This city of 670,000, a onetime hub for textile and apparel production, seems to have found the answer to the question confounding the U.S. right now: How do you revive postindustrial towns and make them part of the knowledge economy?
Displaced factory workers were receptive to Donald Trump’s “Make America Great Again” message during the 2016 election campaign. Yet the president’s policy prescription of lower taxes, higher tariffs, and fewer immigrants are untested, while Greenville’s leaders can rightly claim they have a success on their hands. In per capita terms, the city’s rate of new business creation approaches that of Boston, one of the country’s hotbeds of innovation.
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Greenville’s transformation aren’t easy to replicate, including decades of political commitment to creating a community that’s appealing to college graduates and high-skilled workers. The city also has access to technology and research talent from nearby Clemson University and state-of-the-art manufacturing plants turning out Michelin tires and BMWs.
Culture risk-taking
But Greenville’s culture of risk-taking and its network of investors who fund early-stage businesses are within the reach of places like Danville, Va., where tobacco warehouses and textile mills—some abandoned—attest to the difficulties the city faces in transcending its economic past. “We look at Greenville as where we want to be—what they created the downtown and all the startups,” says Eva Doss, a chief executive officer of the Launch Place, a company that provides consulting services and seed capital to companies that create high-paying local jobs. One recent win for Danville: Panaceutics Inc., whose headquarters are near Raleigh, N.C., plans to open a production lab to blend medications and supplements into customized drinks. The operation will employ 70 people.
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In his 2012 book The New Geography of Jobs, economist Enrico Moretti described the rise of superstar cities and the decline of the rest as “the great divergence” that affects “cultural identity, health, family stability and even politics.” To grasp the size of the chasm, consider just one metric: The mean net worth of urban families in the U.S. exceeded that of nonmetro families by $475,000 in 2016; in 1989 the disparity was $123,700, according to Federal Reserve research.
The most important driver of the phenomenon Moretti describes is the shift from manufacturing jobs to conceptual work. In the late 1970s, 22 percent of nonfarm employees toiled to transform raw materials into a product, compared with less than 10 percent now.
Meanwhile, the share of workers in high-skill service industries has grown. But these knowledge workers aren’t evenly dispersed throughout the country. They’re clustered in cities such as New York, Boston, and San Francisco that are magnets for college graduates, ideas, and money, all of which are integral to any ecosystem that supports startups. Twenty percent of young businesses were based in nonmetropolitan areas in the early 1980s. That figure has dwindled to less than 13 percent.
Early stage companies in Greenville can also seek funding from VentureSouth, the local group Pancoast spoke to at the country club. Its 230 angel investors in North and South Carolina have funneled $28 million to 61 companies. Pancoast moved to the city partly for family reasons and has been “surprised” by the budding infrastructure available to startups. His company is developing nanotechnology that delivers medicines and therapeutic agents through the skin. He says the city is “rich” in bioengineering and chemical engineering talent.
Courtesy: www.bloomberg.com
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