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Early on, the South's fortunes were inextricably tied to global trade. For labor, it relied on imported slaves; for wealth it depended on the income produced by its exports of cotton, rice and other products.

The South continued to depend on agriculture until the mid-20th century as planter elites thwarted most efforts at industrialization. During the Depression, Southern states began offering the rest of the country the type of competition it now faces from developing nations. By promising cheap, nonunion labor, they prompted many businesses to relocate their factories in the South.

Can we shift gears?

This strategy helped the region gain jobs, but it did little to generate the real engine of wealth -- new businesses whose highest-paid employees also called the region home. It's good to have assembly line workers; it's even better to have the people who design the cars and run the business.

(The situation was slightly different in North Carolina. Because the state never had a dominant planter class, it was quicker to develop locally owned industries, especially in textiles and furniture. Still, their success also hinged on rich supplies of low-wage workers.)

"As long as we were the place to do low-cost manufacturing, this strategy had some upside," said Clinton, of the Southern Growth Policies Board. "But beginning in the 1980s, when technology and globalization became larger forces, the South began to suffer as jobs went abroad and the South failed to take its place at the forefront of efforts that would help it succeed."

In the past, the South succeeded by racing to the bottom. In the future, its economic success will hinge on whether it can reach the top, developing the cutting-edge industries and skilled workforce that have enabled Research Triangle Park to thrive and helped Charlotte become a banking center.

The effort will depend on improving infrastructure, sparking entrepreneurship, educating local businesses about global opportunities, and managing growth so that the South is a place where people want to live and do business. But above all, education is the key, for both retraining displaced workers and building elementary and secondary schools that match the quality of the South's first-rate colleges and universities.

"Knowledge is the most powerful tool for success in the global world," Clinton said. "I don't think we value knowledge culturally. It irritates me that Southern comedians like Jeff Foxworthy always make jokes about how dumb Southerners are. We buy into that idea, and we pay for it."

It is these residues of the past that the South must overcome if it hopes to take control of its destiny and thrive in the years ahead.

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