Columbians think of their city as a place that offers an enjoyable quality of life, has a steady economy, and is a good location to operate a business. Taking those assumptions and measuring them, then seeking to find ways to improve on the region’s performance, is the focus of a more systematic approach that is currently underway.
Cities face competition just as businesses do. To measure how Columbia is doing against similar cities, EngenuitySC, a nonprofit organization focused on economic development, has been compiling for the past four years an annual analysis of where Columbia shines and where it falls short on key issues related to a growing economy.
The Midlands Regional Competitiveness Report measures five key metrics to assess how welcoming and nurturing Columbia is to business growth, comparing it to a set of nine other Southeastern cities. It also highlights areas in each category in which the six-county Midlands region excels and in which it needs to improve.
According to Meghan Hickman, executive director of EngenuitySC, the most recent report painted an encouraging picture overall, even when compared with other dynamic Southeastern cities. On issues from quality of life to development of small businesses, the Midlands is keeping up with its peers, but it needs to pick up speed in order to pull ahead, she believes.
“Generally speaking, we feel good about Columbia’s performance, especially over this past year’s numbers,” Meghan says. “But while we are seeing improvements, there is still more work to be done.”
To Carl Blackstone, CEO of the Columbia Chamber, the report confirms that Columbia has the proper assets, from young talent to great amenities, to make substantial economic gains — if it becomes more focused on the ingredients of growth.
“We have all the elements that are needed; we just need more of them,” Carl says.
Among the indisputable assets of the community is its livability, which in the report is ranked among the highest for the cities measured. Columbia scored not far from Greenville and Charleston and ahead of Tallahassee, Florida, and Augusta, Georgia. For the report’s purpose, livability means the quality of life that is available in the community.
The assets that push the Columbia area’s score higher include strong growth in the share of employment in arts and entertainment, affordable cost of living, and ease of access to health care. Its art and entertainment options, in particular, have been developing into strong attractions and employers in recent years. With the added boost of the University of South Carolina right in the heart of downtown, Columbia stands out from among its peer cities.
“The University is a huge economic driver for us,” Meghan says.
That boon applies to business because it makes the Midlands a place where people want to find a job or relocate their company, Carl explains. Many entrepreneurs and millennials want to pick a desirable destination for their careers rather than chasing a job to a new city, and they will look for interesting recreational destinations as they choose.
Carl says, “People want to move to an area that they look forward to living in.”
The Midlands has made its quality of life such an asset that recent graduates are taking a fresh look at staying here instead of moving to Atlanta, Charlotte, or elsewhere. “You’re seeing a bit of a paradigm shift,” Meghan says. “They want to stay here. The challenge and opportunity is in the need for more entry level job options so they can stay here.” The report states that the community’s livability ranking would be improved further by completing the Three Rivers Greenway recreational paths at the heart of the community and the planned waterfront parks that offer more riverside recreational opportunities.
A more challenging category for the Midlands is the entrepreneurial and business environment. The region places next to last among the measured cities in the study, with only Augusta scoring lower. Among the reasons for the relatively low score are the density of businesses per population and the number of employees working in the areas of office and business support or technical services.
Some of the issues of business density come with being both a state capital and a university town. Institutions are steady economic anchors, as they provide stability. However, such huge public-sector employers always will make the region rank lower on such measures of the private sector. Yet, the area still ranks well on overall number of small- and mid-sized businesses in the report. The category of business services, which includes such professional offices as lawyers and accountants, should provide an opportunity for the region to grow.
One way to help more people launch their own small businesses would be to open a one-stop shop for navigating permits and other government necessities, according to Chuck Garnett, president and chief executive officer of NBSC, a Synovus Bank. It would address a frequent sore point for entrepreneurs: the multiple layers of bureaucracy that they face as they get a new endeavor off the ground.
“We also need to make sure that those starting businesses are connected with all the help that is available around the Midlands,” Chuck says. One example he mentions is the Service Corps of Retired Executives, which offers counsel from business veterans to small companies. He fears that many who could use the assistance of it and other organizations are not getting connected to them.
“I’m not sure those resources are as visible as we can make them,” Chuck says.
Another area in which the Midlands has work to do is development of its innovative capacity, a measurement of research and patent activity. Columbia lags behind most of its peer cities in this measure, its score brought down by the number of people in the six-county region with advanced degrees and its ability to secure early-stage capital for technology commercialization through federal programs like SBIR and STTR awards.
Traditional research and development grants have risen in the past year thanks to our strong higher education institutions, Meghan notes, yet many of the other communities in the comparison group also have major universities, so the competition here is inevitably tough.
One community, the Raleigh area, shows what can be done. Decades after launching its Research Triangle project, the Raleigh-Durham area has combined its universities with high-tech companies and top research, and its innovation ranking is off the chart in this study as well as in many other measurements. The Raleigh area is included in the study not as a peer region but as a benchmark to aspire to, Meghan says. It shows what can be achieved if a community is committed to a clear vision over decades of creating an environment that fosters innovation and public/private investment, she adds.
Another area in which Carl believes Columbia must improve is in the creation and retention of talent. Despite all the young people attracted to the area’s universities, Columbia scores in the middle of the pack in training and retaining talent among its peer cities. Among the indicators that hurt Columbia’s scores: the number of people receiving degrees in science, technology, engineering, or mathematics and their wages and the percentage of people working in the knowledge economy. Among the region’s strengths are the number of people with associate’s degrees, a barometer of the success of the technical college system.
Carl sees a shortfall in Columbia’s employment picture for young graduates, especially in the STEM area: not enough jobs are available for new graduates. To him, the region urgently needs to fix this concern.
“The best talent retention tool is a job, and we need to grow jobs,” Carl says.
That is a particular concern in Richland County, which has not kept pace in job creation even as other parts of the Midlands, such as Lexington County, took off in recent years, Carl points out.
Richland County needs to make sure that its job recruitment efforts are focused on industries that offer the best chance of success. If Richland County wants to attract new industrial companies it needs to change its current property tax rates, which lean heavily on industrial tax rates to meet the county’s needs. A major reason that the tax rate is high is because so much of the real estate in the county is owned by government or otherwise tax exempt, leaving a relatively small business base to shoulder much of the tax load.
Columbia trails most of its Southeastern peers in the development of strong industry clusters, areas in which a field of expertise begins to cross-pollinate and develop new companies, boosting the economy. Many of the Southeastern areas, however, do have strong industry concentrations, putting them above the national average.
The Midlands’ most robust cluster is in insurance services, with multiple companies working to meet the industry’s data needs. The report cites more than 11,000 jobs tied to the sector. That is a strength to continue to build on and nurture through industry groups such as ITS-SC, the report recommends.
Columbia can build on its current assets to craft a strong cluster in the field of medicine and medical research, Carl explains. Plans call for the USC School of Medicine to move from its current location on Garners Ferry Road to a new complex on 16 acres of land donated by Hughes Development in the Bull Street District.
This increased proximity and better facilities would bring together the ingredients for a medical research and education cluster that should attract attention in the field, with Palmetto Health and Providence facilities nearby. “We already have that asset,” Carl says.
The combination would be ideal for attracting additional research projects and top-notch staff and faculty members, especially young professionals who want to live downtown.
Meghan emphasizes that the point of all these comparisons is not just to create a set of data but to prompt smart decisions and drive strategic action around the Midlands. It is intended to serve as a benchmarking tool for the region, highlighting both the areas of success and the opportunities for improvement.
The report gives business leaders, like the Midlands Business Leadership Group, a data-driven tool to inform the ideas they will take up, lead, and implement. “The data and research is only as strong as the action it inspires and the decisions it informs,” Meghan says.
Chuck of NBSC feels that the Midlands has the cohesiveness across the region to implement decisions that can help it grow. That has not always been as true as it is today, thanks to better developed contacts, especially between Richland and Lexington counties, Chuck says. “That river is not nearly as wide as it used to be.”
Midlands’ leaders intentionally have been seeking to build alliances to take up initiatives such as improving the region’s competitiveness, Carl says, and leaders are ready to start seeing results. “The business community is in the best position it’s been in for a long time because we have a shared vision of growing our economy.”