Last month, Harvard professor Michael Porter applauded state and local leaders on their progress in transforming the way South Carolina does business.

Next on the agenda: transforming the way South Carolina does government.

In his State of the State address last week, Gov. Mark Sanford was right on the mark when he spoke of how global trends create local consequences. Even those of us who don’t pay much attention to international news — who don’t follow the latest consumer spending reports and aren’t too concerned with the tax rate in Moscow — can see that the world is changing. The competition is growing in number and in strength.

In South Carolina, we’re stronger, too. We’re gaining momentum, but to ensure long-term success in a world where today’s “state of the art” technology becomes tomorrow’s artifact, we have to shift into a higher gear.

It is essential that we raise income levels in our state. How do we do this? By permanently realigning our state economic development structure so that private, not public, forces have the dominant role.

If you want your economic engine to be high-performance, government isn’t the gas; it’s the grease.

Government’s job is to reduce the sources of friction — excessive regulations, high taxes, lengthy permitting procedures — that slow down business growth and the job creation and local investment that accompany it.

By no means is government’s role unimportant. Indeed, Gov. Sanford, with his Contract for Change, has made global economic competitiveness a top priority of his administration.

The reforms that the governor is pushing for will result in a more hospitable environment for business growth as well as better use of taxpayer dollars.

Income tax relief will help South Carolina attract jobs and encourage business start-ups. Tort reform will prevent our state from losing additional investment from businesses that reject our unfair civil justice system. Government restructuring will decrease the public resources spent on duplicative efforts and make state offices more accountable. Educational choices for parents will result in market-driven improvements that prepare every child in this state for today’s knowledge-based economy.

These reforms echo the campaigns called for by Dr. Porter in his 2003 analysis of our state’s economy. He urged us to do more to support our existing businesses, to strengthen our education system, to be better stewards of our small state’s limited resources.

Our government must do its part to help accomplish these goals. However, it is the private sector — the fuel in our engine — that will ultimately determine South Carolina’s destination in the global economy.

Once the government implements a tax system that encourages private businesses to invest and add workers, they’ll do just that. The unemployment rate will drop.

Once the government reduces the tax burden that now falls on entrepreneurs and small businesses, we’ll see more small companies with big ideas survive to commercialize their products and grow into larger companies with even bigger ideas. They’ll likewise need more workers — skilled workers, which our improved education system will provide.

As our economy grows and our business climate becomes more vibrant, more companies will want to come here — diverse companies in competitive, high-tech, high-skill industries. Wages will rise.

Happily, business and community leaders have embraced the notion that they are the ones with the ultimate the power to raise income levels in this state. Many people from both the private and public sectors have become involved in the South Carolina Council on Competitiveness, which was formed to guide the state’s progress toward developing a healthier, more modern economy and fostering a more focused and cooperative mindset among the state’s business, government and academic institutions.

We’re all stakeholders in this effort, and we should recognize the different capabilities of the private and public sectors. We should invest our resources where they’ll have the greatest impact on improving quality of life. Most importantly, though, we should remember that it’s not more government, but more efficient government — and lowering the tax burden, not increasing it — that will unlock our state’s economic potential.

Mr. Faith is the S.C. commerce secretary.