For nearly 50 years, from the 1950s to the early 2000s, South Carolina’s policymakers used an economic development strategy that centered on attracting manufacturers to our state with its flexible workforce, business-friendly environment, and responsive government. Low-wage, low-tax incentives enhanced South Carolina’s agricultural and textile manufacturing base.
This strategy worked for about 30 years. From the 1950s to the early 1980s, per capita income in South Carolina rose nearly 400 times in real terms and increased to nearly 80 percent of the national average. But for the following 20 years, per capita income stagnated at this 80 percent level. South Carolina began to see a rise in competition from countries offering even lower wages and lower taxes. Unable to compete, the state’s textile manufacturing base went overseas. Despite these challenges, economic efforts continued to employ the same recruitment strategies.
In the late 1990s and early 2000s, business leaders began to look for new approaches to transform South Carolina’s economy. The recruitment of BMW to upstate South Carolina in 1992, the loss of the textile industry to overseas locations, and the recognition of the importance of the South Carolina Ports Authority to the state’s economic health triggered a new discussion of how South Carolina should compete in the global economy.
With a new vision of where South Carolina could sit in the global market, business leaders searched for a new model of economic development. In 2003, several of South Carolina’s key business and civic leaders invited Harvard professor and leading authority on competitive strategy, Michael Porter, to make recommendations on how to approach long-term competitiveness in our state. Dr. Porter presented his economic analysis and recommended South Carolina form a public-private partnership of business, government and academia. That group was formed as the South Carolina Council on Competitiveness, and is now called New Carolina.