SOUTH CAROLINA

Regina Abrami, Global Program Director, writes,

Immersions are now standard feed in MBA/EMBA programs, but how many American MBA programs “immerse” their students in the USA rather than the latest must-see “emerging market?”  The Global Program did.  We began our two-month immersion in South Carolina, a U.S. state that transformed itself from an agrarian economy to light manufacturing, and today ranks sixth in the U.S. for foreign direct investment.  In this, South Carolina has traveled a path that many developing countries today face.

In South Carolina, students had a chance to see firsthand how important government policies are to the work of economic transformation.  As factories closed and headed to Asia, South Carolina had to respond, and did so in a big way with automotive and aeronautic clusters now an important part of the state’s economic landscape.  At the same time, South Carolina is a place that demands recognition of its history – good and bad, something not always seen in the other places we will visit. 

Claudia Gutierrez, GP Class of 2015, writes,

Some historians say that history repeats itself. More than that, I think history co-exists in our day-to-day lives. South Carolina, a Southeastern state in the U.S., is no exception. The state shows history present today particularly with regards to its economic situation relative to the Northeastern states. In the 1800’s, the North and the South of the United States were economically different. The North developed into a more industrial economy, whereas the South focused its efforts on agriculture. Influenced by significant world events such as the rise of Egypt and its cotton market, the North quickly gained an economic advantage over the South. Cotton was one of the main crops produced in the South, and it proved difficult to compete with Egypt whose cotton had a better quality and a cheaper price.

Today, the Northeastern economic advantage over the Southeast is still present. However, I was surprised to learn that, according to Bureau of Economic Analysis, the GDPs of the 12 Southeastern states are roughly the same size as those of the 12 Northeastern states ($3.0T vs $3.1T) and that between 2009 and 2012 South Carolina grew faster than all but two of the Northeastern states. Moreover, I was pleasantly surprised to learn that South Carolina is a pro-business state, with incentives that have attracted multi-nationals corporations from around the world.  Every BMW SUV is built here. These multi-national corporations create job opportunities and train people in South Carolina to take these jobs, thus helping the local economy. 

Before I visited South Carolina a few weeks ago, many people questioned why I was visiting and wondered what there was to learn. Although I can now give a rich answer to that question, I am left wondering why it is that Americans do not fully recognize economic progress in some states in the South. Is this a legacy of perceptions that date back to 19^th century? How do you change that perception?

Beyond economics, South Carolina brings other aspects of U.S. history to attention. One that struck me was how slavery has shaped U.S. society up to today. Back in 1865 when the U.S. abolished slavery, the role former slaves would play in society was not addressed. As a result, discrimination became the norm (and in some places the law).  The U.S. still struggles for equality today. Now, many corporations spend thousands of dollars on diversity programs to promote equality in the workplace, and the government imposes rules to try to ensure equality.  Could we have minimized this legacy by more openly discussing societal roles and structures back in the 19^th century? My guess is that we could have.

Regina Abrami, Global Program Director, writes,

I too had no shortage of questions on why “South Carolina,” and my answer had always been “why not?”  Sure, we could have gone to Silicon Valley for start-ups and venture capital or to Boston to learn a thing or two about biotech and defense contracting, but how helpful would either have been as a launching pad for understanding what role foreign investors can play in the economic transformation, positive or negative? 

South Carolina is grappling with these challenges in real time -- trying to attract foreign capital, encourage entrepreneurship, ensure appropriate skill-building in its labor force through partnerships between its community colleges and foreign corporations, as well as develop infrastructure to beat out neighboring competitors (that’s Georgia, in case you’re wondering).  The South Carolina government has also made decisions with clear political implications – not the least its choice to be a “right to work” state – less gently put as no unions here. 

Stephensen Cherng, GP Class of 2015, got a taste of all this, and writes of his experience visiting the University of South Carolina’s “Center for Entrepreneurial and Technological Innovation,” a home-grown incubator that is making a difference for area entrepreneurs.  As he writes,

Today we visited the organization "Center for Entrepreneurial & Technological Innovation" (CETi). It functions as an incubator headquartered in Columbia that helps local start-up companies. My first and foremost observation of CETi was its terrific energy, and not the least owing to Greg Hilton and Bill Kirkland. Both are intensely passionate about CETi’s mission to further entrepreneurship in South Carolina.  CETi provides its clients with knowledge about the market, mentorship for companies within the incubator, and connections to the right network.

Many Americans who are not familiar with the South may consider it to be "behind the times," but CETi is a perfect example of how wrong they are.  CETi aims not only to help start-ups grow, but to succeed internationally.  We learned as much from one CEO who shared his experiences of starting his own company which today distributes nutritional and health care products around the world.  

On a side note - on the same day that we visited CETi I discovered just how delicious Southern Sweet Tea was.  I recommend it to anyone visiting South Carolina. I also learned that South Carolina was the first place in the U.S. to grow tea and produce it commercially. Sweet Tea, rightly so, is now a delicious staple of southern hospitality.

I had two pleasant surprises, each refreshing in their own right, and all on a regular Tuesday in South Carolina. Maybe Americans should rethink their use of the phrase, "went South."  It might just mean to get ahead.  To learn more, please see http://www.uscstartup.org/

Toukam Ngoufanke, GP Class of 2015, and another South Carolina fan, writes, of grits, hot laps, and his enthusiasm for this southern trip,

Perhaps you always thought that grits, hot laps, and enthusiasm had nothing to do with each other. Think again. Visit South Carolina (SC). The state was the first leg of the Lauder Global Program’s six-country (U.S, China, Singapore, Tanzania, and U.K.), activity-packed summer immersion. SC is the thread that knits all three things together. Wondering how? As they say in South Carolina, “Come on in”.

The state is as rich with history as its diet is rich with grits. From Columbia to Charleston via the winter town of Aiken, eating grits went from a first for some of us to something close to an addiction. Think of it as an enthusiasm for grits. Whether it was feasting on delicious she crab soup or delighting in fried flounders sprinkled with lemons, many of us made sure to make space for grits. They were that good. The finest variety of grits was consumed in Aiken. These had been imported from neighboring Georgia where they’d been at one of the few remaining animal-run, gristmill in the U.S. Their consumption was punctuated, Lauder-style, with very engaging conversations over SC’s history going as far back as the mid-17^th century and covering amongst other things: second sons, corn, rice, textile and SC culture.

Aiken also set the stage for hot laps: these are race-car-like laps that BMW kindly allowed us at the company’s performance and delivery center in Spartanburg, SC. If you ever purchased a BMW, wanted to perform/learn driving tricks, and pick up your luxurious purchase in person, the center is your place. What’s more is that BMW produces all X3 and X6 BMWs for global and domestic markets at its Spartanburg plant. The company’s presence in the area has been a boon for the local community. For every one job that BMW directly creates, three to four more jobs are indirectly created by the supply-chain that emerged to cater to BMW’s operations. We also discussed the company’s talent-pool cultivation for its complex manufacturing and assembly operations.

On the topic of jobs, we had the distinct honor to be introduced to the South Carolina Research Authority (SCRA) (see http://www.scra.org/).  SCRA is SC’s best kept secret, and is run by a team of incredibly enthusiastic people. Set up by the state legislature in 1983, SCRA is a 501(c) which operates as private company but with a mandate to foster the state’s economic development in the knowledge economy, a.k.a., the technology space. SCRA has done well. Over the last few years, SCRA’s applied R&D activities, tech investment ventures and R&D facility management services have enabled the company to generate several hundred million dollars in fees annually. Perhaps more importantly, it has boosted the state’s economic output by over $15 billion since its inception. The company has, via subsidiary SC Launch, invested over $70 million of its operating profits into fostering an ecosystem intended to boost SC’s place in the entrepreneurial start-up scene. SC Launch has done so by providing seed money, mentorship, office space, and access to its wide network for budding entrepreneurs. SCRA has also helped start-ups secure over a quarter billion in capital from other sources. The over 1000 jobs created by these start-ups pay average wages of about $60,000 per year. In low-cost-of living SC, this is great pay.   

Some keys to success for you budding entrepreneurs, shared by CETi’s own entrepreneur-in-residence: create wide and deep networks, act with integrity (folks, word gets around!), perseverance, and, cliché as it may sound, lots of enthusiasm.  

Focusing on the role of universities in developing the talent in support of South Carolina’s important automotive cluster, Diego Rimoch, GP Class of 2015, writes of our visit to Clemson University’s International Center for Automotive Research (CU-ICAR) (see: http://cuicar.com/ ).

The CU-ICAR research campus was started in 2007, barely 5 years ago and it’s impressive to see how far along they have come. The campus master plan calls for several technology parks, with the first one already built out. This technology park is full of modern buildings with striking design elements. CU-ICAR offers master and PhD degrees in automotive engineering and its enrollment has been increasing at a very brisk pace. The two year degree is anchored by a program called Deep Orange and which requires that the students build a concept car from scratch. The project is narrowly supervised by industry partners helping the students develop valuable practical skills. Mostly through its tuition fees but also thanks to the research projects it conducts on behalf of its industry partners, CU-ICAR has managed to become self-sufficient. Its close location to all the automotive businesses, including many suppliers, is a strength that they have leveraged successfully.

After the presentation at CU-ICAR we came away feeling they were at the cutting edge of education in their field and that their close collaboration with industry was definitely one of their strong points. They are constantly developing new technologies and processes. They seemed interested in the possibility of partnering up with entrepreneurs who would want to take these ideas to market. It’s something to think about for the future.