{"39614":{"#nid":"39614","#data":{"type":"news","title":"Study Shows Atlanta Kills Off Start-Up Companies","body":[{"value":"\u003Cp\u003EAtlanta is poised to become the nation\u0027s poster child for how to kill off a burgeoning industry.  A new study by professors at Georgia Tech reveals that the city\u0027s reputation as a high technology center masks a decade of erosion.  Though it leads the U.S. in the physical resources that attract and sustain high-tech industry, Atlanta companies haven\u0027t meshed within the local economy.  The result has been a steady migration of companies to other states and an industry profile described by the study as \u0022at best, stagnant.\u0022 The findings offer a wake-up call to Atlanta and a roadmap for other regions looking to grow high-tech industry.\u003C\/p\u003E\n\u003Cp\u003EStudy findings show that 40 percent of Atlanta\u0027s high-tech start-up companies leave for other states within three years.  California, New York, New Jersey and Florida are common destinations for Georgia-born IT companies. That, combined with a persistent decline in large IT companies, accounts for the industry malaise.\n\u003C\/p\u003E\n\u003Cp\u003E\u0022Instead of building great high-tech companies, Atlanta has become a feeder system for great high-tech companies in other states,\u0022 says study author Dan Breznitz, assistant professor in the Schools of International Affairs and Public Policy within the Ivan Allen College of Liberal Arts at Georgia Tech.\n\u003C\/p\u003E\n\u003Cp\u003EBreznitz, and co-author Mollie Taylor of the Enterprise Innovation Institute and the Sam Nunn School of International Affairs, set out to settle the debate over what induces sustained regional entrepreneurial growth in the high-tech industry - physical resources or business social structure.  They focused their research on the Atlanta metropolitan area because it leads the U.S. in the physical factors necessary for developing technological-entrepreneurial clusters: top research universities, a large educated labor pool, a wealth of new technologies and entrepreneurs, a vibrant creative class and generous venture capital financing.  Atlanta has also been perceived as having the social business structure needed to induce growth.  The study revealed otherwise.\n\u003C\/p\u003E\n\u003Cp\u003E\u0022The metro area excels at incubating high-tech businesses, but it lacks the cohesive business social structure needed to sustain them, so many of the most promising young companies leave the city,\u0022 says Breznitz.  \u0022Atlanta high-tech companies don\u0027t interlock with each other, and the large companies that control industry in Georgia don\u0027t interlock with the high-tech industry,\u0022 says Breznitz, highlighting a complaint that he and Taylor heard consistently from the area\u0027s high-tech workforce.\n\u003C\/p\u003E\n\u003Cp\u003EAnalysis of Atlanta\u0027s most promising new companies and the city\u0027s top 50 technology firms revealed little contact either between IT executives with those of Fortune 500 or with other technology companies.  CEOs, attorneys and managers in Atlanta IT companies don\u0027t sit on each other\u0027s boards and don\u0027t communicate.  The problem isn\u0027t unique to the city\u0027s IT industry, but there are far fewer interlocks within the IT community than in other industries that are successful in the region.\n\u003C\/p\u003E\n\u003Cp\u003EThe study identifies the need for policies and institutions that stimulate information sharing, collective learning, access to resources and business community building.  It also identifies venture capital industry with true local focus (which Atlanta lacks) as crucial to embedding a company locally.  In conclusion, business social variables are crucial for long-term entrepreneurial-technological economic growth, and unless Atlanta\u0027s high-tech industry develops multi-dimensional locally centered social networks, it will continue to stagnate.\n\u003C\/p\u003E\n\u003Cp\u003E\u003C\/p\u003E\n\u003Cp\u003E\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"Atlanta is poised to become the nation\u0027s poster child for how to kill off a burgeoning industry.  A new study by professors at Georgia Tech reveals that the city\u0027s reputation as a high technology center masks a decade of erosion.","format":"limited_html"}],"field_summary_sentence":[{"value":"Forty percent of hi-tech startups leave within three years"}],"uid":"27310","created_gmt":"2009-09-24 00:00:00","changed_gmt":"2016-10-08 03:01:25","author":"David Terraso","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2009-09-25T00:00:00-04:00","iso_date":"2009-09-25T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"39615":{"id":"39615","type":"image","title":"Danny Breznitz","body":null,"created":"1449174110","gmt_created":"2015-12-03 20:21:50","changed":"1475894263","gmt_changed":"2016-10-08 02:37:43","alt":"Danny Breznitz","file":{"fid":"189708","name":"trs13928.jpg","image_path":"\/sites\/default\/files\/images\/trs13928_3.jpg","image_full_path":"http:\/\/www.tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/trs13928_3.jpg","mime":"image\/jpeg","size":1798079,"path_740":"http:\/\/www.tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/trs13928_3.jpg?itok=dONZt5JH"}}},"media_ids":["39615"],"related_links":[{"url":"http:\/\/www.inta.gatech.edu\/faculty-staff\/listing.php?uID=15","title":"Danny Brezntiz"},{"url":"http:\/\/www.gatech.edu\/newsroom\/assets\/pdf\/atlpaperMay19th.pdf","title":"Study of Atlanta\\\u0027s IT Cluster"}],"groups":[{"id":"1183","name":"Home"}],"categories":[{"id":"139","name":"Business"},{"id":"135","name":"Research"}],"keywords":[{"id":"489","name":"atlanta"},{"id":"1072","name":"Business"},{"id":"3479","name":"company"},{"id":"168007","name":"start-up"}],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003E\u003Cstrong\u003EGeorgia Tech Media Relations\u003C\/strong\u003E\u003Cbr \/\u003ELaura Diamond\u003Cbr \/\u003E\u003Ca href=\u0022mailto:laura.diamond@comm.gatech.edu\u0022\u003Elaura.diamond@comm.gatech.edu\u003C\/a\u003E\u003Cbr \/\u003E404-894-6016\u003Cbr \/\u003EJason Maderer\u003Cbr \/\u003E\u003Ca href=\u0022mailto:maderer@gatech.edu\u0022\u003Emaderer@gatech.edu\u003C\/a\u003E\u003Cbr \/\u003E404-660-2926\u003C\/p\u003E","format":"limited_html"}],"email":["david.terraso@comm.gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}