SwampFox

S.C. to engage Porter to plan for growth

Submitted by: John Warner on Feb 10, 2003 at 6:00 am Tagged with: General Archives Source:

S.C. plans for growth
Grant Jackson
The State

(Swamp Fox Note: See Michael Porter's Clusters of Innovation: Regional
Foundations of U.S. Competitiveness)

South Carolina is looking to one of the world's best minds on regional economic
performance to help it create a new competitive strategy.
Commerce Secretary Bob Faith is negotiating an agreement with Harvard professor
Michael E. Porter to study the state's economy and where leaders should focus
future development efforts.
"We expect to announce a detailed plan within the next couple of weeks on
exactly how we are going to do it," Faith said.
The agreement also is expected to involve the Monitor Group, a consulting
company affiliated with Porter.
Porter and the Monitor Group would study what clusters of industries and
businesses exist and the best opportunities for future growth. An
implementation plan would follow.
Porter, who was traveling Thursday and unavailable for comment, was one of
Faith's professors at Harvard Business School.
But don't jump to the conclusion that Faith is simply bringing in another
outsider to tell South Carolina how to do things.
Porter, a Michigan native who was educated at Princeton and Harvard, has
considerable ties to South Carolina.
The son of a career Army officer, Porter spent summers in Chesterfield. His
grandmother and aunt lived across the street from the mother of Columbia Mayor
Bob Coble. Last year, Coble was a pallbearer at the funeral for Porter's aunt,
Agnes Porter.
Coincidentally, Agnes Porter was the office manager at a small law firm in
Chesterfield where Jim Fields, the executive director of the Palmetto
Institute, practiced for a year. Fields grew up in Chesterfield County.
Porter has greatly influenced the initial work of the institute, the research
think tank headed by financier Darla Moore.
The institute actually began talking with Porter months before Faith was named
to head commerce by Gov. Mark Sanford. The group wanted Porter for a seminar or
lecture of some kind.
"We think it's a great first step for S.C. to do the evaluation of where we are
and what steps we need to take to bring us into the new economy," Fields said.
Added Faith: "Professor Porter has a passion for this state and really wants to
do this."
Porter is a leading authority on competitive strategy and the economic
development of nations, states and regions.
His paper, "Clusters of Innovation: Regional Foundations of U.S.
Competitiveness," is widely considered the gospel for economic revitalization.
He has worked with a number of states, including Connecticut, New Jersey and
Mississippi. In his home state of Massachusetts, Porter's work led to new
legislation and initiatives such as a governor's Council on Economic Growth and
Technology, which he chaired.
Porter believes regional competitiveness is undergoing a transition from a
focus on low cost to one on increased productivity.
"In many regions efforts to enhance competitiveness were based on lowering the
cost of inputs. The focus was on holding down wages, lowering taxes and
recruiting new companies using financial incentives," Porter wrote.
But that is ultimately self-defeating, he wrote. "Low wages do not yield
fundamental competitiveness, but they hold down the standard of living.
Financial incentives are easily matched by competing regions and erode the tax
base needed to invest in education and local infrastructure."
To be prosperous today, regions need to have a business environment and the
corporate capability to support high productivity.
Faith said South Carolina has put its emphasis on competing on the basis of
cheap land and cheap labor. It has not had nearly the focus it ought to have on
its business environment and competitiveness.
In the old style, state government set the economic development plan and drove
it through policy decisions and incentives.
For South Carolina and the Midlands to be successful in the new global economy,
Faith said, the state must fundamentally rethink its approach to economic
development.