By Dennis Quick
Quick Notes

The good news is that we finished nowhere near last. In fact, we finished near the middle, which I suppose translates to a respectable “C” on our economic report card.

I’m talking about Forbes.com’s “Best States for Business” rankings, released in August.

In case you missed it, South Carolina finished 27th in the ranking. Virginia finished first, Louisiana last. North Carolina, Florida and Georgia made the Top 10, finishing third, ninth and 10th, respectively.

Forbes based the rankings on business costs, labor, regulatory environment, economic climate, growth prospects and quality of life.

What shocked me was our quality-of-life ranking: a dismal 46. (Forbes rated New Mexico’s the worst and Iowa’s the best.) South Carolina’s quality of life is a key selling point among our state’s economic development corps, especially here in the Lowcountry.

When we talk about quality of life, we usually mean climate and scenery, golf courses and beaches. These are certainly strong attributes, which is why so many retirees keep moving here. But the folks at Forbes apparently put little stock in looks and leisure and instead focused on schools, health, crime, cost of living and poverty rates as crucial quality-of-life benchmarks.

We love to brag about our beauty. However, as the saying goes (and as the Temptations so beautifully sang it back in the ‘60s), beauty is only skin-deep. Substance, on the other hand, goes to the bone and is the quality that propels you up the economic ladder, according to Forbes.

Forbes also sneered at South Carolina’s economic climate. Again, we rated 46th. (Arizona ranked first, Mississippi last.) Economic climate ratings reflect growth in jobs, incomes and gross state product; they also reflect unemployment and the presence of big companies, Forbes explained.

The economic climate category seems the most difficult for improvement. All states want to lure companies that provide lots of jobs and pay hefty wages. The competition is fierce, which is why economic developers are so often out and about, pitching hard and dealing like crazy. That Forbes put us near the bottom of the list indicates, among other things, that although companies are coming here, we’re still not pulling in (a) enough jobs and (b) jobs which significantly increase our per capita wealth.

In the labor category, we came in 28th. (New Hampshire came in first, Rhode Island last.) Labor “measures educational attainment, net migration and projected population growth.”

I’m not sure what to make of our labor ranking. Apparently, the education level of our state’s work force is neither high nor low—which is surprising, considering that in 2002 the Manhattan Institute proclaimed South Carolina to have the nation’s lowest high school graduation rate, at 53%—and as our population grows, hopefully the number of eggheads will offset the number of dunces.

Growth prospects, reflecting “projected job, income and gross state product growth as well as business openings/closings and venture capital investments,” is where we climb into the Top 25. Forbes ranks us 21st in the nation. (Colorado is No. 1, West Virginia No. 50.)

I can see us making some headway in the growth prospects category, especially here in the Lowcountry. Massive, mixed-use developments like Carolina Park and Carnes Crossroads, not to mention the ever-developing Daniel Island, most likely will attract top-tier companies dishing out handsome salaries. And I’d like to believe that, due to our ongoing population growth, we’ll see more businesses opening than closing. Whether we’ll get a few drops of venture capital investment in this dry VC landscape remains to be seen.

As for business costs, Forbes ranked South Carolina 17th in the nation. (Wyoming finished first, Hawaii last.) This category covers labor and energy costs, plus taxes. As much as we talk about how cheap it is for companies to do business in the Palmetto State, I’m surprised we weren’t ranked in the Top 10.

Finally, we have regulatory environment. We finished seventh in this category. (Virginia ranked first, Rhode Island last.) This category measures “regulatory and tort climate, incentives, transportation and bond ratings.”

So what does this all mean?

If you don’t care a hoot about Forbes, it means nothing. But since Forbes is among the nation’s most respected business publications, what they have to say about us should jolt us into viewing ourselves more objectively. Next time we look in our economic mirror, we should peer past the beauty of our state’s scenery and lifestyle options—key selling points, to be sure—and deeper into our troubling blemishes.

Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.

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