Georgia can enact strategic public policies to emerge as a leading innovation center
It’s not too late.
Georgia can regain its status as a center for innovation and leading edge technology — but it will take a concerted and collaborative effort by a multitude of entities.
At the GeorgiaForward Forum at Callaway Gardens from Aug. 17 to Aug. 18 — titled: “Creating an Innovation Agenda for Georgia,” a host of tangible ideas were presented and discussed with the hope that real progress can be made.
For starters, Georgia is well-positioned to be a center for innovation:
It has top research universities with dozens of eminent scholars breaking new ground in bio-medicine and technology every day.
It has the much-envied Georgia Research Alliance — a unique public-private partnership between universities, business and government that fosters that research.
It has a history of innovators and entrepreneurs — leaders who have helped develop and grow a host of enterprises — from Coca-Cola to Web-MD to Internet Security Systems to Home Depot to CNN.
And it has two extraordinary gateways to the rest of the world — Hartsfield-Jackson International Airport and the Georgia Ports Authority with its leading Savannah port.
But it also has several obstacles that are holding back the state’s ability to become an internationally-renowned center for innovation. Some of those obstacles should be relatively easy to fix. Others, not so much.
“If we are going to be successful as a state, we have to innovate,” said Ross Mason, founder of the Healthcare Institute for Neuro-Recovery and Innovation Ventures (HINRI) with a history in venture capital. “The economy of tomorrow is going to be driven by early stage investing.”
Georgia as languished behind other technology-driven states when it comes to venture capital.
Stephen Fleming, a Georgia Tech vice provost who leads the university’s Enterprise Innovation Institute, said that 92 cents out of every venture capital dollar invested in Georgia companies comes from out of state.
As an importer of capital, Georgia often loses its most promising companies because investors want their portfolio firms to be close geographically. That often means that budding companies relocate to California, Massachusetts, Texas and other states with more venture capital.
One of Georgia’s biggest hurdles is its pension system for teachers and state employees. Georgia is the only state in the country that does not allow any of its state pension dollars to be invested in its emerging and growing companies.
That means that a valuable source of possible funding is closed to up-and-coming Georgia ventures.
That flawed public policy is reminiscent of when Georgia refused to allow its banks to expand statewide — a restriction that didn’t exist in North Carolina. So the banks in North Carolina were able to get so big that they bought several of Georgia’s major financial institutions.
Fleming said that Georgia needs to be “welcoming to outsiders and immigrants,” although he realizes that’s “not real popular in Georgia.”
When Georgia’s research universities attract top international students to study here, there should be a pathway for them to stay and contribute their expertise here rather than going back to their home country.
Another major stumbling block for Georgia is its mediocre K-12 education system, a challenge that can feel overwhelming.
Mason also said that Georgia needs to do a much better job with technology transfer of innovative ideas from universities to commercial enterprises. Unlike some other states, Georgia’s institutions do not have a standardized formula on financial percentage and timeframe for a possible deal.
If it were up to him, Mason would have Georgia do away with its income tax laws and move toward a consumption tax. Three of Georgia’s competing states — Florida, Tennessee and Texas — don’t have an income tax.
That would encourage innovators to remain or move to Georgia and grow their enterprises here.
According to Mason, the Gallup organization has estimated that 3,000 innovators drive the U.S. economy.
“How do we attract, train and recruit a large number of those innovators to Georgia?” Mason asked. . “It’s like a chain. A missing link is early stage investment. We are doing a great job of doing research. We need angel investors to validate our market place and create an eco-system.”
Over the years, metro Atlanta and Georgia have completed several studies on what industries have the greatest economic development potential. There also have been a host of initiatives by different Georgia entities on its economic strategy.
One of the more recent efforts is the Gov. Nathan Deal’s Competitiveness Initiative that includes the Georgia Chamber of Commerce and Georgia Department of Economic Development.
The Metro Atlanta Chamber championed the New Economy Task Force in 2009. The Georgia Research Alliance conducted a review of the most promising areas of innovation for the state.
And this past legislative session, the Commission on Technology and Science was passed to make its own assessment.
“The State of Georgia has never had a strategic plan for technology and science,” said Tino Mantella, president of the Technology Association of Georgia. Some of Georgia’s leading clusters include health IT, information security, data centers, financial services, to name a few.
So with all these disparate efforts, are Georgia leaders diluting their strength by not having a common economic vision for the state?
“We are working closely with the Georgia Chamber,” Mantella said. “I think there’s more cohesiveness around these issues. I don’t think it’s all that bad.”
Still, others believe there could be better coordination.
“There is a recent history of having organizational silos, of communities planning alone,” said Ross King, executive director of the Associate County Commissioners of Georgia.
King recalled the novel effort during the Gov. Joe Frank Harris administration —the Growth Strategies Commission.
“There was a desire to work with a single focus. But many of the planning initiatives have been lacking implementation and resources,” said King, adding that GeorgiaForward was a valiant effort to create statewide consensus. “There’s phenomenal leadership throughout the state. The question is how do we get full statewide participation.”
GeorgiaForward has the potential to become a fertile ground for government, business, academic and civic institutions to come together in a statewide, broad-based grassroots effort.
So there’s still time for Georgia, if implement the right policies, to become a leading center for innovation.