"Part of that is going to involve whether or not we're willing, on occasion, to put some money on the table," Lewis Gossett, president and chief executive officer of the S.C. Manufacturers Alliance, told The Greenville News.
Other states "dwarf us" with the amount of money they use to seal corporate deals and draw investment, he said.
Gossett said many firms in his organization are headquartered in other states, and South Carolina could garner new investment by becoming "a more aggressive pursuer of corporate regional and divisional headquarters."
State leaders, Gossett said, should tweak existing incentives and create new ones.
"You don't want a budget-buster," he said. "We want to have targeted incentives that make sense."
The alliance, formerly known as the S.C. Textile Manufacturers Association, represents more than 100 of the state's largest manufacturers. Only about 30 percent of current members are textile companies, Gossett said.
The group is sponsoring a study of the state's economic development climate that should be completed in mid-November, Gossett said.
"We wonder if over the last five or six or seven years if the state's had good direction with regard to economic development, if it's really known what it was about," said Gossett, former head of the state's Labor and Licensing Department.
"Are we active enough out there? Are we doing enough to encourage existing businesses to grow? Are we really being competitive for these big projects that are out there when they do come down the pike?" he asked.
"There are some good things happening, but we think that they could be better, there's no question," Gossett said.
South Carolina's weak job growth dropped again in the second quarter, triggering new criticism of Republican Gov. Mark Sanford's policies. The Federal Deposit Insurance Corp. said Wednesday the state placed 50th in job growth, and agency analysts said early data from the third quarter suggests "further weakening."
Sanford spokesman Joel Sawyer said criticism by Democrats that South Carolina continues to fall behind the rest of the nation is "playing politics with a situation the governor is working very hard to improve."
The manufacturers alliance's legislative agenda for 2006 will include initiatives on property-tax reform, workers compensation, tort reform and port expansion.