Business Community Releases Annual Benchmarking Report, Break Away South Carolina

COLUMBIA, SC – February 12, 2010 – The South Carolina Chamber of Commerce has released the fifth edition of Break Away South Carolina, an annual benchmarking review that compares how well South Carolina is performing relative to other states. The report concludes that while South Carolina is making improvements, the state needs to do more to make significant headway in its goal to increase the prosperity of our citizens and improve global competitiveness. The Break Away report measures South Carolina’s performance in six distinct driver areas: Education and Workforce Preparedness; Business Costs; Legal Environment; Infrastructure and Connectivity; Dynamism and Entrepreneurialism; and Quality of Life. View the report.

“Global competitiveness is the key to advancing South Carolina’s position, not just with our neighbors but also with the rest of the world,” said Otis B. Rawl Jr., president and chief executive officer of the South Carolina Chamber. “In order to be competitive, the Palmetto State must consistently measure where it stands in relation to other states. Break Away South Carolina provides an annual benchmarking review that reflects our commitment to analyzing how well we are performing year by year.”

The report comprehensively evaluates South Carolina’s economic standing compared to 49 other states, using more than 100 metrics. It reflects how the state is improving, not in isolation, but in relation to competitor and comparator states.

“This year’s Break Away South Carolina is substantial in that it is the fifth edition, which provides the opportunity to compare long-range data that reflects how South Carolina has improved or declined since the inaugural report was compiled and released. As South Carolina continues to move to a more open and innovation driven economy, it will draw from its unique strengths, while confronting critical challenges,” said Rawl.

Key Findings

• Education and Workforce Preparedness continue to be an area of concern, with a below average national ranking of 39. South Carolina is held back by its performance in the K-12 sub-driver, while scoring in the top 10 in the postsecondary sub-driver.
• In Business Costs, South Carolina continues to score well due to improvements in unit labor costs and average health care premiums, but the rating has declined in workers’ compensation premiums and overall business tax burden.
• The Legal Environment rankings were about average, 26th in the country, with some improvement over the past years, especially in the tort system and malpractice costs. However, South Carolina has continued to lag behind its peers in the business liability costs category. As other states make improvements to their regulatory climates, especially through tort reform, it is imperative that South Carolina follow suit in order to not fall behind.
• Infrastructure and Connectivity performance was above the majority of states, ranking 23 for the first time in five years. Also for the first time, South Carolina performed better in physical infrastructure (22nd) than in digital infrastructure (28th). This ranking change is due to the state’s strong progress in the quality of both its water and electricity system. Regarding digital connectivity, South Carolina now has a solid telecommunications foundation and good broadband coverage. Today’s challenge is to increase use and applications of broadband at the individual and firm levels.
• The Dynamism and Entrepreneurialism driver continues to be discouraging, with South Carolina ranking 45th nationally. This indicates research, innovation, entrepreneurial activities and creative industries in South Carolina have room for significant improvement. Nevertheless, South Carolina shows improvement in research and creativity metrics, such as university spin-offs. Several small business metrics also indicate improvement, such as certain small business financing.
• South Carolina’s performance on the Quality of Life driver is again below average. The state ranks 39th in the U.S. with a two-star score. Interestingly, state quality of life scores are converging, with each state seeking to capitalize in natural, cultural and man-made amenity assets. South Carolina as a travel and tourism state cannot pause on sustaining and improving its competitive position in this area. 

While improvements in Infrastructure and Legal Environment are encouraging, South Carolina’s rankings and scores in the past years indicate the need for continued aggressive deliberation and change to make the state more competitive. The better performance of surrounding and competitor states creates a keen competitive environment. While the recession has stressed most states, opportunity abounds for more flexible, previously trailing states like South Carolina to “break away” in the next expansion phase of the business cycle.

“We know that growing individual wealth is a long-term commitment to the more than four million citizens who call South Carolina home,” said Rawl. “South Carolina’s rankings exemplify the need for continued aggressive change to make the state more competitive. It is imperative the General Assembly adopt issues outlined in the South Carolina Chamber’s 2010 Competitiveness Agenda.”

Break Away South Carolina is the result of a committed partnership between the South Carolina Chamber of Commerce, the Palmetto Institute, New Carolina and the Palmetto Business Forum to gauge how well the state is performing year by year and comprehensively evaluate South Carolina’s economic standing compared with other states. The first Break Away report was produced in 2006. The full 2010 report, Break Away South Carolina, can be viewed at www.scchamber.net.

The South Carolina Chamber of Commerce

The South Carolina Chamber of Commerce, the nation’s first state chamber Accredited with Distinction by the U.S. Chamber, is the state’s largest statewide broad-based business and industry trade association representing more than 18,000  businesses  and more than one  million employees, with 90 percent of membership comprised of small businesses. As the unified voice for business and industry, the Chamber is a catalyst for increasing prosperity and enhancing the state’s global competitiveness in order to improve the quality of life for all South Carolinians.