(upbeat music) - [Narrator] This is Carolina Business Review.

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- There are so many websites, podcasts, live streams, emails, texts, feeds that you can garner news and information from.

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Well, I can't completely prove that point, but there is some truth in it.

Welcome into the most widely watched and the longest running dialogue on Carolina Business Policy and Public Affairs going on our 34th year now of continuous broadcast.

Thank you for making that happen.

On this program, we endeavor to give you information that really is worth knowing about our region.

We have four senior level insiders from across the Carolinas.

We like to bring them together in an unscripted, unedited way with definitely lively conversation that might be common to most of us right here in our region.

We will do that again, and we start right now.

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On this edition of Carolina Business Review, Donald Thompson from the Diversity Movement, Susie Shannon of the South Carolina Competitiveness Council, Sam Konduras from the Greenville City Economic Development Corporation, and Sarah Hall from North Carolina State University.

(dramatic music) - Hello and welcome to our program.

It is important to note here at the top of the dialogue that we are actually taping this program during the wintery mix and winter storm that is flowing through here on this Friday.

So I'd like to thank our guests for coming, driving in, and Donald Thompson, who was supposed to be sitting here at this table, is joining us from his warm cozy office in the triangle.

No pressure, Donald, but Sarah said you could have rode with her, by the way.

- I could have.

I copped out, it is on me.

- No, no, no, Donald, thank you.

You're probably gonna end up being the smarter one when the day is over here, but thank you all for joining us and welcome.

Donald... Donald, you're gonna get the first pitch since you're not here.

That's gonna happen.

You know, we've talked about the economy, we've got new leadership in Washington, we're now at general assemblies that are starting again in the Carolinas.

Inflation, housing costs, healthcare costs, et cetera, et cetera, continue to be an issue.

Donald, what are you hearing about in leadership that you talked to around the economy in 2025?

- So it's clearly a mixed bag, right?

But one of the things is there's certainly optimism in the business community about deregulation, about more favorable White House support for things like crypto technology, for mergers and acquisition.

So when I talk to executives, there is a very optimistic view about all of those things, except for probably the tariff impact.

And then when you flip to another part of our country, the economy is a little bit scary because with the advent of things like AI, different technologies, there's going to be a shift in the type of workforce that's needed for the new economy.

So that mixed bag from those two perspectives is how I see the economy from folks that I'm talking to.

- You know, in the Carolinas... And I'm wanna bring y'all in this, in the Carolinas, Sarah, we've had...

There's been this... Kind of this magical formula that sunny place, close to beaches, close to mountains, close to just about anywhere, and the cost of living has been pretty cheap, but that's being winnowed away now.

Housing is an issue.

Price of housing, cost of energy, not so much, but still starting to get some serious momentum with that, increase is there, inflation, et cetera, et cetera.

Are the Carolinas losing a little bit of that magic?

- I would say no.

In North Carolina, we're the third fastest growing state in the nation.

We bring about 300,000 people annually.

If we look out to 2050, the state... Our state's expected to have 14 million people.

So that's about 3.77 million increase from 2020.

So people still wanna call North Carolina home.

And I imagine that's true for South Carolina too.

- Right.

- It is, yeah.

I think you would see South Carolina sort of maybe purchased in the number one position now.

If you look at the U-Haul surveys, if you look at some of the Census Bureau, even some of the studies that we've been doing, and what I think is really, really interesting, it's not just the raw population numbers that we see moving in, but what we're seeing is that access to a greater population as well.

Right now South Carolina is number three, and those population centroids and access to people within a four, six, eight hour drive, Florida's number one, Georgia's number two, we are actually... South Carolina's projected to leapfrog over Georgia and sit just under Florida.

We might not count Florida, they could sort of live too far down south in the peninsula and concentrated there.

But South Carolina's really looking at being in the greatest... Access to the greatest number of people within the shortest drive, within the longer drive.

That's access to markets, it's access to workforce, it's access to suppliers, it's access to customers.

We view that as a good thing.

- So the portfolio, and let's talk about the Palmetto State for a second.

So the portfolio of South Carolina, heavy manufacturing, aerospace, automotive, that's not surprising.

Sam, does this become...

Does the trade talk and the new Trump administration's trade talk about tariffs, does that become a real headwind for manufacturing?

- I mean, we're certainly paying attention, and there's no doubt advanced manufacturing has had an incredible role in bringing prosperity to South Carolina, fueling a lot of our growth.

But I would say economic development in the Carolinas I believe is gonna transcend a lot of these issues that we will grapple with them along with the rest of the country.

I'm gonna jump on the bandwagon of what we were saying a few minutes ago.

And again, the Carolinas, I believe truly... You can support this with data, they're kind of a window to the future of what's best in America.

And people are coming here in droves, recent Federal Reserve study where we were trying to understand with the growth of Greenville, for instance, where is everybody coming from.

California, New York are major... Florida.

- Greenville upstate- - Grenville upstate, that's right.

Ironically, Mecklenburg County is number two in terms of number of people moving to Greenville and Atlanta is also in the top five.

So, you know, the Carolina lifestyle opportunities, it's still viewed as a place where business is rewarded, where taxation is fair, where politics at least, you know, is not an obstacle in the way it is in other parts of the country.

So, you know, we were named fourth best city in America to live in back in May by U.S. News, Raleigh Durham, Charlotte, we're in the same top 10.

Charleston was 13.

So I think we're surging, but we're gonna have to be very deliberate about the issues you're mentioning if we're gonna maintain that kind of progress.

- So you said politics and Donald, we haven't forgot about you.

I'm gonna bring you here in a second.

- No worries.

- Sarah, politics in North Carolina not specifically, but there is a general assembly that no longer has a super majority, but still pretty heavy in Republican hand when it comes to those lawmakers- - Right.

- But it has a new democratic governor.

Is there any change in dynamic there for economic development or some of these other issues?

- So I think that the... You know, the main thing that our general assembly in North Carolina is gonna be focused on for the coming year is gonna be hurricane relief in Western North Carolina.

And I think there is gonna be bipartisan support from that regardless.

And so I think that's what everyone is focused on, and that is going to be the main, you know, focus for this year.

- Donald, what do you think?

You think that North Carolina's politics... And I know you may not be a poli-sci major, but the policy that you talk about and the leaders you talk about have some concerns about political debate?

- Yeah, I would say one of the things in the workplace and the executives that I work with, the political debate has really spilled into the work environments in many ways.

And so we're dealing with a lot of workplace stress about all of these economic indicators, whether it's housing, whether it's policy, whether it's access, right, to education and opportunity.

The one thing I would comment on the continued strength of the Carolinas and I'm based in North Carolina in particular, is that relative to other economies, we are still that melting pot where you can access manufacturing South Carolina technology, right?

Higher education and the cost of living is still stable enough that people are still wanting to be here, work here, and build families here, which... That part is still very, very exciting.

- So I wanna call you all out, your cheerleaders, your boosters, you're good at it, and you've got good arguments.

You're an attorney, aren't you?

And you've made a good argument- - Reformed, but yes.

- Okay, you're a recovering attorney- - [Donald] Same here.

- But Susie, really, you've gotta be thinking about the... You know, the landmines in the road because it's... And I'm not looking for a negative part of this, but we grow until, "oh, we didn't even see that one coming."

What is coming that we really do need to be considerate about?

- If I were to pick two letters that are now comprised one word, I would probably say artificial intelligence, AI.

So I think you've got a workforce that is a little bit leery, I would say actually AI coupled with automation, right?

If you've got semi-automated forklifts, if you've got automated robots and then you've got artificial intelligence driving a lot of that innovative technology, software, hardware, you've got a workforce that is leery of, "is this gonna take my job?"

You've got employers going, "can I afford to adopt and deploy AI and automated capabilities, but at the same time, can I afford not... You know, can't afford not to," right?

Because otherwise you lose your competitive posture.

So I think those are some of the fears, if we wanna just throw out the T word and the tariffs, you know, there are some upsides on the tariffs where we're looking at bringing back some of that manufacturing and production.

There's certainly been a lot of state level, federal level to include bipartisan support of recovering some of that production back to the U.S. or at least within, you know, the North American footprint where we might have more favorable trade.

- The high tech manufacturing in the upstate of South Carolina, is it a bit of a wild west when it comes to AI there?

Or do they have a plan, they're just not sharing it completely?

- AI's on everybody's mind and everybody's trying to determine actionable strategies on how to leverage it, including economic development, how to do economic development differently using that as a tool.

I mean, I think what I'd stress with the Carolinas is with our... An incredible foundation of advanced manufacturing, as we talk about in South Carolina with the BMWs, Michelins, Boeings, But we're hyper-focused on a knowledge economy, innovation, entrepreneurship, and we see enormous challenges.

Our ability to attract creative class to the Carolinas is incredible.

A lot of smart people wanna build companies here.

We are... We were featured by the London based economist this past summer, "Greenville is one of the unexpected new rising startup ecosystems in the country."

And I think many Carolina cities from Winston-Salem to Charleston to Raleigh of course, and Charlotte.

So I think, you know, let's just say it is a new era of economic development that is gonna be much more tech-based, much more leading edge, and much more complex.

Because even in a city like Greenville where investment, innovation, talent are, of course, top of the pyramid of what we're focused on, I every day work on strategies around inclusivity, belonging, how do we cascade these strategies out to a wider group of our population positioned more for success.

And we absolutely own the fact that livability issues around affordable housing, transportation, how do you get people to these jobs, mobility are not going to be fixed on their own, and it's gonna take...

It's gonna be an endless journey working on those.

Donald, are you trying to get in here?

- I did, and I appreciate those comments, right?

When you think about transportation access, different things, those are all words that incorporate diversity, equity, inclusion, but don't have the lightning rail effect associated with 'em, right?

What we're really trying to do is create a better working environment for people in all aspects of our economy.

The point on AI that is very critical to make here is people should have legitimate concern about their career path, but instead of sitting in fear, we've gotta create an environment where people can make AI additive to their career skillset so that they can participate fully in the new economy.

So if you are in content development, how does AI help you smarter?

If you're in technology and coding, how do you now become a quality engineer?

How do you become more of an AI architect so that you use the tools versus only thinking about the aspect of how the tools displace what you do today?

There's gonna be a big pivot in the workforce, and a lot of organizations are losing people at lower level jobs because AI can do some aspects of those reasonably well, and it makes senior professionals more productive.

I think it's important for those of us in economic development, those of us working on inclusion, that we create ways for people to entree into that economy versus just be scared and shut out of it.

- Well, and that's a good point.

Being scared and shut out of it.

Sarah, is... For those of you that are here, you clearly know the dialogue that's...

I mean, this is called an insider's panel, you're an insider, but a lot of people aren't, and a lot of people are scared by AI and innovation and all of... And not just new terms, but where is this going?

And as Donald said, "what's it gonna do to my job?"

But does AI have a communication problem, a broad branding problem?

- Well, first of all, just to Donald's point, I wanna say that digital skills are crucial, right?

And so as we talk about AI and all the promise that it can bring, right, for economic development.

So we wanna talk about some of those opportunities.

I think it's important to consider some of the skills needed when it comes to literacy and then accountability, right?

So the AI tool is only going to be as good as the questions we ask it.

And that is how... You know, so those are some of the digital skills that we're gonna need.

The other thing that I just think that... We're talking about infrastructure earlier.

I think there's a lot that we're gonna be learning about AI across the economy.

I know there's a lot of studies that are being done and how much energy is required to utilize- - You mean actually electricity?

- Electricity that is required to utilize AI and that's one of the reasons our organization is so focused on energy.

- Harry Sideris from Duke Energy was here, but admitting to the fact that they are going to have a very steep J curve, if you will, about supplying that energy.

I wanna come back to AI with you on something, Susie.

So the idea that AI is...

Seems like the wild West and there's not really a standardized way of understanding it and deploying it.

Does that come down to general assembly in a state?

Does that come down to a federal statute?

Is there some guidance we're missing?

- I think we're gonna be picking D, all the above.

I think we are gonna see a patchwork quilt.

It might be a beautiful quilt.

There might be some little, you know, unthreaded spots that are in between.

I mean, we're also watching what other states are doing with respect to AI legislation because, you know, you tend to see precedent if it's adopted in California or Connecticut or Colorado or Texas, sometimes it spills over because- - Who's doing it well?

- I'm not gonna point to a single state that's doing it well 'cause I don't think they are.

I could point to a few states that are not doing it well or became precariously close to not doing it well.

And the business advocacy side had to sort of step in.

So I know the incoming administration has already sort of appointed an AI Czar.

So I think we're gonna see some movement.

I think with respect to the South Carolina General Assembly, I can shake that magic eight ball and say with certainty that I think we're gonna see some AI legislation over the next two years.

And a lot of that's gonna come down to maybe starting with state government as the Petri dish, as the test bed, in delivery of consumer services to our citizenry, but also AI and education inside of the classrooms, particularly in the high school pathways.

And there it's about how do you set up all of those things that we need around accounting for bias and accounting for those guardrails and safety and security.

If you want me to continue to take a scalpel off of my optimism, we are also gonna need to look at these critical technologies like artificial intelligence, like quantum computing, right?

Where we're talking about qubits instead of ones and zeros.

And it may take a threat actor only four seconds to crack our code now, to crack our password than 4,000 years.

And that's pretty scary.

It's gonna completely up in those entire ecosystems.

- Last question on AI for you Donald is...

Same question, is there some structure that we are A, either close to for AI as it's generally accepted, almost like gap accounting and do you have conversations about that?

- I think it's gonna be the wild, wild west for a minute.

Especially with the new incoming administration being so pro business, which is a good thing.

But that pro business focus needs to focus on what are some of the AI bias, I'll even use the machine learning or the autonomous vehicles for example, right?

If there's an autonomous vehicle, right?

And that autonomous vehicle has an accident, who's responsible?

And so once you start to think through some of the ramifications of all the automation we're building into our lives, it's very, very difficult, right, to map that out at the pace that the technology is changing.

And so right now I don't see someone that's doing it well, but we've gotta figure out how to get there 'cause there's a lot of landmines there as well.

- I'm gonna come to you in a second, Sam.

But you know, Donald, very quickly I did have a conversation with a member of the board of Ford and asked them that question.

This was just in a sidebar conversation about autonomous vehicles.

And he said, "it's not so much about us building autonomous vehicles, it's about dealing with insurance companies to say, our vehicle's gonna stop at a red light and not run a red light and the other cars will not, that are not autonomous vehicles.

So we're trying to figure out liabilities and how we price premiums."

So I think you're right, wild west when it comes to insurance.

- Right.

- Sam, on the issue of immigration with a new administration, if in... Whatever happens politically, if an immigration is...

It drops, what do we do about jobs, especially in the Carolinas?

- That's a great question and I wanna thank you for asking me that.

You know, I mean, I'll start with the premise that South Carolina was deep in international business long before it was even a strategy because of the textile industry coming over from Europe and 50% of the world's textiles were made within 50 miles of Greenville, South Carolina for a period in the 20th century.

So, you know, we have approximately 1400 foreign based companies in the state of South Carolina, highest concentration per capita in the United States.

So we are operating in a global economy.

We certainly, you know, are committed to that proposition.

We... You know, it's gonna be quite a debate, but I think balance, everybody wants a logical, equitable approach to how this country continues to be a beacon of hope for people with talent and jobs.

You know, I'm a second generation Greek American, you know, so I can't really answer your question head on with that other than to say kind of like the tariff issue.

This is something we're gonna have to see how the administration really takes action and how states are going to respond.

Other things if we have a chance to talk about, you know, infrastructure and opportunities for the future.

The EDA recently made South Carolina one of 12 tech hubs.

This is something Susie is very aware of and we could share and it, and our tech hub designation called SC Nexus is completely based on a resilient energy grid and creating solutions and helping to cultivate companies that can address those issues and to train an entire new workforce.

So this is where some of the things that are a little bit daunting and what do we do are also gonna be incredibly opportunistic if we seize these opportunities and anyway, I wanted to add that just because I think...

This is where I think in the Carolinas we are being very deliberate on the hard issues, not putting our head in the sand.

- We have about three minutes left.

I wanna come back to something you said, Sarah, and in regards to energy and we've heard more than just from the president of Duke Energy, but we've heard from the Secretary of Commerce in both North and South Carolina that there is an energy crisis, there will be an energy crisis unless we deal with how to produce more energy.

How do we produce more energy?

- I mean, I think that's a...

It's a great question.

It's one we've been grappling with.

We actually are gonna be bringing a whole bunch of leaders together next month to sort of grapple with this question.

And so I think, you know, Duke Energy, Dominion, some of our other major energy producers are looking at...

I mean, in North Carolina we have a bipartisan bill, right, that is asking for clean energy, right?

So by 2050 we're supposed to be carbon neutral and so big push for clean energy here in North Carolina.

And so, I mean, I think having that energy mix of renewables, clean energy and natural gas and decreasing our coal.

- But I think that what we really need to be working on, and you mentioned workforce 'cause that's a really big issue.

- Yeah.

- And then also just... We need to be upgrading our infrastructure and we have a real big problem with getting- - You mean roads, bridges, wifi?

- Our energy infrastructure, right?

And so we have a really big problem and a bottleneck right now with getting those infrastructure projects built.

And so I think we need to figure that out and we need to figure it out yesterday.

- How much is that dialogue happening in South Carolina around energy?

- I think it's all consuming at the moment and I think it will be.

There was a bill that was House Speaker Smith's sort of shepherded bill that popped up over the last couple of years that's now been reactivated for the incoming session that starts next week, the new two year General Assembly.

Energy is gonna be at the top of the list.

Our State Department of Commerce, one of its three strategic target areas with life sciences headquarters recruitment is also energy.

I think the $45 million of EDA Tech hub infusion- - And EDA, what does that... What does EDA stand for?

- So Economic Development Administration, which is an arm of the U.S. Department of Commerce.

And so it has been the throughput for $45 million into South Carolina, into the SC Nexus initiative that Sam mentioned.

And that is all about building out a resilient grid and it's about diversifying the portfolio of sources where we get those energies.

There've been about 15 billion of investments around energy over the last couple years just in South Carolina.

- Yeah, we are putting 10 pounds of information in a five pound bag here, folks.

So thanks for moving along quickly.

I wish we could keep going, but thank you for driving in on a day that is... Has a winter storm warning for all of you.

Oh, I'm sorry Donald, you didn't drive in.

You were remote.

But Donald, no, thank you always for being part of this gang.

Sarah, please do come back.

I hope I didn't scare you off.

- No, absolutely.

- Thank you, Sam, good to see you.

- Good to see you too, Chris.

- Thank you for joining us.

We certainly hope that you stay safe on a very cold... Stay inside if you can, stay warm.

Thank you for watching this dialogue.

Until next week, I'm Chris Wedding.

We hope your business and your New Year's off to a good start.

Goodnight.

(mellow music) - [Narrator] Gratefully, acknowledging support by Martin Marietta.

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Foundation for the Carolinas.

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Thank you.

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