Study urges southern states to pay more attention to cities, universities

RALEIGH, N.C. (AP) -- The South is adding jobs at a record pace, but its economy is increasingly dependent on a few "new economy"

cities, a nonprofit research group says in a new "State of the South" report.

MDC Inc., based in Chapel Hill, traditionally has been an advocate for rural areas and community college expansion, said Ferrel Guillory, a co-author of the study. But the new report urges Southern leaders to pay more attention to the cities that are their economic engines and the universities that fuel high-tech jobs.

"We've got to keep our hypergrowth, new-economy cities healthy because we're increasingly dependent on them economically,"

Guillory said.

The report, which includes Oklahoma, described these cities as "the amalgam of core city, suburbs, office-and-research parks and nearby towns that form a unified economic entity" that "sprawls across traditional municipal, county and even state boundaries."

Employment in five of the South's 22 largest metropolitan areas grew more than 100 percent from 1978 to 1997, the most recent year for which figures were available, the report said. Ten more metro areas did better than the national average metro increase of 45.5 percent.

Orlando, Fla., led the way with a 150.6 percent increase, from 374,684 jobs in 1978 to 938,944 in 1997. The Austin-San Marcos, Texas, area was second at 150 percent, followed by West Palm Beach-Boca Raton, Fla. (121.3 percent); Raleigh-Durham-Chapel Hill (113.3 percent); and Atlanta (105.3 percent).

Jobs grew by 63.7 percent overall in Southern metro areas compared to that national average, while the increase in non-metro areas was only 28.9 percent in the South, 30.3 percent nationwide.

"We really are two Souths, in many different dimensions,"

Guillory said. "We have the Raleigh-Durhams and Austins and Atlantas that are speeding ahead, while other cities do not.

"And we have some rural counties that are being pulled into the orbits of the fast-growing urban regions," he said. "Those rural counties are doing much better economically. But other rural counties are falling farther behind because they don't have the interstate highways and other infrastructure.

"You have gaps within gaps."

MDC has issued State of the South reports every two years since 1996. The research group has been studying changes in the South since 1967.

The latest report indicates that the South has reduced its reliance on traditional low-wage industries and is adding new jobs faster than any other region of the country.

"The overall message is that the South, in many measures of economic and social well-being, is doing much better, better than it has ever been," Guillory said. "It is just that in the global economy, with technology moving so swiftly, we've got to do even better."

The fastest-growing job sectors involve "knowledge workers,"

Guillory said.

National employment in information technology industries grew from 4 million in 1994 to 5.2 million in 1998, the report said, quoting Commerce Department statistics. IT industries have contributed to about 30 percent of U.S. economic growth since 1995.

But only two Southern states -- Virginia and Georgia -- ranked above the U.S. average of 19.6 information sector workers per 1,000 jobs in 1997. Only Virginia, Georgia, Florida and Texas outranked the national average of 33.3 per 1,000 in professional, scientific and technical services jobs that year. And Virginia, Georgia and Texas were the only Southern states at or above the national average of 46 per 1,000 workers in high-tech jobs in 1998.

"That's where we're lagging," he said. "We need to invest in our universities to create more knowledge workers. We're still behind the curve there."

The slow-moving, isolated South of the past is disappearing in the global economy, he said.

"For much of the last century, speed didn't matter in the South," he said. "You could kind of go at your own speed. But in the global economy, the South is not isolated and it cannot go just at its own speed. It has to prepare its people for the opportunities that globalization opens up.

"The optimistic message is that we are much stronger as a region; we know how to run faster; we know how to change," he said. "We overcame Jim Crow, we built infrastructure, and we're not living in the 1950s."

Twenty-seven percent of the Southern workforce worked blue-collar jobs 30 years ago, according to the report. By 1999, that had shrunk to only 14.9 percent.

"We've got to close some gaps. We have to ensure, for instance, that blacks and Latinos get to college and succeed because they are going to be growing part of our workforce," he said. "We have to ensure that rural kids -- black, white and Hispanic -- be able to become entrepreneurs.

"We're doing better, we've got a lot of jobs," he said. "But we've got to move from a lot of jobs to better jobs."

Business, he said, has to be part of the changes the South makes, along with philanthropic groups and the government.

"This is not a report that says government needs to get out there and fix it," he said. "We need new leadership, strong leadership, in all sectors."

------ On the Net: Full text report: http://www.mdcinc.org Data charts will be available at Web site Sept. 15.