South Carolina has become headquarters to hundreds of the world’s largest companies, fueling billions in investments and hopes that the Palmetto State will continue to grow its position in the global economy.
Now, new data points to signs of growth: A U.S. Department of Commerce report released in March shows that the state’s 2012 exports totaled nearly $25.3 billion in goods sold to 197 countries around the world, a 2.23 percent increase over 2011. South Carolina is currently ranked the 12th fastest growing economy in the nation, tying with North Carolina as the fastest growing state on the East Coast. And it ranks fourth nationwide for the percentage of employment in U.S. affiliates of foreign companies at seven percent and 104,300 employees.
All of this reads very optimistically for state officials, who hope to retain and attract business abroad to admit new markets in developing countries and renewed interest in American-made products.
“We see FDI (Foreign Direct Investment) as new money in South Carolina’s economy – new money to come in and build growth in the state and the country,” says state Secretary of Commerce Bobby Hitt. “Until two decades ago, South Carolina was known primarily as a textile state. Today, it has garnered a global reputation as a leader in aerospace and auto manufacturing. It’s leading the nation in advanced manufacturing, having evolved from being ‘the little engine that tried’ to being ‘the little engine that could.’”
The state’s manufacturing sector, which took a hit during the recession, has come back strong and is leading the way in growing South Carolina’s international business presence, according to Otis Rawl, president and CEO of the S.C. Chamber of Commerce.
“South Carolina has certainly positioned itself as a global leader, particularly in manufacturing,” Otis says. “In fact, Site Selection magazine recently ranked the state as the 10th most competitive. We ranked first in tire exports, holding 30 percent of the share of U.S. made exported tires.”
South Carolina’s manufacturing base continues to grow, too. Since January 2011, more than 200 manufacturing firms have committed to invest $7.4 billion in the state.
“Certainly BMW, Michelin, Continental Tire, Bridgestone, Boeing and other great manufacturing companies are changing the landscape of our state and creating great jobs for our citizens,” says Otis.
Why South Carolina?
State officials often point to port expansion, including a $350 million Charleston harbor deepening project that will make way for larger ships to enter state waters. There’s also an increasingly skilled workforce, incentives for businesses and legislative support, among other factors.
“International companies don’t expand in South Carolina because we are low cost. They expand here because they can be profitable here. We have a stable business environment and infrastructure to ensure company success,” says Bobby. “This is our state’s track record. We don’t just recruit companies; we take care of them.”
Otis adds, “With the forward movement on the expansion of our port system, the state stands poised at the edge of greatness. Port volumes are expected to double to more than two million containers a year by 2025, and the S.C. General Assembly has taken steps to ensure the state is ready. We must continue that momentum.”
Planes, Trains, Automobiles And More
The products that South Carolina ships to other countries are as varied as the state itself. BMW, Michelin, Boeing, Daimler, Fujifilm and Bosch are just a few of the well-known global companies that have selected the Palmetto State as headquarters for their North America locations.
There’s also agriculture, which has long played a significant role in the state’s economy. Last year, South Carolina’s agriculture, forestry, fishing and hunting exports increased by 24 percent over 2011. Wood products, meat, cotton and other fabrics rounded off the top four exports.
When it comes to agricultural products, the United States exports more than it imports, officials at the state Department of Agriculture say. In South Carolina, more than 237,000 containers of agricultural products were exported in 2012 through the Port of Charleston, compared to nearly 81,000 imported containers.
“South Carolina agriculture is a part of the past, present and future, and the world is taking notice,” says S.C. Commissioner of Agriculture Hugh Weathers. “Like other industries, agriculture continues to evolve with changes in technology making it more efficient than ever before. Feeding the world is an important task. The world population is estimated to reach nine billion in the next 30 years, and that means farmers in South Carolina and across the world will need to continue doing what they do best – finding more efficient ways to farm and to feed the world.”
Lesser known business sectors in South Carolina are also making their mark on the international scene; such is the case of Scout Boats, an independent boat manufacturer based out of Summerville, S.C.
Founded more than two decades ago by Steve Potts, the South Carolina boat maker builds sport fishing, walk around and bay boats, as well as other models ranging from 15 feet to 35 feet. An in-house research and design team works with engineers to take concepts from blueprint to production, and this has helped grow the company’s reputation and business clientele worldwide, company officials say.
“International sales have been responsible for as much as 25 percent of our revenue,” says Alan Lang, national and international sales manager for Scout Boats. “We continue to grow our global presence by making new relationships with international partners and marketing ourselves in the global atmosphere as a world renowned, luxury fishing boat company.”
In the upstate of South Carolina, another watercraft company prepares its products daily for shipments worldwide. Confluence Watersports manufactures, markets and sells a portfolio of kayak, canoe and accessory products for the international paddle sports industry. Like many other manufacturers, Confluence was drawn to the state by existing manufacturing space and other conveniences.
Company CEO Sue Rechner says, “Confluence Watersports decided to locate to South Carolina in 2005 as a result of the acquisition of the assets of Watermark, Inc. One of the Watermark brands, Perception Kayaks, was started near Easley in the mid-1970s, and the facility was deemed a good choice for manufacturing of all Confluence Watersports brands.”
With 400 employees today and a facility in Greenville, the company has expanded internationally by licensing its eight brands to two manufacturing partners in the United Kingdom – an international partnership that has lasted for more than 25 years. Sue says that international sales have been good for the company, which touts itself as the world’s largest roto molding manufacturer of kayaks and canoes.
“The key to Confluence Watersport’s success in the past has been its ability to develop products with international design and performance appeal, its continuous investment in human capital and in research and development,” Sue says. “The future of Confluence Waterports’s international growth opportunity is bright as many developing nations begin to experience expansion of their economies and realize the advantages of developing their natural resources to embrace tourism and outdoor pursuits that are water-based.”
Small- and medium-sized companies like Scout Boats and Confluence Watersports are leading South Carolina’s international business growth. A new state-by-state analysis conducted by Business Roundtable, an association of leading U.S. companies’ CEOs, showed that 80 percent of South Carolina exporters are companies with fewer than 500 workers.
The same report says that state exports have grown three and a half times faster than the state Gross Domestic Product (GDP) since 2002, and the state’s trade-related employment grew four times faster than total employment from 2004 to 2011.
“Trade is a powerful engine for economic growth, supporting American jobs and increasing U.S. exports to countries around the world,” writes Business Roundtable President John Engler in an August news release. “With 95 percent of the world’s population outside of the United States, and more than one in five American jobs supported by trade, U.S. international trade and investment agreements have a major role to play in maximizing economic growth in South Carolina and all 50 states.”
The Future of S.C.’s Global Presence
At the University of South Carolina, experts track and predict the next trends in international business.
“There will undoubtedly be an increase in international business as some high profile new entrants (e.g. Continental, Boeing) and their suppliers who are co-locating here increase sales overseas,” says Hildy Teegen, a international business professor and former dean of the Darla Moore School of Business. “Manufacturing is likely to broaden in scope and scale around already established clusters.”
Agriculture exports serving a growing global population and tourism, which already is a huge export in the services arena, will also continue to grow, Hildy says.
Knowledge-based industries, to which USC’s nationally ranked business school largely contributes, is also expected to grow as educators and the next generation of international business leaders work to expand their expertise.
According to recent United Nations data, this past year was the first year ever that Foreign Direct Investment to developing countries exceeded that of the developed countries.
“From a U.S. perspective, experts have tracked an increased diversification of the countries in which businesses are operating through export activities, collaboration with suppliers, and through direct investment,” says Kendall Roth, senior associate dean for International Programs and Partnerships at the Moore School. “From an educational perspective, developing expertise in our students as future managers in countries such as Vietnam, Indonesia, Malaysia, China, India, Russia, Brazil, Chile, Mexico, etc., are high potential opportunities. It’s high potential for the students, but also for South Carolina companies that recognize the value in employing this expertise to secure their own position in the emerging economic order.”