INNOVATIVE METROPOLITAN AREAS IN THE SOUTH: HOW COMPETITIVE ARE SOUTH CAROLINA’S CITIES? by David L. Barkley and Mark S. Henry Professors and Co-Directors Regional Economic Development Laboratory Department of Applied Economics & Statistics Clemson University

THE NEW ECONOMY THE KNOWLEDGE ECONOMY THE GLOBAL ECONOMY Changes in Technologies Changes in Production Practices Changes in Location of Economic Activity Changes in the Demand for Labor Industry Clusters Clusters of Innovation Regional Innovation Systems

Table 1. Examples of State and Local Programs to Encourage Research and Innovation ProgramLocationFunding Stowers Institute for Medical ResearchKansas City, MO/KS$2 billion endowment California Institute for Regenerative Medicine State-wide$3 billion over 10 years North Carolina Bio-Technology Research CampusKannapolis, NC$1 billion endowment The Ohio Third Frontier ProjectState-wide$500 million Scripps Florida Kentucky Research Challenge Trust Fund Palm Beach, FL State-wide $510 million $340 million Donald Danforth Plant Sciences CenterSt. Louis, MO$150 million Hudson-Alpha Institute for BiotechnologyHuntsville, AL$130 million Translational Genomics Research InstitutePhoenix, AZ$100 million Louisiana Optical Network Initiative Grow Wisconsin Business Incubators State-wide $40 million $30 million

Table 2. Selected Measures of Metropolitan Innovative Environment A. Innovative Activity PATENT:Number of patents issued per 1000 population (USPTO, ) ARD:Academic R&D expenditures per 1000 population (NSF, ) SED:Doctorates awarded in science and engineering per 1000 population (NSF, ) GSSGraduate science and engineering students per 1000 population (NS, ) ETEC:Percentage of employment in technical professions – computer science; engineering except civil; natural, physical, and social science (BLS, 2000)

Table 2. Selected Measures of Metropolitan Innovative Environment (cont.) B. Labor Force Quality PHSG:Percentage of adult population (25+) that are high school graduates (CBP, 2000) PCG:Percentage of adult population (25+) that are college graduates (CBP, 2000) PWP:Percentage of population (age 16-64) that are employed (Census, 2000)

Table 2. Selected Measures of Metropolitan Innovative Environment (cont.) C. Entrepreneurial Environment PCEST: Percentage change in number of establishments (CBP, ) PEL2O: Percentage of establishments with fewer than 20 employees (BLS, 2000) INC500:Number of Inc 500 companies per 100,000 population ( 2000) VCAP:Venture capital investments ($) per capita (Price Waterhouse Coopers, 2000) EMB:Percentage of employment in managerial and business professions (BLS, 2000)

Table 2. Selected Measures of Metropolitan Innovative Environment (cont.) D. Agglomeration Economics HTEMP: Percentage of employment in high-technology industries (CBP, 2000) HTEST: Percentage of establishments in high technology industries (CBP, 2000) ITEMP: Percentage of employment in information technology industries (CBP, 2000) ITEST: Percentage of establishments in information technology industries (CBP, 2000) E. Competitiveness in Global Economy EXPORTS: Exports as a percent of gross metropolitan product, metro areas ranked in quantiles (DOC, 1999)

Table 3. Metropolitan Areas in Regional Innovation Systems Cluster Groupings 1. Outliers (4) Atlanta, GA CMSA Austin, TX MSA Raleigh, Durham, Chapel Hill, NC CMSA Baton Rouge, LA MSA 2. High (12) Dallas-Fort Worth-Arlington, TX CMSA Houston-Galveston-Brazoria, TX CMSA Huntsville, AL MSA Melbourne-Titusville-Palm Bay, FL MSA Orlando, FL MSA Pensacola, FL MSA Richmond-Petersburg, VA MSA San Antonio, TX MSA Sarasota-Bradenton, FL MSA Tampa-St. Petersbusrg-Clearwater, FL MSA Tulsa, OK MSA West Palm Beach-Boca Raton, FL MSA

Table 3. Metropolitan Areas in Regional Innovation Systems Cluster Groupings (cont.) 3. College Towns (5) Athens, GA MSA Bryan-College Station, TX MSA Charlottesville, VA MSA Gainesville, FL MSA Tallahassee, FL MSA 4. Medium (20) Augusta-Aiken, GA-SC MSA Birmingham, AL MSA Charleston-North Charleston, SC MSA Charlotte-Gastonia-Rock Hill, NC-SC MSA Cincinnati-Hamilton, OH-KY-IN MSA Columbia, SC MSA Greensboro--Winston-Salem–High Point, NC MSA Greenville-Spartanburg-Anderson, SC MSA Jackson, MS MSA Jacksonville, FL MSA Knoxville, TN MSA Lexington, KY-IN MSA Memphis, TN-AR-MS MSA Nashville, TN MSA New Orleans, LA MSA Norfolk-Virginia Beach-Newport News, VA-NC MSA Oklahoma City, OK MSA Roanoke, VA MSA Wilmington, NC MSA

5. Below Average (47) Abilene, TX MSA Albany, GA MSA Alexandria, LA MSA Amarillo, TX MSA Ashville, NC MSA Auburn-Opelika, AL MSA Beaumont-Port Arthur, TX MSA Biloxi-Gulfport-Pascagoula, MS MSA Chattanooga, TN-GA MSA Clarksville-Hopkinsville, TN-KY MSA Columbus, GA MSA Corpus Christi, TX MSA Decatur, AL MSA Dothan, AL MSA Enid, OK MSA Evansville-Henderson, IN-KY MSA Fayetteville, NC MSA Fayetteville-Springdale-Rogers, AR MSA Florence, SC MSA Fort Smith, AR-OK MSA Fort Walton Beach, FL MSA Goldsboro, NC MSA Greenville, NC MSA Hattiesburg, MS MSA Hickory-Morganton-Lenoir, NC MSA Jackson, TN MSA Jacksonville, NC MSA Jonesboro, AR MSA Killeen-Temple, TX MSA Lafayette, LA MSA Lake Charles, LA MSA Lakeland-Winter Haven, FL MSA Lawton, OK MSA Little Rock-North Little Rock, AR MSA Long View-Marshall, TX MSA Lubbock, TX MSA Lynchburg, VA MSA Table 3. Metropolitan Areas in Regional Innovation Systems Cluster Groupings (cont.)

5. Below Average (47) (cont.) Macon, GA MSA Mobile, AL MSA Monroe, LA MSA Montgomery, AL MSA Myrtle Beach, SC MSA Odessa-Midland, TX MSA Owensboro, KY MSA Panama City, FL MSA Pine Bluff, AR MSA Rocky Mount, NC MSA San Angelo, TX MSA Savannah, GA MSA Sherman-Denison, TX MSA Shreveport-Bossier City, LA MSA Sumter, SC MSA Tuscaloosa, AL MSA Tyler, TX MSA Victoria, TX MSA Waco, TX MSA Wichita Falls, TX MSA 6. Low (18) Anniston, AL MSA Brownsville-Harlingen-San Benito, TX MSA Danville, VA MSA Daytona Beach, FL MSA El Paso, TX MSA Florence, AL MSA Fort Myers-Cape Coral, FL MSA Fort Pierce-Port St. Lucie, FL MSA Gadsden, AL MSA Houma, LA MSA Huntington-Ashland, WY-KY-OH MSA Johnson City-Kingsport-Bristol, TN-VA MSA Laredo, TX MSA McAllen-Edinburg-Mission, TX MSA Naples, FL MSA Ocala, FL MSA Punta Gorda, FL MSA Texarkana, TX-Texarkana, AR MSA

Table 4. Changes in Aggregate Economic Activity by Cluster Groupings, Change in Change in Cluster Grouping Employment Population (%) (%) A. Metro Counties Outliers (32) a High (58) College Towns (13) Medium (113) Below Average (106) Low (33) a Number of metro or nonmetro counties in the cluster grouping.

Table 5. Changes in Aggregate Economic Activity by Cluster Groupings, Change in Change in Cluster Grouping Employment Population (%) (%) B. Nonmetro Counties Outliers (31) High (40) College Towns (24) Medium (136) Below Average (315) Low (42) Rural LMAs (349)

Leading Southern Metropolitan Areas 1. Austin-San Marcos Baton Rouge Raleigh-Durham-Chapel Hill Gainesville, FL West Palm Beach-Boca Raton Houston Dallas-Fort Worth-Arlington Melbourne-Titusville-Palm Bay1.45 South Carolina Metropolitan Areas 14. Greenville-Spartanburg-Anderson Florence Charlotte-Gastonia-Rock Hill Charleston Columbia Augusta-Aiken Myrtle Beach Sumter.17 Table 6. Patents Per 1000 People by Southern Metropolitan Area,

Table 7. Total R&D Expenditures at Universities and Colleges, Area Total R&D R&D Expenditures Per Capita Leading Southern Metropolitan Areas 1. Bryan-College Station, TX1,193,191,000 $ Athens, GA 713,914, Gainesville, FL 893,001, Baton Rouge, LA 703,565, Hattiesburg, MS 388,843, Charlottseville, VA 410,689, Auburn-Opelika, AL 260,924, Raleigh-Durham-Chapel Hill, NC2,550,055, South Carolina Metropolitan Areas 16.Columbia 305,927,000 $ Charleston 179,002, Greenville-Spartanburg-Anderson 306,074, Augusta-Aiken 133,100, Charlotte-Gastonia-Rock Hill 36,745, Myrtle Beach 1,638, NR Florence 0 0 NR Sumter 0 0 Source: National Science Foundation

Table 8. Percentage of Metropolitan Labor Force in Professional Occupations, 2000* * Professional occupations include Computer and Mathematical Operations (15-000); Life, Physical and Social Science. Occupations ( ); and Architecture and Engineering Occupations ( ) Leading Southern Metropolitan Areas 1. Huntsville10.1% 2. Raleigh-Durham-Chapel Hill Melbourne-Titusville-Palm Bay Austin Dallas-Fort Worth-Arlington Houston Tallahassee Atlanta 4.7 South Carolina Metropolitan Areas 13. Charlotte-Gastonia-Rock Hills 3.9% 31. Columbia Greenville-Spartanburg-Anderson Augusta-Aiken Charleston Sumter Myrtle Beach Florence 1.5

Leading Southern Metropolitan Areas 1. Charlottseville40.1% 2. Raleigh-Durham-Chapel Hill Gainesville, FL Bryan-College Station Austin Tallahassee Athens, GA Atlanta 32.0 South Carolina Metropolitan Areas 10. Columbia 29.2% 19. Charlotte-Gastonia-Rock Hill Charleston Augusta-Aiken Greenville-Spartanburg-Anderson Florence Myrtle Beach Sumter 15.8 Table 9. Share of Adult Population with College Degrees, Source: U.S. Census, 2000

Leading Southern Metropolitan Areas 1. Gainesville, FL88.1% 2. Fort Walton Beach Melbourne-Titusville-Palm Bay Tallahassee Raleigh-Durham-Chapel Hill Lawton, OK Fayetteville, NC Austin84.8 South Carolina Metropolitan Areas 11. Columbia84.3% 40. Charleston Myrtle Beach Charlotte-Gastonia-Rock Hill Augusta-Aiken Greenville-Spartanburg-Anderson Sumter Florence73.1 Source: U.S. Census, Table 10. Share of Adult Population with High School Diplomas

StateDeals Investments (millions) Investments Per Capita Texas 2154$18,403$ 883 Virginia1098 8,340 1,178 Florida 833 8, Georgia1026 6, North Carolina 869 5, Tennessee 273 1, South Carolina 87 1, Alabama Louisiana Kentucky Oklahoma Mississippi Arkansas Table 11. Venture Capital Investments in the South, by State, Source: PriceWaterhouseCooper Money Tree

Leading Southern Metropolitan Areas 1. Miami – Fort Lauderdale, Fl27.7% 2. Richmond – Petersburg, VA Tallahassee, Fl Austin-San Marcos Atlanta West Palm Beach – Boca Raton, FL Huntington-Ashland, WVA-KY-OH Raleigh-Durham-Chapel Hill, NC11.4 South Carolina Metropolitan Areas 25. Augusta-Aiken 9.5% 40. Charleston Charlotte-Gastonia-Rock Hill Greenville-Spartanburg-Anderson Columbia Sumter Myrtle Beach Florence 5.4 * Source: 1997 Economic Census ** NAICS 54 activities include legal advice and representation; accounting, bookkeeping, and payroll services; architectural, engineering, and specialized design services; computer services; consulting services; research services; advertising services; photographic services; translation and interpretation services; veterinary services; and other professional, scientific, and technical services. Table 12. Share of Establishments in Professional, Scientific, and Technical Services Industries (NAICS 54), 1997

Entrepreneurial Growth Companies - Annual employment growth rate > 15% - Employment growth > 100% for Southern Metropolitan Areas Labor Market AreaCompaniesHigh GrowthShare Austin 20,915 1, % Atlanta 69,279 4, Nashville 24,458 1, Pensacola 10, Raleigh 25,768 1, Little Rock 13, Charlotte 28,383 1, United States Average 4.7 Florence 12, Green.-Spart.-Ander. 22,771 1, Columbia 13, Augusta-Aiken 9, Charleston 12, Sumter 3, Source: National Commission on Entrepreneurship, Table 13. Entrepreneurial Growth Companies as a Share of Business in Labor Market Areas,

North Carolina % Georgia % Texas % U.S.+60.4% Kentucky % Alabama % Tennessee % Florida % South Carolina % Mississippi % Virginia % Arkansans % Louisiana % Oklahoma % Source: U.S. Patent and Trademark Office, April Percentage State Average Average Change Table 14. Change in Utility Patent Activity , Southern States

Top 25% (1-29) G-S-A Florence Columbia Charlotte Charleston Augusta-Aiken ? (30-59) Charlotte Charleston Columbia Augusta-Aiken Charleston Charlotte ? (60-89) Augusta-Aiken Myrtle Beach G-S-A Florence Myrtle Beach G-S-A Columbia ? Bottom 25% (90-117) Sumter Myrtle Beach Florence ? Innovative Activity (Patents) Human Capital (College Graduates) Entrepreneurial Support (Professional Services) Local Quality of Life Figure 1. Ranking of South Carolina Metropolitan Areas Across Regional Innovation System Indicators Rank Among Southern Metro Areas

REGIONAL ECONOMIC DEVELOPMENT RESEARCH LABORATORY CLEMSON UNIVERSITY

Industry Clusters Support clusters in new industries related to existing industrial base Strengthen emerging/potential clusters in the region Innovation Policies for Non-RIS Regions (Rosenfeld, 2002 and Tödtling, 2004)

New Firms Promote entrepreneurship and new firm development Attract cluster-related firms Innovation Policies for Non-RIS Regions (Rosenfeld, 2002 and Tödtling, 2004) (Continued)

Knowledge and Innovation Develop cluster-specific technology centers Attract branches of national research organizations Build up and attract new labor skills Innovation Policies for Non-RIS Regions (Rosenfeld, 2002 and Tödtling, 2004) (Continued)

Networks Link firms to local and external knowledge providers Technology transfer programs Innovation Policies for Non-RIS Regions (Rosenfeld, 2002 and Tödtling, 2004) (Continued)