SB&D's 2015 Persons of the Year
South Carolina Gov. Nikki Haley and the Greater Memphis Region's Dr. Glen Fenter
By Michael Randle
Each year Southern Business & Development names its "Person of the Year" based on outstanding contributions to the practice of economic development in the region. This year we are naming two individuals who continue to lead by example at workforce training and closing the deal; the Mississippi River Delta Region's Dr. Glen Fenter and South Carolina Gov. Nikki Haley.
The South's economy is best defined as a diverse, moneymaking machine that drives the largest economy in the world. No other U.S. region comes close to the economic vastness that is the American South. After all, it remains the fourth largest economy in the world based on GDP or, in the South's case, GRP (gross regional product). Only the U.S., China and India's economies are larger than the American South's economy.
Go ahead and pick your economic indicator, whatever it might be. It can be population, the number of metros in the U.S., retail purchases, manufacturing jobs, service jobs. . .whatever it is. . .the South always accounts for between 35 and 45 percent of the nation's total or more; meaning the South is the No. 1 region in the nation in all of those socioeconomic categories.
In fact, the South leads all U.S. regions in every economic category that the federal government tracks, including GDP. While the South doesn't quite account for 40 percent of U.S. GDP, at $5.84 trillion in fiscal year 2014, the region's Gross Regional Product dwarfs the West's $4.05 trillion, which is in second place.
In terms of job creation, you can throw out that 40 percent average most years. For example, in calendar year 2013, the South accounted for 44 percent of all new jobs created in the U.S. In calendar year 2014, 43 percent of all new jobs were created in the South.
Yet, among all the accolades one can write about in regard to the South's economy and how far it has come in the past 40 years, there is one more statistic the South owns that is 35 to 45 percent of the nation's total. The South is home to 37 percent of poverty in the country. It remains the poorest region of the country. Here is the regional poverty breakdown:
Source: The Henry J. Kaiser Family Foundation.
More than anything, poverty levels in the South are linked to its large population and the broad diversity of that population. If the South is home to as many people as the Northeast and Midwest combined -- almost 40 percent of the U.S. population -- why wouldn't it have nearly 40 percent of the poverty?
Regardless, never accepting this not-so-impressive statistic about poverty in the South is the region's greatest gift, and it has been for decades. The South invented economic development as it is practiced today; therefore political and economic development leaders have been fighting poverty through economic development programs far longer than in other regions.
One such person who has done that for decades is site selection consultant Bob Leak, Sr., of Leak Goforth Company, LLC. "Just about every county in the South today has a professional person helping to find industry and bring industry into their communities," Leak said. "The reason being that job creation and capital-based investment have become the best thing that can happen to a community. It's all the political rage with all of the governors and mayors, and everyone talks about economic development. It wasn't always that way."
I asked another consultant how gifted the South is regarding the practice of economic development. "The level of professionalism among economic development practitioners in the South is tremendous," said Jay Garner of Garner Economics. "We work all over North America and there are some really good economic development practitioners everywhere. But consistently, they are the best in the South because of the commitment that volunteering and elected leaders have for successful economic development programs."
And not all of those successful economic development programs are funded today strictly by governments. "I do see more investment in community and economic development by the private sector than ever before," said Mac Holladay, CEO of Atlanta-based Market Street Services. "Across the South, people are stepping up; they know that their region —their city — has to do it together with more partnerships. I think that's great work. I think that's where you see the energy and the new ideas coming from the local and regional level."
While it might have been skewed over the years, the true definition of economic development to those who understand it in the broad sense is "to create jobs for those who need them the most;" that would be the unemployed and underemployed. To do that, education must be a serious part of the equation, as well as job training and an attitude from Southern leaders that assets are what need to be sold to prospective industry, all the while not worrying so much about liabilities.
This year, two people stood out as highly successful professionals in the practice of economic development in the South. These two individuals seem to be thinking about how they can make the areas they serve more prosperous every single day.
The first, South Carolina's Gov. Nikki Haley, is as dedicated a governor as you will ever find when it comes to selling her state to growing industry. South Carolina's economic development success this year has been nothing short of extraordinary.
The second person recognized is educator Dr. Glen Fenter. He is one of the most recognized workforce development minds in the business and is a powerful asset for the communities he has served. So, for the first time, here are SB&D's 2015 Persons of the Year: Gov. Nikki Haley and Dr. Glen Fenter.
South Carolina Gov. Nikki Haley
There are a lot of "firsts" when it comes to Gov. Haley. Elected in 2010 and then reelected in 2014 by the largest margin for a South Carolina gubernatorial candidate in 24 years, Haley is the youngest governor in the U.S. (age 43) and she is the state's first female and minority governor. She is also the first Indian American woman governor in American history.
Born in rural Bamberg, S.C., Haley is the daughter of Indian immigrants. She received an accounting degree from Clemson University, and after earning her degree, she returned home to Bamberg to work in the family's retail store. In 2003, she attended a speech by Hillary Clinton, inspiring her to run for office. In 2004 she was elected to office for the first time, representing Lexington County in the state's House of Representatives as a Republican. But when she first thought about entering politics, Haley said she didn't know if she was a Republican or Democrat. She said she joined the GOP because of economic issues.
From there, she has been a rising star in the Republican Party. And even democrats have praised her actions, specifically the No. 1 Democrat in the country. Regarding the removal of the Confederate flag from South Carolina State Capitol grounds after the racially-motivated tragedy at Charleston's Emanuel African Methodist Episcopal Church this summer, President Obama said, "But as people from all walks of life, Republicans and Democrats, now acknowledge – including Gov. Haley, whose recent eloquence on the subject is worthy of praise – as we all have to acknowledge, the flag has always represented more than just ancestral pride."
Haley is rumored to be a vice presidential running mate again in 2016, just like 2012. Rumors started that she would be the running mate of Mitt Romney in the last presidential election. She stated that if asked, she would have turned down the invitation due to unfinished work as the governor of South Carolina. Romney ended up picking Paul Ryan.
Asked recently at a GOP gathering who she is endorsing for President in 2016, she said she has not chosen a Republican candidate yet. She is looking for a nominee who "speaks from their gut." In a story published in the "News India Times," Haley said, "I want someone that's not over-consulted. I want someone that's genuine. I want details. I want substance. I want problem solvers."
But it's not Gov. Haley's political wins or ambitions -- or even the removal of the Confederate flag -- that persuaded us to name her one of our "Persons of the Year" for 2015. It's her ability to work with Secretary of Commerce Bobby Hitt and other economic development officials in the Palmetto State successfully creating jobs and fighting poverty in her state. South Carolina is excelling on the economic development front and much of the credit must go to Haley.
Her book titled, "Can't Is Not an Option," is a proper description of her job generation and economic development skills. Apparently, when it comes to recruiting industry, Gov. Haley does not take no for an answer. She is an adept, talented closer, something her predecessor, Mark Sanford, was not.
According to Dennis DesRosiers, president of Canada-based DesRosiers Automotive Consultants, the Southern Auto Corridor and Mexico are winning the battle for automotive industry investment in North America. "Over half the capacity and 80 to 90 percent of investment dollars are going to the U.S. South or Mexico," DesRosiers said recently. South Carolina is certainly getting its share of automotive investment dollars in 2015.
For the first time in the Southern Auto Corridor's history, one state landed two major assembly plant announcements in the same year. That's exactly what Haley and South Carolina officials have done in 2015. In March, Mercedes-Benz Vans, a division of Daimler, announced plans to invest $500 million to build a new, full van manufacturing plant in Charleston County, S.C. The plant will house 1,300 workers to build the next-generation Sprinter van model. And in May, Volvo Cars announced it will build a $600 million, 2,500-employee plant -- the Swedish automaker's first in the U.S. -- in nearby Berkeley County, S.C.
Both plants are being built near the Port of Charleston, meaning exporting the vehicles in the future is important to both companies. Construction on the Volvo plant will begin later this year. Construction on the Mercedes plant will begin early next year.
As mentioned, landing two assembly plants by one state in the South in one year has never been done. And there are other firsts for Haley and South Carolina. On June 16, 2014, Gov. Haley announced 7,100 new jobs from three projects: The Lash Group, Giti Tire and LPL Financial. The 7,100 jobs were the most jobs announced in a single day in the state's history.
One thing that South Carolina has done very well over the years is recruit foreign-based companies. In 1992, South Carolina recruited the only BMW plant in the U.S. In 1999, South Carolina recruited the very first large Chinese manufacturing investment in the U.S. — Haier — which set up shop in Kershaw County. Following those projects, Haley has perfected foreign direct investment in her two terms, and the Mercedes and Volvo deals are great examples.
The FDI prowess exhibited by South Carolina officials has also helped on the reshoring front as well. With almost 8,000 jobs coming back since 2010, South Carolina leads all U.S. states in reshored jobs.
These developments have certainly helped employ more South Carolinians. South's Carolina's unemployment rate is at a 13-year low and more South Carolinians are working than ever before.
Here is a humorous story about the Volvo deal. The Berkeley County, S.C., site won out over a site near Savannah, Ga., in Bryan County. It got down to those two sites, both close to major automotive export ports. Georgia Gov. Nathan Deal took a secret overseas economic development trip in January of this year. The Volvo deal was still in play, but it hadn't gotten to the point where Georgia and South Carolina had made the short list. After finding out Gov. Deal had made the secret trip, Gov. Haley assumed he was in Sweden, wooing Volvo. He was not. He was in England wooing Jaguar Land Rover, which announced in August it would build its newest plant in Slovakia.
Deal's trip "freaked out" Gov. Haley in that she had not taken her own trip to Sweden to close the deal with Volvo. Haley said of Gov. Deal's economic development mission in January in a story in the Charleston Post and Courier, "Wherever he goes, I have to make sure I know where he's going and what he's doing and make sure that we've already talked to them before he gets there."
With the high profile projects South Carolina has captured under Gov. Haley's administration, it is obvious she is a very good closer. Haley's deal-closing abilities are right up there with some of the best Southern governors of all time. Jim Hunt, Ned Ray McWherter, Bob Riley, Carroll Campbell, Bill Clinton, Haley Barbour and George Allen all come to mind as former Southern governors who were outstanding closers of major economic development projects. If Gov. Haley becomes Vice President Haley, or simply finishes her last term and goes back to the family store in Bamberg, she makes that list.
Dr. Glen Fenter
There's no shortage of copy being written about the U.S. workforce skills gap and how the country has millions of unfilled jobs, both in the service and manufacturing sectors. Plenty of employers place the blame on the lack of workforce skills. . .but not all of them. John Correnti, who passed away this summer before he could see his newest venture -- Big River Steel -- completed in east Arkansas, was not one of those employers who thought there is a skills gap. In fact, he used the word "hogwash" when I asked him about the emerging skills gap. He told me that the training his companies offered after workers completed community or technical college was sufficient for his steel operations.
However, there is no question there is a skills gap in certain industry sectors. It is improving quickly, which is not being reported. Great strides in worker training are happening all over the South. Every single Southern state has outstanding, customized workforce training programs. And through new models, applications and philosophies, there is a workforce training revolution going on today in the region. Dr. Glen Fenter is the poster child of that revolution.
Noted site selection consultant Michael J. Mullis said in a video of SB&D's 2014 Southern Economic Development Roundtable that the workforce is improving dramatically in the South. "We're seeing a lot more input into the South right now from other parts of the world and it is creating many opportunities for new growth and expansion," Mullis said. Also, our technology base. . .our knowledge transfer base for skill set has changed in the South significantly, and it has improved dramatically over the last 10 years. So, that is allowing us to bring major projects to consider Southern states to utilize those human resources." If you know Mike Mullis, you know he doesn't mince words. If he says the skill sets in the South have improved dramatically, then they have.
Few educators have had a greater impact on workforce training and economic development in the South than Dr. Glen Fenter. He became president of West Memphis, Ark.'s ASU Mid-South (formerly Mid-South Community College) in 1992. Fenter successfully developed Mid-South Community College into a thriving $100 million campus, giving prospective students in the Arkansas Delta region educational opportunities that simply were not there prior to his arrival. He is fond of saying, "If you do not believe God works miracles, you need to go to Mid-South Community College."
Dr. Fenter's view of higher education is that of a synergist in the practice of economic development. He believes strongly that only about 15 to 20 percent of what he calls "our gene pool" is interested in, or should even be on, the campus of a four-year institution. In contrast, Fenter thinks that higher education should work directly with economic developers and employers to create a pipeline of trained and skilled workers, particularly in the manufacturing and logistics sectors.
Fenter's workforce development philosophy has been recognized numerous times on the national level. In 2010, he went to Washington at the invitation of U.S. Senate Majority Leader Harry Reid and Senators Debbie Stabenow and Blanche Lincoln to discuss strategies for strengthening America's workforce. Mid-South Community College was the only higher education institution invited to participate in the discussion.
In 2005, Dr. Fenter worked with the presidents of four other community colleges in eastern Arkansas to create the Arkansas Delta Training and Education Consortium (ADTEC), which provides a regional approach to meeting current and future educational and training requirements through the creation of career pathways that begin with secondary education and extend through the provision of economically targeted baccalaureate degrees.
ADTEC received national recognition for its workforce education model five times in seven years. Honors include the Bellwether Award in Workforce Development, the U.S. Department of Labor Recognition of Excellence Award, the Southern Growth Policies Board Innovator Award, and recognition as a national model in a Workforce Strategy Center report underwritten by the Bill and Melinda Gates Foundation.
In June, Fenter retired as president of ASU Mid-South. His challenge now is to develop the greater Memphis workforce. He accepted the position of CEO of the Greater Memphis Alliance for a Competitive Workforce (GMACW) last year and began working full-time with the organization on July 1. Essentially, Fenter is now the Memphis region's workforce czar.
The GMACW is the result of an 18-month collaboration and planning process under the direction of the Memphis Shelby Regional Economic Development Plan, supported by the Brookings Institute and led jointly by FedEx, the City of Memphis and Shelby County, Tenn.
The public-private GMACW is one of the most comprehensive workforce development initiatives we've ever seen. Obviously it is an all-in effort by Memphis officials to create a pipeline of skilled workers by aligning K-12 and higher education programs exactly with employer needs in the Memphis region, which includes eastern Arkansas and north Mississippi.
And the Memphis region needs an all-in workforce development program like GMACW. According to the Washington, D.C.-based Brookings Institute, Memphis is ranked 86 out of the nation's 100 largest metros on the Skills Gap Index. That means employers are struggling to find qualified workers in Memphis. The plan calls for the training at local community colleges of 2,000 people a year in logistics and 1,000 people a year in manufacturing. There will also be an emphasis on training workers for Memphis' large biomedical device industry.
The fact that GMACW is a local industry-driven program makes it very unique. The whole idea is to train workers based on the skill sets local employers say they need. This would ensure that local companies will have a trained labor force that can backfill for decades. If that can be achieved, it will be a strong tool in recruiting industry to the Memphis area for years to come.
It was a Herculean effort to organize the GMACW, considering how many people and entities have a stake in the program. The Greater Memphis Chamber of Commerce, the Memphis Economic Growth Development Engine (EDGE), Brookings, more than 100 business leaders that make up the Chamber's Chairman Circle and other government officials all came together to create a singular workforce development program for the entire area to eliminate the skills gap.
But without an agreement between two outstanding technical schools in the Memphis region – ASU Mid-South and Southwest Tennessee Community College – GMACW would have not been possible. Last year, Dr. Nathan Essex, president of Southwest Tennessee Community College, and Dr. Fenter, president at the time of Mid-South Community College, signed a memorandum of understanding agreeing to share faculty, facilities and resources to better train students on industrial workforce training. The new programs hatched out of that agreement will provide students with industry-required certifications to allow for faster entry into the job market.
The GMACW was able to lure a workforce development wiz like Glen Fenter away from his passion, which was to locate, lift and give hope and opportunities to young adults in the Arkansas Delta through Mid-South Community College.
The Greater Memphis Alliance for a Competitive Workforce, while unique, is one of several strong workforce development strategies coming out of the state of Tennessee. Shortly after being elected as governor in 2010, Bill Haslam implemented his "Drive to 55" program. The program is a mission to get 55 percent of Tennesseans equipped with a college degree or certificate by the year 2025. Only 32 percent of Tennesseans currently have a degree or certificate beyond high school. At the current rate, only 39 percent of citizens in Tennessee will have a degree or certificate in 2025.
To jumpstart his "Drive to 55" initiative, Haslam – just like Memphis – has gone all-in on the workforce development front with the Tennessee Promise. Beginning with this year's class, Tennessee Promise offers two years of tuition-free community or technical college to Tennessee high school graduates. And the program is a last-dollar scholarship, meaning it will cover college costs not covered from Pell, HOPE or TSAA plans. Only Tennessee, Oregon and Minnesota have passed tuition-free community college legislation, however, three other states introduced legislation this year.
In a story published by the Memphis Business Journal in August, Fenter said that he wants the GMACW to be the "poster child" of Gov. Haslam's Tennessee Promise program, which is quickly becoming the acclaimed state model connecting education and workforce needs for employers. "In today's global economy, there is an inextricable link between education and economic development," Fenter said in the story.
In an article on the ASU Mid-South website covering Dr. Fenter's farewell dinner from the school, Fenter said that as early as the 1970s, the majority of middle-class jobs were accessible to high school graduates. But today, things have changed. "Few, if any, of those job opportunities remain, driving the reality that without access to affordable, meaningful education programming beyond high school, a growing portion of our population sadly has very little chance of meaningful participation in our venerable 'American Dream.' We can and must change our course before it is too late."