Economic Scorecard: Region needs to focus on 4 challenges

Lowcountry leaders must focus on four critical issues for the area to become an economic powerhouse like Raleigh or Austin, Texas, according to the 2014 Regional Economic Scorecard.

Panelists from the Charleston Regional Development Alliance and Charleston Metro Chamber of Commerce introduced the fifth annual assessment of economic progress in Berkeley, Charleston and Dorchester counties this morning during the Charleston Regional Business Journal's Power Breakfast.

Transportation, education, innovation and talent are the main challenges facing the region, according to the scorecard.

Transportation

Mary Graham, senior vice president at the chamber, said 43 people a day are moving to the region. Traffic in the region has increased 43% since 2004, and S.C. drivers pay less than $10 per month on average in motor-fuel user fees.

"We don't have enough infrastructure," Graham said. "The Department of Transportation estimates there is a $42 billion gap in our state in terms of infrastructure funding. We've got to do something to address those needs throughout our region and our state. It's time to invest in this."

She said the Charleston chamber, along with the chambers in Columbia and Greenville, will be pushing this year for a 25-cent increase in the motor-fuel user fee. It is currently 16.75 cents per gallon, which is the third-lowest in the country."25 cents still makes us lower than Georgia or North Carolina. It's a motor-fuel user fee that hasn't been increased in this state in 27 years," Graham said. "It doesn't get us to the $1.5 billion that we need to address the issue, but it gets us a long way towards it."

Bryan Derreberry, president and CEO of the chamber, said infrastructure is the state's Achilles' heel."Five years ago, they looked at the cost of repairing and adding to the statewide infrastructure. It was $29 billion. In five years, it has gone up to $42 billion," Derreberry said. "Every year we don't get it accomplished, we fall further and further behind."

Education

Graham also discussed the talent-gap analysis included in the scorecard, which shows that many of the region's technical and high-wage jobs are being filled by workers from outside of South Carolina."We have severe shortages right now in being able to fill these jobs with the current workforce supply we have in our region," she said. "That's one of the areas we're very focused on."

Graham said they'll also be working to help develop four-year and graduate degrees that are needed for industrial production, computer and software, science and engineering, sales and marketing, medical and business sectors.

"The College of Charleston is doing a fabulous job in their IT-computer technology department. They graduated 21 students with four-year degrees last year. We need 179 a year," Graham said. "So we have somehow got to scale up significantly to be able to meet the workforce demands going forward."

Innovation

Steve Warner, vice president for global marketing and regional competitiveness at the Charleston Regional Development Alliance, said the region has lost ground on innovative activity --- the ability to generate new ideas, products and processes --- since 2005. For comparison, Greenville and Lexington, Ky., have improved on most of those indicators, according to the scorecard.

"The good news there is we've had a little bit of improvement in venture capital, which is kind of the lifeblood for innovative activity," Warner said. "But we still have challenge areas in STEM higher education programs." He connected innovation to high-tech job creation by explaining a 2012 study completed by the Bay Area Council, a San Francisco-based think tank and public policy organization.

The study found that one job in the high-tech sector, defined as industries with "very high shares of workers in STEM fields," leads to 4.3 additional jobs in local goods and services economy.

Talent

Recruitment and retention of skilled workers is going to come down to making housing more affordable, according to Graham. "We've got to tackle the housing issue we have in this community," Graham said. "We know the cost of living here in our community is higher than normal, is higher than any of the other communities that we are benchmarking against. But if you look at housing prices, what is really going on to drive that?"

Charleston's median home price is $224,100, which is higher than Richmond, Va., Jacksonville, Fla., Knoxville, Tenn., Lexington, Greenville and Raleigh, according to the scorecard. The region's population is also expected to reach 1 million by 2027.

"We can't continue to go further and further out in development because that's going to only lead to further traffic congestion and lots of other issues. We're at a point in our community where we've got to go up," she said.

Using the scorecard

David T. Ginn, president and CEO of the Charleston Regional Development Alliance, said the scorecard is a "wonderful leadership tool." He said he uses it as a sales tool as well. He said a colleague in a large Florida market was doing a similar scorecard a few years ago.

"Some of their indicators --- like our innovation indicators --- were trending the wrong way, and the business leaders on his board said, 'Stop doing it. It's making us look bad.' It is tough to show your warts and all, but I think it's important," Ginn said.

He said he shows the scorecard to groups so that the region can be measured objectively, leaders can know what's doing well and everyone can team up to work on parts that aren't high-performing.

Anita Zucker, CEO of The InterTech Group, was in the audience at the event. She asked business leaders in the room to help make elected officials aware of the scorecard's data.

"Whether we're working on improving education, whether we're working on selling our region, whatever it is that we're doing, to me this is an incredibly valuable piece of information," Zucker said. "We need to sell our tools to our elected officials and make our counties and our delegation aware."