There has been a lot of wailing and gnashing of teeth in Raleigh over Volvo’s recent decision to locate its first North American production facility in South Carolina. For years, many economic developers have tried to get a car company to build in North Carolina. Ever since BMW converted peach orchards in South Carolina into its second-largest production facility in the world, some N.C. officials have wanted the same thing for their state. They lost Mercedes to Alabama and vowed that wouldn’t happen again. They went after Volvo with all they had, but it wasn’t enough.
Although South Carolina can’t fill its potholes, repair its bridges or properly educate a vast number of its children, it can find an estimated $204 million to essentially “buy” the manufacturing facilities.
Here is something to ponder. Despite its success in getting large manufacturing facilities, South Carolina has no Fortune 500 companies headquartered there. (Well, technically Domtar is in South Carolina, but just barely over the state line in Fort Mill, and Charlotte considers it a Charlotte company.) North Carolina, on the other hand, has 14. Some of them are homegrown, such as Bank of American, Duke Energy and Sonic Automotive. And some relocated to Charlotte, such as Sealed Air Corp.
How is it North Carolina can both grow and attract headquarters? Many believe it is a combination of factors, beginning with the state’s commitment in 1956 to build a research park bounded by Duke University, N.C. State University and the University of North Carolina at Chapel Hill. RTP is now the largest research park in the country. Along with the park came a dedication to providing first-class higher education through the state’s consolidated university system and subsidies to private universities and colleges.
The 1970s and 1980s brought Jim Hunt to the governor’s office with his ambitious plans to improve childhood education to bring it on par with higher education, through preschools, kindergartens, improved curriculum and higher pay to attract and retain the best teachers.
The result is a state that is “business friendly” because it has well-educated people and is for the most part a clean and comfortable place to live.
Meanwhile, South Carolina has been systematically reducing its emphasis on K-12 education and pretty much ignoring higher education, gutting environmental protections and spending millions to attract manufacturing jobs from companies willing to put up with South Carolina’s limitations but that don’t want their executives to live there.
But things in North Carolina are changing. The legislature seems intent on remaking North Carolina in South Carolina’s image, slashing education spending and belittling teachers at all levels, rolling back environmental protections, altering the governance of the university system and showing a willingness to spend millions of dollars to attract manufacturing jobs from out-of-state companies.
The whole idea of recruiting large manufacturing facilities has become something of an economic development fad since the recession drove unemployment rates into double-digits. But North Carolina’s lack of success compared with South Carolina does not mean North Carolina is an economic development failure. There is an old country saying that is apt here: “Dance with who brung you.” It means don’t ignore the person who made it possible for you be at the party. But state government at all levels seems to be turning its back on what made North Carolina great. It is pursuing the wrong dance partners.
Kenneth S. Allen of Lake Wylie, S.C., is a former reporter and editor for The Charlotte Observer and former editor of Greenville Business Magazine and Columbia Business Monthly.