Doug Woodward
Professor of Economics
Upside Potential
Downside Risk
Upside Potential
Upside: U.S. Economy
• Easy Money
–Low interest rates
–Real effects on housing, autos sales
• Stable rising stock market
• Falling gas prices
• Recovering private sector
• Job expansion
South Carolina Economy: Pointing Up
Upside Potential for South Carolina
Acceleration for South Carolina
Upside Potential:
Second Best State to Do Business
Ranking based on
Business Environment, Infrastructure, and Labor
Area Development Magazine
South Carolina’s
Manufacturing Renaissance
Downside Risk
Downside in 2013
• Consumer contraction
– End of payroll tax cut
– Other tax hikes
• Business investment
– Uncertainty
• Government spending contraction
– Military
• Global economic slowdown
– Especially Europe
High Risk for South Carolina
European Exports as a Percent of GDP
Long Run Development
Challenges in South Carolina
• Marathon, not sprint
• Per capita income is flagging in South Carolina
• Need High Impact Entrepreneurs
– Local headquarters
– Big job and income creators
But what happens in 2013?
Hang on!
1913
Thank You!
For more information:
Access wealth of data on
SCDash
Panel Questions
1. South Carolina has often been at the lower end of rankings on
innovation and entrepreneurial activity. These data may not be
accurately showing what is happening now. What do you see, both
positive and negative, regarding the changing entrepreneurial
climate?
2. Looking at the innovation/entrepreneurial climate in 2013, what
one thing excites you the most? What worries you the most?
3. Do you notice any emerging or strengthening clusters of
innovation and startup businesses?
4. In which knowledge economy segments or markets does SC have
the best chance to be or become competitive/leaders? Why?
5. How difficult is it really for SC-based entrepreneurs and start-up
companies to gain access to capital? Why?
6. Are there enough technology-oriented knowledge workers in SC
to support “gazelle” companies? If not, how do we obtain them?
7. How does the fiscal situation in Washington potentially affect
what happens here is South Carolina. To what extent is the federal
government supporting entrepreneur and innovation in South
Carolina, for example through defense contracts?
Economic Outlook Conference
December 12
Road Ahead
Road Ahead in 2013
South Carolina and Anderson Income
Personal
income
South
Carolina
$156,230,797
Anderson
$5,854,207
2011 Levels
Per capita
Population
personal
(persons)
income
(dollars)
4,679,230
188,488
Wage and
salaries
$33,388
$76,323,367
$31,059
$2,199,706
Percent Change from 2010 to 2011
Per capita
Personal
Population
personal
Wage and
income
(persons)
income
salaries
(dollars)
Total
employment
2,481,658
85,297
Total
employment
South
Carolina
4.65%
0.91%
3.71%
3.57%
1.24%
Anderson
4.47%
0.64%
3.80%
5.35%
2.36%
Source: Bureau of Economic Analysis
South Carolina and Anderson
Building Permits
2010
2011
% Change
United States
604,610
624,061
3.22%
South Carolina
14,021
15,542
10.50%
Anderson, SC
420
280
-33.33%
Source: U.S. Census
Source: Bureau of Economic Analysis
Zucker on Innovative Israel
• Why Israel?
– The other story
– The Silicon Valley leads as innovative hub.
• serial entrepreneurs, revenue models, and the level
of education among business founders.
– But Tel Aviv was ranked second.
• What are the lessons for South Carolina?
– We ranks low.
20 13
• Superstitious?
1913:
One Hundred Years Ago…
• Global Warming
– Death Valley hit the highest temperature ever recorded in the world
– on July 10, 1913:
• 134 degrees F.
• Production and Middle Class
– The Ford Motor Company introduced the moving assembly line
– Workers paid $5 a day to set middle class standard
• Money
– Federal Reserve System established
– Created in December with Woodrow Wilson’s signature
• Taxation
– Income tax
– Origin of the individual tax is the 16th Amendment, ratified February.
Military
•
•
•
•
•
•
•
•
•
•
South Carolina’s military community generated a total of $15.7 billion in economic activity and supported
approximately 138,161 jobs earning $7.2 billion in annual employee compensation.
Fort Jackson, McEntire Joint National Guard Base, Shaw Air Force Base, Joint Base Charleston, Space and Naval
Warfare Systems Center Atlantic, Marine Corps Air Station Beaufort, Marine Corps Recruit Depot Parris Island,
and Naval Hospital Beaufort generated a combined total of over $13.33 billion in economic activity and
supported 120,043 jobs in South Carolina. These jobs earned approximately $6.4 billion in annual employee
compensation.
o These installations purchased over $252 million worth of goods and services from South Carolina companies and
individuals.
o Every ten full-time positions on these installations supported approximately 13 full-time, non-Department of
Defense civilian positions.
o Approximately 360,541 out-of-state civilians (including tourists and non-DOD civilian personnel) visited these
installations, spending a combined $65 million during their visits.
Fort Jackson generated a total of $2.012 billion in economic activity statewide and supported 19,834 jobs.
These jobs earned approximately $941 million in annual employee compensation.
o The 120,000 out-of-state civilians that visited Fort Jackson in 2011 generated a total of $24.8 million in economic
activity and supported at least 304 jobs earning approximately $7.9 million in employee compensation.
Since 2000, the Department of Defense has obligated over $34.1 billion to defense contractors operating in South
Carolina, accounting for approximately 2% of South Carolina’s gross state product each year.
o Defense contractors operating in South Carolina but serving the out-of-state military community military
community generated a total of $1.29 billion in economic activity in FY 2011 and supported at least 5,800 jobs
earning $285 million in employee compensation.
A Year Ago:
Fall Outlook
Off the Crutches
Can the fragile South
Carolina private
sector really get
moving again?
Healing the U.S. Economy in 2012
• Government fiscal stimulus
– Payroll tax cut
• Monetary stimulus
– Quantitative easing
– Low interest rates
• Recovering private sector