.
In a vacuum, South Carolina’s per capita income of about $26,000 is merely a number on a page. “The absolute number becomes interesting when you compare yourself to someone else,” noted Sellers.
Compared to the rest of the country, South Carolina lags behind at only 82 percent of the national average. “Then compare us to Georgia and North Carolina,” he said, which are at 92 percent of the national average. “We are at a distinct disadvantage to our closest neighbors.”
Sellers said it’s easy to blame our state’s challenges on issues like race, a bad mix of industry or a rural economy. But none of these issues fully explain why we continue to lag behind in average individual income. New Carolina has done considerable research to determine the reasons behind these challenges.
First, Sellers said, our state’s productivity lags behind the rest of the country. He noted this has nothing to do with the work ethic or even the products we turn out. Rather, this lag is due to other states embracing an increased use of technology in traditional industries like textile manufacturing and agriculture.
Second, South Carolina has a smaller percentage of available workers who are actually working. These two indicators can be changed with focus and hard work, Sellers said.
To combat these challenges, New Carolina is pursuing a three-pronged approach.
First, Sellers said, “We must embrace the idea of developing clusters for business development.” Clusters, he explained, are businesses that traditionally might be competing with one another but now work together to build on their common interests. Cities are a critical element in developing successful clusters.
An example of a successful cluster is the California wine business. Wine growers realized to compete with France and Australia, they had to find ways to work together to market their products. They focused on the idea of California wine first and their individual products second. Profits increased for all involved. South Carolina must take a similar approach, and New Carolina has identified nine cluster areas that include businesses like agriculture, tourism, manufacturing and automotive.
Second, we must create an environment where new ideas can “live and breathe,” Sellers said. This includes providing funding for businesses with new ideas to thrive. This also means ensuring we have an educated workforce to work in these new jobs. Also, we must provide the quality of life these workers will want.
Finally, we must connect the dots. Sellers noted, “South Carolina is a state where everyone likes to be in charge. We’re working hard to get folks to work with each other within our state. Cheraw is not competing with Mullins for projects. We’re competing against North Dakota, North Carolina and South Korea.” Local leaders must work together and not against each other in this competitive environment.
Referring back to his initial bridge analogy, Sellers said, investment in our cities is a must for a successful state. By supporting the development of clusters and regional collaborations, cities become the conduits to connect the dots and make ourselves stronger to compete nationally and internationally rather than competing with our next-door neighbors.
Sellers’ speech got good feedback from members attending the Annual Meeting, said Howard Duvall, MASC’s executive director. “Our goal in having Ed as our keynote speaker was to get our hometown leaders thinking about how cities of all sizes have a role to play in this “new economy.” Based on the good questions his talk generated and the feedback from members, I believe he did a good job to begin connecting the dots.”
MASC will continue to work with New Carolina and other business organizations to ensure leaders in the state’s cities and towns have the resources and information they need to ensure all hometowns are successful in the new economy.