ECONOMIC DEVELOPMENT IN SOUTH CAROLINA: AN OVERVIEW OF RECENT TRENDS AND FUTURE PROSPECTS

This paper summarizes recent employment and earnings trends in South Carolina and reviews changes in the competitive environment that may impact future employment opportunities and earnings for the state's workers. The new competitive environment is characterized by greater global competition, a continuting shift from goods-producing to service-producing industries, new production organizations and technologies, and industrial restructuring. The implications of these structural changes for the state's businesses and workers are discussed, and public policy initiatives to prepare for these changes are suggested.Community/Rural/Urban Development,

EMPLOYMENT GENERATION STRATEGIES FOR SMALL TOWNS: AN OVERVIEW OF ALTERNATIVES

Employment growth is a primary economic development goal of most small communities. More jobs generally mean more residents, more spending at local businesses, and more tax revenues for local governments. Thus job growth permits the expansion and improvement of public goods and services, leading to an improved local quality of life and enhanced prospects for future employment growth. The purpose of this paper is to summarize the principal advantages and disadvantages associated with alternative employment generation strategies. The discussion of community approaches to more and better jobs is organized as follows. First, two theories of community economic growth are presented as background to the causes and effects of local employment change. Second, six employment generation strategies are introduced along with suggested plans of action for communities interested in implementing a specific strategy. Finally, a procedure is provided for incorporating an employment generation program in the community economic development strategic plan.Labor and Human Capital,

ADVANTAGES AND DISADVANTAGES OF TARGETING INDUSTRY CLUSTERS

Regional industrialization efforts include industrial recruitment, entrepreneurial and small business development, and business retention and expansion programs. Recently, many states and communities have targeted their industrialization programs at specific industries to promote the development of industry clusters. Broadly defined, an industry cluster is a loose, geographically bounded collection of similar and/or related firms that together create competitive advantages for member firms and the regional economy. The purpose of this paper is to summarize the debate concerning the advisability of industry cluster targeting as an employment generation strategy for states and sub-state regions. Our review of the appropriateness of a clusters strategy begins with a summary of industry cluster characteristics. Next we present the potential advantages developed clusters provide regional economies and the difficulties of establishing competitive clusters in new locations. We conclude with a summary of the implications of an industry clusters strategy for regional industrial development.Industrial Organization,

ESTIMATING THE COMMUNITY-LEVEL IMPACTS OF ATTRACTING NEW BUSINESSES: THE IMPLICATIONS OF LOCAL LABOR MARKET ADJUSTMENTS

The purpose of this report is to estimate short-and long-run labor market adjustments associated with employment change for South Carolina counties. An appreciation of the source of employees for new jobs enables community leaders to better select the appropriate level of industrial incentives and to better plan for changes in demand for public goods and services. We provide an overview of the components of a local labor force and the implications of component change on local income and expenditures for public goods and services. Then we present the results of the Clemson University Community Policy Analysis (CPAN) Model for county labor markets. This model estimates the allocation of new jobs in a county among the components of a county's labor force. Third, we summarize the concepts of "job chains" and "leakages" and discuss the relationship between these concepts and community-level impacts. Finally, we conclude with a discussion of how insights into labor market adjustments may be used to improve public policy in community planning and industrial development.Labor and Human Capital,

THE LOCATIONAL DETERMINANTS OF WESTERN NONMETRO HIGH TECH MANUFACTURERS: AN ECONOMETRIC ANALYSIS

The Tobit estimation procedure was used to determine the factors which influence the location and size of high technology manufacturers in nonmetro areas in the West. The results indicate that high tech branch plants tend to locate in populous counties adjacent to Metropolitan Statistical Areas (MSAs). Percent of local employment in manufacturing and agriculture was inversely related to branch plant employment, and the stock of human capital was not significantly related to employment. High tech unit plants also exhibited a propensity to locate in the more populous counties. Unlike branch plants, the unit concerns were more likely to develop or locate in communities with a highly educated work force and at greater distances from metro areas. The unit plants better fit the perception of high tech plants selecting high amenity locations with abundant skilled labor.Industrial Organization, Labor and Human Capital,

Targeting Industry Clusters for Regional Economic Development: An Overview of the REDRL Approach

An industry cluster is a geographically bounded collection of similar and/or related firms that together create competitive advantages for member firms and the local economy. The targeting of economic development programs at industry clusters provides three principal advantages: multiplier effects are stronger, employment growth potential is enhanced, and new firm spin-offs are promoted. The Clemson University Regional Economic Development Research Laboratory (REDRL) targeting method uses a screening process to identify local industry clusters with high potential for future growth. The region’s industries must pass five screens to be selected as a targeted cluster: substantial local presence as indicated by number of establishments and employees, industry employment in the region is growing, the region is relatively specialized in the industry (LQ> 1.0), and local employment growth exceeds the national industry average. Next, industry value chains are identified to determine if linked industries are good prospects for targeting. Finally, the identified high potential industry clusters are rated according to workers’ wages, potential future employment growth, import substitution potential, average plant size, and linkages to the local economy. Comparisons of these industry characteristics provide communities with insights regarding the potential economic and fiscal impacts associated with the attraction of an establishment in one of the target industries. In summary, the industry cluster targeting approach provides community leaders with (1) a list of industries for which they have a reasonable likelihood of attracting and (2) information regarding the likely benefits and costs associated with each industry. As such, a targeting approach permits communities to use their limited industrial development resources more efficiently to meet their industrial development goals.Community/Rural/Urban Development,

Employment Change in the Nonmetropolitan South: An Overview of Recent Trends and Future Prospects

Employment growth in the nonmetropolitan South exceeds the national average, yet job losses are the norm for many counties in the region. In addition, the earnings per job differential between workers in the rural South and the nation has widened. Recent changes in the economic environment promise new challenges for many southern nonmetropolitan communities. The new economy is characterized by continued growth in service-reIated activities, the rapid adoption of new technologies and production organizations. corporate restructuring and industry clustering, and enhanced competitiveness resulting from globalization of markets. The implications of these changes for labor demand in rural areas will vary markedly depending on local history. characteristics, and responses to the changes. Competitiveness in the new environment will be enhanced through raising labor productivity, improving public goods and services, providing supportive institutions, and raising local quality of life

EFFECTS OF BANKING STRUCTURE ON THE ALLOCATION OF CREDIT TO NONMETROPOLITAN COMMUNITIES

Recent and proposed legislative changes encourage increases in multioffice banking activity. In this manuscript, the allocation of credit to nonmetropolitan communities in a branch banking state (Arizona) is compared to that in a unit banking-holding company state (Colorado). Rapidly growing nonmetropolitan areas have experienced increased lending activity under statewide branching relative to unit banking. Rural communities, which experienced slow or negative growth, had lower loan-to-deposit rations under branch banking than might have existed under unit banking. Therefore, conversion to branch banking may result in a reallocation of loanable funds within nonmetropolitan areas.Financial Economics,

Innovative Activity in Rural Areas: The Role of Local and Regional Characteristics

Community/Rural/Urban Development,

DO MANUFACTURING PLANTS CLUSTER ACROSS RURAL AREAS? EVIDENCE FROM A PROBABILISTIC MODELING APPROACH

A statistical procedure for detecting "contagious" location patterns for manufacturing establishments is presented. Manufacturing industries' establishment clustering tendencies are ranked based on the "dispersion parameter" of the negative binomial distribution. Establishment data are for three-digit SIC manufacturing industries, nonmetro counties of BEA Component Economic Areas, 1981 and 1992. Findings indicate that virtually all manufacturing industries cluster establishments in nonmetro areas. Approximately two-thirds of the industries had dispersion parameters indicating a high or moderate level of spatial concentration. The propensity to cluster plants in nonmetro CEAs was evident for both 1981 and 1992, though weaker in 1992. Much of the industry clustering in nonmetro areas appears to be attributable to local "natural advantages" and not to inter-firm spillovers.Community/Rural/Urban Development,