In the two years since I was appointed President of the University of South Carolina, I have reflected often on our state's history as I cast an eye to the future, defining the role that institutions of higher education may play in reshaping its economy. Let's begin by looking back briefly on the economic history of the Palmetto State, so that we may have a better appreciation of the direction we need to take in the years ahead.

Walter Edgar is arguably the most distinguished historian of the state of South Carolina, and a member of our faculty. He notes that due to the remarkably successful mercantile activity of the 17th century, regrettably dependent on trade in slaves and their exploitation to foster agricultural industries, Carolina was the wealthiest of the original thirteen colonies. In his classic history of our state, Professor Edgar observes that this phenomenal success was derived from an entrepreneurial, can-do spirit: "Because South Carolinians were willing to exploit whatever was available, make changes, and take chances, they were able to create a prosperous society that was the envy of British North America."

In the early years of our republic, South Carolina's dominance in trade through the Charleston seaport augured well for its future. The abundant crops of rice plantations, cotton fields, and tobacco farms generated substantial wealth. Although the economy was devastated in the years after the Civil War, the industrial revolution later brought textile mills, providing another boon to the Carolinas. Early in the twentieth century enormous farms and hunting lodges with vast acreage drew many wealthy outsiders to this state. As they began telling their friends about the phenomenal beauty and pristine character of this state -- from the marshlands and beaches of the low country to the beauty of the Appalachian Mountains in the upstate, and the richly varied topography in between -- tourists eventually came in droves, boosting the hospitality industry. Today many South Carolinians reflect upon the overall trend of the past four centuries with pride, and speak in glowing terms of perpetuating the wonderful traditions of those who laid the groundwork for the twenty-first century.

While I appreciate how that rich history has shaped our society, I am deeply troubled by the general failure to adapt our industries to the knowledge revolution that has stimulated so much of our nation's unparalleled economic growth. Admittedly there are exceptions here and there, such as selected areas along the I-85 corridor, but those efforts pale in comparison to other parts of the country. For several decades, areas such as the Silicon Valley in California, the Route 128 corridor around Boston, and the Research Triangle in our neighboring state of North Carolina have demonstrated clearly how the knowledge revolution can dramatically affect economies far beyond the boundaries of their respective regions. But because the transformation of these regional economies is based on emerging scientific discoveries and constantly evolving computing technologies, those pockets of technological innovation and economic robustness are not content to rest on their laurels, and must continually redefine themselves.

We are at a critical juncture in South Carolina's history, but we have much further to go than these nationally recognized regions because we have been tardy in exploiting the knowledge revolution. We must take steps now toward changing our business recruitment and job creation strategy, or risk falling further behind the rest of the country.

In short, it is imperative that we resuscitate the mentality that characterized 17th century South Carolina: to "make changes and take chances."The South Carolina Competitiveness Initiative, a study recently commissioned by major stakeholders in our state's economy, contends that we can no longer compete effectively on the basis of being a low-cost place to do business. Our rich-in-land, favorable climate, and cheap-in-labor strategy articulated so long ago provided us with a diverse industrial mix and a conscientious labor force. But that strategy simply won't work any longer. In a word, South Carolina must shift its focus from low cost to high quality. If we South Carolinians wish to experience the kind of economic development of which we are capable, we must be much more aggressive and imaginative in cultivating the unending stream of intellectual property from our research universities.

Our strategy to modify this state's economic development has two thrusts. First, we must cultivate the talent we already have. By harnessing South Carolina-based innovation and the brain power cultivated in our research universities, local firms will be able to improve processes, develop new products, increase sales, expand their businesses and thus ultimately create jobs. In addition, our leading-edge faculty researchers will spawn new technologies that local companies can then commercialize. But that commercialization requires a broad array of talent: the graduates of technical colleges are just as essential to the productivity of these enterprises as graduates of research universities.

At the University of South Carolina we are taking measured yet bold steps toward becoming a top tier research university, in considerable measure through intensifying collaboration with our sister higher education institutions. The program we rolled out last April 26th announcing the $40 million commitment from Palmetto Health and the Greenville Hospital System to create Centers of Excellence fully shared by Carolina and MUSC, together with lottery funds and matching commitments from our respective universities, will enable us to leverage that $4 million annually into $16 million per year for 10 years, yielding a minimum of $160 million. We plan to leverage some of this money to establish an array of degree offerings on the campus of the Greenville Hospital System through the shared resources of the University of South Carolina, MUSC, and the Greenville Technical College.

This health sciences research and education cluster will parallel the International Center for Automotive Research at Clemson. Both of these entities are directly responsive to the recommendation of the Competitive Initiative to organize stimulation of our state's economy around specifically targeted clusters.

While it is true that research universities have as one of their primary missions the creation of knowledge and charting previously unmapped intellectual terrain, it is imperative that these endeavors not be restricted to faculty, staff and students of research universities. Baccalaureate institutions, community colleges, and technical schools must be intimately involved in the activity of translating these scientific discoveries if we are to achieve the economic transformation we so desperately need. This translation necessarily involves the commercialization of intellectual property. The fact that technical school faculty and students at present are not generally involved in these initiatives comes from two sources: First, there is in some quarters of many research universities an intellectual snobbery that assumes that the only people who are capable of embarking on such initiatives and leading them are research university faculty. This is palpably untrue, and such arrogance needs to be laid to rest.

It is my fervent goal to have our research initiatives involve undergraduate students as well as graduate students. As we cast a wider net for scholarly involvement, it would be singularly inappropriate not to solicit aggressively the involvement of technical school faculty, staff and students.

The second source of limitation comes from the faculty in community colleges and technical colleges themselves. Many of these folk feel either ill equipped or disinclined to engage in original research. I submit that is an entirely inappropriate response. In the interest of brevity, I shall give only one of dozens of examples I could offer. I am responsible for four two-year colleges. At one of these institutions we have a faculty member who is teaching four courses each semester exclusively to freshmen and sophomores, who last year received a grant as a principal investigator from the National Science Foundation and this year received another grant as principal investigator from the National Institutes of Health. All the while, he continues to teach four courses per semester. I have had some two-year faculty say to me: "I can't do research because my teaching load is too heavy."Or, "That's not a mandate of our institution."If that is indeed the case, we need to expand dramatically the vision of our faculty and the mission of our colleges and universities.

I have long believed that I need to lead by example, and I shall take to the grave this sage advice from my dear departed mother. "Your deeds speak so loud that I cannot hear what you say." In addition to the Greenville Tech collaboration I just mentioned, shortly after becoming president of USC I suggested that we include the Midlands Technical College in our business incubator program. Adhering to my mother's observation, over a year ago Barry Russell, President of Midlands Tech, and I organized a public ceremony to celebrate their inclusion in our business incubator program. I'm even more delighted to tell you that two Midlands Tech students, working with their faculty, have developed two start-up businesses growing out of their intellectual property and have formed corporations to commercialize their respective discoveries. There is no reason in the world why the example of our faculty member with the NIH and NSF grants and the example of the Midlands Tech faculty member and our business incubator startup company could not be replicated thousands of times across the country.

The second thrust of our new strategy is this: as we work with other institutions within our state's boundaries, we must simultaneously recruit nationally eminent scientists to our research universities and at the same time attract, retain and grow a critical mass of forward-thinking, knowledge-based companies from across the nation and around the world. Our new USC businessLink initiative, which is accessible either online or in person at the City of Columbia's Economic Development Office, helps companies connect to the innovation emerging from our research centers, which are rich in instrumentation and scientific expertise.

As we accelerate the diversification of our economy to knowledge-based businesses, we will have a golden opportunity to attract world-class talent who can generate research that will equal the best anywhere. Working closely with our Governor, our Secretary of Commerce, and the General Assembly, we are securing nationally eminent scholars in order to sustain the strong legislative commitment to the Centers of Excellence programs. At Carolina we just succeeded in recruiting to our Nanotechnology Center Dr. Richard Webb, an internationally renowned physicist and member of our nation's most prestigious collection of scholars, the National Academy of Sciences.

All of these efforts demonstrate unequivocally the University of South Carolina's commitment to recruiting individual companies through collaborative efforts involving the commercial, governmental and educational sectors. This means that public research universities must dip deeper into the innovation stream, and -- to extend the metaphor -- push harder to build bridges between our educational programs and technological innovations on one shore, and across that stream to what knowledge-driven businesses need.

As those of us in the public sector -- at technical schools as well as research universities -- join forces with those of you in the private sector, we can create an environment rife with economic activity that makes this a place where the brightest and best want to live; a place where people are talking about great school systems, terrific universities and meaningful career opportunities; and a place where responsible government is working hand in hand with its taxpayers to preserve our remarkable natural resources for future generations.

The development of our research campus, the increased collaboration among our institutions of higher education on initiatives such as our business incubator program, the creation of BusinessLink, and the impact of the South Carolina Competitive Initiative: all these are watershed events for us. We now have a road map to guide us in making changes that will bring true prosperity to our state. Only one question remains: Are South Carolinians ready to embrace this new model of economic development? If we are all committed to making these changes in a unified fashion, we will not fail. Quite frankly, however, success will not occur without a long-term commitment from government, business and education. As pointed out by Harvard Professor Michael Porter, who served as the principal consultant to the Competitive Initiative, the race we are in is not a sprint; it's a marathon.

The challenge before us is monumental, and in several respects our near term prospects are formidable. But I truly believe that if we find ways to coordinate our resources to elevate the quality of research and teaching in all South Carolina institutions of higher education, and at the same time invest in the high tech and knowledge revolution industries that are capable of transforming the economy of this state, we shall accomplish far more than if we work in splendid isolation from one another, or if we persist in pouring new wine in old bottles. I pray that you will join me as we usher in a new day for South Carolina.