The expression “brain drain” was, unfortunately, the most fitting way to describe what was happening in South Carolina several years ago. The vast majority of the state's best and brightest high school seniors were opting to attend college out of state.

As recently as 2001, less than half of all students with SAT scores between 1200 and 1390 chose South Carolina colleges and universities; only 16 percent with SAT scores 1391 and higher were staying in state for higher education. Conventional wisdom suggested that many wouldn't return to the Palmetto State after graduation from out-of-state universities.

South Carolina legislators hoped to change that when they crafted Education Lottery funded college scholarships aimed at high-achieving students. The strategy worked handsomely—in 2005 nearly 47 percent of those with SAT scores above 1391 and a whopping 78 percent with SAT scores above 1200 intended to stay in state for college. SAT averages of USC's freshmen in recent years indicate that Carolina is attracting its share of these stay-in-South Carolina high achievers.

It's an encouraging development and an important piece of the larger plan that is coming together to boost per capita income and the standard of living for all South Carolinians.

“The lottery dedicated to these purposes is the smartest, best thing we've done relating to economic development in the last decade,” said Doug Woodward, an economics professor in USC's Moore School of Business who studies the many variables of South Carolina's economy and business climate. “It was a very enlightened thing to do.”

But the lottery scholarships alone can't guarantee that bright students will stay in state once they finish their college studies, Woodward said. To keep the newly minted graduates from migrating to more prosperous parts of the country, South Carolina needs a thriving business community that will provide the kinds of jobs that graduates want.

To provide those jobs, the state must maintain its commitments to the other economic development initiatives like the Endowed Chairs Program at USC, MUSC, and Clemson that could become a spawning ground for new industries.

“We need to build on these incentives and provide more of them,” said Woodward, noting that university research by top scientists and engineers can transform campus communities into high-tech meccas.

“These programs form the basis for attracting companies that will pay high wages and translate into higher per capita income for all South Carolinians,” said Woodward, noting that high per capita income is the chief measure of prosperity and correlates directly to the percentage of the population over age 25 holding college degrees.

All of the initiatives for economic development require infusions of money, and, in addition to the Education Lottery, the state should also be looking for additional funding sources for the kinds of programs that will lead to high-wage jobs. “The universities have got to take the lead in this, and South Carolina got it right when it started the lottery-funded scholarships. We just need to build on that.”

Bright students at colleges and universities are part of the equation, he added, because they create the kind of culture that is so important to all economic development: an atmosphere of intellectual ferment that is a magnet for corporate headquarters and research and development labs, better businesses, and affluent retirees.

USC has increased the number and quality of good students it is attracting, said Dennis Pruitt, vice president for student affairs. The question now is whether the University can serve as an economic engine able to attract intellectual capital and to provide work opportunities for high-achieving students once they graduate.

One way to do that is to get students attached to South Carolina companies while they're still in school with internships, co-ops, job shadowing, and summer work experiences, Pruitt said. And therein lies a key role of research campuses: to help attract new industries that rely on intellectual capital.

“It's a combination of both things that have to occur simultaneously; that's what we're hoping is going to happen,” said Pruitt, pointing out that USC's recently announced Innovista research campus and development of Columbia's riverfront are key to creating the desired “perfect storm” of job opportunities in South Carolina.

What's needed to maintain the momentum are good graduate students, continued investment in the state's infrastructure and education, more need-based aid to help those from lower socio-economic families who want to attend college, and more civic participation by the state's citizens.

“What you want is more students graduating with a college education and have them get jobs that pay the commensurate amount of money that a good college graduate can make,” Pruitt said. “If South Carolina's percentage of its population with college degrees expanded to just the national average, it would mean a huge increase in the state's GDP and its per capita income.”

Much of the economic activity will be centered in cities that are homes to the research universities—USC, Clemson, and the Medical University of South Carolina in Charleston—but the benefits of that activity will expand to rural areas for up to 120 miles in every direction, Woodward said. Along with development of its intellectual capital, South Carolina's favorable climate and overall quality of life also are providing incentives for people to think of the state as a destination of choice, which Davis Baird, dean of USC's Honors College, sees as the true objective of all development efforts.

“Smarter students staying in state for college is good,” Baird said. “But it's equally important to make the state a destination of choice by providing good jobs for those smart students to work at when they finish college. We want to make South Carolina an economically viable destination and an attractive place for smart, creative people.”

Will some successful students continue to leave the state after completing lottery-funded college work in South Carolina? Sure they will, Baird said. But that isn't an altogether bad thing: Those who locate elsewhere will be good ambassadors of the state, and others will eventually return with broadened horizons if there are good jobs waiting for them in South Carolina, he said.

“In general, if you have creative, smart people in an area, something good will happen,” he said. “This is what South Carolina needs.”

For the economic puzzle to come together, Baird said, an essential piece of it must be the continued focus of USC and the state's other research universities on science and engineering efforts that will lead to economic development and commercialization that will provide jobs. At the same time, “We also need to support the arts and humanities for they will provide the exciting creative environment that attracts innovative people.

“We need to continue investing in our schools, growing the University at the undergraduate level, and seeing the state make more of a commitment to higher education for the good of its economic development,” he said. “USC's riverfront and Innovista plans are the most exciting things I've seen in my 20-plus years with the University.

“If you had only economic development without attracting smart undergraduates to the state's schools, or if you made the schools attractive to undergraduates without economic development, you'd have a failed plan,” he said.

“We also want to draw people to South Carolina from other parts of the country and that is happening now with the University's McNair Scholars program [for out-of-state students], which also is helping to get the word out about South Carolina.

“With more out-of-state students there is more shaking up and mixing going on that leads to creative things happening and brainy ideas from other sources.”