The Southern United States isn't the first (or, even, second) place investors and corporations go hunting for brilliant innovations.
Maybe it should be?
Story by Andrew Dietz | Photographs by Bill Boling
To understand the current state of Southern innovation, it is instructive to start in San Francisco with a prophet named Moses.
Moses Ma is a well regarded Silicon Valley innovation expert with a thriving consultancy and a recent book he co-authored called Agile Innovation: The Revolutionary Approach to Accelerate Success, Inspire Engagement, and Ignite Creativity. Revealing a vision of the South he claims his California colleagues hold, Moses proclaims this about Southern innovation: “If America is a time machine, then Silicon Valley is living in the 22nd century while the old South is not yet in the 21st.”
I was introduced to Moses twenty years ago when he was running the video game company he founded, Velocity, which was a pioneer in networked, multiplayer games. Arriving for the first time at Velocity’s seemingly empty office on the 31st floor of San Francisco’s prestigious Embarcadero Center, I wondered where Moses and his teammates had gone.
“They’re finger-painting right now,” the receptionist told me. She pointed to black curtains drawn against an interior glass wall. “In the conference room,” she said and shooed me past the drapery where I found Moses and his ink-fingered programmers rubbing portraits of a chunky young woman splayed buck-naked across the table. Louie Armstrong’s “What a Wonderful World” serenaded us. Beyond the floor-to-ceiling windows overlooking San Francisco Bay, a flock of starlings performed aerial ballet. In the late 20th century, this was how you fostered a culture of creativity in the world’s center of innovation.
Put an arrow to a Southerner’s neck, and he just might change.
Recently, Moses Ma and his Agile Innovation experts completed a workshop for one of Forbes Magazine’s 15 Southern billionaire families and its real estate and oil empire lieges. Some in the family wondered if, over 100 years since forming, it was time for the company to diversify and innovate. Enter Ma’s innovation SWAT team. It started like this: Moses wanted to pepper the training session with massage therapists, gravity inversion devices, yoga and tai chi instruction to ease the initial tension. All of these ideas were nixed.
“There has to be greater acceptance of change, but people won’t change when they’re afraid. Creativity is found on the other side of fear,” Ma said. So, he flipped the rules and pushed the group to the “other side of fear” – spurring participants to walk over broken glass and to break arrows against their throats. “Change doesn’t come quickly to the Deep South,” Ma opined. “It is set in its ways, processes and rituals.”
But there’s good news. "I found the group to be extremely innovative once they unlocked their creativity. Which is what our work is all about. After letting go of their initial shyness, they produced hundreds of ideas and innovated as skillfully as any Fortune 500 company," Ma said.
The “Southern Mind” may still be stereotyped as an ultra-conservative, ossified relic, but the arts (among other things) of the South demonstrate that there is an improvisational, iconoclastic and rebellious undercurrent to Southern culture. A free-flowing ethic of expression, experimentation and eccentricity runs through the Southern creative landscape. And there’s a down-south discipline and diligence born of necessity. The South’s genius is as likely to spring from a DIY - a self-taught do-it-yourselfer - as it is from a Ph.D. Coupled with the region’s highly sociable, collaborative spirit, these intangibles may provide a razor’s edge that sets Southern Innovation apart.
The question is:
Can the region advance beyond appearances and actually wield the blade it holds?
Eat More Innovation
A hundred years ago, the Southern innovation train seemed to tote only carnival-car frivolities when it went north of the 40th parallel.
A Nashville dentist and his confectioner friend built the first cotton candy machine in 1897. Lips set to smacking when Nashville’s Standard Candy Company concocted GooGoo Clusters in 1912. Chattanooga Bakery came up with the MoonPie in 1917. Other modern Southern inventions like Kentucky Fried Chicken, Chik-fil-A boneless breasts, Popeyes spicy chicken, Krispy Kreme donuts and Krystal Burgers were best when swallowed with any combination of Southern soft drinks like Coca-Cola, Pepsi (yes, Pepsi started in North Carolina), RC Cola, Mountain Dew, Dr. Pepper, Nehi, Barq’s, Mello Yello and Cheerwine. For much of the 20th century world, Southern innovation sounded like the raucous belches of the overcarbonated.
Innovation appears to be different down yonder nowadays. Birmingham’s Innovation Depot sits alongside the mile long swath of land carved out by the town’s founding fathers as The Railroad Reservation – it was the city’s hub of commerce during its industrial heyday. Housed in a revamped Sears department store, Innovation Depot is a 140,000-square-foot space that nurtures early-stage life sciences and technology innovators vying to be the next Steve Jobs or Mark Zuckerberg. Opened in 2007, by 2014 Innovation Depot was cultivating 99 early-stage companies with 694 employees and 26 U.S. patents filed. A contemporary behemoth of concrete, glass and steel and capped with a giant art deco Innovation Depot logo, it is the flagship facility among dozens of Alabama innovation initiatives, incubators, hubs, centers and funds dotting the state – from Mobile to Auburn, Tuscaloosa to Muscle Shoals.
Alabama isn’t alone in its effort to seed more innovative Southern businesses. The chamber-of-commerce-hyperbole clangs like the bells of a church steeple when it comes to whose Southern innovation is bigger.
Let’s begin with Tennessee. In Nashville, Launch manages a network of nine business accelerator offices across the state. Memphis has Memphis EPIcenter, Emerge Memphis, Memphis Bioworks and StartCo, which operates three venture accelerators. Chattanooga has declared a 140-acre zone in the midst of its rejuvenated downtown as its Innovation District. They hype it as, “A catalytic mix of start-up businesses, business incubators & accelerators alongside innovation economy generators & amenities - available in a dense, walkable urban core.”
At The University of Florida’s Innovation Square in Gainesville, your business can shape audacious ideas in the school’s Innovation Hub facility. Or, there are seven other incubators percolating in this college town for you to choose. Or, if you’re a student innovator, you can bunk at Infinity Hall where The Entrepreneurial Living Learning Community encourages you to invent the next big thing from the comfort of your dorm room. They call it a dormcubator.
In South Carolina, the Watt Family Innovation Center launched in January 2016 at Clemson University and – connected to a high-performance computing resource and a 100-gigabit network – can link researchers, students, government agencies and private-sector partners across the State. Greenville has its NEXT Innovation Center, The Greenville SEED co-working space and the International Transportation Innovation Center. Charleston has its own Innovation District and the Lowcountry Innovation Center. Boeing recently opened a 104,000 square foot Research & Technology Center near the company’s massive Dreamliner plant in North Charleston.
In Georgia, Savannah promotes its Creative Coast initiative meant to cultivate the City’s creators and innovators. Creative Coast produces the annual Geekend gathering of entrepreneurs, designers, and techies to spark collaboration, inspiration and innovation. Since 2011, Columbus, Georgia has been hosting Creative South: a yearly gathering of the region’s creative and design community that fills the historic Springer Opera House. Over 80 new business incubators are active in Atlanta focusing on niches from consumer products and neuroscience to healthcare technology and civic innovation.
At least ten of the country’s largest corporations – from The Coca-Cola Company and AT&T to Georgia-Pacific and Newell Rubbermaid - have opened ATL innovation centers. With Georgia Tech as its resident, Midtown Atlanta calls its Innovation District a "Living Lab" where local entrepreneurs, app developers and researchers are encouraged to collaborate and test new innovations. Midtown Atlanta hosts the office of the CEO for one of the world’s largest architecture and design firms, Perkins+Will. They designed Clemson’s innovation center as well as University of Florida’s Infinity Hall and also created the designs for the Georgia-Pacific and Newell Rubbermaid innovation centers. The firm’s own Innovation Incubator participates actively in the Atlanta market with Alumni such as Ryan Gravel who conceived the City’s Beltline project.
Not to be outdone, North Carolina, Virginia, Mississippi, Kentucky, Louisiana, Texas and Arkansas all tout an array of innovation networks, gateways, partnerships, zones, centers, councils and conferences. Nearly half the Board of Directors for the National Business Incubator Association come from Southern cities.
Participation in the South’s innovation ecosystem has popped up from unexpected places, too. For instance, Cherry Bekaert, an accounting and financial advisory firm whose office footprint covers the mid-Atlantic and the Southeast, has launched a major initiative to encourage innovation among the middle market companies it serves. The firm just completed a national research study on the level and nature of business innovation. The results: “Innovation is alive and well in the South,” says Dawn Patrick, partner and leader of Cherry Bekaert’s THInc innovation practice. “From Maryland to North Carolina, Florida to Georgia there’s a consistently growing commitment to idea generation and to new platforms for innovation.”
It remains tricky, though, to distinguish real advancement from puffery. Despite all of the current efforts to spark innovation, in 2014, California still produced more patents (40,661) than 12 Southern states combined (26,924). Among the most influential innovations from the new first decade of the new Millennium, none was created in the South. Even if the Southern innovation engine is running faster than ever, is it flying full force like a maglev bullet train or just chugging along like Thomas the Tank Engine? Or maybe it is all like the locomotive and lightning in Albert Einstein’s relativity thought experiment – what’s actually happening all depends on your frame of reference. From the platform of Birmingham’s Innovation Depot, it looks like great progress. Standing on the threshold of Google headquarters, Southern innovation still looks like the wreck of the Old 97.
View From The Valley
Andrew Drake spent twelve years living in the South and is married to an Atlanta native. So, he is at least an adopted Southerner. In Silicon Valley, that buys him nothing.
Frustrated with entrepreneurial opportunities in Atlanta, in 2010 Drake moved west and joined an emerging technology company. In some ways, he was starting over. “There is an enormous bias in Silicon Valley,” Drake said of how his time in the South is viewed by his California colleagues, “that if it didn’t happen here, it doesn’t really count. I don’t get any credit out here for the work I did in Atlanta.”
For Drake, two elements stand in stark contrast between his years in the South and those in the Valley. “The first is risk. Innovation is a great word to use when things work but even when they don’t – which is most of the time with innovation – failed risk-takers are respected in Silicon Valley,” Drake said. “Where I worked in Atlanta, trying and failing was a black mark. They talked a good innovation game but they didn’t really mean it and I think that’s broadly true of the old line Southern companies.”
Critical mass is the second element that Drake believes is sorely lacking in the South’s innovation equation: meaning despite its best efforts, the region doesn’t have enough serial entrepreneurs, venture success stories and risk capital to support a viable self-sustaining ecosystem. “It’s one thing to be a truly innovative individual but if you’re the only one in town, your ability to make a difference is smaller than if you’re surrounded by innovative collaborators,” Drake said.
Drake is right. The South is no Silicon Valley.
Nor, perhaps, should it try to be.
Stephen Fleming, an outspoken champion of Atlanta’s innovation infrastructure, has been trying to convince his fellow Southerners of this for a long time. Fleming is an Atlanta native, Georgia Tech graduate, and a successful venture capitalist. Easy to spot in a crowd, Fleming is a burly, bearded man with a booming voice and a lapel button with a red slash through the word “Valley.”
He explains, “To well meaning people who ask how we make Atlanta the next Silicon Valley – I point to my button and say that‘s not a useful nor desirable goal. A more helpful question is, “How do we become a better Atlanta and build upon what we’ve got?”
Back in 1997, while his comrades were hoping to turn Atlanta into Silicon South, Fleming joked about the South’s prospects, “They say that on the Internet no one knows you're a dog. Well, no one knows you're a Southerner, either!" He also said, "This is not a zero-sum game. Silicon Valley doesn't need to lose in order for the South to win."
Fleming has called himself an Academic VC. After seven years as general partner of an early-stage venture capital firm sponsored by the Georgia Research Alliance, he returned to his alma mater – Georgia Institute of Technology - in mid-2005 where he was Vice President, Economic Development and Technology Ventures and Executive Director of the Enterprise Innovation Institute until his departure in December 2015. He understands the interplay between innovation-dependent businesses, economic development agencies, entrepreneurial citizens and research universities. But there’s only one of these where the diverse ingredients for innovation naturally cluster: just one whose primary purpose is to be a hub for cross-discipline, open-minded, fact-based exploration. It is the university. Fleming put it this way in a recent article, “We connect the ecosystem. That’s what we’re about.” That need for connection isn’t always immediately apparent to folks in the lab.
In 2012, National Science Foundation picked Georgia Tech for its I-Corps university technology commercialization program to make the connection between the scientists and the suits. Tech was one of only three universities (alongside Stanford and University of Michigan) to be an I-Corps designee and given $1.5 million in funding to move new technologies from laboratories into operating businesses. As part of the national faculty of I-Corps, Georgia Tech Alumnus John Bacon (just one degree from Kevin Bacon; John is the actor’s first cousin) helps to connect university technology spinouts with corporations and teaches university researchers how to turn their knowledge into money-making products.
Bacon also leads IP2Biz, an innovation consultancy and his office in Midtown Atlanta overlooks the center of the City’s innovation community. “Innovation is all about collisions. It rarely survives without interactions with collaborators. Looking down to Tech Square from my office, I see those face-to-face connections occur every minute of every day. The Midtown Atlanta technology landscape is a strong, legitimate, sustainable example of an innovation ecosystem,” said Bacon.
The push to remake Southern Universities into super-productive innovation centers escalated in 2015 like a Cold War arms race.
- In January, The Watt Family Innovation Center at Clemson University – a $30.5 million facility - announced that Philips Lighting North America and SCRA Applied Technologies had signed on as founding innovation partners.
- In February, University of South Carolina broke ground on a new Innovation Center to house its Center for Applied Innovation.
- In July, Louisiana Tech University announced its public-private partnership with the Cyber Innovation Center in the form of a new Louisiana Tech Research Institute. In August, Vanderbilt University announced that it is developing a new Innovation Center to “support a “maker” culture that will encourage entrepreneurship and creativity.”
- In September, the U.S. Economic Development Administration awarded University of Florida $8m toward the Phase II construction of its Florida Innovation Hub. The school’s Innovation District – including pedestrian paths to ensure creative collisions of like-minded innovators - is already functioning.
- In October, the Cambridge Innovation Center said it would build its second U.S. expansion location at University of Miami Life Science & Technology Park.
- In November, Macon’s Mercer University established a new center “designed to advance a culture of innovation and develop a thriving community of entrepreneurs, with a focus on utilizing technology to foster economic growth, create 21st century jobs and attract and retain talent.”
- In December, the University of Houston announced a partnership with the Texas Collegiate Regional Center to develop two 75,000 square-foot buildings as part of its Energy Research Park innovation complex.
“The rise of innovation-based projects are a reflection of universities becoming more actively engaged in the business of economic development,” say Perkins+Will urban designer, Kevin Bacon (not to be confused with John Bacon’s actor cousin, Kevin Bacon). “These projects are unlocking the intellectual capital of their universities – their students, researchers, faculty, and staff – and supporting entrepreneurship to sustain the creation of new business and jobs in the communities in which they are located.”
The investment in Southern university-centered innovation is beginning to pay off. In September 2015, Reuters published its ranking of the world’s most innovative universities based on academic publications and patent filings. Three Southern universities made Reuter’s top 25. The University of North Carolina scored – at #15 – as the top ranked Southern school. That’s got something to do with Buck Goldstein, whose transition from VC to university innovator, shares some of the elements of Fleming’s story.
A prescient entrepreneur, Goldstein launched a pioneering B2B online service, Information America, in the early 1980s. After selling Information America in 1994 and a successful run in venture capital, Goldstein joined the university faculty at the University of North Carolina at Chapel Hill in 2004 to help make entrepreneurship and innovation a core practice of the university. In 2010, Buck Goldstein and UNC Chancellor Holden Thorp co-authored Engines of Innovation – The Entrepreneurial University in the 21st Century. Goldstein and Thorp propose that if our country’s top research universities can operate in a more entrepreneurial and innovative manner themselves, they hold the key to solving our worst social challenges and dramatically improving our economy.
“The engines for growth in the next 25 to 50 years are going to be great universities – especially in the South. If our regional economy is looking for what’s going to replace furniture, textiles, crops and carpet, you can look at higher education and its role in sparking innovation,” Goldstein told me.
“Corporate science and technology research at places like Xerox PARC and BellLabs used to be preeminent in terms of innovation. Now nothing compares to the investment in research and development taking place at the nation’s top schools. In 2014, the National Science Foundation ranked UNC 8th in research & development spending at $1 billion,” Buck said. “If you look at the 125 biggest research universities, their combined endowment is something close to $250 billion. They are multi-disciplinary with all the pieces needed for solving the biggest challenges under one roof. You could argue they’re the crown jewel of the society. They have the staying power to make a long-term difference. If you’re betting on what will be around 200 years from now – University of North Carolina, University of Georgia or any company you could name - you would bet on UNC and UGA,” he added.
Fixin' To Innovate 1.0 was the first in a three-part series on the Southeast Region's efforts to reinvent itself as a bastion of creativity. In Part Two of the series - Fixin' To Innovate 2.0 - we look at how the area's unique art, architecture, music and literature is influencing its innovation output.