COLUMBIA -- Only three states have an economy more competitive than South Carolina, and Charleston is king in the Palmetto State.

What state leaders do with that edge will determine how South Carolinians fare in what University of South Carolina economists on Wednesday called a fragile economic recovery.

Bobby Hitt, the state Department of Commerce secretary, said South Carolina is in a job renaissance with 17,000 new jobs recruited this year. "There is a buzz; it's our time and manufacturing is going to lead us there," Hitt said.

Texas, Georgia and Alabama have an edge over South Carolina when it comes to the cost of doing business, a strong infrastructure and healthy labor climate, Doug Woodward, USC's top research economist, said. The ranking, by Area Development magazine, is based on measures of those three elements.

Globally, the United States is ranked by the World Bank as fourth for the most competitive economy of the 183 counties ranked, Woodward said. Singapore rates No. 1, followed by China and New Zealand.

The comments came at the university's 31st annual Economic Outlook Conference. More than 200 business and government officials attended the five-hour forum.

Boomtown: Charleston

Charleston is the state's bright spot, Woodward said.

That's due to several factors. The area outpaced every other metropolitan area in the country over the past decade for the share of adults who have a four-year degree, he said. The rate in Charleston is 32 percent, compared with 28 percent nationally.

That builds the area's creative class and its entrepreneurial spirit, and that can be seen in the development of software companies and a digital corridor, anchored in part by Blackbaud, Woodward said.

The Boeing Co., the Charleston port and the recent global tourism designation by Conde Nast make the Lowcountry South Carolina's strongest economic engine, Woodward said. Boeing's decision to build the Dreamliner plant in North Charleston sparked attention and caused businesses to take a look at South Carolina. "That opened a lot of eyes," Woodward said.

The forecast

Despite the good news, unemployment is predicted to linger around 10 percent for the next year.

Joey Von Nessen, a USC economist, said unemployment may not return to pre-recession levels until 2018, although the recovery could happen by 2014 if employment growth stays at 2 percent, he said.

Employment is expected to grow by 2 percent, factoring in changes in the size of the labor force and the number of jobs available. Total employment grew 1 percent in 2011.

Families, meanwhile, should see a 2.5 percent increase in their income next year.

Woodward said the job growth will take years to translate into higher household incomes. But higher wages will follow increased productivity. "It will occur," he said. "We will see higher living standards. That's the history of capitalism."

Food and fuel prices are volatile, but Woodward said he does not expect any dramatic spike in either.

Creating uncertainty going forward is the European debt crisis, the 2012 presidential election and the upcoming court decision on the federal government's new health care law, referred to as ObamaCare by detractors.

S.C.'s future in tires?

Hitt highlighted the boom in the manufacturing sector, led by significant announcements this year in the tire industry. The state recruited 12,000 manufacturing jobs this year, or 70.5 percent of the total jobs announced.

Michelin, which has been in South Carolina for about 30 years, will expand by 270 new jobs and a $200 million investment. Bridgestone Americas will bring 850 jobs for a $1.2 billion investment.

Rounding out the news is 1,700 new jobs and a $500 million investment by Continental Tire.

Hitt said those announcements will make South Carolina a major player globally. To build on that, he said, USC and Clemson University should develop a world-class logistics education program that makes state workers experts in exporting the tires.

Woodward said the tire-production opportunities are a result of a decision by President Barack Obama to impose a 35 percent duty charge on Chinese tire manufacturers, which was approved by the World Trade Organization.

Knowledge-based sector

Manufacturing won't solve South Carolina's economic woes alone, Woodward said. State leaders need to pursue a knowledge-based industry as well.

The state doesn't have any specific home runs in the knowledge sector, but Woodward said the recent announcement that Nephron Pharmaceuticals will bring 700 jobs to Lexington County is a healthy start.

"Success breeds success. I think the only thing holding us back is the overall global and national outlook," he said. "These days, it's much easier to sell South Carolina."