2015 Midlands Regional Competitiveness Report

TM

Imagine More

2015 Midlands Regional

COMPETITIVENESS REPORT TALENT | ENTREPRENEURIAL & BUSINESS ENVIRONMENT | INNOVATION | INDUSTRY CLUSTERS | LIVABILITY

www.EngenuitySC.com

OVERVIEW The most insightful journeys in life are TM measured by progress, not perfection.

The second annual Midlands Regional Competitiveness Report (MRCR) is a Imagine More great example of this - a journey where success is tracked by steps in the right direction. This report takes a closer look at the five indicators of competitive communities – talent, entrepreneurial/ business environment, innovative capacity, strong industry clusters and livability – measuring Columbia and other MSAs on a variety of metrics to see how we compare.

At EngenuitySC - a public-private partnership focused on enhancing our region’s economic competitiveness and prosperity - we provide unique expertise and staff capacity for the region around four key service areas: project management, regional collaboration, new industry cluster activation and regional marketing, research and analysis. MRCR is one of the primary tools produced from our regional marketing, research and analysis service area.

In this second edition of the report, you’ll see something new: indications of where we’ve improved - or, in a few cases, where we’ve fallen behind - as a community. This is one of the key benefits of looking at year-over-year data.

We know that things don’t change overnight, either for better or worse. But a look around our rapidly changing community - from the growing number of construction sites across the region, to exciting riverfront developments - tells a story of a world-class competitor.

However, our story is not finished. Not even close. In fact, this report will show that while we are moving in the right direction, we’ve still got progress to make.

That is why, just as we did in last year’s report, we are challenging the region to own the “Magnifying Opportunities” in each section. These recommended actions should become a catalyst for conversation and a task list for change in the next 12 months. This work, and continued improvement, will not happen with just one organization. We all have a role to play and we welcome you to join the movement for a more competitive Midlands.

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2015 Midlands Regional Competitiveness Report

Indicators of Competitive Communities Measuring success around the five indicators of economically competitive communities

1 TALENT A region’s ability to provide a skilled workforce to meet the demands of industry in its economy

2 ENTREPRENEURIAL & BUSINESS ENVIRONMENT A region’s ability to commercialize innovation and to provide an environment that supports the growth of business ventures

3 INNOVATION A region’s capacity to support creation of new knowledge and generate new ideas, products and processes

4 INDUSTRY CLUSTERS A region’s relative size, strength and density of high impact clusters and ability to grow industries that are competitive on an international scale

5 LIVABILITY A region’s ability to attract and retain talent through building a dynamic live, learn, work and play environment

Reading this Report How to read the data This report is based on data produced by various federal government agencies.

Data was compiled and analyzed by economists at the University of South Carolina’s Darla Moore School of Business.

What is considered the Columbia MSA? The data in this report is for the Columbia metropolitan statistical area (MSA), the primary MSA that covers the South Carolina Midlands. It includes Richland, Lexington, Kershaw, Fairfield, Saluda and Calhoun counties. More details about the region on next page.

What is an index?

This report examines many indicators of regional economic competitiveness.

Each indicator is compared to the national average. For example, an index of 110 for the Columbia MSA means that our region is performing 10% above the U.S. average. Likewise, an index of 90 means our region is performing 10% below the U.S. average.

(Indicator/U.S. Value) x 100 = Index Value

Other content in this report The Indicators • Individual metrics that together make up the overall index in each category • Each indicator has an icon beside it to denote improvement, worsening or no change (year-over-year), or if it is a totally new or revised metric Focus on Trends • Positive: the individual metrics within a category where the Columbia MSA showed improvement year-over-year • Negative: the individual metrics within a category where the Columbia MSA worsened year-over-year A Closer Look • Spotlights a company or organization that is excelling within that particular area of competitiveness Through Their Lens • A local leader’s perspective on how we’re performing within that indicator Magnifying Opportunities • A short list of recommendations on where to focus as a region over the next 12 months

www.EngenuitySC.com

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GEOGRAPHY Columbia MSA

Fairfield

Population: 61,697

○The Columbia Metropolitan Statistical Area is an area of six counties - Richland, Lexington, Kershaw, Fairfield, Saluda and Calhoun - in central South Carolina. Its anchor city is the state capital of Columbia. As of the 2010 census, the Columbia MSA had a total population of 767,598, making it the second-largest metropolitan statistical area in the state of South Carolina.

Richland Population: 384,504

Saluda Largest cities in Columbia MSA (by population) • Columbia • Lexington • West Columbia • Cayce

• Irmo • Forest Acres • Camden • Batesburg-Leesville

Population: 19,875

Lexington Population: 262,391

Why are some Midlands counties not included in this report?

2015 Midlands Regional Competitiveness Report

Population: 129,272

Population: 15,175

Who determines what is included in the Columbia MSA? MSAs are defined by the Office of Management and Budget (OMB) and used by the United States Census Bureau and other federal agencies for statistical purposes. By definition, an MSA is a geographical region with a relatively high population density at its core and close economic ties throughout the area; typically, MSAs are anchored by a single large city that has a large amount of influence over a region.

Columbia

Calhoun

Some counties that are often thought of as part of the Midlands are not technically included in the Columbia MSA. These counties include Newberry, Orangeburg and Sumter, among others. We use the geographical area of the Columbia MSA - not the loose definition of “The Midlands” - in order to compare the region to the other regions in the most fair way possible.

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Kershaw

Population: 23,956

Population source: US Census Bureau; 2010 Census

Our Comparative Locations

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7 5 2

1. Raleigh, NC MSA* Population: 1,130,490

6. Charleston-North Charleston, SC MSA Population: 664,607

2. Knoxville, TN MSA Population: 837,571

7. Winston-Salem, NC MSA Population: 640,595

3. Greenville-Anderson-Mauldin, SC MSA Population: 824,112

8. Augusta-Richmond County, GA-SC MSA Population: 564,873

4. Columbia, SC MSA Population: 767,598

9. Lexington, KY MSA Population: 472,099

5. Greensboro-High Point, NC MSA Population: 723,801

10. Tallahassee, FL MSA Population: 367,413

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*Raleigh is an aspirational metro, meaning it serves as a target for the Midlands as opposed to a peer metro Population source: US Census Bureau, 2010 Census

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How were the comparative locations chosen?

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The metro areas were chosen based on a diverse set of economic assets comparable to the Columbia MSA. These assets vary across the metros, with all metros having at least one of the following similar assets to Columbia: • State capital • Major university in region • Strong higher education system (2-year and 4-year) • Comparable population

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• Entrepreneurial environment • Strength in technology • Similar geographic situation and landscape

South Carolina counties included in this report: Charleston-North Augusta-Richmond Charleston, SC MSA County, GA-SC, MSA • Berkeley • Aiken • Charleston • Edgefield • Dorchester • (also includes Burke, Columbia, Lincoln, McDuffie and Richmond counties, GA)

Columbia, SC MSA • Calhoun • Fairfield • Kershaw • Lexington • Richland • Saluda

Greenville-AndersonMauldin, SC MSA • Anderson • Greenville • Laurens • Pickens

www.EngenuitySC.com

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TALENT A region’s ability to provide a skilled workforce to meet the demands of industry in its economy

The Indicators

The Index

100 137

Raleigh

GDP per Worker: Measures a regional workforce’s productivity to support robust industries

+

STEM Degrees: Percentage of degrees awarded in science, technology, engineering and math

–

Knowledge Workers: Percentage of population employed in knowledgeintensive (STEM) occupations

+

Educational Attainment: Percentage of population with: • Associate’s degree • Bachelor’s degree or higher

+

Global Talent: Percentage of population that is foreign-born

111

Greenville

100

Charleston Lexington (KY)

97

Columbia

96

Tallahassee

96

Greensboro

96 93

Knoxville Winston-Salem

91

Augusta

91 U.S. Average

Change In Index Value Baseline Index Value (2014): 96 2015 Index Value: 96

–

= NO CHANGE

Year-over-year change + – =

= improved = worsened = no change = new or revised metric

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2015 Midlands Regional Competitiveness Report

Focus on Trends

Employment Outlook

Positive • Increase in the percentage of foreign-born talent • Increase in STEM degrees awarded • Continue to be strong in educational attainment, with 8.4% of population with an Associate’s degree and 30.7% with a Bachelor’s degree or higher (higher than the US average and an improvement over last year’s data)

Columbia was named the fourth-best city in the U.S. for job outlooks for Q3 2015, indicating strong employer hiring confidence.

The area has a 31% net employment outlook compared to 16% nationwide.

Negative • Employment in STEM occupations is below the US average and decreased slightly to 18.27% from 19.04% • GDP per worker slipped from last year

Net employment outlook

31% 16%

○

A Closer Look Apprenticeship Carolina Apprenticeship Carolina works to increase awareness and use of registered apprenticeships. The growth has been phenomenal.

In the Columbia MSA, there are 228 programs and 1,348 apprentices. Typically, traditional trades, like construction, are seen as ideal for apprenticeship. Apprenticeship Carolina has broadened that scope to include nontraditional industry sectors like healthcare, information technology and advanced manufacturing. An excellent example is Calhoun County’s Devro, Inc. - a leading supplier of collagen casings used in the production of sausages and other meat products. Devro, Inc. has 67 machine operators in a 2-year apprenticeship program designed to create a pipeline of talent within the organization.

Columbia

U.S.

Source: manpowergroup.com

Magnifying Opportunities Increase state funding for public two- and four-year higher education institutions to help mitigate cost for students and increase graduates to meet the demands of business Support regional opportunities, like Cradle to Career, that will establish data-driven benchmarks and provide accountable oversight Increase participation in programs like Youth Apprenticeship and ApprenticeshipSC Emphasize STEAM (science, technology, engineering, arts and math) and soft skills in regional K-12 programs

www.EngenuitySC.com

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ENTREPRENEURIAL & BUSINESS ENVIRONMENT A region’s ability to commercialize innovation and to provide an environment that supports the growth of business ventures

The Indicators

The Index

100 116

Charleston

Proprietors’ Income Share: Percentage of income in a region generated by business ownership

–

Small Business Activity: Percentage of establishment births of the total establishment activity (businesses with 20-499 employees)

116

Raleigh

105

Knoxville

Business Density: Number of establishments per 1,000 employees

97

Tallahassee Lexington (KY)

94

Greenville

93

+

Business Services: Share of population employed in professional and technical services occupations

88

Columbia

86

Winston-Salem Augusta

85

Greensboro

84 U.S. Average

Change In Index Value Baseline Index Value (2014): 88 2015 Index Value: 88

+

= NO CHANGE

Year-over-year change + – =

= improved = worsened = no change = new or revised metric

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2015 Midlands Regional Competitiveness Report

●

Focus on Trends Positive • Proprietorship is strong, as indicated by an increase in percentage of income generated by business ownership • Share of employment in professional and technical services increased Negative • Small business activity has decreased slightly from last year’s data ○

A Closer Look

South Carolina Has Fastest Growing Number of Start Ups South Carolina is ranked 29th in the U.S. for start up activity compared to 46th last year: that's the biggest 1-year increase in the nation. Here in the Midlands, many entrepreneurs are seeking and finding success thanks to the many resources available to them.

29th

The ranking of S.C. for start up activity

Source: Kauffman Foundation Annual Report

Columbia College Columbia College recently announced a $5 million gift from The Robert and Janice McNair Foundation to create the McNair Center for Entrepreneurism.

The Center will serve Columbia College students in both the Women’s College and in its co-ed Professional Studies programs, in addition to connecting with regional innovation communities. The new Center will include a McNair Fellows program for students with customized coursework and apprenticeships, a micro seed fund for students and alumni entrepreneurs, a mentor network working in partnership with the South Carolina Women’s Entrepreneurship Network, and an advisory cabinet to establish connections in the entrepreneurial community.

Magnifying Opportunities Tell the unique Midlands story: strong small-business culture, regional “cool-factor”, easy to do business Support local business retention and expansion efforts Create more fundable, scalable, growth-oriented companies in the Midlands Generate an excitement for investing in next generation of business opportunities Capitalize on new, vibrant spaces under construction for some of the region’s incubators and co-work spaces, using them as a tool to recruit and retain top talent

www.EngenuitySC.com

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INNOVATIVE CAPACITY A region’s capacity to support creation of new knowledge and generate new ideas, products and processes

The Index

100

Innovation Awards: SBIR and STTR Awards per 100,000 residents

354

Raleigh Tallahassee

158

Lexington (KY)

155 107

Knoxville

92

Greenville

89

Charleston

74

Columbia

65

Winston-Salem Greensboro Augusta

The Indicators

47

+

Intellectual Property Creation: utility patents per 10,000 workers

–

Research & Development: university and college R&D expenditures per 1,000 people

+

Academic Achievement: Percent of population aged 25 years and older holding a graduate degree

Why is Raleigh’s index so high?

The Raleigh area’s Research Triangle Park has been in existence for decades and has served as a model for research parks in other areas, including Innovista in Columbia. Drawing on the intellectual and innovative power of the University of South Carolina, Innovista is an urban plan to transform portions of the city into a vibrant commercial and residential region where technical and creative talent can live, learn, work and play. Progress here is evidenced by the university’s partnership with IBM and Fluor to create the Center for Applied Innovation at the corner of Blossom and Assembly Streets.

Research & Development Funding: amount awarded from all sources per 1,000 people

40 U.S. Average

Change In Index Value Baseline Index Value (2014): 72 2015 Index Value: 74

= + 2 Points

Year-over-year change + – =

= improved = worsened = no change = new or revised metric

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2015 Midlands Regional Competitiveness Report

Focus on Trends

Through Their Lens

Positive: • Utility patents have increased and the Columbia MSA’s growth rate for patents is higher than the U.S. average • Have a high percentage of population (11.5%) with a graduate or professional degree and that percentage has increased year-over-year

“Avtec has been recognized as one of South Carolina’s fastest growing companies for the past three years. This is in large part because of our employees’ ability to create software and hardware solutions that meet the market demand for our dispatching technology.

Our technologies are used in many of the nation’s Fortune 500 companies, and have been deployed in countries around the world. Although Avtec is a global company, I believe South Carolina has the perfect mix of things that employees want, and that employers want. There are great places to live, a wide range of recreational activities, access to the beach and the mountains, and a community of smart, hard-working people. As our company continues to grow and expand its footprint outside the United States, we keep grounded in the fact that Avtec was founded in South Carolina, and for 35 years, we have proudly called the Midlands ‘home.’ ”

Negative: • Higher education R&D expenditures decreased from last year’s data ○

A Closer Look The McNair Center for Aerospace Innovation and Research Aerospace is a high-impact industry for the nation and South Carolina.

Aerospace contributes $17 billion in economic output and supports over 100,000 jobs in the state economy. The University of South Carolina’s McNair Center for Aerospace Innovation and Research advances the state’s knowledge-based economy through research, interdisciplinary education, economic development and collaboration with industry and related government agencies. McNair houses the only university-based production level automated fiber placement machine in the U.S. and announced a partnership with Boeing, the world’s largest aerospace company, to conduct advanced research projects that could deliver the next generation of aerospace technology.

– Michael Branning, Avtec President

Magnifying Opportunities Encourage spin-off companies with innovations discovered through local R&D Maximize programs - such as SCRA Technology Ventures and Capital Angels - that help fund companies Get on track to increase private and federal higher education R&D funding Encourage and train more innovative small businesses to apply for SBIR and STTR funding

www.EngenuitySC.com

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HIGH IMPACT CLUSTERS A region’s relative size, strength and density of high impact clusters and ability to grow industries that are competitive on an international scale

The Index

100 275

Raleigh

188

Charleston

176

Lexington (KY)

–

High Impact Density: Share of regional employment in traded clusters

=

Employment Diversity: Concentration of employment in top 5 occupations

+

Employment per square mile

=

High Wage Employment: Concentration of jobs in high wage occupations (annual pay of $43,500+ per year)

–

High Impact Growth: Establishment growth rates in traded clusters

141

Greenville Greensboro

130

Tallahassee

130 120

Columbia Winston-Salem

116

Knoxville

114 104

Augusta

U.S. Average

Change In Index Value Baseline Index Value (2014): 120 2015 Index Value: 120

The Indicators

= NO CHANGE

Year-over-year change + – =

= improved = worsened = no change = new or revised metric

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2015 Midlands Regional Competitiveness Report

Focus on Trends

Through Their Lens

Positive • Employment per square mile is nearly triple the US average and has increased, indicating a climate conducive to clusters Negative • Share of employment in clusters has slipped from last year’s data • Growth rate in traded clusters fell slightly, but is still above the U.S. average

A Closer Look What is a cluster?

A cluster is a geographic concentration of related companies, organizations and institutions in a particular field that can be present in a region, state or nation.

Source: The Competitive Advantage of Nations by Michael Porter

Why are industry clusters important?

Strong industry clusters lead to a more competitive community: a high concentration of employment in a cluster indicates a strong workforce and skills in that industry, which attracts new companies in those industries to the area.

More competition among employers typically leads to a higher wage.

“The Transportation, Distribution and Logistics (TDL) industry is the heartbeat of commerce in South Carolina - from rail, to road, to skies, to sea - and the Midlands is the central intersection. At Alliance Consulting Engineers, we recognize how important industry clusters, like TDL, are to the competitiveness of the Midlands. We are so proud to have recently been named one of Inc. 5000’s “fastest growing private businesses,” but we couldn’t have gotten there without the rich assets of this region. We are grateful for the success and look forward to growing even stronger and more prosperous in years to come.”

– Deepal Eliatamby, President, Alliance Consulting Engineers and Chair, TDL Council

Magnifying Opportunities Work in partnership with the SC Council on Competitiveness to identify opportunities with the fastest growing clusters in our region Take advantage of clustering opportunities in aerospace and analytics with new regional partners, Boeing and IBM

$48,763

Economic development organizations should work collaboratively to recruit globally impactful technology and IT firm headquarters Create a streamlined solution to quickly meet the workforce needs of companies interested in relocating

Median household income in Columbia (2012 data) www.EngenuitySC.com

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LIVABILITY A region’s ability to attract and retain talent through building a dynamic live, learn, work and play environment

The Indicators

The Index

100

Arts and Entertainment: Compound annual growth rate of employment in the arts, entertainment and recreation (2010-2014)

122

Raleigh

108

Charleston

106

Winston-Salem

Healthcare Access: physicians per 100,000 residents

–

Commute Time

Tallahassee

105

+

Vitality: Percentage of population 1844 years old

Columbia

104

–

Volunteer Rate

=

Cost of Living Index

–

Crime: Violent crime rate per 100,000 inhabitants

=

Gallup Wellbeing Index

101

Augusta Greenville

98

Greensboro

97

Knoxville

96 95

Lexington (KY)

U.S. Average

Change In Index Value Baseline Index Value (2014): 107 2015 Index Value: 104

= – 3 POINTS

Year-over-year change + – =

= improved = worsened = no change = new or revised metric

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2015 Midlands Regional Competitiveness Report

Focus on Trends

Through Their Lens

Positive • The region has a strong growth rate in its arts, entertainment and recreation employment, indicating an increase in entertainment and recreation offerings • Nearly 40% of the population is 18-40 years old, contributing to a young and vibrant culture • Though no change from last year, the cost of living is below the national average and competitive with many peer regions

“The South is famous for its hospitality and giving spirit and the Midlands of South Carolina clearly embodies these attributes. As the President & CEO of Central Carolina Community Foundation, I was thrilled to watch the second annual Midlands Gives scoreboard climb to over $1.5 million on May 5th. We had challenged our community to surpass the previous year’s total and our residents responded beyond our wildest dreams. Fueled by 11,392 gifts to 251 local nonprofits, in 24 short hours we more than doubled the results of our inaugural year. Our region ranked 7th in the country, surpassing 82 other communities, many much larger than ours. According to a Knight/Gallup study*, cities with the highest rate of attachment have the highest rates of economic growth.

Philanthropy has connected our region and increased residents’ attachment. I am proud to call this vibrant, caring, growing community home!”

●

Negative • Volunteer rate has slipped (from 25.3% to 24%) and continues to be lower than many peer regions • The Columbia MSA has seen an increase in violent crime: from 417 occurrences per 100,000 inhabitants to 578 (2013 data compared to 2012 data in last year’s report) • Average commute time has ticked up to 23.3 minutes (from 22.7 minutes)

Columbia named #8 best college town in U.S. Columbia was named one of the nation’s Top 10 college towns in 2015. A high population of 25-to-29 year-olds (an indication of retaining post-grad talent), Division 1 Athletics, diverse entertainment options, cultural and economic enhancements from local colleges and rental housing availability and affordability are all factors in the ranking.

Source: Livability.com

– JoAnn Turnquist, President & CEO, Central Carolina Community Foundation *soulofthecommunity.org

Magnifying Opportunities Develop a shared Midlands vision for improving regional competitiveness and collaboration between Chambers, nonprofits and economic development entities Increase philanthropic giving through programs like Midlands Gives, presented by Central Carolina Community Foundation Support growth in arts and entertainment through better promotion of regional assets Encourage regional employers to incentivize and promote volunteerism Support municipal and county efforts to combat gang and gun violence

www.EngenuitySC.com

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Anchor Sponsor

TM

Imagine More

Competitiveness Sponsors

1000 Catawba Street, Suite 130, Columbia, SC 29201 803.354.5720 | engenuitysc.com

About EngenuitySC

EngenuitySC Board Members

Headquartered in Columbia, S.C., EngenuitySC is an economic development nonprofit focused on enhancing our region’s competitiveness and prosperity.

In partnership with business, government, education and community leaders, EngenuitySC specializes in regional collaboration and project management, the activation of local industry clusters and regional research, analysis and marketing.

• Founding Co-Chair: Mayor Steve Benjamin, City of Columbia • Founding Co-Chair: Dr. Harris Pastides, University of South Carolina • Chair: Dr. Keith Shah, BlueCross BlueShield of South Carolina • Chair-Elect: Steve Hall, Ovation Partners • Lee Bussell, Chernoff Newman • Councilwoman Tameika Isaac Devine, Columbia City Council • Chairman Johnny Jeffcoat, Lexington County Council • Bill Kirkland, University of South Carolina • Councilman Paul Livingston, Richland County Council • John Lumpkin • Dr. Ron Rhames, Midlands Technical College • Chairman Torrey Rush, Richland County Council • Larry Wilson, FirstMark Capital

For more information, visit www.engenuitysc.com.

Designed and published by: SC Biz News, publisher of the Columbia Regional Business Report

Collaboration Sponsors

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