South Carolina. Emerging Technologies and the State of South Carolina: Creating World-Class Technology Clusters-- A Assessment. John R.
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1 South Carolina Emerging Technologies and the State of South Carolina: Creating World-Class Technology Clusters-- A Assessment John R. McIntyre Georgia Tech Center for International Business Education and Research Working Paper Series Working Paper /06 For further information: ciber@mgt.gatech.edu March 2005 (c) 2005
2 1. South Carolina Innovation and technology clusters have become one of the key success factors of world-class regions in their search for manufacturing and R&D foreign direct investment. This paper constitutes a preliminary effort to canvass the existing resource base and platform from which Alabama can leverage its relative competitive advantages in key technologies that are likely to drive the technological race at the dawn of the twenty first century. This paper therefore allows the reader to begin defining the rough outlines of a competitive profile, conceivably instrumental in crafting a state-level strategy for foreign direct investment targeting. For years, South Carolina has pursued a low-cost economic strategy, emphasizing its competitive work force and good physical infrastructure in order to attract manufacturing operations. However, with the emergence of many low cost competitors around the world, South Carolina has been struggling in creating jobs. In October 2003, the state s unemployment rate was 7.1%, higher than the U.S. rate of 6.0%. According to 2003 South Carolina Competitiveness Initiative Report authored by Dr. Michael Porter, South Carolina has a good base for developing strong industrial clusters, including positions in autos, textiles, chemical products, forest products, production technology, and power generation and transmission. Industrial clusters account for a significant part of the state s traded sector, with textiles and fibers, forest products, tourism and automotive assembly and components accounting for more than $ 10 billion of the state s $23 billion traded gross state product. Textiles and apparel have been facing significant declines in sales and employment, and the trend
3 is expected to continue over the next years, as companies are moving towards lowerwage countries. According to the Palmetto Institute, the Materials sector has been one of the most promising clusters in the state. Comprised of Chemicals, Plastics, Glass, and Rubber industries, the Materials sector has been benefiting from the Automobile and related industries. South Carolina is the 4 th largest Chemical Products cluster in employment in the country. Low cost, strong tech colleges, good transportation infrastructure contribute to the competitiveness of this sector. The Savannah River Site (SRS) accounts for almost half the cluster s employment. Forestry, Wood, and Paper is a well integrated sector, with relevant employment concentration. The IT and Computers sector is still small, but has been developing in a fast pace. Most of the firms provide basic internet and computer services. The hardware manufacturing base is small, compared to other Southern states. Notable software companies include Integrys Solutions in Greenville and Computer Software Innovations in Easley, which has developed an accounting and administrative software package that is used by approximately 80 percent of the school districts in the state. The Charleston Digital Corridor, the technological economic development effort of the city of Charleston, is promoting a regional initiative in order to support small startups in the region. Emerging research-driven sectors include Advanced Materials, Environmental Science, Biotechnology, and Defense. Advanced Materials is a diversified sector, with over 50 companies, producing advanced textile composites, polyolefins products, specialized chemical compounds & products, and ceramic composite products. A growing number of R&D facilities have been focusing on various aspects of advanced materials, including Nanotechnology, and Photonics. South Carolina is the 13 th in automotive cluster employment with rapid employment growth and improving research strengths. Some of R&D strengths include the Clemson Graduate School of Automotive Engineering, and the University of South Carolina fuelcell technology. The South Carolina Research Authority ( is a public, self-funded, non-profit organization that works to attract and support technology-based companies in South Carolina. SCRA has established five research parks strategically located throughout the state. Created as a means to encourage relationships between the private sector and South Carolina's major research universities, the research parks support over 40 private sector companies, each working to develop new technologies in diverse areas, such as advanced transportation systems, environmental engineering, information management and security, manufacturing research, software engineering, pharmaceuticals, and healthcare. The Clemson Research Park is located on Interstate 85 near Clemson University. The I- 85 Corridor running between Charlotte and Atlanta is one of the region s most manufacturing-intensive regions. Clemson University began construction of a state-ofthe-art material science building which will contain wet/dry, laser, and electromicroscope laboratories. Savannah Research Campus is located on Interstate 20 near Aiken, and
4 Charleston Research Park is situated in downtown Charleston, providing easy access to MUSC. Carolina Research Park is located close to USC, in the Columbus region. The Francis Marion University Park in Florence is home to the Pee Dee Educational Center. The vast majority of total R&D funding in South Carolina comes from industry. Milliken & Co. is one of the largest R&D industrial firms and operates the world s largest textilerelated research facility in Spartanburg. Other critical industries for science research include chemicals, paper, electronic components, information systems, optics and tires. DOE runs the Savannah River Technology Center. DOD maintains a unit of the Space & Naval Warfare Systems Center in Charleston. The Commerce Dept., through NOA, supports the Coastal Services Center in Charleston. EPSCoR, or the Experimental Program to Stimulate Competitive Research, is a federalstate partnership science and R&D program managed by seven federal agencies, including NASA, EPA, and the Department of Energy. Of the 23 states funded by the program, South Carolina has been considered a remarkable achiever in regards to its research environment. Clemson University, the Medical University of South Carolina, and the University of South Carolina have been major participants. Throughout the period, EPSCoR has been investing $50 million in various fields, including $9 million for nanoscience, structural and chemical biology, and bioengineering. Funds will also support the National Science Foundation s Engineering Research Center at Clemson Univeristy, which researches advanced fibers and films. The Medical University of South Carolina is a major recipient of the federally funded Biomedical Research Infrastructure Network, having received over $120 million in medical R&D in 2003.
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