Created by the Technology Entrepreneur Support Group
Technology is critical to every sector of our state’s economy. Technology companies – including information technology, telecommunications and healthcare technology companies – provide over 180,000 jobs in Georgia. Most importantly, there are over 1 million jobs in the state in which technology plays a key role. These are typically high-paying jobs that draw the best and the brightest. The Technology Entrepreneur Support Group comprises private and public organizations that have come together to address a shared concern that Georgia is losing ground as a technology center and that the state’s job and revenue growth is suffering as a result. Through a series of discussions, meetings, and review of current research, the group reached a consensus on what must be done to improve Georgia’s overall status and begin recovering from the current recession. This paper serves as a call for leadership and action and as an initial blueprint for gubernatorial candidates and other state leaders. We believe that Georgia must establish a culture of technology and innovation to create high-paying jobs, retain and attract top technology companies and talent, and increase the state’s revenue base.
Georgia boasts a world-class business climate, an abundance of top universities, a large Fortune 500 presence, an exceptional workforce, and a robust quality of life. Recent successes such as the relocation of NCR have confirmed the legacy created by The Coca-Cola Company, The Home Depot, and AT&T that Georgia is a premier location for leading companies. Efforts led by the Georgia Department of Economic Development (GDEcD) have only strengthened our appeal and have resulted in the state’s overall business climate being ranked eighth in the nation by the business news channel CNBC.
Despite our rich socioeconomic history and profound efforts by many committed entities, both public and private, Georgia is losing its standing as an innovation hub. According to the State Technology and Science Index released by the Milken Institute in 2008, Georgia has plummeted in the overall national rankings from 18th to 24th. Georgia dropped from 26th to 34th in its ability to attract R&D funding, from 10th to 17th in technology concentration and dynamism (effectiveness of policy-makers and economic development stakeholders), and from 11th to 30th in its technology and science workforce. Georgia is barely mentioned twice in the index, reflecting our irrelevance in the eyes of a major economic think tank. Research by local organizations has arrived at similar conclusions.
Members of our Group have been concerned for several years about the decline of Georgia’s technology industry and have conducted research to determine the causes. We have reviewed these studies which are listed in the attached bibliography, and captured the reoccurring themes below. We recommend several crucial actions if Georgia is to reverse this trend in order to reach its full potential as a worldwide technology hub.
Create a Culture of Technology and Innovation: Georgia needs to dramatically further its own use of technology to improve services, cut costs, and help solve complex problems such as transportation, K-12 education quality gaps, and even our water crisis. We need to make investments in rural broadband, Science, Technology, Engineering, and Mathematics (STEM) education, and other technology initiatives that will yield large dividends, and we need to recognize the importance of seed funds, incubators, and research and development as critically important investments in our future. Georgia should embrace technology as an enabler and catch up with other leading states, which “get” the importance of a culture of innovation, as demonstrated by their strategy, investment, and marketing.
Create a Strategy: Georgia needs a well-defined technology strategy that goes beyond identifying established clusters. The strategy should acknowledge the importance of strong clusters, but it should identify and support new, emerging clusters at a much more rapid rate. Georgia’s strategy should also comprehensively address the inception, development and growth, and retention of technology companies in Georgia and encompass what the Council on Competitiveness refers to as the three platforms crucial to innovation: Talent, Investment, and Infrastructure. Then, to sustain its strategy, Georgia must market the state’s strengths and accomplishments more vigorously. There are many success stories that are simply not being told, and Georgia must be diligent in doing so.
Foster Connectivity: Several studies have highlighted the fragmented, isolated nature of Georgia’s technology community from different perspectives – economic development, entrepreneurial and geographical. Members of Georgia’s technology community are less connected to one another in comparison to those in leading technology centers around the world. An alarming 40 percent of venture-capital-invested companies are no longer in Georgia after three years and 75 percent have left Georgia after 10 years, according to a 2009 study by Georgia Techs’ Dan Breznitz and Mollie Taylor on The Communal Roots of Entrepreneurial-Technological Growth? Social Fragmentation and the Economic Stagnation of Atlanta’s IT Cluster. We need to foster a more collaborative and competitive environment: young companies and large companies, private and public organizations, and rural and urban communities. A variety of grassroots solutions have emerged to correct this disconnect – co-working spaces, meet-ups, and online community sites – but the top leadership more than anyone else can create opportunities to bring people together to better anchor our technology companies in Georgia.
Focus on Organic Growth: We need to do more to foster and retain our homegrown technology firms. Company needs vary by an enterprise’s stage of development and transition points – startups, pre-revenue to post-revenue, small to mid-sized, and mid-sized to large. Other states are further ahead in nurturing companies at each stage of their development. Georgia also lags other states in funding early-stage companies. We need to cultivate all stages of funding for technology growth. There’s much discussion about attracting more institutional venture capital to Georgia but unleashing local capital by encouraging and incentivizing Georgia’s own angel investors will have more immediate impact, as well as help attract venture capital. We also need to strengthen our efforts to connect local angel investors with the traditional economic development network. In addition, we simply cannot continue to be the only state in the nation that does not allow their public pension funds to invest in the alternative investment class. Georgia would do well to look at world-class programs such as those in New Jersey, Texas, Maryland, Idaho, and Virginia (as described in the 2009 paper by the Office of Policy Analysis and Research, Georgia Tech Research Institute on Innovation & Entrepreneurship in Georgia, A White Paper Prepared on Behalf of Technology Association of Georgia) as models for what government can do in promotional terms, both in setting the right tone and driving local and external sources of investment.
Establish A Proactive and Engaged Technology Advisory Board: A dynamic, engaged, working committee must monitor and analyze technology industry issues and communicate its findings and recommendations in a timely manner. This team should include representatives from the public and private sectors, academia, technology and technology-enabled companies, and service providers. Ideally, this advisory board will establish credibility to influence legislative issues quickly and decisively. For example, such a group could help address Georgia’s budget crisis by advocating opportunities where technology can yield cost savings and service improvements, and assist in reallocating funding cuts.
To accomplish these five objectives, Georgia needs leadership. We realize that our technology-related organizations bear a responsibility to address these issues, but we also know that dedicated political leadership with a visionary plan can provide the framework for our success. Georgia has lost ground in technology. We are committed to working with the governor and other state leaders to effect the changes needed to return Georgia to prominence as a technology center, not only in the South, but around the world.
1. “How do We support Emerging and Innovative Technologies?. Georgia Centers for Innovation, Georgia Department of Economic Development, Presentation developed by Marlit Hayslett, Georgia Tech Research Institute
2. State Technology and Science Index – Enduring Lessons for the Intangible Economy, Milken Institute, by Ross DeVol and Anita Charuworn with Soojung Kim, June 2008
3. ‘Survey: Venture Capitalists Optimistic about State of Southeast Investing”, Survey conducted by Southeast Venture Conference and Morris, Manning & Martin, LLP
4. Innovation & Entrepreneurship in Georgia, A White Paper prepared on behalf of Technology Association of Georgia, Prepared by the Office of Policy Analysis and Research, Georgia Tech Research Institute, March 2009
5. “Where Georgia Leads” A Presentation to the Metro Atlanta Chamber of Commerce, Presented by Lassiter & Associates,
6. The Communal Roots of Entrepreneurial-Technological Growth? Social Fragmentation and the Economic Stagnation of Atlanta’s IT Cluster, Dan Breznitz and Mollie Taylor,
7. “New Economy Taskforce, A Presentation to the Metro Atlanta Chamber of Commerce Board of Directors Meeting”, Bain & Company, July 16, 2009
8. “The New Orleans Saints”, by Jason Meyers, Entrepreneur.com, August, 2009.
9. Georgia Economic Developers Association (GEDA) 2010 Legislative Agenda
10. Economic Gardening: Next Generation Applications for a Balanced Portfolio Approach to Economic Growth.
11. Task Force on State Investment Strategies, Executive Summary, Commission for A New Georgia, January 27, 2009
12. “Roadmap to Florida’s Future, 2010 – 2015 Strategic Plan for Economic Development,” www.eflorida.com
13. “What Atlanta needs to maintain tech leadership”, by John Yates, Morris, Manning & Martin LLP, www.technjournalsouth.com., January 11, 2010
14. “The Tel Aviv Cluster”, New York Times, by David Brooks, Op-Ed Columnist, January 12, 2010
Don Betts, Executive Director, Technology Clusters Initiative, Enterprise Innovation Institute, Georgia Institute of Technology
Melanie Brandt, Chief Operating Officer, Technology Association of Georgia (TAG)
Michael Cassidy, President and Chief Executive Officer, Georgia Research Alliance (GRA)
Ben Dyer, Chairman, TechDrawl, LLC
Sid Elliott, Director of Business Strategy, Georgia Research Alliance (GRA)
Allyson Eman, Executive Director, Venture Atlanta
Stephen Fleming, Vice Provost, Enterprise Innovation Institute, Georgia Institute of Technology
Marty Gupta, Managing Director, CAP Consulting Group
Marlit Hayslett, Director, Georgia Tech Research Institute
David Hartnett, Vice President Economic Development, Metro Atlanta Chamber
Harriett Hollis, Executive Director, Atlanta CEO Council
Tino Mantella, President, Technology Association of Georgia (TAG)
Ashish Mistry, President, Atlanta CEO Council
Michael Robertson, Independent Consultant
Gordon Rogers, President, Atlanta Technology Angels (ATA)
Alan Taetle, Partner, Noro-Moseley Partners
Sterling Wharton, Executive Director, Centers of Innovation, Georgia Department of Economic Development (GDEcD)
Stacy Williams-Shuker, Director, Center of Innovation, Georgia Department of Economic Development (GDEcD)
Kimberly Wood, Director of Community Information and Resources, Technology Association of Georgia (TAG)
John Yates, Partner, Morris, Manning & Martin, LLP