Economic Development in South Carolina

[Captain Worley]

Engineering (I are one) isn't a service job, you're creating a product. Neither is architecture. Medical? Mmmm...I guess I could see that, but I really don't feel it is service.

Banking advertising and call centers aren't exactly high pay unless you're a higher up.

Maybe there's a generational gap in terms of what was taught in school. Reviews some business classes offered today.

Yeah...I'm beginning to wonder about the quality of today's education.

Edited December 23, 2008 by Captain Worley

[GvilleSC]

Engineering (I are one) isn't a service job, you're creating a product. Neither is architecture. Medical? Mmmm...I guess I could see that, but I really don't feel it is service.

Banking advertising and call centers aren't exactly high pay unless you're a higher up.

Yeah...I'm beginning to wonder about the quality of today's education.

In engineering and architecture, you're not creating a product. You're providing your services that produce drawings. The construction workers are producing the product that you're envisioning.

Go on and question education. My degree will be worth more, but you may not understand that either....

[Captain Worley]

That's why I question what they're teaching today. Engineering and architecture aren't service industries, but if it makes the professors feel happy to call them that, so be it. Meanwhile I'll keep on designing/making stuff for them to buy.

If you're still working on your degree, I'm going to say that the real world will teach you that a lot of the stuff you learned in school was either flat wrong or too general to be of use. A degree just tells the world you could sit down, shut up, and listen for four years. Five for a Master's.

Peace out and Merry Christmas, y'all!

[krazeeboi]

It's a buzz word. Knowledge is only economically valuable if you manage to do something productive with it for the people. Note that his chart lists Charlotte up rather high on this index, yet he fails to take any note that Charlotte is in dire straits today because it's two biggest knowledge companies are economic failures.

Banking isn't generally considered a knowledge-based industry but point taken about the state of the banking industry today. Now contrast the state of affairs in Austin and the Triangle area, known for their plethora of knowledge-based companies, with that of metro areas without such industries.

[monsoon]

Banking isn't generally considered a knowledge-based industry but point taken about the state of the banking industry today. Now contrast the state of affairs in Austin and the Triangle area, known for their plethora of knowledge-based companies, with that of metro areas without such industries.

Maybe you didn't take this in the context of which it is posted. I will accept that as I said there is a general state of denial of what I posted. I recommend a re-read of what I posted. If it isn't still clear, then get back to me in a couple of decades and we can talk about it again. The finance industry is 100% knowledge based.

[GvilleSC]

That's why I question what they're teaching today. Engineering and architecture aren't service industries, but if it makes the professors feel happy to call them that, so be it. Meanwhile I'll keep on designing/making stuff for them to buy.

If you're still working on your degree, I'm going to say that the real world will teach you that a lot of the stuff you learned in school was either flat wrong or too general to be of use. A degree just tells the world you could sit down, shut up, and listen for four years. Five for a Master's.

Google the terms: "architectural services". What you will find is a plethora of architecture firms who describe their work as an 'architectural service'. This isn't just from the academic world, it's from working at architecture firms. This not only comes from that sector, but business classes are pointing to the same thing. It's very valid, IMO, and it's not simply a new way of thinking or being taught based upon those I see emphasizing their field as a service...

[krazeeboi]

Maybe you didn't take this in the context of which it is posted. I will accept that as I said there is a general state of denial of what I posted. I recommend a re-read of what I posted. If it isn't still clear, then get back to me in a couple of decades and we can talk about it again. The finance industry is 100% knowledge based.

I really tire of you making it a goal to piss people off for no apparent reason. If you disagree with me, fine; just say that. But stop acting like you're the only one on this site who's able (or willing) to read or grasp the reality of things. That's the real reason why we keep losing people, because it's stupid, worthless comments like this that drive people away. I'm just getting sick of the whole thing. This thread was going fine until you decided to act like everybody here is stupid and illiterate. So do what you need to do, but it needed to be said.

[CorgiMatt]

Banking is one of the industries that seeks to benefit from Innovista's just-announced consortium of businesses and universities for the establishment of a national center for training in information technology. Sounds like knowledge is crucial to the future of the banking industry. I think the industry could have used more of it judging by the late debacle.

[monsoon]

I really tire of you making it a goal to piss people off for no apparent reason. If you disagree with me, fine; just say that. But stop acting like you're the only one on this site who's able (or willing) to read or grasp the reality of things. That's the real reason why we keep losing people, because it's stupid, worthless comments like this that drive people away. I'm just getting sick of the whole thing. This thread was going fine until you decided to act like everybody here is stupid and illiterate. So do what you need to do, but it needed to be said.

Ahh yeah a topic of mostly one-liners and link posts to meaningless newspaper announcements that amount to nothing. Add to that good dose of the usual Upstate vs Columbia boosterism thrown in and we have something that people are just flocking to read Do I think I am the only one on this site that has the ability to read or grasp the reality of things? No. Does the content of this topic an many others on this site reflect that, I don't think so. However you are right. I was rude to you and I apoligise for that.

I also apologise to people like Corgimatt, who actually make a good contribution to UrbanPlanet for the turn this took at mostly at my doing. I had hoped this might amount to something more than it has.

[goodbye]

Ahh yeah a topic of mostly one-liners and link posts to meaningless newspaper announcements that amount to nothing...

To some of us who actually live here, those new job announcements have significantly greater meaning, as does the state's unemployment rate. This is the 'Economic Development in South Carolina' thread afterall, where such information is an integral part of the topic.

[CorgiMatt]

Ahh yeah a topic of mostly one-liners and link posts to meaningless newspaper announcements that amount to nothing. Add to that good dose of the usual Upstate vs Columbia boosterism thrown in and we have something that people are just flocking to read Do I think I am the only one on this site that has the ability to read or grasp the reality of things? No. Does the content of this topic an many others on this site reflect that, I don't think so. However you are right. I was rude to you and I apoligise for that.

I also apologise to people like Corgimatt, who actually make a good contribution to UrbanPlanet for the turn this took at mostly at my doing. I had hoped this might amount to something more than it has.

Well, thank you for the compliment, Monsoon. I get nervous about all the arguing we do on these forums, but I see it as a by-product of the passion we share for urban issues and the love we have for our communities. Some of us, myself included, need to do a better job of celebrating the successes of each other's cities and metros. And we should empathize with each other genuinely when our respective communities' get some bad news. But let's not take all the fun out of it.

[breed]

It's a buzz word. Knowledge is only economically valuable if you manage to do something productive with it for the people. Note that his chart lists Charlotte up rather high on this index, yet he fails to take any note that Charlotte is in dire straits today because it's two biggest knowledge companies are economic failures. Both got to where they are today by exploiting endless changes to financial laws they were behind, and now one has collapsed and is being taken over and the other is sucking up tens of billions of federal tax dollars to stay in business. Expectations are that just between these 2 companies, layoffs are going to be at least 75,000 and most likely more.

Where both banks failed and where the American economy in general has made the same mistakes and where this author does not seem to get it, is they don't understand that value to a society only comes from 3 sources. You dig it up, you grow it, or you manufacture it. You can have a knowledge economy but if it doesn't exist to improve these three things, then you are in trouble. Bob Lutz spelled it out exactly a couple of weeks ago. "You don't add value to an economy by writing stuff on paper and selling it back and forth". That is exactly what we have been doing. Over the last 25 years we declared war on the American worker and at the same time lionized CEO's, business executives and worshiped Wall Street. We have happily elected politicians who wage war on labor unions all while getting in bed with corporate executives. So in the process we have transferred trillions of dollars of wealth overseas because that is where stuff is produced now and we are left with basically nothing. We have been getting away with this because of a card game played over real estate prices. It was an illusion of wealth that never existed.

That perceived wealth based on ever appreciating property values supported by exotic and cheap credit has disappeared almost overnight because like a house of cards, it was unstable and a disaster waiting to happen. The people who have spent careers telling us it was all good are running for cover and using words like "liquidity crisis" to explain what happened. That is because they don't want to admit, or more likely don't understand the 3 basic ways to create value in an economy, Grow, dig or manufacture. It's like telling a The Pope that God doesn't exist.

The fact of the matter American business and government has sundered manufacturing, so now we are left with farming and mining. Compare this to a place like Japan where they view every manufacturing job in terms of their national defense and will do anything to dominate a market based on it. Farming and mining is a description of what you see in the 2nd and 3rd world, and that is where we are heading real fast. The fact that we don't have any problem hading over $2T+ to Wall Street, but are fighting tooth and nail to "loan" the big 3 just $18B is testimate to that. It might take another generation before we "get it" again, but where will be by then.

I realize this is going to fall on deaf ears of many here because we are still in a big state of denial that it is happening. This is especially evident amongst people who are less than 30 years old who really never have known anything else. Ironically they are going to spend the rest of their lives paying for it. Don't expect me to defend any of it when the naysayers show up, and they usually do. I will let the results speak for themselves. I will add however the most economically viable parts of SC for the average person, where the highest standard of living exists, are the ones that have the largest manufacturing bases (barring government). Go to the parts of the state where this doesn't exist and you will quickly see what I mean.

Now that we're all done cryin!

Back on topic...

I think you do a good job of voicing many of the frustrations with what's going on, but a couple counter-points...

Three sources of value

While I think your "three sources" of value has merit, to say that there is no other way to generate value is difficult to agree with. As previously mentioned, engineering is a service. Fluor is doing engineering work for projects around the country. I certainly wouldn't want them to go elsewhere simply because they don't dig, grow or manufacture something. The same could be said for advertising, being a lawyer, etc.

I think the issue is that you may be blurring the lines between service jobs and the agregious liberties taken in the financial sector. I think the big thing that's going to change is that people with money are going to have to be smarter. Investment won't be done blindly. That's a good thing. In fact, I think that after things start to return to normal, the financial industry is going to be a very high growth industry, as everyone will expect much more due diligence when evaluating investments.

The loss of manufacturing

While the United States has certainly lost a substantial portion of their manufacturing, it hasn't lost it all. I don't think it will either. If anything, energy prices will mandate manufacturing closer to its final destination. Also, with the increased emphasis on automation, manufacturing jobs are becoming less of a job producer than they have been in decades past. In fact, the cost of labor in China has doubled in the past decade, so plants in China are looking at automation to help compete with the new bottom-dollar labor areas.

One thing that no one seems to touch on is that we are in an economic system where country boundaries don't really matter much. GM in China, BMW in the US, Bud is owned by the Dutch, it just doesn't matter. Corporations pay little mind to political boundaries. They don't have to.

One of the fundamental facets of capitalism is that those who do the work in the most efficient manner possible should do the work. That means if another country can do the work cheaper, then we should let them. However, there is a concern that wages in countries like China are artificially low... I think that is the critical question that few have really touched on. Then there is the issue of environmental standards. Ours are certainly more stringent than China's. Of course, Europe has the same view of our lax standards.

I do think this is a good reason to support some sort of cap-and-trade system (the administration of which is definitely not a dug, grow or manufacture.) Clearly, the environmental costs of shipping goods are not being adequately accounted for in the costs of goods. Manufacturing will start to return to local production. Although I would imagine that once decent alternative fuel sources are found (and they will be), it will return to lowest-cost-wins.

Strongest parts of SC

I don't think you can pin all of the struggles in the state on the inability to dig, grow, or manufacture. On the coast, you had unrealistic homeprice appreciation and a huge dependency on tourism. With the economy tanking, both of those are sucking wind.

On the other hand, manufacturing is a capital-intensive enterprise. This means it always has a lot of economic inertia. It is the last to experience the booms and the last to experience the busts. It will be interesting to see how the Upstate's manufacturing holds up 12 months from now when the this year's widgets remain on store shelves.

[monsoon]

. Corporations pay little mind to political boundaries. They don't have to.

One of the fundamental facets of capitalism is that those who do the work in the most efficient manner possible should do the work. .....

Two comments on this. First the United States, nor any other decent society is one based on pure capitalism and thank goodness it's not. You gave the example of BMW yet they would not be in SC without substantial taxpayer assistance. Taxing the people to create jobs is not capitalism. I am not saying there is anything wrong with it but it is an example that puts the "the USA has a capitalist economy" argument to rest. Teddy Roosevelt a 100 years ago spit out his sausages when he discovered during breakfast how the Chicago meat packing industry operated. Thankfully the capitalists were forced, by goverment, to get rid of the child labor, clean up their slaughter houses, and submit to governmental inspections of what they do. Business, in this country, exists with substantial governmental involvement raging from things like the above to special tax breaks, the legal idea of a "corporation", etc. It is not capitalism.

The most capitalist place in the world now is actually communist China. In the parts of that country where it is allowed to occur, corporations get away with pure capitalism. This means they exploit labor in almost slave like conditions, have no regard for what they are doing to the environment, and produce junk that is going to end up filling up USA landfills. And their partner, the Communists, are happy to let them do it as long as they get their portion of the big payout and nobody notices. The fact they had to close factories for hundreds of miles around Bejing just to try and calm the air pollution some is an example. Since Chinese the people there have no constitutional rights, it is a capitalist's paradise. It's not something to be desired and accepted. Newsweek a few weeks ago did an article that covered how it has become the most stressful place in the world to live because of it.

The second point that I want to make is that multi-national Corporations are extremely cognizant of political boundaries and move to take every advantage of it. I will give you an example. Take a huge fortune 500 company based in the USA. Especially something like an IT company. When one of these gets hit with bad times, and they have to get rid of say 10,000 people, they almost always lay off their people in the USA first and shift the work. The reason for this is they can lay the US workers off with no governmental repercussions. If they instead did these layoffs in Europe, where there are strict labor laws, then they end up paying substantial penalties. So it is the US worker that gets axed. Work also gets placed in places such as Canada because the government there pays for healthcare whereas in the USA they usually have to take on this cost. Finally corporations put work in high cost places such as Europe because they know they will not get business there if they don't.

[monsoon]

..... As previously mentioned, engineering is a service. Fluor is doing engineering work for projects around the country. .....

Engineering on it's own does not create value. It is what you do with the results of that engineering that do and are a part of the cost. I can hire an engineering firm to lay out the detailed drawings to build a car, but unless the car is actually constructed, there is no value to society. For value to occur the end result has to be something that actually produces a real tangible result. And that can be distilled down to a rather simple set of criteria. Does the end result fill a basic need for society. i.e. Does it feed, clothe, house, or provide transportation to the people. If not, can I sell it to another society so that I can purchase these items. This list is a bit debatable but the end result of any economic activity must do one of these things for it add value to a society because society can't exist without them. This is where the dig, grow or manufacture argument comes from.

This is a simplification, but I think it gets the point across. We got into trouble for example by overbuilding homes. Now one could say, but that produces housing. Yes it does, but much of it wasn't constructed for that purpose. Instead it was built to produce future income for people so it ended up failing the test. We squandered huge amounts resources in the process and now there are homes all over the country that people don't need, can't afford, but which have been built and are a burden that society now must bear. What remains now, are the decisions on where the pain of this folly is going to go.

[Spartan]

Finally corporations put work in high cost places such as Europe because they know they will not get business there if they don't.

Will you elaborate on that statement a little more?

[Spartan]

If you recall, a while back there was discussion of a statewide initiative to create economic clusters within South Carolina to create a more diverse economy, bring new job growth in specific sectors, and raise per capita income. Krazeeboi even posted a link to a video to that regard. The organization called New Carolina: South Carolina

[krazeeboi]

^Yeah, the automotive component is definitely the Upstate's niche. Maybe even aerospace to a certain extent. With that new public/private IT consortium coming to Innovista, I'd add information technology for the Midlands. And what are "creative industries"?

Was the Pee Dee/Grand Strand left out? They really suffer from not having a major research institution to help drive economic growth in certain sectors.

[B&R]

There is too much gloom and doom over the decline of manufacturing. The truth is that the USA had the best year ever in 2006 in value of manufacturing. The value of goods produced set a new record. And, yes, that was after adjusting for inflation.

Also the percentage of US GNP that comes from manufacturing has changed very little for several decades. Rumors of its demise are overblown.

What has happened is that there have been changes in what is manufactured and in employment numbers.

Newer industries have grown and older ones declined. Time changes things. The workers in old industries don't necessarily have the skills for the new jobs and have problems adjusting.

Employment has also dropped in many cases because of increased use of robots and computer controlled systems. For example, a decade ago there was a story in the local paper about a Greenville textile factory that was producing the same amount of cloth with 20 workers that formerly would have required 200. The owner was proud of his new efficient factory but unless people suddenly starting buying 10 times the clothing that is 180 people out of jobs. Repeat this hundreds of times and you can understand what former Clinton advisor Reich said in a speech last year. He pointed out that the US lost 180,000 textile jobs from 1997 - 2003, which sounds bad until you learn that China lost 1.8 million jobs during the same period. The same thing was happening around the world.

[GvilleSC]

Greenville already has a pretty significant engineering base. Y'all mentioned the automotive and aerospace. Who made this list?

[Spartan]

^New Carolina: South Carolina

[monsoon]

The truth is that the USA had the best year ever in 2006 in value of manufacturing. The value of goods produced set a new record. ....

I might be missing something but next week it is 2009 and as I said above, value is not measured in dollars. 10s of thousands of manufacturing jobs have disappeared just from SC in the last 3 years and there are towns in this state that are turning into modern dust bowls because there is nothing left. I drove through Marion, Mullens, Hartsville and Darlington today and there is an endless row of large factory buildings that are closed and weeds now growing in the parking lots. These places have been devastated. This, IMO is not an unfamiliar site in SC and one that should be considered unacceptable. It's certainly not the fault of the people who live in these places because they are not willing to live in labor camps at $1/day wages.

On your point about robots. I was designing products that were built by robots 25 years ago. Robots do not put people out of work. That is a myth that is not borne out by evidence. Instead robots free up human labor to do jobs that don't make sense to robotize or are too dangerous for people to do. They do not decrease jobs in manufacturing but instead increase them. If you use your human workforce for the more complicated parts of the processes, the parts where thinking and initiative count, you end up with better products more sales and more work. If robots eliminated human labor they would not be closing plants in SC and sending the work to China, Mexico and other places.

I will also tell you that anyone can be trained to do new work if they are given the chance. I would be interested to hear what is an "old industry" vs a "new industry" but I can't think of any manufacturing process that that does not employ skilled knowledgeable people. For examplei, is ship building an "old industry" given that they have been building them for 1000s of years? Yet if you were to look at any modern ship, especially something like a destroyer, you will find some of the most advanced manufacturing technology in the world in use. Give me a senior welder from one of these places and I will show you someone who can tell you how to correctly design a process to manufacture a multitude of 21st century projects that are in desperate need for the same skills. It's a matter of investing in this talent rather than forcing them to complete with welders in communist china.

The USA will learn this lesson by two ways. The will continue to demonize it workers and turn itself into a 3rd world economy or it will change it's course before it it too late. If not, what we are seeing now is just the tip of the economic despair that is to come.

[Spartan]

To be fair, those are small towns in the most economically depressed area in SC, and it has been for years... long before this recession hit. Its not fair to say that is a familiar site across the entire state. Having traveled through similarly rural parts of the Upstate and the Midlands, I just don't see that as being the norm. That does not make it any more acceptable, and I agree with you there. But how do you change it? I mean that as a non-rhetorical question, because I have no idea. How can you make an area that is so depressed into an economically viable place when it has so few redeeming qualities?

IMO, its not unlike the farm towns of the midwest that are being abandoned. These towns in the Pee Dee were and are farming centers, so with mass farming people are not as integral to the process. Something is going to have to come along to reinvent the economies there.

[monsoon]

^You fix it by putting up the same trade barriers to 3rd world nations that are not playing fair and against industrialized nations that protect their workers. It isn't that hard of a solution. Of course this would be a complete admission that globalization has been very bad for the individual. This is why we have had economic stimulus checks being written to people, interest rates lowered to 0, trillions given to banks, etc etc. Yet the economy continues to fall. It's simply because what I have said above is not being addressed. The fact that most of the nation has become Starbuck zombies over the last 25 years doesn't help either.

If it is not fixed, and we simply accept the fact that places like the ones I mention in SC should be allowed to fall because they were there first, then SC will end up becoming a much less relevant state than it already is, because nobody is going to stay in these places. Columbia, The Upstate, and Charleston don't operate in vacuums. If the rest of the state dies, they are not going to be that well off either.

[CorgiMatt]

People will migrate more and more to the urbanized areas, assuming the urbanized areas of the state remain viable themselves, and hopefully increase their viability.

[GvilleSC]

How about a realistic fix?