< PreviousUPS T A TE S C | INTELLIGENCE REPOR T 88 JULY 2021 S I T E S EL E C T I O N T ALENT & BR AINPO WER THE UPSTATE’S TALENT ROI IS SUBSTANTIAL AND GROWING Every year, the South Carolina Teacher of the Year gets the same honor: the privilege of driving for an entire year a brand new BMW X manufactured in Spartanburg (in addition to a nice check for $,). It’s just one way the German carmaker and other major employers in Upstate South Carolina are connecting with the education system supplying the skills and talent they need. Among its , employees, the BMW plant employs hundreds of equipment service associates and maintenance technicians. How do they fi nd the people? In the company decided to grow its own, creating the BMW Scholars program with four technical colleges in the region where curriculum was developed for what BMW needed, and students attend school nearly tuition-free while working hours a week at the plant. e program has graduated over people in its fi rst decade, and every one of them has been off ered a job at BMW. e company also has worked with the technical colleges and the University of South Carolina Upstate to develop a Bachelor of Applied Science (BAS) degree completion program that allows students with an Associate of Applied Science (AAS) in Mechatronics, Industrial Electronics Technology, or Automated Manufacturing Technology to pursue a four-year degree. ose credentials mean something: An April report from the South Carolina Manufacturers Alliance notes that transportation equipment manufacturing experienced an average annual employment growth rate of % between and , helping to drive up the annual wage of the average manufacturing job in South Carolina to $,, compared to $, for all jobs. e Upstate is a big reason for the big numbers. e region’s educational institutions aim to keep it that way, building that proverbial talent pipeline whether the jobs are in advanced manufacturing or other advanced fi elds such as medical devices and life sciences, cybersecurity and fi ntech, or software development. It starts at places such as the A.J. Whittenberg Elementary School of Engineering in downtown Greenville (a National Blue Ribbon School), and it extends to the upper echelons at Clemson University. Deep and Wide Pool of Resources e Upstate SC Alliance itself has been in on the game, especially during the pandemic. e Alliance launched Skill Up in fall , aiming to connect individuals with in-demand occupations that are accessible with months or fewer of technical training. e program grew out of the Alliance’s Move Up program, which has an equally broad reach into such fi elds as fi nancial and creative services. Other bright spots in the region include Greenville Technical College and its Center for Manufacturing Innovation; Spartanburg Community College’s Workforce & Industry Support Initiatives; Tri-County Technical College; and Laurens County Development Corporation’s “A Higher Opportunity” initiative. In West Greenville, Greenville Tech just opened the Truist Culinary Institute in a redeveloped space across from West Located in the historically under-served West End of Greenville, the award-winning A. J. Whittenberg Elementary School of Engineering routinely places its student engineers alongside professional engineers in the Upstate corporate community. Photo courtesy of National Blue Ribbon Schools and A.J. Whittenberg S I T E S E L E C T I O N JULY 2021 89 Greenville School in order to train talent for the city’s blooming food scene. “The challenge for academia is, how do we stay relevant?” says Anand Gramopadhye, Ph.D., dean of the Clemson University College of Engineering, Computing and Applied Sciences. That applies whether you’re dealing with the disappearance of the camshaft from a car engine or the revolution in telehealth and online education. “We in academia have to respond,” he says during an impromptu chat in the hallway on one of several graduation days on campus this spring, “and Clemson has responded very well.” Partnerships abound, from the cleanroom Nephron is donating to further work on robotics-filled syringes to the slew of automotive, engineering and materials companies working with CU-ICAR, the Clemson University International Center for Automotive Research visible along I-85. A sampling of the university’s corporate partners includes Duke Energy, Samsung, Arthrex, Fluor, Honda, Bosch, Siemens, GE, Michelin and Volvo. “Right now we have around 55 strategic partners,” explains Jack 92 JULY 2021 S I T E S EL E C T I O N Ellenberg, associate vice president, Corporate Partners and Strategic Initiatives, at Clemson. His team, including Angela Lockman, a former KPMG consultant who is senior director of business development, is still in startup mode, having just launched in 2017, though with nearly 80 combined years of experience and more than 400 projects and $64 billion in corporate project investments on their resumes. They have the tools, including five innovation campuses, six research and education centers across the state and ag extension offices in every South Carolina county (Clemson’s original name was Clemson A&M). Ellenberg helped lead state economic development under three governors in his previous life, running offices overseas and opening up inland ports. He knows whereof he speaks, and companies know he will cut to the chase as fast as they will, if not faster. “We approach everything with an ROI model,” he says. “No one on our team is an academician, and that’s by design. And we purposely did not use the words ‘economic development.’ We said we were going to make it an enterprise.” Clemson today has 26,000 students, and is in high demand: Applications skyrocketed from 27,926 in March 2020 to 45,406 in March 2021, even as college applications across the nation trended down. Clemson is the No. 29 public university in the nation with $219 million in total research expenditures, and one of only six official Carnegie R1 institutions to have achieved that designation without a medical or veterinary school. Against that backdrop, Ellenberg S I T E S E L E C T I O N JULY 2021 93 develops a portfolio with every corporate partner, looking ahead three to five years, and looking for ways to connect every company’s No. 1 issue — talent — with his team’s No. 1 goal: student engagement. New Engagement Model Sometimes the engagement proceeds to developing new credentials. That’s what happened when Arthrex in 2017 invested $40 million in Sandy Springs near the Clemson campus. Clemson had the best bioengineers (biology is actually its leading major), but Arthrex leadership needed a specific regimen in order to fill positions such as technology consultants, who sit in the OR with surgeons when they are implanting Arthrex devices in patients. Arthrex founder Arthrex President and founder Reinhold Schmieding approached the freshly minted Clemson corporate partnerships team. “Our faculty worked with him across multiple colleges, primarily business and engineering, to develop two certificate programs, open to any student in any major,” says Lockman. Today 15 students are Arthrex scholars, thereby seeding a talent pipeline. And the company works with Tri-County Tech on the credentialing too. “The students test drive them, and they test drive the students,” Ellenberg says of the Arthrex program. Clemson’s research campuses are ready for a test drive too, with land and space available, backed by an extremely proactive university president in James Clements. “He likes to use the phrase ‘big and bold’ ” Ellenberg says, “asking questions like ‘How do we transform the industry, and transform society?’ ” For Ellenberg, one way is to listen. “We like to talk about soil conditions,” he says. “If you prep the soil, companies will prosper. We ask, ‘What do you need?’ and then we listen. We’ve flipped it from ‘We want you to give to the university’ to “We want you to invest in the university.’ The days of a company saying, ‘I want to give you $20 million to do whatever you do’ are gone. What’s the ROI? We have to deliver on our commitments. “We’ve changed the model,” he says, “of industry engagement among universities and colleges.” 94 JULY 2021 S I T E S EL E C T I O N WHERE STARTUPS ARE STAKEHOLDERS In May I met with a cross- section of the Upstate’s startup community at NEXT on Main, a second location for incubator and coworking organization NEXT Upstate that opened in in downtown Greenville in following the opening of the NEXT Innovation Center. NEXT, which supports more than high- growth companies, is one of more than incubators and coworking spaces that have sprung up in the region, backed by a blend of public and private organizations. Cliff Holekamp, cofounder, managing director and general partner, Cultivation Capital, relocated to Greenville in to open Cultivation’s fi rst offi ce outside St. Louis. e early-stage venture capital investment fi rm, which specializes in tech from the coastal markets, is involved in about deals a year, and was looking to expand its East Coast presence. Going virtual at the onset of the pandemic, as it did for many, sparked a change in perspective. “I had more fl exibility than I thought I did with regard to where I was living, and how the company was thinking about location and geography,” Holekamp said. “We looked from Arizona to Florida, Georgia, South Carolina, North Carolina and Texas. After full analysis, we ended up in Greenville.” Unfollowing the Crowd Scott Pancoast is CEO and founder of Zylö erapeutics, which has developed a proprietary topical delivery system for various medical applications. He was a San Diego biotech leader for two decades, at one time leading the San Diego Venture Group, whose meetings he watched balloon from a handful of people to an average attendance of years in. He was fi rst introduced to Greenville when his son attended Furman University. e idea of the city as a place to do business didn’t arise until he was working with Professor Joel Friedman at the Albert Einstein College of Medicine in the Bronx, and the topic of site selection came up in connection to his nascent company. “He said it had to be New Jersey or the Philadelphia area,” Pancoast remembers, “one of those centers of life sciences.” But Pancoast looked seriously at Greenville’s incentives, then learned about the broader and growing ecosystem for startups. He was further convinced by the area’s reputation for manufacturing, as Zylö was considering manufacturing the small silica topical drugholder system itself. Once he started hearing about institutional support from NEXT and the South Carolina Research Authority (SCRA), “I made the decision to start the thing here,” he says. His home is two blocks away from NEXT. Lab space was found at the Clemson University Biomedical Engineering Innovation Campus (CUBEInc.) at Prisma Health Patewood Hospital. A fi rst round of fi nancing was led by Venture South, a growing affi liation of angel venture capital groups in cities that got started in Greenville. Two grants have come from the SCRA UPS T A TE S C | INTELLIGENCE REPOR T ENTREPRENEURIAL E C O S Y S TEM Photo: Getty Images S I T E S E L E C T I O N JULY 2021 95 as has $200,000 of investment. For manufacturing, Zylö in November 2020 moved into a former Michelin showroom facility with 25-ft.-clear ceilings that can be outfitted as a “box in a box” in the event the company needs a cleanroom environment. He says Zylö is also benefiting from a regulatory environment quite different from California’s. “To wit,” he says, “every sales tax audit we or my portfolio companies had in California, they are basically told that you don’t leave the audit until there’s a finding. There were all these claims. Very frustrating. Contrast it with the first sales tax audit here. He said, ‘You guys are screwing it all up. Here are five tax exemptions you’ve been missing. Look back five years and I’ll help you do it.’ “We’re in the line of airplane approaches for Greenville Spartanburg International Airport, so it was an extra two weeks for a permit,” Pancoast continues. “But it was nothing. In California, I may have never gotten a permit, and if so, it would have been held up forever.” California is still a global model for both venture capital and life sciences. But the Upstate could be home to types of hubs other than those attached to Michelin tires.96 JULY 2021 S I T E S EL E C T I O N “ is has a long way to go to be a San Diego,” Pancoast says, “but it continues to fl ourish, and I see continuing evidence it will get to be something people outside the Southeast will have heard of.” Both Pancoast and Holekamp credit university connectivity with helping them ramp up their own networking and talent connectivity. Holekamp, who served as the fi rst full-time faculty member in entrepreneurship at Washington University in St. Louis, knows a blossoming ecosystem when he sees one, and likes what he’s seeing from Clemson, Furman and other schools. “For any entrepreneurial ecosystem, you have to have a combination of talent and density,” he says. “Talent is number one, and having universities as strong partners is really important. e fact that Anthony is at this table right now and not sitting on campus is huge.” at would be Anthony Herrera, executive director of Furman University’s Institute for Innovation & Entrepreneurship. e former Toyota leadership development executive from Texas is leading Furman’s entrance into the innovation space. “Furman hadn’t really played in this space,” he says, “and was not really thought of as a stakeholder in the universe of entrepreneurship.” But they are now. He envisions a time when Furman, Clemson, the University of South Carolina and other schools form a brainpower nexus to rival what UNC-Chapel Hill, Duke and North Carolina State University have done in the Research Triangle. Connecting to the entrepreneurial world is a strategic priority for the school. ere’s even a side benefi t: All the Furman parents like Scott Pancoast who suddenly discover a region while visiting their child on campus. “I’ve heard that story multiple times,” Holekamp attests. Herrera admits it’s part of his duties now. “I meet with parents now who are looking to move their companies here.” Next Level Jacob Hickman, director of business recruitment for the Upstate SC Alliance, is at the table too, and notes how cultivating fi rms like Cultivation and Zylö is the next level for a region already saturated in Young people need to see there is opportunity in medium-sized cities. ere is enough scale to build a career in a place the size of Greenville.” — Cli Holekamp, Co-founder, Managing Director and General Partner, Cultivation Capital talent and density,” he says. “Talent is number one, and having universities as strong partners is really Young people need to see there is opportunity talent and density,” he says. “Talent is number one, and having universities as strong partners is really advanced manufacturing. He doesn’t need to say much more, because the company leaders are saying it for him. “I’m on the road all the time, looking for the next Scott,” he says of Pancoast. “I’ve lived in eight different cities, including New York, Boston, Los Angeles and Oklahoma City,” Pancoast says. “We love Greenville. And recruiting from out of state is a lot harder in New Jersey than Greenville. We’ve recruited five people, and there is not one bit of evidence of resistance to moving to Greenville.” John Moore, principal, Momenteum Strategies, and the founder and former CEO of NEXT, says the hotness of the market can even sometimes become an HR issue. He was recently at lunch with leaders from a large corporation in the area that brings in people from all over the world. “They complained they had a big problem,” he says. “People wanted a position here, or they were exiting.” For Holekamp, the Upstate made sense from a personal perspective and from a growing business perspective. “Our firm is focused on developing ecosystems in second-tier markets. I looked at Atlanta, Raleigh and Charlotte, but as a company we would not have an opportunity to be a leader in the community. We did that in St. Louis. I want to do that again. Here, we have an impact on the community, but proximity to deal flow in Charlotte, Atlanta and Raleigh. I’ve been here four months and I have done a deal in each of those cities.” Talent Cultivation It’s a contagious philosophy at Cultivation and a growing number of venture organizations — to not just be Ken Brower John Moore S I T E S E L E C T I O N JULY 2021 97Next >