RESEARCH TRIANGLE PARK, N.C. – North Carolina is not the only state locked in bitter battles for recruiting as well as retaining businesses.

Our good neighbors in South Carolina on Sunday read headlines in the Greenville News that Michelin might move a major research and development project out of S.C. to Canada.

That recruiting battle will surely be one of the hot topics at the InnoVenture conference set for March 27-28 in Greenville. John Warner, an outspoken advocate for building a new high-tech oriented economy across South Carolina, puts on the event.

In his blog called “Swamp Fox,” Warner picked up a quote that state leaders need to hear:

“In this global economy, it’s not just who can produce cheaply. It’s who can innovate.”

The quote came from Joel Sawyer, speaking on behalf of S.C. Governor Mark Sanford.

North Carolina leaders pretty much heard the same message recently from Lenovo CEO William Amelio who said companies have no loyalty any more when it comes to location. They are looking for what is best for the firm – location, incentives, tax breaks, and well-trained workers.

North Carolina recently had to pull out all stops in keeping Quintiles from moving its entire operation to Kansas City.

While the luring of Google to Lenoir in Western N.C. has sparked a great deal of comment and a review of state incentive packages, the bottom line is that N.C., S.C. and others have to play the incentive game or kiss businesses goodbye.

S.C. already has lost one Michelin R&D project to Canada, Warner noted in his blog.

“What’s great news for Canada, is horrible news for South Carolina in terms of creating and retaining employment for our youth not only because of research jobs that left, but because of the production that will now likely end up in Canada as well,” Warner wrote.

The project at stake for bidding now is called the “Tweel,” which is a non-pneumatic tire and wheel assembly that as Warner noted “flexes like a pneumatic tire but doesn’t have any air pressure in it. Time magazine selected the Tweel as ‘One of the Most Amazing Inventions of 2005,’ and it was invented here in South Carolina.”

But will it be built in Greenville and thus produce jobs?

A Michelin spokesperson laid down the gauntlet to S.C. – “incentives must be considered.”