DARLA MOORE
SPEECH TO THE LAURENS COUNTY ROTARY CLUB
October 29, 2003
I am delighted to be in Laurens today surrounded by beautiful fall colors and, more importantly, good friends. One of the pleasures of serving as a USC Trustee, and there are days when I must admit I can't think of too many pleasures with all of the budget cuts and the way our football team plays sometimes - but one of the real pleasures has been getting to know Herbert Adams. Herbert is a real asset to USC with both his tireless work on the Board and his vision of what our university and state can be. We need more individuals like Herbert serving in positions of public trust in our state.
I read a recent newspaper article which really underscores what I want to talk with you about today. The article announced the closing of two plants in Union and Saluda by Milliken, causing the loss of 260 jobs. Both Union and Saluda counties have a population of less than 30,000. Union's unemployment rate was already at 13.8% and Saluda's was at 5.2%. Being rural areas, it is obvious that the job losses will be devastating and, more important, there will be no jobs to replace the losses nor will these jobs ever return. What really caught my attention, however, was that in Union the exit of manufacturing labor has forced the local governments to come to grips with an unemployment problem. No kidding! According to the article, the city and county had each pitched in $1 million to build an empty building on an industrial site in hope of attracting new production businesses to the area. But, as the mayor of Union so pointedly noted in the article, "We are one of 25 counties that have got the same thing." Well, I will at least give the Mayor credit; he has got a keen sense of the obvious! What the Mayor knows but will not admit is that building empty buildings is not the solution except for the real estate agent and the builder. I wonder how far a million dollars would have gone in providing retraining for the workers who lost their jobs or in collaborating with the local technical education college to create new classes in areas with potential for new jobs. I wonder how far a million dollars would have gone in providing such basic needs as transportation and day care so the jobless could travel to larger metropolitan areas for better training or to look for new jobs. How about adult education classes or after school homework classes? I know these thoughts are not usual ones when you think about economic development but maybe it's time to think differently.
A couple of weeks ago I made a speech at a diversity gathering in Lake City. One of the key points which I truly believe applies to this situation is that in a crisis and trust me this is what we are in today, DO NOT try to do the same thing better. Do something different. I am sorry but building industrial parks or new buildings will not work when you do not have the workforce sufficiently trained to compete for jobs in the new economy. So, let's talk about some things we can do differently that might help.
- We need to identify the problems that deserve our attention now. When I look at the economic indicators for Laurens such as an unemployment rate of 9.4% in September, when I see a workforce approximately 41,000 below last year's level in South Carolina, and when I see the dramatic difference in per capita income between urban and rural, and black and white, I worry about workforce training, about educational opportunities, and about the economic gap between blacks and whites, and rural and urban. This is just my view, but I will tell you, there needs to be a meeting of the minds on these problems now.
- Once identified, let us develop a strategic plan which actually addresses the problem rather than just doing the same things that have not worked in the past. This will not be an overnight fix but it will be a plan that looks to the future - that builds on your existing assets - that requires public/private collaboration, and demands results.
- In order for any plan to work, there must be measurable standards. What is your goal? How are you going to accomplish it? What are the measurements that will determine your progress? Saying you are doing all you can or the best you can is not enough if it is not improving the measurements. That is politics - not good government.
To help regions achieve these goals, however, there must be a state framework which supports a new approach to economic development. Unfortunately, South Carolina has been slow to embrace this new approach and it is telling.
In 1990, the per capita income of South Carolina was at 82% of the national average. Ten years later, our per capita income stood at not quite 82%. During the most prosperous time of our nation's economy, South Carolina had not moved up one single percentage point. Even more disturbing, during the same time, our neighboring states of Georgia and North Carolina have moved their per capita incomes to above 90% of the national average. In the latest labor statistics published by the Bureau of Labor last week, South Carolina led the nation in the percentage of lost jobs during 2003. The state's average wages of $29,785 in 2002 were 81.9% of the national average. South Carolina's 3.6 patents per 10,000 employees in 2001 were well below the national average of 7.7. Our venture capital of $3 per worker in 2002 compared to the national average of $155 per worker. By the way, Georgia was at $146 and North Carolina was at $148 per worker.
What these statewide numbers say is what the Palmetto Institute's first major study confirmed. According to DRI-WEFA, South Carolina cannot compete vigorously in the new knowledge-based economy with its existing mix of industries and the quality of its economic foundations, which include labor force skills or education, access to capital, research and development, infrastructure, particularly Information Technology infrastructure, quality of life, and business climate. The study found we rated very high in quality of life and business climate but did not do well in the other four areas.
So, we have got to make a change - a real change in the way we approach economic development. The experts on this subject, including DRI-WEFA and Dr. Porter, recommend the concept of industry clustering. This concept builds on interrelated companies, suppliers, competitors, affiliated groups, research institutions, and organizations at the regional level to provide a synergy of human capital, infrastructure and intellectual support to grow the economy. Rather than solely chasing industries to locate in your region, you build upon and support your existing assets through technology and innovation. They will in return attract new industries and talent to the area.
Now, let me pause here one second to make a point. When I say we must be innovative, I am not just speaking of high-tech. Dr. Porter has said it is not what you make but how you make it. It is just as important for a textile industry to be innovative as it is for a start-up company dealing in biomedical products. That is how we in America must compete. We must make the product better or more quickly deliverable or some how unique in order to compete in a global economy. But, again, to be innovative, you must have a framework in place to give you the support, the access to capital, the human capital, and the infrastructure necessary for your efforts.
In December, the Palmetto Institute along with leaders from the Commerce Department, the State Chamber of Commerce, and the Palmetto Business Forum will roll out a long-term strategy for economic development in South Carolina. It will be, in my opinion, the first step in changing the way we think about economic development in South Carolina. The plan not only will give us a roadmap on how to become a more competitive state, but the plan will, if implemented, give us the tools necessary to support the types of businesses that will help our economy grow.
I must tell you, I am excited about the plan and its implementation. I also must tell you that it will require a great deal of work and collaboration. Unlike the old economy, this plan will not be driven by the government -- this plan will be driven by the private sector. Be assured, we will point to areas the government needs to support but it will be the efforts and collaboration of the private sector with the academic community, with regional organizations, and with each other that will make this effort successful. It will be our job to convince the General Assembly of the types of incentives which will help our small, innovative businesses rather than just the big elephants. It will be our job to work with our educational leaders to make sure we have the type workforce necessary to grow our businesses. It will be our job to collaborate with research universities to ensure they are helping with talent and research.
The bottom line is that this approach has worked in other regions, and with the help of Dr. Porter and the Monitor Group from Harvard, I believe it will work in South Carolina. I know the Palmetto Institute and its Board members will be doing everything we can do to make it successful. Because, you see, our mission is simple - increase the wealth of all South Carolinians, and we believe this is the first step in accomplishing such a mission.
Allow me to leave you with two final points. In the late 50's and early 60's, the medium family income of Columbia was greater than Raleigh, North Carolina, and Austin, Texas. So, first, it is not that we can't achieve success if given the right attitude and commitment -- we have proven that we can. Second, there is a wonderful passage in David McCullough's biography of John Adams where the young Adams writes about the desire of the colonies to be free and independent. He wrote that the issue was not just the tyranny of England but, more important, the timidity of the citizens of the United States in not speaking up more loudly in favor of freedom and independence. In other words, don't let someone else control your destiny -- that is your responsibility. Today, by your very presence here, you have demonstrated your desire to control the destiny of your region - to improve the quality of life for Laurens and its citizens. Rest assured, the Palmetto Institute shares your goals.
Thank you.