By Andy Brack
The Brack Report

In a race like the Daytona 500, it’s pretty hard for the last-place car to zoom to a first-place finish.

Every car is a high-performance machine. Every driver goes round and round the track at dizzying speeds. For the last-place driver to get the checkered flag, he has to do significantly better to catch up to all of the other cars in the field.

So it is with bottom-ranking states like South Carolina that want to make big improvements in areas from education to business competitiveness. Other states don’t just sit still while the laggards make improvements. Top-performing states continue to innovate, make changes and get better. For South Carolina to make significant gains, it has to do more than innovate at an average rate; it has to do really big things to rocket forward.

That’s why a new benchmarking report from the S.C. Chamber of Commerce should make everyone think a little. Boiled down, it says the state isn’t doing enough now to make significant improvements in per capita income goals over the next 20 years.

“South Carolina’s rankings exemplify the need for continued aggressive change to make the state more competitive,” said S. Hunter Howard, president and CEO of the state chamber.

The chamber’s report, which is available for free at www.scchamber.net, measures how the state is doing in six areas.

The good news: We’re doing average in terms of having governmental structures for a business climate that encourages an innovation economy. Similarly, we’re doing about average for all states in providing the infrastructure needs of business. We’ve got pretty good roads and digital connectivity, compared to other states. Our bridge safety rating has slipped, but we’re doing better in improving broadband access, the report says.

The middling news: Surprisingly, our quality of life is rated 32 out of 50. With South Carolina’s warm people, great natural settings and outstanding cultural offerings, you’d think we have “quality of life” down pat. But it’s not a measure of solitude and contentedness. It relates to the state’s ability to attract businesses and entrepreneurs by having a quality business environment that works hand-in-hand with lifestyle amenities. On another driver, business costs, the chamber says the state ranks 36th due to slippages in workers’ compensation premiums and health care premiums. But the business tax burden is less than in other states.

The challenges: Education and innovation. As many would expect, South Carolina’s education rating is low at 44th, but progress has been made. Howard points to progress made with the Education and Economic Development Act, which includes provisions to channel eighth-graders into selecting a career cluster and developing an individual graduation plan. Additionally, there are more guidance counselors, which should lower the state’s high dropout rate. The business community also needs to keep pushing on kindergarten for 4-year-olds. “Too many of our students entering first grade can’t read,” Howard said.

The state also ranks near the bottom, at 42nd, in “dynamism and entrepreneurialism,” which can be translated into having a business environment of innovation. To make improvements, Howard said the state needs, among other things, to continue to support a program of endowed university chairs to bring smart people to the state to conduct research and help spin off projects to create jobs.

“Legislators need to realize that if things don’t change, and change quickly, South Carolina will become one of those states where business will not locate due to noncompetitive tax rates, noncompetitive workers’ compensation policy and a lack of a trained work force,” Howard said. “Legislators need to take a holistic approach to creating better jobs and to improving the quality of life.”

Jim Fields, executive director of the Palmetto Institute, agreed. South Carolina should take a two-prong approach. Do more quickly to make improvements on the economic engines of the state such as tourism, the state ports, resources at the Savannah River plant and the CU-ICAR center at Clemson, while continuing to make long-term investments in industry clusters, research and other things to strengthen our economic foundations, he said.

Andy Brack is editor and publisher of the S.C. Statehouse Report (www.statehousereport.com), a forecast of business developments in the S.C. Legislature and state government. E-mail him at brack@statehousereport.com.

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