Corporate Command Status in the Nonmetropolitan South, 1990-2001

Abstract

Southeastern Geographer Vol. XXXXII, No. 2, November 2002, pp. 302-3 10 THE CHANGING SOUTH CORPORATE COMMAND STATUS IN THE NONMETROPOLITAN SOUTH, 1990-200 11 William W. Graves Few would argue that modern economic growth in the South has been centered in urban and suburban areas. The lack of a derelict industrial landscape, low labor costs and a rapid migration of human and financial capital into the region has allowed cities such as Dallas, Atlanta, Charlotte and Houston to rapidly rise to the top of the corporate urban hierarchy (Wheeler and Brown, 1985; Wheeler, 1992). This growth has bypassed the nonmetropolitan South, and job creation in this region has been driven by new branch-plant manufacturing facilities. The dependent (and mobile) nature ofthese jobs has acted to depress local wages and drain local capital; this branch-plant, corporate headquarters dichotomy has widened the divide between the prosperous-urban and peripheral-rural South (see Lyson,1989; Hartshorn and Walcott, 2000). Nearly all southern states have policies in place to encourage economic growth to diffuse into their nonmetropolitan peripheries. Until recently, the dominant policy tool used to encourage growth in the rural southern economy has been the idea of industrial succession; in other words, branch-plants attracted to the region's low costs would eventually attract service and technology employment and, given entrepreneurial good fortune, these facilities would eventually evolve into locally owned and controlled enterprises. Evidence supporting the validity of this process is widely available, and includes the following examples: Kanter's (1995) thorough examination of the Greenville-Spartanburg area's evolution from textile town to an internationally financed (and controlled) technology-oriented cluster ofmanufacturers , Charlotte's transformation from rail-hub and mill town into a national financial center (Graves, 2001), the transformation of rural northwestern Arkansas into a wealthy service industry enclave triggered by the growth of the Wal-Mart corporate headquarters (Hays, 2002), and the rapid migration ofcorporate headquarters which transformed much of the urban South into national command and control centers (Wheeler and Brown, 1985; Wheeler, 1992). In each case, development was said to be driven, in part, by a filtering down process or by local spillovers and entrepreneurial activity generated by existing branch-plants (see Erickson, 1976; Semple and Phipps 1982; Park and Wheeler, 1983). These transformations have stemmed the out-migration of financial and human capital from the South and, for the first Dr. Graves is an Assistant Professor ofGeography in the Department ofGeography and Earth Sciences, University ofNorth Carolina at Charlotte, Charlotte, NC 28223-0001. E-mail: bgraves@email.uncc.edu. CORPORATE COMMAND STATUS303 time, allowed for large-scale, local, profit accumulation (Borchert, 1978; Hartshorn and Walcott, 2000). Despite their successful application in the largest southern urban areas, the popularity ofdiffusionist growth theories, such as the industrial succession process discussed above, has waned. The near daily images of vacant textile mills (Lunan, 2002) are visual reminders of the relative absence ofjob growth and stagnant incomes in the rural South (Furuseth, 1992). This situation has led observers to suggest that the region faces structural impediments to this succession-driven process of development. One of these obstructions is the increased importance of local linkages and human capital caused by the transformation from a Fordist to a postFordist mode ofproduction (see Scott, 1988). Johnson (1997) posited that the isolation of the region which attracted branch-plants has prevented the development of the clusters necessary for modern industrial development. However, Johnson continued to note that the lack of clusters in the rural South does not impede the growth of all types of firms—not all businesses benefit equally from clustering; less innovative businesses such as retailers, natural resource firms and low-tech manufacturing are likely to reap greater benefits from the low wages associated with isolation. Other obstacles to economic development in the nonmetropolitan South include the lack of an innovation infrastructure (Feldman and Florida, 1994), primarily human and financial capital. The absence of these resources is a concern of all firms, but these disadvantages will have less impact on relatively "low-tech" firms such as retail and mass production. The obstacles to the development of high-tech firms in the South suggest that the most likely evolution of...