United States

Charleston sees wind energy sector as foundation of its next historic chapter

For most who try to envision the city of Charleston, South Carolina from afar, the images that come to mind are likely to be those of horse-drawn carriages plying historic downtown streets, of sundrenched golf courses and nearby beaches, and perhaps, and if they’ve visited at all recently, of the looming presence of the Arthur Ravenel bridge, which spans Charleston harbor and overlooks (at a distance) the remains of Fort Sumter, birthplace of the American Civil War.
Charleston sees wind energy sector as foundation of its next historic chapter

But for those in the business and economic development community in this idyllic community on the southeast coast of the US, the concept of “vision” is all about the future. And they intend to have wind power be a cornerstone of theirs, according to a recently released regional strategy.

The unveiling of a plan for economic growth tied to wind energy, aerospace biomedical research and advanced security and IT, coincided with the wedding of Britain’s Prince William and Kate Middleton, the newly anointed Duke and Duchess of Cambridge.

It was at almost precisely the same time that the royal couple returned to Buckingham Palace that more than 400 local business leaders gather at a technical college auditorium just outside of Charleston to be told that the city – and in fact, the three-county region that encompasses it, were equally ready for their close-up on the global stage.

“In my view our community is a crossroads, but it’s a good crossroads,” said a clearly energized David Ginn, president and CEO of the Charleston Regional Development Alliance.

“It is time for this community to move on to the next level,” he continued. “The way to do that is with a smart, global strategy that plays to our strengths.”

That strategy is called “Opportunity Next,” and it is the sequel to Forward Charleston, a 2004 strategy document prepared by Angelou Economics out of Austin, Texas that has served as the blueprint for the region’s economic development strategy ever since.

More than just another plan to replace an old one, Opportunity Next represents an evolution in thinking that closely mirrors the evolution of the community, and is far more granular than the earlier document, combining targets for business recruitment, fostering and support, with a complimentary strategy for developing core, and in many cases, overlapping, core competencies needed to bring the new vision in to fruition.

And just what is that vision?

It’s decidedly high tech and forward-looking, and heavily reliant on the success of foundational developments like the $98 million large-scale wind turbine drive train testing facility that’s currently being built at the Clemson University Restoration Institute on the grounds of the former Charleston Naval Base, and on the fortunes of the new Boeing 787 plant in North Charleston.

But it’s also based on enhancing the commercialization of research at MUSC, and the technical brainpower and innovation at SPAWAR (the US Space and Naval Warfare System Command located a few miles north of the aforementioned facilities) and other defense-related customers throughout the region.

In short, most of what the plan talks about are “green”, high-paying jobs and the ability for future local college graduates – and older locals, as well – to move between employers and industry sectors without ever having to move away to pursue their passions or career choices.

The final pillar of the vision is tied to the Port of Charleston and logistics, intertwined industries that gave birth to the City of Charleston in the 1600s, and are now also undergoing their own changes due to the proliferation of new technologies in their industries, customers’ demands that they be more “green” and the impending, 2014 opening of widened locks on the Panama Canal, that for the first time will allow colossal cargo ships to travel directly between Asia and the U.S. east coast.

Region in crisis fights for its economic life

Underpinning the embrace of wind power and green technology are memories of what happened to the region when Congress decided to close the Charleston Naval Base & Shipyard in 1993.

Until then, Charleston’s business leaders generally agree, the region was probably too dependant on the stability – and jobs – that a large scale military base brings with it. With the region girding for the loss of 22,000 to 24,000 jobs – and potential unemployment of between 15 percent and 20 percent – the closure was a cold dose of a new reality.

A lot went on before Angelou Economics was hired to design a comprehensive strategy for the region, but nothing that was as much of a turning point for the region.

The consultant’s Forward Charleston recommended the region develop competitive industry cluster tied to its inherent advantages to drive innovation and wage growth.

The five industry sectors Angelou’s consultants proposed were aviation/aerospace, automotive, biosciences, advanced security, and the creative industries.

At the same time, they said, an additional cluster, travel and tourism, could best be championed by the Charleston Area Convention & Visitors Bureau.

Ginn would later say that the biggest lesson the consultant taught the region’s economic development team, was that while the Charleston region was very diverse with assets and jobs and opportunities, in many of these asset areas, it just wasn’t very deep.

“In other words, there was a lot of opportunity to deepen each of these sectors,” he said.

Armed with Forward Charleston, the Development Alliance enjoyed a string of solid and almost routine “wins.”

The “activity level”, a standard measure of how one is doing in economic development, was good.

Even Google – a company that’s very silicon valley and not very Lowcountry – chose to locate a datacenter in Berkeley County.

But it was the arrival of Boeing that really shook everything up.

Suddenly the perceived “quality” of prospects eyeing the region jumped to a whole other level, and not coincidently, it became time for a whole new economic development plan.

Private sector must take leading role

The CRDA responded by hiring another Austin, Texas-based firm, Avalanche Consulting – headed up by Amy Holloway, an Angelou Economics veteran who had worked on Forward Charleston – and Greenville, S.C.-based McCallum Sweeney Consulting, led by site selection guru Ed McCallum.

Beginning in July 2010, the two firms engaged in an intense and in-depth competitive assessment of the region’s strengths and challenges, indentifying target audiences for the region’s future economic and workforce development initiatives.

As the work continued, the two consultancies collaborated on formulating detailed action plans for growing target companies in the region, and an organizational program of work that aligns the efforts of key regional stakeholders.

Over the course of the project, the consultants drew on input from more than 1,100 local residents, 200 focus group participants and 133 area companies.

Holloway, who has worked with more than 100 different communities over the course of her career, said there are certain key things that successful, thriving communities do right.

“The first thing is they realize that realism takes precedence over local differences,” she said. “That’s essential and particularly for a community like this one, because with things like the presence of Boeing and the drive-train test facility, you’re on an international platform now.”

Another thing highly successful communities realize is that economic development organizations and workforce development efforts must share targets for where they see their future.

“There also has to be a balance between business recruitment and entrepreneurship,” Holloway said. “You can’t just engage in elephant hunting – trying to recruit only the biggest of companies – at the expense of your existing small business base.

“Finally, they all recognize that the private sector has to take a leading role in making the future what they want it to be,” she said, adding, “this region is already an international destination for tourists; Similarly, this region can be a globally competitive destination for business and talent as well. It just takes a different level of economic development activity.”

New status as an international city

McCallum largely amplified Holloway’s statements, but also honed in on local controversies like the current battle between North Charleston and the State over planned rail connections to the new container terminal being built by the S.C. State Ports Authority at the Navy base.

“You need to take a balanced approach to economic development that capitalizes on the changes that have occurred in the region and the changes that continue to occur,” he said.

“This is one of only three locations on Earth where wide-bodied passenger jets are being built, and it will be one of only three places in the world where the largest of the next generation of wind turbine drive trains will be tested,” McCallum continued. “Embrace your new status as an international economy.”

Turning to the raging controversy over the state rail plan, McCallum said that it’s important that local residents “treasure and nurture the port.”

“You know, from the outside, when you look at Charleston, it kind of looks like a lot of turf fighting; but to me, it’s an expression of love,” he said. “It’s about people having a difference of opinion over how best to preserve what they have here.

“Again, it goes back to that new status I mentioned; I lot of what we’re going through now is the result of our leap-frogging from being a regional city to an international city, without having been a national city in between. We have to recognize that and learn to move forward together in this new context,” he said.”

McCallum also encouraged business leaders to embrace the vision of the Clemson University Restoration Institute, which he said will be the mechanism that moves South Carolina definitively into the wind energy sector, and could foster other renewable energy activity as well.

Most important of all, he said, “Don’t miss out on target opportunities; be prepared to pounce.”

“You have to realize that target opportunities only come once. And they might have a short shelf life. Don’t miss it,” he said.

Test facility seen as hub for growing cluster

From almost the minute it was announced, the Clemson University wind turbine drive train testing facility was seen as establishing a beach-head for wind energy in the state and an enticement for both domestic and international companies in the sector to invest in the city and surrounding counties.

Experts said the lab, which is being built in a large vacant industrial building at the center of the former Navy base, would put North Charleston on the map as a key player in the global wind power industry.

A big reason hopes are so high is the example Clemson University set when it established its International Center for Automotive Research (CU-ICAR), an advanced-technology research campus, to capitalize and on BMW Manufacturing Company’s opening a large production facility in South Carolina’s upstate region.

Since its opening, the facility has served as an incubator where academia, industry and government organizations can and routinely do engage in synergistic collaboration.

The facility currently boasts more than $200 million in commitments of support from public and private entities, and it ranked as one of the top 10 automotive colleges in the country.

South Carolina Commerce Secretary Robert M. Hitt, a former manager of corporate affairs for BMW’s Spartanburg, S.C. plant, said with the help of CU-ICAR, South Carolina has attractrf 46 automotive industry suppliers to 14 different counties in the state since the BMW facility opened for business.

“We’re a welcoming state,” Hitt said shortly after speaking at the unveiling of Opportunity Next. “The way I see my job, I’m a resource for anyone and everyone considering coming to South Carolina. I try to facilitate their landing in one of counties in every way I can.”

“And as well as we’re doing now, we’re only going to do better as suppliers for the new Boeing facility in North Charleston begin to set up their own operations, not only in the Lowcountry, but throughout the state,” he said.

But Hitt said a lot was going right even before Boeing came on the scene. He points out that out of that 20 of the 50 most admired companies in a recent Fortune magazine poll now have a presence in the state, a presence that’s resulted in $4 billion in capital investment in the state and the creation of 20,500 jobs.

“Given what’s already happened across the state, and what’s in the process of happening thanks, yes, to Boeing, but also things like the creation of the Clemson University Restoration Institute, which will place us at the cutting edge of the wind energy industry, I think our future will be pretty remarkable,” he said.

Clemson President James F. Barker described CU-ICAR as “a great example of how a research university like Clemson can be a catalyst for economic development". He predicted the new turbine test facility will serve the same role going forward.

Many state lawmakers agreed, among them state Sen. Larry Grooms, one of several who helped Clemson put together the proposal that secured $45 million from the federal government to support the testing facility project.

"This is of tremendous significance to our state," he said .

Citing Energy Department figures, Grooms said, "anyone who develops an offshore wind turbine cluster could be the beneficiary of 20,000 jobs, and we are better suited than any other state."

South Carolina already has the makings of a cluster, he and others said. General Electric has a massive turbine manufacturing plant near Greenville, and several bearings companies and other suppliers have set up shop nearby.

Meanwhile, the old Navy base is an ideal place for manufacturers to assemble the turbines, Grooms said. The turbines of the future may become so large and heavy that companies will have to manufacture them at a waterfront site and load them by barge, he said.

And that, of course, dovetails nicely into the development of the new cargo terminal nearby.

Many in attendance said they believed the opening of the widened Panama Canal only enhances the desirability of the region for wind energy companies, as they’ll soon be able to put their large wares on a ship in Charleston and sail it directly to China, where the renewable energy market is booming.

Creating a new generation workforce

A few days prior to the unveiling of Opportunity Next, Renewable Energy Magazine sat down for an hour preview of the plan with Stephen C. Warner, the development alliance’s vice president of global marketing and regional competitiveness.

For Warner, the beauty of the plan is the way aligns the quest to grow target industries with the goal of fostering certain core workforce competencies through the state and local education systems.

“That alignment really grew out of what I can only describe as an ‘Aha moment,’” he said. “It’s not enough to say we want to be home to suppliers to Boeing or that we want to have a cluster of wind energy companies grow up around the Restoration Institute, talent is the key to making that happen.”

That’s why a major component of Opportunity Next is establishing a new entity – Graduate Charleston – that will focus on educational system improvements while also creating a scholarship program for qualified students interested in attending technical college.

Opportunity Next also calls for the creation of an alignment strategy board to make sure the goals it espouses remain aligned as they are implemented.

But both Warner and Holloway emphasized that the plan is about far more than establishing new committees.

While aspects of the effort’s findings will remain proprietary – “why tip our competitors in other states to how we intend to pursue our economic development efforts,” Warner said – certain things have to happen for the plan to be successful.

According to Holloway, the private sector needs to be continually engaged, and needs to participate in the process of communicating with and reminding state officials of the target strategies, any progress that’s being made, and also, any way they can support the effort.

“When it comes to the education piece, you really do need to engage your workforce development folks,” she said. “You also need to expand higher educational offerings, and strengthen pre-K through 12 education,” she said.

Like McCallum, Holloway said there needs to be a definitive decision on rail service to the new port terminal, additional funds need to be secured to improve Interstate-26, and, perhaps most of all, greater understanding of the importance of the Port of Charleston needs to be fostered throughout the region.

“It’s surprising how few people really understand the port’s importance to the region’s economy,” she said.

Holloway also calls for the creation of a “neighborhood” consisting of job training, higher education, R&D and the private sector – likely in conjunction with the development of the restoration institute campus – to promote great entrepreneurship and innovation.

“The final piece is marketing,” she said. “There needs to be a public education effort put in place to educate the public at large about the tri-county area’s regional assets. And part and parcel of that will be increased coordination of the efforts of the local tourism and economic development officials.”

“This plan is a strategy for supercharging our community,” David Ginn said. “But the plan is only the end of the beginning, if you will; now that hard work begins.”

For additional information:

Opportunity Next

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