By John Lummus, President and CEO, Upstate SC Alliance
Historically, industrial recruitment has focused on the size and scope of a project, with capital investment and job creation parameters determining the level of government support available to a company seeking to locate in South Carolina.
Looking to the future, however, the S.C. Department of Commerce and its allies in economic development recognize the growth potential for an established foreign company looking to ease in with sales and marketing or technology development.
That value has driven the state’s new Landing Pad strategy, which aims to position South Carolina as a welcoming environment for established overseas companies looking to make a soft entry into the American market and notify businesses of all sizes that the Palmetto State is open for business.
Establishing a soft landing ecosystem is also a strategy outlined in the Upstate Regional Foreign-Direct Investment Plan released by the Upstate SC Alliance in spring 2016.
“In this new economic world, there are only so many elephants that we can go after,” Fred Monk, senior advisor for international strategy and trade with the S.C. Department of Commerce, recently said to members of the Upstate SC Alliance Board of Directors. “There are a lot of companies that we do not know about that are in countries that we visit with some regularity who can be prime economic development prospects here.”
The Landing Pad program is dependent upon support and engagement from regional economic development alliances and local economic developers, Monk added. “The Department of Commerce is the intake, and really, the alliances are the implementers, and in the end, it is the local economic developers who have to foster these new clients.”
The Upstate SC Alliance has worked directly with small international projects in the past, such as in-tech Automotive Engineering LLC, a Munich-based provider of integration testing for automotive manufacturers that located to CU-ICAR in 2013. The company has since relocated to Greer and employs a team of engineers and technicians throughout the country.
Discussions among the state Department of Commerce about how best to serve these businesses were prompted by prospecting meetings with established companies in India, Monk said, where several business leaders expressed a mix of interest and uncertainty in entering the United States market.
“These aren’t incubator companies; they are established companies with real money and real interest,” Monk said. “But their challenge is they are afraid of the U.S. market, they don’t have people here, they don’t have an office here. So why don’t we help them to get established? Encourage them to set up a sales office. Encourage them to establish a distribution center, and then if they can establish a distribution center, maybe they can place a manufacturing facility here.”
The program is inspired by the Wallonia Foreign Trade and Investment Agency (AWEX) Welcome Centers in Belgium, and Monk said Indian and Chinese businesses who have had success in their home countries are most likely to use the program.
Monk said it is important to distinguish between domestic incubator programs and the needs of a Landing Pad company.
Domestic business incubators, such as NEXT and the Spartanburg Community College’s Center for Business and Entrepreneurial Development, offer some of the support that these businesses may need, such as affordable rent and flexible terms. But these companies require services beyond the scope of startups, such as cultural mentors who can offer housing assistance, connect with translation services or help navigate processes like applying for a driver’s license or establishing accounting practices.
And while most manufacturing-centered economic development projects are better suited for less developed areas where land is abundant and affordable, urbanized areas may be a better fit for these foreign-owned firms as they engage in marketing and building sales relationships. This alternative approach to economic development also opens the door to emerging industries, such as bioscience and associated research and development.
The Department of Commerce is also generating a business resource guide and working alongside organizations such as the Upstate SC Alliance to identify international business support services within each region.
For more information on the Landing Pad program, contact the S.C. Department of Commerce’s Division of International Strategy & Trade at GrowfromSC@SCCommerce.com.