From the early years of America’s history to the present, the Carolinas—North Carolina and South Carolina—have played pivotal roles. In colonial days, the Carolinas were part of a vast region Charles I, the King of England, granted to English judge and politician Sir Robert Heath in 1629. In reference to the monarch, the region was named ‘Carolana,’ from the Latin form of Charles. Charles’ son, Charles II, later changed the region’s name to Carolina in 1663.
The area remained a single colony until 1729, when the British divided it into two—and further changes were to come. On May 23, 1788, South Carolina became the eighth state to ratify the Constitution of the United States, and earned the nickname the Palmetto State, a reference to the sabal palmetto, the state tree. On November 21, 1789, North Carolina became the twelfth state. Nicknamed the Tar Heel State, the expression refers to pitch and tar used to coat the hulls of wooden ships.
Historic economic drivers
Bordering the Atlantic Ocean, both states historically had different industries. Until the 20th century, South Carolina was known for agricultural products like cotton; this later shifted toward manufacturing, textiles in particular. North Carolina was, and remains, the leading tobacco producer in the United States, with an estimated production volume of 260.1 million pounds. Like South Carolina, North Carolina shares a climate and fertile soil conditions ideal for agriculture.
In the 1920s, North Carolina’s industries expanded to include furniture, textiles, chemicals, and other manufactured goods, and these soon surpassed farming. By the late 1990s, other sectors emerged including tourism, government, commercial and financial services, and handicrafts and pottery, especially in the Blue Ridge and Piedmont regions of the state. For years, other key industries in the state have included farming (chickens and hogs in particular), and growing peanuts, corn, soybeans, and potatoes. These sectors, along with fishing, mining, forestry, and manufacturing, have helped support North Carolina’s economy for decades.
South Carolina emerged as a prominent manufacturer of nondurable goods and became home to U.S. military facilities, including Shaw Air Force Base and the Marine Corps Recruit Depot (MCRD) at Parris Island. Like North Carolina, the state also has an active fisheries industry, along with forestry, tourism, transportation, mining, and manufacturing.
While many of North and South Carolina’s long-time industries remain, others have joined them over the years, including aerospace, biotechnology, transportation, information technology (IT), business and financial services, and many others. Both North Carolina and South Carolina are right-to-work (RTW) states, with workers given the choice to join a workplace labor union or not.
Strategic development
According to the North Carolina Department of Commerce, “Many of the world’s best-known brands across a range of future-focused industries call North Carolina home.” While mindful of the state’s legacy industries such as tobacco, textiles, and furniture, North Carolina is fast becoming home to the next generation of industries, including biotechnology, pharmaceuticals, energy, plastics, and chemicals.
With an estimated population of about 11 million, a median age of 39, and an unemployment rate of 3.8 percent, North Carolina is increasingly attractive to a range of business sectors, both established and emerging. A few years ago, the Department of Commerce issued its Strategic Economic Development Plan for the State of North Carolina: Goals, Strategies, and Tactics for the New Economic Landscape. A comprehensive, 19-page document, the Plan outlined critical areas. These encompass fundamentals from decreasing childcare costs for working families and ensuring North Carolinians possess high-quality post-secondary credentials to workforce recruitment, supporting local businesses and industries, and building vibrant communities.
Since 2018, North Carolina has seen over 73,000 new jobs created, and has attracted more than $19 billion USD in private business investment. What makes this figure even more remarkable is that $6.3 billion was announced in 2020 during the COVID-19 pandemic, when much of the American economy stalled. In recent years, the state has also invested about $200 million into its rural communities, renovated buildings slated for re-use, extended public infrastructure to industrial sites, and revitalized entire neighborhoods.
“These and other conventional economic development activities continue to be important to the state’s economic development initiatives and have contributed to our success,” states the Plan. “North Carolina is now in a solid position to remain competitive for economic development opportunities in our key targeted industry sectors—aerospace, automotive, clean energy, information technology, and life sciences.”
This fall, North Carolina State University Professor Emeritus Mike Walden called North Carolina’s economy “a powerhouse of growth in recent decades.” Citing that the state has been recognized at a prime location for economic development, Walden noted that North Carolina continues attracting top firms, “especially in industries that are leading in both national and international economies.” The downside, he says, is that much of this growth has taken place in urban areas, with smaller cities and rural areas being left behind, despite the state attracting approximately $42 billion in capital investments from 2021 to 2024.
Growing strong
Not to be outdone, South Carolina is also experiencing considerable growth. As of this year, South Carolina’s gross state product (GSP) achieved an impressive $271.8 billion, with 2.7 percent growth over the five years prior to 2024.
According to global industry research leader IBISWorld, “Businesses in South Carolina employed a total of 2,333,124 people in 2024, with average annual employment growth over the past five years of 1.4 percent.” Sectors leading the way in total employment are real estate and rental and leasing, manufacturing, and retail trade. This year, the state’s top three biggest industries by revenue included new car dealers, health and medical insurance, and hospitals, which generated $19.8 billion, $17.8 billion, and $14.7 billion respectively. This was followed by other sectors including supermarkets and grocery stores, pharmacies and drug stores, commercial banking, and gas stations with convenience stores.
Many companies operating in South Carolina read like a who’s who of the business world. The largest (by employment) in the state include Walmart, employing 1.5 percent of South Carolinians with 36,148 staff; Prisma Health (the state’s largest private non-profit health organization), with 28,761 workers; and the world’s leading premium automobile and motorcycle manufacturer, the BMW Group, with 11,000 employees. Other giants in the top ten include Lowes Companies Inc., the United States Postal Service, Home Depot, and Target Corporation.
While both South Carolina and North Carolina remain powerhouses in time-tested industries like agriculture, mining, and manufacturing, the Carolinas continue to welcome newer sectors, including technology and finance, making both North and South Carolina ideal for business growth and development.
