About South Carolina

Report published: September 26, 2018

South Carolina has an urgent need for good-paying jobs and accessible skills pathways to expand its workforce capacity and economic prosperity. An aging workforce and a large population of eligible workers disconnected from education and employment opportunities have contributed to a low labor force participation rate. Low wages and mismatched skills for job prospects are among the reasons South Carolinians are increasingly discouraged by the labor market. To address these obstacles, the state could advance strategies that leverage competitive advantages in high-growth industries and equip South Carolinians with critical workforce-ready skills.

Extensive research and over thirty interviews with stakeholders and experts in South Carolina have identified offshore wind as a promising job creator and economic driver. Offshore wind turbines harness the power of strong ocean winds by generating energy from faster, more consistent wind speeds and can be leveraged to meet the vast energy needs of coastal states. In fact, upcoming offshore wind projects across the Atlantic Coast signal an opportunity for South Carolina to supply local products and support technological innovation. Given South Carolina’s offshore wind research infrastructure and expertise, high offshore wind manufacturing potential, and robust logistics industry, the state is positioned to benefit from long-term market growth in this region.

Through the offshore wind industry, South Carolina can leverage its numerous strengths to take advantage of expanding opportunities, such as:

  • Capitalizing on growing demand and falling costs. By 2030, the global offshore wind industry is projected to grow 16 percent annually and costs are forecasted to be as low as 6 cents per kWh.
  • Leveraging cutting-edge research. South Carolina is home to a globally competitive drivetrain testing facility, which has attracted partnerships with GE and MHI Vestas. The state also has significant expertise in offshore meteorology and oceanography.
  • Mobilizing existing manufacturing and industry assets. South Carolina is home to fifteen active wind manufacturing facilities and many companies that could expand their in-state operations to serve the offshore wind market, such as subsea cable manufacturer Prysmian Group, Siemens, and Timken. The state’s strengths in advanced composites, shipbuilding, and logistics also support offshore wind activities.
  • Harnessing robust infrastructure assets. South Carolina’s ports can handle the manufacturing and staging of offshore wind turbines, and the state’s transmission system can handle the interconnection of large offshore wind capacity.
  • Supporting good-paying jobs. With forward-thinking solutions, South Carolina’s offshore wind industry could support 847 jobs annually through 2035.

To realize these opportunities, state and local leaders can pursue strategies that create a strong foundation for industry growth in offshore wind and help South Carolina businesses grow, innovate, and outcompete regional, national, and global competitors. In today’s competitive, globalized economy, businesses are more likely to thrive in cities and states that offer a rich innovation ecosystem, provide fertile ground for capital investment, boast a highly skilled workforce, maintain a robust value chain, and offer clear policy signals. By having a close network of partners and suppliers, South Carolina companies can reap the benefits of increased productivity and operational efficiency, amplifying local job creation and economic growth.

Capitalizing on this opportunity offers real benefits for the state economy and South Carolinians. Offshore wind could support an average of 847 jobs annually through 2035 from the development, installation, and operation of offshore wind farms in South Carolina as well as component manufacturing for local and regional projects. This industry offers a diverse array of good-paying jobs that cater to various education and experience levels, including computer-controlled machine tool operators, electrical engineering technicians, and industrial production managers. Policymakers can support these jobs by taking advantage of increasing global demand and overcoming barriers to industry growth.

Summary of Recommendations

The analysis presented in this report culminates in recommendations for South Carolina leaders based on stakeholder interviews and best practice research. Each recommendation identifies strategies to address barriers or untapped opportunities in the state’s offshore wind industry across five foundational building blocks: innovation ecosystem, access to capital, workforce development, value chain, and local market. Although they draw on model policies and programs from elsewhere, South Carolina could also advance innovative solutions that become case studies for other states. While the recommendations are intended to be complementary and would be more powerful if adopted as a package, each can also be viewed as a stand-alone option. South Carolina policymakers and stakeholders can use this guide for collaboration and prioritization of actions given the opportunities and challenges that lie ahead in the growing offshore wind industry.

Innovation Ecosystem

Policy 1: Foster the Commercialization Culture at Universities

South Carolina universities have the opportunity to help homegrown innovations play a larger role in the global economy by embracing a culture that fosters entrepreneurship among faculty, students, alumni, and the community. University leaders could leverage favorable commercialization policies and programs such as recognizing technology transfer activities in tenure and promotion reviews, instituting startup support programs, and facilitating startup-industry exchanges.

Policy 2: Facilitate Mentorships for Entrepreneurs Statewide

In addition to organic networking and knowledge-sharing opportunities, regional efforts to build robust entrepreneur-mentoring programs can help develop entrepreneurs as individuals and bring their ideas to fruition. South Carolina universities, incubators, accelerators, or economic development organizations could replicate the highly successful MIT Venture Mentoring Service model to manage regional volunteer mentor networks and curate mentor-mentee matches.

Policy 3: Establish a Venture Catalyst Program to Strengthen Rural Entrepreneurship

Through stronger entrepreneurial services, rural communities could better develop advanced technology ideas to meet community needs, tap into high-growth markets, and drive local economic development. Drawing on Oregon’s Venture Catalyst program, South Carolina could deploy a seasoned entrepreneur or investor in each rural area to provide business development expertise, connect residents with resources, and address critical gaps in the local innovation ecosystem.

Access to Capital

Policy 4: Extend and Expand the Angel Tax Credit

South Carolina’s Angel Tax Credit de-risks and incentivizes equity investments in high-growth industries and has had a significant impact on startup growth and job creation since its inception. The South Carolina General Assembly could extend the lifespan of the incentive past the end of 2019 and consider amending the annual credit caps to more closely align with investors’ level of interest in local startups and encourage larger investments.

Policy 5: Increase Funding for the SC Launch Program

The South Carolina Research Authority’s SC Launch program offers diverse early-stage funding opportunities to advanced technology startups and fills critical gaps in the state’s innovation ecosystem. To continue to support local entrepreneurship and achieve outsized economic impacts, South Carolina could raise the cap on business contributions to the Industry Partnership Fund, which currently limits the program’s annual budget to over $6 million and is often exceeded within minutes.

Policy 6: Establish an Offshore Wind Business Development Fund for Small Businesses

Small and growing firms face steep barriers to entry to the offshore wind market that may include high administrative costs for bidding on contracts and capital expenditures for retooling operations. The South Carolina General Assembly and Department of Commerce could fund a competitive grant program to cover operating and capital expenses for local small businesses interested in supplying the offshore wind industry.

Policy 7: Encourage Program-Related Investments in Offshore Wind Businesses

As opposed to traditional nonprofit grants, philanthropic foundations are increasingly making program-related investments (PRIs) that advance their charitable mission while generating a financial return. To leverage PRIs as an alternative funding pathway for startups, the Governor’s Office or Department of Commerce could appoint a foundation liaison who builds relationships with foundations and brokers PRIs in support of in-state businesses, innovation, and jobs.

Workforce Development

Policy 8: Create a Simulated Workplace Program for Job Readiness Skills

A significant challenge for South Carolina employers is the workforce’s soft skills gap; they struggle to find potential workers with a good work ethic, critical-thinking skills, writing ability, and effective communication. South Carolina schools could implement simulated workplaces in classrooms to help students develop these job readiness skills and acclimate them to professional expectations prior to joining the labor force.

Policy 9: Address the STEM Skills Gap to Boost Manufacturing Employment

Despite the importance of advanced manufacturing in South Carolina’s economy, the state’s low labor force participation rate and shortage of people with STEM backgrounds results in a limited workforce to support business growth. South Carolina’s technical colleges could help disenfranchised workers get over the remedial hump and build the STEM workforce by expanding integrated basic education and skills (I-BEST) programs for specific in-demand career pathways.

Policy 10: Establish Offshore Wind Certificate Programs at Technical Colleges

Offshore wind projects are a particularly challenging work environment and demand specialized knowledge and skills, which makes dedicated workforce training programs critical to industry success. As South Carolina’s offshore wind value chain and project pipeline develops, the state’s technical colleges could establish certificate programs that teach students wind power fundamentals and wind turbine maintenance skills.

Policy 11: Increase Student Engagement in Offshore Wind Research Activities

South Carolina has extensive offshore wind innovation assets to drive technology development and build research expertise across its workforce. The South Carolina General Assembly could expand the SmartState program to enable state matching funds for educational outreach programs and sponsored graduate-level student engagement, which aligns with the program’s mission to stimulate research, commercialization, and economic growth.

Value Chain

Policy 12: Assess the Offshore Wind Readiness of State Ports

Ports are critical for reducing offshore wind project costs and centralizing industry resources, such as manufacturing warehouses, testing facilities, and training centers. In collaboration with the South Carolina Ports Authority, the state could assess existing port infrastructure and recommend planning and investments to support current and future offshore wind industry needs.

Policy 13: Bolster Foreign Direct Investment in the Offshore Wind Industry

Foreign direct investment (FDI) could help catalyze South Carolina’s offshore wind industry growth by filling critical gaps in the in-state value chain and bringing new jobs and capital into the state economy. State leaders could attract specific anchor companies and their suppliers as well as strengthen relationships with key countries and offshore wind cluster networks.

Policy 14: Establish a Regional Offshore Wind Memorandum of Understanding

Regional partnerships are key to overcoming offshore wind’s complicated supply chain and logistics needs. The Governor’s Office and State Energy Office could organize a memorandum of understanding (MOU) on the regional offshore wind industry with North Carolina and Georgia with the goals of lowering capital costs, boosting investor confidence, and distributing economic benefits throughout the region.

Local Market

Policy 15: Highlight the Tourist Attraction Potential of Offshore Wind

A common but largely misplaced concern of offshore wind farms is that they may harm the tourism industry, a significant economic driver in the state. In preparation for future offshore wind deployment, South Carolina communities could adopt best practice models for allaying public fears and stimulating tourism activity, such as strong community engagement requirements throughout project development as well as informational exhibits and guided boat tours after construction.

Policy 16: Incorporate Utility Performance-Based Regulation

South Carolina’s failed nuclear project and high electricity consumption levels has put a spotlight on the state’s current utility model, which incentivizes large capital investments without strong measures for social and economic benefits such as project reliability and energy efficiency. South Carolina could explore implementing some level of performance-based regulation (PBR), which can alternatively compensate utilities for achieving outcomes that are important to customers, regulators, and utilities.