Insights on S.C. Sites
Jun 30, 2017 02:31PM
By Emily Stevenson
By John Jeter
If Field of Dreams were filmed today in South Carolina, the whole build-it-and-they-will-come script would likely have to be flipped—our hero, flush with capital and an expansive business operation, would need the talented team first before beginning construction on a major-league project. In other words, the Palmetto State may be no Iowa cornfield, as in Kevin Costner’s 1989 movie, but the labor bench here is slim—at a time when site-selection experts say workforce shortages and worker skills could be a strike against the home team.
“It’s become a pervasive issue everywhere I go, and it’s just gotten worse,” says Didi Caldwell, founding principal of Global Location Strategies, a Greenville-based site-selection consultantancy that has landed $3.6 billion in sited direct investment since 2013.
“Skills have eroded,” she says. “We went through the manufacturing decline, the recession. As a culture, we don’t value people that do things with their hands, and manufacturing has become a lot more technical and a lot more complicated.”
And a lot more capital-intensive, requiring more, and better-trained, workers. With the state unemployment rate at 4.3 percent and worker skills a stubborn concern, will companies shy away from selecting South Carolina?
“The number one issue is workforce,” agrees Mark Williams, president of Strategic Development Group, a Columbia-based site-selection consultant who’s also chairman of the peer-nominated Site Selectors Guild, a national organization founded in 2010 and billed as the “only association of the world’s foremost professional site-selection consultants.”
“That’s historically been an issue for us, but South Carolina has made a lot of gains in that area due to our recent successes and improvement of skills, but we’re at a period of time with demographics and job growth that has gotten our employment rate so low that workforce has been a persistent issue,” he says.
As Mark Farris, president and CEO of the Greenville Area Development Corp., told some 200 real estate, financial, political, and other leaders at a land-use forum in May:
“A lot of communities across the U.S. have stopped recruiting companies and started recruiting people because they know that if they’re getting the kind of Millennials that can operate on sophisticated machinery, the higher skill sets, the companies will come,” he said, “If we’re able to do that, we’ll be much more successful on the economic-development level because, believe me, the companies are searching for that labor.”
According to Site Selection magazine, South Carolina nevertheless has the workforce goods. In the magazine’s Atlantic Region category, comprising eight states from Delaware to Florida, the Palmetto State tied for second place with Virginia—behind Georgia—in “State Workforce Development Rankings.” The scores, released last January, are based on state financing for workforce preparation; workforce readiness, derived from U.S. Chamber of Commerce Foundation findings; and ACT National Career Readiness Certificates. (The South Carolina Chamber of Commerce noted in its January Workforce & Jobs Report that the state became the first in the nation to achieve 100 percent Work Ready certification from the American College Testing nationwide accreditor.)
“I can’t emphasize enough the worker piece—not just people at a working age, but in pre-K,” Williams says. “Our clients are looking where they’re looking, not just at the workforce they’re getting immediately, but they’re looking at pre-K and looking at a pipeline of workers. Things are getting more and more technical, more and more capital intensive.”
In its October 2016 survey of corporate real estate executives, Site Selection cited “Workforce skills” number one in “Site Selectors’ Most Important Location Criteria.” “Workforce development” was the sixth most important issue, behind “incentives”; state and local taxes; and “land/building prices and supply.”
Yes, finally, the site itself, or as Caldwell says, “You can have the best community in the world, you can have a fantastic workforce, and if you do not have an appropriate site for a building to put this project in, then it’s going to look elsewhere.”
Williams and Caldwell agree South Carolina has been, as Williams says, “a victim of our own success.” With $27 billion in capital investment since 2011—including $1 billion each from Boeing, Volvo, and BMW, and Daimler’s $500 million, among many—Williams says of large-scale, infrastructure-ready tracts:
“Ten years ago, industrial sites were well-serviced and ready to go. With so much success in announcements, it’s left a hole in our inventory.”
Back to the state’s infrastructure situation: Like the rest of the nation, South Carolina scores poorly.
The American Society of Civil Engineers’ 2017 Infrastructure Report Card gave the U.S. a D+ for the viability of assets ranging from roads to railways, from schools to sewer lines, from airports to seaports; the ASCE says it doesn’t grade each state individually.
Noting, among other issues, that South Carolina’s roads cost each driver $502 a year and schools have an “estimated capital expenditure gap of $90 million,” the report then says:
“This deteriorating infrastructure impedes South Carolina’s ability to compete in an increasingly global marketplace. Success in a 21st-century economy requires serious, sustained leadership on infrastructure investment at all levels of government.”
Williams voices optimism on that front.
“I see more political will in South Carolina than I do in most other states I’ve worked in. It’s a big nut to chew, but I think they’re doing their best.”
He mentions the legislature’s new 12-cent gas tax to fix roads and bridges, approved in May over Gov. Henry McMaster’s veto: “I can’t speak for the gas tax, but the business community’s united behind general infrastructure improvement. I think the state gets it. The people in this state understand more than a lot of other places do.”
So can South Carolina still field site-selection dreams? The state’s already proved that, Williams and Caldwell say.
“I see the availability of sites and the availability of qualified workers as the two key issues,” Williams says. “I think it’s worth saying those shortages are the result of success.” He adds: “If I were the state of South Carolina, I would focus on those two issues. In some respects, they’ve already started.”