November 17, 2006

Building a Sustainable Knowledge Economy in Charleston, South Carolina

Ernest G. Andrade  /  Intelligent Community Forum Newsletter

With the transition from a manufacturing economy to a knowledge economy well underway across the United States and globally, tomorrow's "Intelligent Community" will be one that successfully balances its economic development strategy between business formation and business recruitment. The days of cheap labor and tax incentives are giving way to a well-educated workforce, competitive broadband infrastructure and quality connected places.

Building a sustainable knowledge economy is a long-term commitment that starts by making an honest assessment about the current state of the community. Often, communities find this assessment less than positive and implementing a comprehensive knowledge economy strategy daunting. However, if this assessment is followed by mapping the pockets of innovation and networking with relevant individuals and organizations effectively through a process of "Strategic Doing," the community will embark on the long and exciting journey towards building their high-wage, knowledge economy.

"Strategic Doing" is a management discipline that generates new collaborations and translates ideas about these collaborations into action. Three key pieces of statistical data reinforce an argument that communities should spend more of their economic development resources on business formation.

First, approximately 80% of all job creation occurs from within the community; second, a majority of the businesses being formed today have five or fewer employees; and third, there is an inverse relationship between high wage, knowledge-based companies and their physical space requirements.

Charleston, South Carolina is a historic, coastal community in the Southeast United States with a statistical metropolitan population of 600,000. In 2001, a knowledge-based economic development initiative, dubbed the "Charleston Digital Corridor" was launched by the city of Charleston as a complement to the city's overall economic development strategy.

At the time, a reporter curiously questioned the number of knowledge-based companies that would locate to the Digital Corridor in twelve months. Recognizing that this reporter would most likely not follow up on his question, it would have been easy to throw out an exaggerated number. However, since there are many factors outside of Digital Corridor's control, it was best to focus on the ambitious goals the organization set out to accomplish over both the short and long term.

In Charleston, the initiatives that have been successfully implemented by the Digital Corridor include:
*Developing a talent portal for exclusive use by Corridor companies. Recognizing that talent is the key driver for successful knowledge-based companies, the talent portal connects qualified talent with career opportunities. This portal has also successfully addressed issues of brain-drain and spousal employment by allowing students and spouses to post and search relevant information.
*Connecting entrepreneurs with their successful counterparts and other seasoned professionals in the community who are available to assist them with the challenges they face in growing their business.
*Providing a source of early-stage capital for companies with high growth potential.
*Negotiating real estate and other business services on a company's behalf. By understanding the market inventory, the Digital Corridor's intervention helps companies negotiate better rental rates and lease terms.
*Offering start-ups and other companies considering relocating to the community a temporary, full-service business environment.
*Providing a news and public relations outlet for Charleston's growing knowledge economy.
*Hosting a limited attendance, monthly education series on topics selected by the Digital Corridor companies.

This event has also become an effective networking opportunity among companies. All the aforementioned initiatives are designed to work in concert with Charleston's existing knowledge economy. "As we transition our operations from Los Angeles to Charleston, the Digital Corridor is a tremendous ongoing resource to my company," said NanoScreen CEO, Daniel Dechert. "The level of support my company has received is unparalleled," he added.

A long term commitment and level of consistency are very important to growing a successful knowledge-based community. Further, it is important to build a level of trust among companies by offering them an efficient, high quality, technology enabled experience.

Almost six years since its launch, the Charleston Digital Corridor has grown from 18 knowledge-based companies to almost 80 businesses; the average wage rate of Digital Corridor companies is over twice the regional and state per capita wages and graduates from South Carolina universities are finding a growing number of career opportunities at home. Charleston is being increasingly recognized by national publications as one of the top mid-sized cities for entrepreneurs. Knowledge-based businesses are typically more networked than their traditional business counterparts.

"The greatest irony is that while the Digital Corridor does not call on companies to recruit them, an increasing number of knowledge-based companies from elsewhere are learning about the Charleston Digital Corridor and choosing to commence business operations in Charleston, South Carolina," said Charleston Mayor, Joseph P. Riley, Jr.

Tomorrow's successful communities will be those who invest their financial and professional resources in the process of "Strategic Doing," where the return on investment is measurable and the growing knowledge-based community celebrated.

Ernest Andrade is the Director of Business Development for the City of Charleston, South Carolina. He is the architect of Charleston Digital Corridor, a nationally recognized open source, economic development model to attract, nurture and grow knowledge-based enterprise. He is also the principal of Andrade Economics - a firm that positions communities for greater economic prosperity by helping them identify and optimize their creative assets through a process of technology-enabled community engagement. You can email Ernest Andrade or call 843.724.3773.