Regional Report: South Atlantic States Thriving In Recession Rebound
The South is staying financially fit with investments and innovations in logistics, automotives, energy, biotech and renewables.
Lisa A. Bastian (Apr/May 10)
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Life Sciences Pave Way to the Future
The South Atlantic states fare well in the biotech arena. Many notable biotech players are conducting research and commercialization activity in the region. "For the most part, the Southeast part of the United States, from Florida up through Virginia, is a growing area for the life sciences," said Patrick Kelly, vice president of state government relations and alliance development for the Biotechnology Industry Organization (BIO). "We've seen a lot of development in the last eight to 10 years, and significant investment made by states in their biotech infrastructure."
In the past few years, Florida's investment of $1.5 billion in state and local incentives has attracted eight major research facilities - and 1,100 jobs - to the state, including the Scripps Research Institute, the Sanford-Burnham Medical Research Institute, and the Max Planck Institute.
North Carolina also leads. "They've been at it since the early 1960s with the establishment of the world-class Research Triangle Park," Kelly said. He called the park a perfect best practices example of how industry, government, and education can work together to advance life sciences commercialization and research and development. In South Carolina, "the state is in the process of developing a life sciences sector by fleshing out its infrastructure," Kelly said, with help from local universities.
Since the 1990s, the Georgia Research Alliance has driven the state's technology-based economic development strategy, generating over $2.1 billion in new investments. After Atlanta hosted BIO's 2009 convention, which showcased its biotech assets, Georgia landed two new, major projects.
Virginia "has done a lot," according to Kelly, in the last several years to bring investment to the Commonwealth. It has a Philip Morris research and development facility in Richmond and a bioscience park adjacent to Virginia Tech in Blacksburg. West Virginia has also hitched onto the biotech wagon. It has allocated more state dollars to programs attracting top researchers to its universities, and recently established its first biosciences association.
View Through the Fed
Robert Schnorbus, regional economic manager for the Federal Reserve Bank of Richmond, tracks and interprets data for a district that includes West Virginia, Virginia, North Carolina, and South Carolina. "Recent surveys show manufacturing has been improving in our region from the first of the year, and there's been a slowing in the decline of the service/retail sector," he said. "We hope we've seen the bottom of the recession."
Schnorbus expects newer industries in those states - auto parts, financial services, pharmaceuticals, high tech - to replace and offset lost jobs in some older, declining industries. The region's educated workers and competitive wages will help the area's recovery. "Those are certainly locational advantages that will only continue to attract new industries in the future," Schnorbus said.
The Federal Reserve Bank of Atlanta's district encompasses Florida and Georgia. Michael Chriszt, assistant vice president there, says his group is "definitely seeing a pickup in manufacturing, not necessarily in job numbers, but in activity levels. Production and orders are up." In the retail sector, "the outlook is much improved."
There are more positive signs. In Georgia and Florida, the number of hours worked in manufacturing has risen. While the Federal Reserve Bank of Atlanta noted signs of improvement in real estate, "it's too early to say things are getting better. The growth in real estate development hasn't picked up yet. New construction is lagging a bit but we're seeing positive signs from Florida," Chriszt said. Bank surveys revealed that Florida recently added 26,000 jobs, although many were temporary positions.
Some economists predict the recession could continue for another few years, meaning the South Atlantic states - and the rest of the country - could be in for a bumpy ride. But when recovery arrives, this region will be one of the top reasons for America's emergence as an energized, globally competitive nation on solid economic footing.