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- In the dead heat of the summer last year, this was a bit lost, it was July 2023, global news organization Bloomberg reported, and I wanna quote this to get this right, "For the first time since the government started tracking it, six southern states, North Carolina, South Carolina, Tennessee, Georgia, Florida, and Texas are contributing more to the nation's gross domestic product than that of the Northeast."

Bloomberg went on to call it a $100 billion wealth migration tilting the US economic center of gravity south.

Thank you for watching the most widely watched and longest running program on Carolina business, policy, and public affairs seen every week across the Carolinas for more than three decades.

On this program, we will unpack what that data may mean for the Carolinas, and we go to the top of the economic development machine.

South Carolina Secretary of Commerce joins us again, the Honorable Harry Lightsey, and the dialogue starts right now.

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(energetic music) On this edition of Carolina Business Review, an executive profile featuring Harry Lightsey III, South Carolina Secretary of Commerce.

(energetic music) - Hello.

Welcome to our program.

Your Honor, welcome back.

Thanks for taking the time, sir.

- Well, it's great to be here.

Thank you.

- Mr. Secretary, I wanna start with that, it's a rather startling statistic.

It was kind of buried in the summer in the Carolinas.

You know, nobody's really paying attention to business, but this idea that certainly the Carolinas for a long time have held themselves out as a better place to live, better quality of living, better place to do business, et cetera, et cetera, and lo and behold, after all of the years of pushing on that, it turns out that the southern states are the center of gravity for the US now.

It's no longer the Northeast.

Are we the proverbial dog that caught the car now?

Now what do we do?

Do we need to think differently?

Is there another set of rules?

- Well, I think, I mean, of course the world is always changing, and so we have to react to those changes as they occur.

But the south has been very successful.

In fact, just in the last couple of weeks, new census data came out, and in the last year, '22, '23, South Carolina was the fastest growing state in the entire country.

So we have more in migration into South Carolina per capita than any other state in the country.

So the south is where people are moving, where people want to be, and that's certainly very exciting.

- How do you keep an eye on, I don't wanna call it the dark part of that, sir, but how do you make sure that with that kind of growth and in migration, which is pretty spectacular, thanks for sharing that is then it becomes an affordability question, is the cost of living question, it's the rise in energy prices because of all of this.

How do you balance that?

How do you make sure that that doesn't get outta control for the narrative that you need to have?

- Well, I mean, the growth is occurring.

So we get to deal with that.

And, you know, it certainly, infrastructure is very important.

There's a lot of building going on in South Carolina and across the south.

We're doing a lot with water and sewer.

The General Assembly has invested billions of dollars in extending water and sewer systems and road work.

And so there continues to be a lot of infrastructure built in South Carolina.

That's very important.

Our cost of living is still very low relative to other parts of the country.

And I think our policymakers want to keep it that way.

We'll continue to be a low tax state and a pro-business state.

And I think those are characteristics that will set us up for growth in the future.

- Columbia Mayor Rickenmann in your hometown, Columbia Mayor Rickenmann, made the point that he would like you talk about taxes.

He would like the counties, Richland County, in this case, to have more control over taxing businesses.

Does the South Carolina tax code need a relook?

Does it need to be reformed in that way?

- Well, that's a little bit beyond what we do at the South Carolina Department of Commerce, but you know, there are policy makers that are calling for a relook at the South Carolina Tax Code.

There are parts of our tax code that are a little bit outta step with our neighboring states in terms of property taxes for businesses, certainly.

So, you know, that's something that policymakers may decide to look at.

You know, they've aggressively reducing the income tax rate in South Carolina for the last several years, which is very good for us and very good for our citizens.

And so I think the legislature certainly understands that being a low tax state is very important, and I think that policy will continue.

- As we talked about as we started this dialogue, officer, we talked about the incredible growth in migration and challenges.

South Carolina Department of Commerce recently is rebranding in a new strategic framework, and I'll use the term from your own website, why now when you've got so much momentum and arguably one of the best years on record was last year, to the end of last year?

- Yeah, so actually the last two years have been by far the best years in terms of announcements of new investments and new jobs being created in South Carolina, and that's great.

But the world is changing and is changing rapidly.

We're seeing technologies like AI, and robotics, digitization, all of these different mega trends that are all occurring simultaneously.

And so, you know, we're seeing transformation in a lot of industry sectors.

The automobile sector, which is incredibly important to South Carolina, is changing from the current internal combustion engine to the battery electric vehicle.

The biggest change that industry sector has undergone since the days of Henry Ford, and we're seeing similar changes in areas like biotech with the new genetic and molecular research that's going on there.

So the world is changing fast, and we thought that our brand, which has been around for about 11 years, has really kind of been a great brand and it's worked well, but we felt like we wanted to take a strong look at where we were and where we were going.

We wanted to show that we are kind of embracing this change, embracing the future.

We felt like we wanted a brand that told people from around the world that are looking at South Carolina, that South Carolina is a place when you invest in South Carolina, you grow.

You grow as a business, you grow personally, and your community grows.

When you put investment in South Carolina, you are part of building the new economy, and we're embracing that.

And that South Carolina is the new home of American innovation.

So those are all messages we wanted to send through our new brand.

Our line is launched a legacy.

It contains the promise that if you come to South Carolina, you'll have our support, the support of all of our state from the moment you launch until you become a legacy business.

You know, that's an important promise that we make to our businesses.

We take that very seriously.

We take our commitments very seriously, and we strive to meet all of those commitments.

- The Launch to Legacy tagline is interesting.

And the idea that you want to be... And, sir, this is the way that I cipher it.

The idea that you wanna be a center of excellence around innovation, is that about technology?

Is that about the aerospace and the automotive industry?

Where do you put the stake in the ground to say this is what this means?

- Yeah, so coincident with the rebranding effort, you already mentioned it.

We did some strategic planning, we did some thinking about where we want to go in the future, and that's really the first time we've done that in several decades.

So it was something that was timely.

Of course, manufacturing is the bread and butter of the South Carolina economy, and it will continue to be so, and we'll continue to grow our manufacturing and hopefully bring new companies and manufacturing to South Carolina.

I'm very happy where we are with the automobile industry.

We've had some companies make some very serious investments and in embracing the future of the battery electric vehicle, Scout Motors announced that they're going to make their home in South Carolina, right outside of Columbia, between Columbia and Charlotte on I-77.

That is a whole new brand, an American brand, iconic American brand that's being reinvigorated and brought to life in a new world of a battery electric vehicle, so we're excited about that.

We've had BMW also announce a significant investment to begin to produce battery electric vehicles at their facility in Greer.

And we've had a lot of investments in that space.

So we feel great about that.

Aerospace, which is another important sector to South Carolina.

Boeing makes the 787 in Charleston.

Lockheed Martin makes the F-16 Fighter Jet in Greenville, and we're starting to see a strong recovery in the aerospace sector.

We feel like after several years of being down, that sector is starting to really start to grow.

Biotechnology is one of the new sectors that we really want to stress.

North Carolina's been very successful in that area.

We think we can be too.

It's been one of the fastest growing sectors in South Carolina for the last couple of years.

But we really want to emphasize that as we go forward.

Advanced energy is another sector that we really want to stress going forward.

If you think about it as we are now moving away from fossil fuel as our source of energy for the first time, really, since two cavemen rubbed a couple of sticks together, a few thousand years ago, we've been reliant on fossil fuel and now we're moving away from that in a number of different directions.

And that is really creating a whole new level of creativity and innovation in the energy sector.

You know, a sector which really has been based on a technology that was invented over a hundred years ago by Tesla and Westinghouse, and now we're seeing a whole new look at how that's going to happen.

South Carolina applied for a status as a tech hub in advanced energy to the US Department of Commerce.

We were very excited to be designated by the US Department of Commerce as one of the 31 tech hubs in the United States.

Only five of those are focused on energy along with us.

And that means that the US Department of Commerce believes that we have the assets in place to be a global leader in advanced energy in the next 10 years.

And we'll have this full support of the United States government as we begin to work to advance in that sector as well.

So we're excited about that.

And then finally, headquarters, white collar jobs, R&D is a space that we think we can be very competitive.

Yesterday, I was in Fort Mill, and Continental Tires, which has been in our state since 2009, unveiled their new headquarters building, which is a incredibly beautiful building, and a real statement in terms of what headquarters could look like in the future.

And so, especially in the region around Charlotte headquarters is very appealing because of the connectivity you have with the Charlotte Airport.

And so we think that with our low cost of living, our great quality of life, we can be very competitive in that space too.

- You know, let me go back to this whole idea about innovative energy, and I'm probably not saying that right, sir, but so on this program actually, the CEO of Santee Cooper, Jimmy Staton and Keller Kissam at Dominion have both said that there's a looming energy crisis in the Carolinas, and not just South Carolina, but North Carolina faces that.

So I'm assuming there were strategic conversations going on within commerce, but also around the state, around this whole idea of providing enough energy going forward that, number one, it continued to be a low cost resource, but is that what's, and I don't wanna put words in your mouth, sir, but is that what's behind some of this being an energy innovation hub?

- Well, that's part of it.

Certainly we want to make sure that our citizens have access to reliable and low cost energy for the future.

And with our growth, you know, that presents us some challenges.

We talk to our utilities about that.

Our tech hub is really focused on being a global leader in commercializing technologies, new products in the energy space.

And to the extent that helps us in South Carolina as well as being able to put those products around the country and around the world.

You know, that's a great thing.

So we'll continue to do that.

You know, we think in our application that we made to the US Department of Commerce for funding phase two grants, we stated that we think that energy grid is moving very quickly into a new world of distributed energy resources.

If you think about solar offshore wind and the potential, you know, in the future of small modular nuclear reactors as energy sources, zero carbon energy sources.

But those are all going to be...

They're not gonna be a huge big generating plants like we've seen to date.

They're gonna be spread out across the territory of the grid, and they'll be able to contribute to the grid from wherever they are.

And the grid has to be able to adapt to those new technologies.

It has to get a lot smarter.

It has to have the ability to receive energy from multiple different sources and be able to efficiently move that around to meet the needs.

- Where are there geographic centers like Clemson, USC, College of Charleston academically based?

Where do you hope to have those centers located?

- Yeah, so our tech hub is called SC Nexus.

It is a coalition of 40 different types of entities.

Both of our research universities, University of South Carolina, Clemson University are part of our tech hub.

It's also the Savannah River National Laboratory, which is in South Carolina, is part of our coalition as well.

And they have a long history of expertise in nuclear energy and other areas as well.

And then South Carolina State is part of our tech hub.

They have the only nuclear engineering program of any HBCU in the country.

And we have other HBCUs as well.

Our tech colleges are part of our coalition and our K12 education system as part of that.

So it's a grounds up look in terms of building workforce with the skill sets to be employable in this area.

It's also looking at entrepreneurship and having companies start in this area, but also established companies.

We've got a number of companies that are already in South Carolina that are doing work in this area.

Companies like GE and Rolls-Royce, and they're part of our tech hub as well.

It runs technically the designated area.

Runs from the upstate through the Midlands over to the western side of our state, Aiken and North Augusta where the Savannah River National Laboratory is.

But we think it's gonna benefit the whole state.

And we're really excited about the potential.

- As you well know, some of the biggest challenges are education, affordable housing, and just finding people to fill the jobs.

So when Scout announced in the Midlands, North Columbia area as you know, how do you address those issues about still keep the cost of living?

How do you find the workers?

How do you make sure that, we call it workforce housing, but how do you directly address that and use the very large pulpit that you have to do that?

- Yeah, so Columbia for Scout was really the last mainly untapped labor pool in the southeast.

And that was a big attraction for them.

- [Chris] The whole Midlands or North Columbia?

- Well, the whole Midlands.

And they look at people within an hour drive of their facility.

They consider that the eligible labor pool for their factory there that they're building.

So that was largely untapped and they were very attracted to that.

And so that's a big part of it.

The growth that we talked about earlier.

That's a big part of the equation.

We have people coming to South Carolina to fill these jobs.

We're also very blessed in South Carolina that we've got six major military institutions and we have a very active program to recruit those military personnel that are transitioning out of the military into civilian life to recruit them to stay in our state.

The legislature passed several years of law that allows military veterans to receive their benefits without having to pay any taxes on those military benefits, which is significant for them.

And military personnel make great employees and they're wonderful for the companies who bring those people into their companies.

You know, they understand the discipline necessary to be a productive employee.

So that's a big piece of the puzzle as well.

Our education system, as we said, we're working with students now in the K12 system all the way into middle school.

- And you're moving that needle enough with the technical schools as well?

- Absolutely.

We've invested a lot of money in the technical colleges and in many cases, and especially in some of the higher demand needs and skill sets, you can go to a technical college for free in South Carolina and get those skill and be employable, you know, very quickly in a couple of years.

So that's great.

We're also working with our higher universities across the state, our four year colleges because there are higher level skill sets that are being demanded by our businesses as they work in these areas like AI, like robotics, and digitizations, you know, software skills are very important.

And so we're working with schools at all levels to help our students acquire those skills to be employable.

- Going back to the industrial portfolio of South Carolina, as you talked about the automotive and aerospace sectors for sure.

And when corporate issues like Boeing is facing right now can impact sites like the South Carolina site.

I'm not asking you about that, but does the idea of a portfolio that's very large in a few industries, has that driven the strategic framework rethink?

Is that a risk going forward?

Are you hopeful that the next 5 or 10 or 20 years is going to alleviate that and diversify from that?

- Yeah, well, Chris, I grew up in South Carolina in the '60s and '70s, and we really watched our textile industry, which was the basis of our economy, all those jobs leave our state.

And really was devastating to a number of communities across our state.

And we were very reliant on that one industry sector.

And I think ever since then, we tried to learn from that and to have a diversified base.

You know, manufacturing is the base of the South Carolina economy.

But we have a diversified manufacturing portfolio, as you mentioned, automobile, which is important, employs 75,000 South Carolinians.

Aerospace is another big sector, but we also have multiple other types of manufacturers in our state and is a very diversified portfolio.

But you're correct, as we looked forward, we wanted to target a couple of sectors that we feel are going to be positioned us for growth in the future.

And so that we're not caught in that problem that we experienced back in the '60s and '70s where we're watching jobs move out of our state to somewhere else.

- So the pain of that is still driving force behind the redevelopment.

- Absolutely.

- We've got about two minutes left.

And I wanna go back to the idea of the strategic framework.

Was there a consideration for an increased expansion into collaboration with states like North Carolina?

In competing, yes, but also are there other areas, and I know I've asked you this question a thousand times, but are there areas that the states could work together to be a Carolina and put on a united front?

- Yeah, absolutely.

And you know, we've built a great relationship with Secretary Sanders and with Chris Chung here in North Carolina.

There are great opportunities.

Charlotte is a region that really straddles both states.

The Charlotte airport technically is in North Carolina, but it's right across the border, but it's truly an asset for both of our states.

And so they're great opportunities for us to work together to really push this whole region to get people to understand that this whole region is really well positioned for a number of different types of investments.

- In a minute, if the state revenue has created a budget surplus for several years now.

If South Carolina's revenue levels off, or if the economy gets slow, is there a model that you planned for?

And we have about 45 seconds.

- Yeah, so we really don't plan for that.

South Carolina, we believe South Carolina's positioned for strong growth.

- I like your attitude.

- Strong growth in the future.

And as our governor says, "Our state is booming, our economy is booming," and we really see that continuing.

- Mr. Lightsey, you're always kind to come up and actually sit in the studio and join us.

So best of luck going forward.

The rebranding on seems to be moving forward.

Best of luck to you and the crew in South Carolina.

- Well, thank you very much.

- Yeah, thank you.

Thank you for having... Or thank you for being here.

Thank you for watching our program.

If you have any questions or comments or you'd like to re-watch this show or share it, you can.

CarolinaBusinessReview.org is the website.

Until next week, I'm Chris Williams.

Hope your spring is off to a good start.

Thank you for supporting and watching.

Goodnight.

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