MCDERMOTT COLUMN: Charlestons economic scorecard cuts against grain
Confidentiality is a cornerstone of the way the Charleston Regional Development Alliance operates. That isn’t unusual, given the group’s semi-clandestine line of business.
The alliance’s primary job is to pitch the region to expansion-minded employers. And those wooed prospects almost always demand and receive a certain level of secrecy during the negotiating stages, especially if they’re mulling multiple locations.
The sales script is pretty predictable.
“The tradition is to just put your best foot forward,” said David Ginn, president and CEO of the quasi-public group.
So much for tradition.
The development alliance last week, as it has for the past two years, released its latest “economic scorecard,” a snapshot in time that tracks and measures Charleston’s progress in a handful of key categories. The primary competitive peer set is made up of six regional metro areas, including Greenville and Savannah.
The report is based mostly on 2005-10 data and includes many high points about the local economy and the makeup of the region’s workforce. At the same time, it breaches a cardinal rule of salesmanship in the economic development game by pointing out some glaring local weaknesses.
“It exposes your challenges,” Ginn allowed.
And it’s all packaged in a public document that any CEO can download.
“Certainly not a marketing piece,” Ginn allowed.
Yet parts of it are. The highlight of the latest scorecard was Charleston’s 8 percent-plus growth in gross regional product from 2005 to 2010, bolstered by a recovering manufacturing sector and the arrival of Boeing Co. The output of the value of all local goods and services was nearly two times the U.S. average, handily outpacing the six other peer regions.
Other important economic indicators ticked up, such as the 20 percent increase in average annual earnings per worker.
“On a percentage basis, we’re performing very well,” Ginn said. “On an absolute basis, there’s still room for improvement.”
Indeed, the scorecard also highlights some key challenges.
For instance, average wages are below the U.S., and the flow of venture capital, a source of lifeblood for many technology startups, is pitifully weak in Charleston.
And the scorecard also points to a growing problem that the average Joe can relate to: traffic congestion. Without a plan to improve road and other infrastructure, that issue will only get worse based on the prediction that 200,000 people will move into the area over the next decade, said Bryan Derreberry, CEO of the Charleston Metro Chamber of Commerce.
The worry is that fast-paced businesses that require “speed to market” will pass over the region, he added.
“If they can’t get it done here, what will they do? They will go somewhere else,” Derreberry said.
Congestion also contributes another pressing problem: Charleston’s housing-affordability index for 2010 was far below its peer group and the U.S. average.
The result has been longer commutes, more traffic and more sprawl as cheaper housing moves farther from the region’s employment clusters.
Derreberry worries that the lack of conveniently located affordable housing could deter talented young workers from moving in.
“If I’m spending every paycheck on commuting and housing, I don’t have any discretionary income to do stuff,” he said. “And this is a group that likes to do stuff.”
Ginn said he’s not aware of any of his competitors who have used the less-flattering aspects of the previous scorecards at Charleston’s expense, though some have half-jokingly thanked him for doing their research for them.
The most common response from his peers in the economic development game is one of surprise.
“It’s hard for communities to do this,” he said.
Derreberry said the hope is that the scorecard and other local self-assessments will show business leaders and residents that Charleston isn’t sticking it head in the sand.
“You have to have the dashboard indicators to show you where you’re driving the region,” he said.
Reach John McDermott at 937-5572.