Commerce Secretary Bob Faith; Senate Finance Committee Chairman Hugh Leatherman, R-Florence; Rep. Bobby Harrell, R-Charleston, chairman of the House Ways and Means Committee; and Lee Bussell, chairman of the state chamber's board of directors, all pressed the 80 or so business leaders in attendance to throw their shoulders behind new efforts to lure small, knowledge-based companies to the state.

The tactic is a departure from the state's focus on manufacturing, which has been its main target industry for at least 10 years."To move ourselves into a new economy, we've got to look at a whole new set of metrics that are foreign to most people in South Carolina," Bussell said. "As we revise and change our strategy, we can once again be successful, but it's going to take a lot of education, a lot of buy-in."

Bussell said the state's economic development approach has grown increasingly outdated since the early 1990s. Bussell cited Austin, Texas, and Raleigh, N.C., as cities that have enjoyed significant growth by focusing on small, venture capital-backed companies.

"What we have done in the past, not that it's wrong, is just not enough anymore," Bussell said. "I can promise you in Silicon Valley they don't talk about hourly wages. You don't raise per-capita income 50 cents at a time; you raise per-capita income by changing and shifting the whole strategy."

Harrell assured attendees that a new focus on luring small, knowledge-based companies wouldn't hamstring the state's manufacturing industry. He cited agriculture as an example of an industry that stayed strong when the state shifted its focus to manufacturing in the 1980s.

The panel, however, fractured when it came to discussing Gov. Mark Sanford's recently unveiled economic development plan, specifically a proposal to fund a 15 percent income tax cut with a 68-cent tax on cigarettes and a 5-cent tax on state lottery tickets.

Leatherman said tax cuts are an important part of fertilizing new business but that the cuts should come in the future, when the state's finances are healthier.

"The total tax burden on our citizens is not out of line with the rest of the country," the senator said.

Harrell said he was undecided about the tax proposals but that the rest of the governor's plan "is very close to a slam-dunk" in both the House and the Senate.

Harrell called for an overhaul of Medicaid to check increasing costs. He said the state should make "tough decisions" and tighten the criteria on who and what should be covered by Medicaid.

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