Financial technology, commonly referred to as fintech, describes any innovative technology created to improve and automate financial services. This industry and many others have seen remarkable growth in South Carolina. According to the Governor, the state secured over $36.4 billion in new investments and created more than 86,000 new jobs in the past year. South Carolina is recognized as a leader in advanced technology and manufacturing, with several factors contributing to the growth of various industries within the state.
Booming Economy and Population growth
In his January address, Governor McMaster highlighted South Carolina's "record budget surplus," which included over $3.5 billion in unexpected revenue. Forex trading investment in the state nearly quadrupled in 2022, and the year saw the announcement of more than 100 new projects. According to the Department of Commerce, South Carolina attracted nearly $10 billion in capital investments between January and December 2023. This marked the second-largest total in the state's history.
The state also experienced significant population growth and was the fastest-growing state last year, with a 1.7% increase, as reported by the Census Bureau. The state's population now stands at 5.4 million, which is an increase of over 255,000 since April 2020. Both retirees and young individuals are drawn to the state because of the job opportunities and lower cost of living. The Carolinas now experience strong investor interest driven by recent and projected job growth rates well above the U.S. average.
Both the housing market and manufacturing industry in South Carolina have also experienced a surge in demand. With the state's booming economy, the fintech sector is also poised for significant growth.
Business-Friendly Environment
Many financial companies are migrating from tax-heavy areas to South Carolina. The state is dedicated to improving its business-friendly climate and creating an environment in which firms may thrive. In fact, South Carolina rates as one of the most business-friendly states in the U.S., with a cheap cost of doing business, a tax base that promotes economic growth, and several additional incentives.
Tax Incentives for Job Creation
South Carolina's Coordinating Council for Economic Development provides performance-based tax incentives to corporations for job creation and investment, as well as discretionary grants to promote infrastructure, site renovation, and product development. Companies in South Carolina also benefit from statutory tax benefits, such as no state property tax, no inventory tax, no sales tax on manufacturing machinery, industrial power, or finished product materials, no municipal income tax, and a favorable corporate income tax structure.
Reliable Energy Infrastructure
South Carolina has one of the lowest industrial electricity prices in the country, with an average cost of just 5.29 cents per kilowatt hour — 30% less than the national average. South Carolina's strong industrial legacy has resulted in an abundant and long-lasting energy infrastructure that fulfills the demands of today's capital-intensive industries.
The state's cheap industrial power tariffs and stable energy infrastructure encourage the expansion of capital-intensive fintech businesses.
South Carolina's Nexus for Advanced Resilient Energy (S.C. Nexus) was also one of the states chosen in October as Economic Development Administration Regional Technology and Innovation Hubs by the United States Commerce Department.
Skilled Workforce
Businesses invest in South Carolina for a variety of reasons, including the people. South Carolinians are diligent individuals who have received extensive training at research institutions and technical college systems. South Carolina's emphasis on workforce development through technical institutions and training programs provides a consistent supply of talent for the fintech industry. According to the South Carolina Department of Commerce, the state employs approximately 2.4 million people, with commerce, transportation, and utilities accounting for 20% of the total.
With tens of thousands of new jobs coming into South Carolina, many in cutting-edge businesses, the state has made sure that its workforce is appropriately equipped to take on these new responsibilities. To address this issue, the state has made significant expenditures in globally recognized workforce development programs, ensuring that our citizens have access to inexpensive degrees or trade certifications. Workforce Scholarships for the Future is a renowned workforce development initiative. This program offers full scholarships to pay tuition and mandatory fees at any technical institution for an adult or recent high school graduate seeking an industry certificate or associate degree in a high-demand vocation.
Employers in South Carolina have access to a well-trained and large labor pool of roughly 1 million people within a 60-mile radius of the region's geographic center. With some of the best workforce training resources in the country, the region is home to three four-year universities, four technical colleges, an extensive public and private school system, and the South Carolina Governor's School of Science and Mathematics — one of the nation's Top 24 elite public high schools.
Strategic Location and Infrastructure
The state's strategic location on the East Coast allows easy access to large markets and has enabled its world-class port system to develop. The Port of Charleston is one of the nation's fastest-expanding container ports, and it currently has the distinction of being the deepest harbor on the East Coast, allowing the world's largest ships to arrive at any time of day or tide.
South Carolina, located midway between Miami and New York City, is well-positioned to transport products up and down the East Coast, as well as to numerous key markets in the West. Its transportation and commerce infrastructure includes about 600 miles of state and federal roadways, which provide a network of efficient freight routes to the region's two interstate highways, I-95 and I-20.
South Carolina is also home to the South Carolina Ports Authority's Inland Port Dillon, a rail-connected extension of the Port of Charleston that provides the same services as a deep-water port at a fraction of the cost and connects the region to global markets.
Balancing Economic Strength with Future Challenges
The South Carolina government is in one of its finest budgetary shapes in modern history, allowing it to enact record-breaking tax cuts and invest massively in infrastructure and labor. These factors, along with a favorable regulatory climate and a business-first orientation, position South Carolina among the greatest areas in the country to do business.
