EngenuitySC’s 2021 Midlands Regional Competitiveness Report Identifies Areas of Growth/Opportunity in Economic Competitiveness

Columbia MSA maintained or improved rank in all five indicators of economic competitiveness

 

January 25, 2021 (COLUMBIA, S.C.): On Monday, Jan. 25, EngenuitySC unveiled its 2021 Midlands Regional Competitiveness Report in an online launch event sponsored by BlueCross BlueShield of South Carolina. Official results (showing a mix of improvement, sustainment and regression in economic competitiveness) were announced by the organization’s founding co-chair Steve Benjamin, Mayor of Columbia, S.C, current board chair Elise Partin, Mayor of Cayce, S.C., and Dr. Joseph Von Nessen, research economist in the Division of Research at UofSC’s Darla Moore School of Business.

The Midlands Regional Competitiveness Report is a major annual initiative of EngenuitySC, a nonprofit that works to make the Columbia, S.C., region a standout choice for top talent and competitive companies. View report info here: http://www.engenuitysc.com/competitiveness-report/.

An Overview of the Competitiveness Report

The report analyzes economic competitiveness in the Columbia metropolitan statistical area (MSA) compared with that of nine other city regions in the Southeast, including Raleigh, North Carolina, Charleston, South Carolina and Lexington, Kentucky. The report measures success based on the following five major indicators of economic competitiveness: talent, innovative capacity, entrepreneurial and business environment, industry clusters and livability. The index for each indicator shows how the MSAs compare to both peers and to the national average. Research for the report is gathered and analyzed by Dr. Von Nessen and the team under Dr. Doug Woodward, Director of the Division of Research at UofSC’s Darla Moore School of Business.

Key Findings

The Columbia MSA’s relative rank improved or stayed the same in all five indicators in the report. In two areas – Talent and Innovative Capacity – the region saw an increase in index value as well.

Notable positive trends for Columbia in this year’s report include the following: continued strong performance in the arts, entertainment and recreation sector, with Columbia’s third straight year topping its peers in growth; an increase in the Innovative Capacity index, thanks in part to a series of record-breaking years for research funding at the University of South Carolina; and continued growth in foreign-born talent, contributing to a visibly international community. For the second year in a row, Columbia ranked in the top three in Entrepreneurial and Business Environment, driven in part by strong long-term growth in business establishments, highlighting Columbia’s “small business-first” environment.

Notable negative findings include an uptick in commute times, driven in part by a strong population shift towards Lexington County (which housed about 60% of the MSA’s year-over-year growth); a 2.6% decrease in total employment in traded clusters, a concern because traded clusters generally pay better wages, are responsible for more GDP and generate more innovation than local clusters; and low percentages of STEM graduates and low salary levels tell us that while the region’s educational attainment is broadly competitive, these degrees likely aren’t in high-growth career areas.

“One of the benefits of this report each year is that it highlights the competitive assets that Columbia maintains and can continue to build upon,” said Dr. Von Nessen. “For example, in 2021 we can clearly see that because of the pandemic, the strong talent base that Columbia produces has now become an even more important tool for long-run economic growth. With the phenomenon of remote work emerging, we have an opportunity to match our local talent with employers from around the world while still keeping them here where they can live and contribute to the Midlands economy.”

Importance of the Midlands Regional Competitiveness Report

The Midlands Regional Competitiveness Report is one of the hallmark projects of EngenuitySC every year. Through the creation and publication of the report, EngenuitySC measures the Columbia, S.C. region’s most useful success metrics for economic growth year after year. The report has become an important annual benchmark for the region’s performance against other regions with whom it competes for talent, new businesses, research and development dollars, industry growth and quality of life.

“Now more than ever, we must harness the power of partnerships,” said Meghan Hickman, executive director of EngenuitySC. “One thing we’ve all learned while navigating the current pandemic is that we must work together to overcome community challenges, even if we’re physically apart. As is always our intention with this report, we hope the data and stories of success will catalyze action and inspire readers to commit to making progress with us. Columbia is an incredibly special place that is bursting with opportunity. It is time to seize the moment and take action.”

Governed by high-ranking regional leaders in education, government and business, EngenuitySC is a nonprofit that works to make the Columbia, S.C., region a standout choice for top talent and competitive companies. The EngenuitySC board is steered by founding co-chairs Steve Benjamin, Mayor of Columbia, S.C. and Bob Caslen, president of the University of South Carolina, under the leadership of current board chair Elise Partin, Mayor of Cayce. Find out more about EngenuitySC at http://www.engenuitysc.com.

“On behalf of the EngenuitySC board, we are honored to create and share the seventh annual Midlands Regional Competitiveness Report” said Mayor Partin. “Because of the timing of data collection, the impact of COVID-19 is not reflected in this data set, but it can still help us get a leg up on the recovery and rebounding we can do as a community. Having a roadmap that identifies pre-COVID areas of opportunity will not only help us recover from the economic impacts of this year, but will help us to continue to grow into one of the Southeast’s best places to live, learn, work, play and visit.

This year marks the seventh year in which EngenuitySC’s Midlands Regional Competitiveness Report has been made public. It is available to view online at http://www.engenuitysc.com/competitiveness-report/.

The launch of the 2021 Midlands Regional Competitiveness Report kicks off EngenuitySC’s 2021 Competitiveness Series presented by BlueCross BlueShield of South Carolina and Dominion Energy. The series will include a slate of events between now and June, with the next scheduled for Feb. 11. in partnership with the Central Carolina Community Foundation. Complete details for that event and all others that are part of the Competitiveness Series can be found at https://www.engenuitysc.com/competitiveness-series-2021/.

See below for report summary, and find more info, in addition to the full report, via this link: http://www.engenuitysc.com/competitiveness-report/.

 

SUMMARY

EngenuitySC’s 2021 Midlands Regional Competitiveness Report

Overview of Results:

  1. Talent

Overall index rank: #9 of 10

Index value 88 

Observations:

  • Columbia saw continued growth in foreign-born talent, compared to our peers. In an increasingly globalized environment, a visibly international community is attractive to talent of all backgrounds.
  • When it comes to educational attainment, the Columbia region’s population is broadly competitive. There’s very little differentiation, particularly in percentages of college graduates.
  • Low percentages of STEM graduates and low salary levels, however, tell us that these degrees likely aren’t in high-growth career areas, such as computer science and engineering. Decreasing traded cluster employment over the past decade and relatively low GDP per employee support this observation.
  • Each year, there’s relatively little separation in this index between our peers across the Southeast. The likely reason is a complex mix of cultural, historical, socioeconomic and political factors.

Opportunity:

  • COVID-19 has led to a reshuffling of the American office-based sector, with many employees now able to work from anywhere. That’s led to significant numbers of people leaving high-priced tech centers like San Francisco and New York in favor of accessible, affordable midsized metros. With its reasonably priced housing market, downtown housing boom and access to amenities, the Columbia region can look to other metros that are using targeted marketing efforts — like Tulsa and Savannah — and financial incentives to harness this migration from major cities and bring fresh talent to the Midlands.
  1. Innovative Capacity

Overall index rank: #7 of 10

Index value 94 

Observations:

  • Columbia improved in this index, thanks to a series of record-breaking years for research funding at the University of South Carolina.
  • We continue to rank above the national average for the percentage of graduate and professional degree holders and for non-federally sourced R&D funding. As Columbia and UofSC attract increased research attention from the Department of Defense, the community should continue to build the visibility of its research profile.

Opportunity:

  • A new 5-year, $5.7M NASA grant will bring together UofSC and Benedict College, supported by other schools around the country, to work on new technologies and advanced materials for urban air mobility vehicles (think drone deliveries and air taxis) components. The research will center on scalable assembly and production techniques using new lightweight, high-strength materials. As the reach of the McNAIR Aerospace Center grows, this sort of research can be attractive to aerospace companies looking for a new location. At the same time, it will introduce students to career opportunities in the next generation of aerospace — one of South Carolina’s most prominent statewide clusters.

 

  1. Entrepreneurial & Business Environment

Overall index rank: #3 of 10

Index value 115 

Observations:

  • As demonstrated by one of the highest establishment growth rates among its peers, Columbia continues to harbor a “small business-first” environment. By providing a strong support ecosystem, the region can ensure inclusive growth as these companies mature and reach new customers.
  • The Columbia region’s share of employment in professional and technical services is third among our peers. Possibly related to state government’s (a frequent customer of these support industries) outsized local presence, this presents an opportunity for continued growth as a regional hub for technical expertise.
  • While these institutions provide a measure of stability across economic fluctuations, they also can serve as a hindrance to growth. Often offering lower salaries than comparable private-sector positions, these jobs are likely to be among the slowest to be replaced following the COVID-19 pandemic.
  • Tax data is not consistently available across metropolitan areas, thereby excluding it from analysis. Both Richland and Lexington Counties, however, tax industrial properties at substantially higher rates than our South Carolina counterparts, due in part to the effects of S.C. Act 388. This hampers the region’s overall competitiveness. (Source: Lincoln Institute study)


Opportunities:

  • As schools and businesses pivot to learning and working from home, the COVID-19 pandemic has highlighted the importance of broadband access. Several Columbia-area business leaders have championed a campaign to increase broadband access in rural areas, led by South Carolina’s legislative delegation. This effort can increase educational and career equity for underserved communities throughout our region and across the state.
  • COVID-19 has placed many small businesses into survival mode. As the economic recovery begins, efforts — such as Columbia Economic Development’s “Support Small, Save Local” video series — encouraging residents to shop and dine “local” will be critical to shoring the foundation of our unique Midlands economy.

 

  1. Industry Clusters

Overall index rank: #7 of 10

Index value 45

Observations:

  • Columbia continues to have a diverse economic profile, with no one industry dominating employment. The correct balance is important for long-term growth. A single strong industry cluster can power years or decades of robust job creation but can leave a region without long-term economic resilience if that industry is disrupted. Many small cities across Appalachia, once dependent on mining or furniture manufacturing without further diversification, have been left stranded by broad industry shifts. At the same time, a total lack of strong industry clusters reflects a region that lacks dynamism. The regions which perform best in the long run are those with multiple strong, successful industry clusters comprised of firms which reinvest in their communities.
  • Since 2010, Columbia’s total employment in traded clusters has decreased by 2.6%. This is an area of significant concern: on the whole, traded clusters (high-impact industries with products primarily traded outside the immediate area) pay better wages, are responsible for more GDP and generate more innovation than local clusters. Additionally, Columbia’s loss of traded cluster jobs can be directly tied to the low percentage of employment in high-wage occupations.

Opportunity:

  • The Columbia region has several major industrial parks currently under development, providing sites with the potential to attract tens of thousands of jobs:
    • The 1,544-acre I-77 International Megasite in Fairfield County — located just north of Columbia — will leverage the site’s proximity to talent and convenient location to attract a major manufacturer and suppliers, with a heavy focus on the automotive industry.
    • The 1,349 acre Blythewood Business Park in Richland County will offer a highly-accessible location with the potential for 5.3 million square feet of industrial and office space, aligned with the County’s study, in a rapidly-growing area.
    • Columbia Metropolitan Airport is developing unused property into two new industrial parks in Lexington County. Joining the nearby Saxe Gotha and Lexington County industrial parks, the sites will offer prospects air-, rail-, and interstate-accessible properties with a strong workforce pool.
    • The new sites will be joined by nearby Sandy Run Industrial Park, straddling Lexington and Calhoun Counties to offer a 761-acre site convenient to I-26, I-77, I-20 and rail lines.

 

  1. Livability

Overall index rank: #7 of 10

Index value 97 

Observations:

  • Columbia continues its strong performance in the arts, entertainment and recreation sector, with its third straight year topping its peers in growth. Properly marketed, this critical sector can serve as a flashpoint in attracting talent and businesses.
  • A strong population shift towards Lexington County — which housed about 60% of the MSA’s year-over-year growth — has contributed to an uptick in commute times. With no signs of slowing down, this area should be evaluated closely for mass transit options to reduce congestion and increase efficiency.
  • Though the region has seen improvement, the violent crime rate in the Columbia MSA is the worst among our peers. An abundance of scientific literature ties violent crime most closely to localized economic disadvantage. This highlights the importance of place-based approaches to economic development, ensuring that all parts of the community have access to quality education and real job opportunities.

 Opportunities:

  • As the Columbia region grows, transit will be a major factor in maintaining the high quality of life residents now know. Innovative partnerships to expand mass transit to growing industrial parks and major employers — such as the COMET’s route between downtown Columbia, Dominion Energy, Amazon and Nephron Pharmaceuticals — can increase access for employees and reduce transportation costs, while ensuring companies can meet their staffing needs.
  • The development of Columbia as a hub in the emerging telehealth sector would both expand healthcare access and create more jobs for area residents. COVID-19 is forcing wider adoption of telehealth technologies by providers and patients alike, and with smartphones accessible to almost everyone, telemedicine provides an avenue to reducing some of the public health inequalities seen in the Gallup Well-Being Index.

Find the full report online here: http://www.engenuitysc.com/competitiveness-report/.