Metro Atlanta · Special thanks to members of the Innovation Advisory Group: Sam Adams Invest Atlanta Troels Adrian ... Mergers & Acquisition Activity ... degrees than any other comparison

I N N OVA T I O N I N D I C A T O R S P R O J E C T

2 0 1 6

Metro Atlanta

About this ProjectThe Metro Atlanta Innovation Indicators Project is the second comprehensive evaluation of innovation data for the 29-county region. It illustrates how Metro Atlanta is performing on different measures of innovation relative to its own history and compared to other regions throughout the U.S. that are recognized as innovation leaders. This project was commissioned to establish baseline metrics to inform actions and measure the impact of current and future efforts designed to build the region’s innovation capacity. For more information about the Metro Atlanta Innovation Indicators Project and its findings, visit www.macoc.com. Special thanks to members of the Innovation Advisory Group:

Sam AdamsInvest Atlanta

Troels AdrianMetro Atlanta Chamber

Mike AlexanderAtlanta Regional Commission

Kornelius Bankston Metro Atlanta Chamber

Evelyn BoldenCox Enterprises

Jen BonnettATDC

Mike CassidyGeorgia Research Alliance

Hillery ChampagneMetro Atlanta Chamber

Johnson Cook Boom Ventures

Tom CunninghamMetro Atlanta Chamber

Charlton CunninghamStartup Atlanta

Christina De GiulioMetro Atlanta Chamber

David DuncanClark Atlanta University

Mark FarmerGwinnett Chamber

Stephen FlemingBoostphase

MaryBeth FlournoyGeorgia Power

Jacob GluckGoza Tequila

Marshall GuestMetro Atlanta Chamber

Adam HarrellNebo Agency

Amanda HendleyTechnology Association of Georgia

Derek HowardTechnology Association of Georgia

Louis JourdanClayton State University

Ayesha KhannaPoints of Light

Katie KirkpatrickMetro Atlanta Chamber

Eloisa KlementichInvest Atlanta

Sandeep LukeSurya, Inc.

Brooks MathisCobb Chamber

Ann McDonaldMorris, Manning & Martin

Heather MinerTechnology Association of Georgia

Amy MooreGeorgia Research Alliance

Charles MosesClark Atlanta University

Catherine PearsonIgniteHQ

Jean Marie RichardsoniFolio Corp

Charles RossKennesaw State University

Amanda SealsKennesaw State University

Jennifer ShererMetro Atlanta Chamber

Sarah ShoupMetro Atlanta Chamber

Kelly SydneyMetro Atlanta Chamber

Peter TokarCity of Alpharetta

Grant WainscottMetro Atlanta Chamber

Pierce WalkerYouth Entrepreneurs Georgia

Jim WeyhenmeyerGeorgia State University

John YatesMorris, Manning & Martin

Report developed and prepared by Collaborative Economics

Principal researchers and authors:

John Melville, Co-Chief Executive OfficerDoug Henton, Co-Chief Executive OfficerElizabeth Brown, Project ManagerJanine Kaiser, Senior Consultant

Designed by:

Bridget Gibbons

coecon.com

This project was made possible by funding from:

Invest AtlantaMetro Atlanta Chamber

Summary of Key Findings.......................................................................................................................................................................4

Innovation Indicators Dashboard..........................................................................................................................................................6

Why and How Innovation is Important for Metro Atlanta..............................................................................................................7

Introduction to Comparison Regions...................................................................................................................................................8

Innovation Resources...............................................................................................................................................................................9

Adult Education Levels....................................................................................................................................................................9

Adult Population Growth by Education Level.............................................................................................................................9

Change in Adult Population by Education Level....................................................................................................................10

STEM Higher Education...................................................................................................................................................................11

High-Tech Occupations....................................................................................................................................................................11

Innovation Processes..............................................................................................................................................................................12

Idea Generation

Academic Research and Development (R&D) Expenditures.............................................................................................12

Patents....................................................................................................................................................................................................13

Commercialization

Academic Licenses........................................................................................................................................................................14

Startups Spinning Out of Universities.......................................................................................................................................15

Productivity of Academic Research Dollars.............................................................................................................................15

Small Business Innovation Research and Small Business Technology Transfer Grants (SBIR/STTR).....................16

Early Stage Funding.......................................................................................................................................................................17

Venture Capital and Total Private Investment........................................................................................................................18

Funding Sources.............................................................................................................................................................................19

Business Innovation

Mergers & Acquisition Activity....................................................................................................................................................20

IPO Activity......................................................................................................................................................................................20

Innovation Results...................................................................................................................................................................................22

Innovation Industry Churn..........................................................................................................................................................22

Entrepreneurship.................................................................................................................................................................................23

Employment.........................................................................................................................................................................................24

Wages....................................................................................................................................................................................................25

Appendix...................................................................................................................................................................................................26

Contents

Summary of Key Findings

Talent that Drives InnovationMetro Atlanta has a large and growing pool of highly-educated workers, gradually closing the gap with comparison regions.

Metro Atlanta's adult population became more highly educated as it grew 18 percent between 2005 and 2014. The proportion of adults with some college or an associate degree rose 24 percent and adults with a bachelor's degree or higher climbed 23 percent.

Metro Atlanta added more than 50,000 adults with a bachelor's degree or higher between 2013 and 2014. Metro Atlanta added far more adults with bachelor's degrees than any other comparison region except San Diego–almost 40 percent more than Boston, close to 50 percent more than Denver & Boulder, approaching 60 percent more than Austin, and about 85 percent more than Research Triangle.

Metro Atlanta has one of the largest pools of regional high-tech talent. The region employed nearly 163,200 individuals in high-tech occupations in 2015, ranking second-highest among comparison innovation regions behind Boston.

However, Metro Atlanta’s concentration of workers in high-tech occupations is much lower than other comparison regions. The region has 17 percent more high-tech workers as a share of all workers than the national average, which is well behind Austin (79 percent more than the national average), Research Triangle (75 percent), and Boston (52 percent). Nevertheless, Metro Atlanta is closing the gap, as its concentration of high-tech workers grew the fastest of the comparison regions, increasing by 30 percent between 2006 and 2015.

In 2014, Metro Atlanta recorded the second-highest number of STEM degrees awarded among comparison regions, with just over 9,960. This represents a 40 percent increase in the number of STEM degrees awarded annually compared to a decade earlier, ranking Metro Atlanta third in growth rate among comparison regions. Between 2012 and 2014, Metro Atlanta’s growth rate in STEM degrees accelerated to 15 percent, which compares to its growth of 22 percent in the seven years leading up to 2012.

Commercialization that Creates Businesses, Products, and JobsMetro Atlanta is experiencing mixed results on licensing and spinoffs, but fast growth and diversification in private investment.

Over the past decade, the number of licenses executed by Metro Atlanta research universities grew by 38 percent, compared to Research Triangle’s 123 percent, Boston’s 12 percent, and Denver & Boulder’s six percent.

In 2014, Metro Atlanta universities executed 208 licenses for intellectual property created at their institutions, down from 282 in 2013 and a high of 406 in 2012. Meanwhile, the number of academic licenses from Research Triangle institutions continued to grow, while Boston and Denver & Boulder experienced a one year set back before resuming their growth trajectories.

Idea Generation that Seeds InnovationMetro Atlanta's university R&D and patent production are lagging most comparison regions.

Investment in academic R&D in Metro Atlanta has increased 24 percent between 2005 and 2014, outpacing only San Diego and Austin. A concerning trend is the decline in academic R&D investment in recent years in all comparison regions except Research Triangle.

Metro Atlanta’s patent production fell eight percent from 2,433 in 2014 to 2,250 in 2015. Patent production also slipped in Austin and Denver & Boulder between 2014 and 2015 by only two percent in both regions. In comparison, the number of patents issued grew by two percent in Boston and San Diego and held steady in Research Triangle since 2014.

The number of patents has grown the most in Metro Atlanta’s Technology and Bioscience & Health areas over the past decade. Together, they comprised 37 percent of all patents produced in Metro Atlanta between 2006 and 2015. Between 2014 and 2015, Metro Atlanta’s patenting activity increased most in Supply Chain Logistics (+45%).

4

Metro Atlanta’s academic institutions are more productive with their research dollars than the other comparison regions when measured in terms of licenses executed. Research expenditures per license executed have continued to decline in Metro Atlanta, from $9.5 million per license in 2006 to $5.5 million in 2014, indicating increased research productivity over time. During this period, research productivity also improved but to a lesser degree in Research Triangle, while decreasing in both Boston and Denver & Boulder.

The number of startups spinning out of universities in Metro Atlanta averaged 16 per year between 2005 and 2014, totaling 162 spinoff companies over the decade. The region’s total was higher than Denver & Boulder’s 109, comparable to Research Triangle’s 164, and well behind Boston’s 599.

Angel and Seed investment in Metro Atlanta totaled $225 million between 2006 and 2015, more than double Research Triangle’s total investment, but below that of the other comparison regions. Metro Atlanta's Angel and Seed investment slid eight percent to $62 million in 2015 from more than $67 million in 2014.

Metro Atlanta companies raised $735 million in venture capital funding in 2015, up 45 percent from 2014. All but one comparison region experienced increases in venture capital funding between 2014 and 2015, including Boston rising 117 percent to $5.9 billion. Metro Atlanta lagged all other comparison regions except Research Triangle in total venture capital raised in 2014 and 2015.

In 2015, Metro Atlanta ($3.5 billion) ranked second among comparison regions in total private investments, behind Boston ($9.5 billion) and ahead of Austin and San Diego (both $2.6 billion), Denver & Boulder ($2.2 billion), and Research Triangle ($800 million). Metro Atlanta's total private investment spiked in 2014 with a large private equity investment in First Data and then declined 31 percent in 2015.

Metro Atlanta-based companies continue to experience high rates of mergers and acquisition (M&A) activity, second only to Boston in 2015. Between 2013 and 2015, the region’s M&A activity increased substantially from 84 deals in 2013 to 134 deals in 2014, then sustained that gain with 136 deals in 2015. The amount of M&A activity in San Diego and Boston declined between 2014 and 2015, while Denver & Boulder, Austin, and Research Triangle experienced gains.

Metro Atlanta produced 13 IPO deals between 2006 and 2015, with an average value per offering of $399 million, the highest average IPO value of the comparison regions. However, the total value of Metro Atlanta's 13 deals was $5.2 billion, third behind Boston ($8.3 billion) and Denver & Boulder ($6.2 billion).

Summary of Key Findings

5

Regional Results from InnovationEntrepreneurship and business formation slowing but jobs rising in innovation industries.

The rate of new entrepreneurship in Metro Atlanta was the highest of the comparison regions between 2008 and 2012. However, the region’s rate of new entrepreneurship fell 34 percent between 2010 and 2014.

Over the long term, Metro Atlanta has experienced a net increase in the number of business establishments in Innovation Industries: from 2007 to 2015, it gained about 3,300 more firms in these industries through starts and move ins than it lost in establishment closures and regional move outs. There has been a constant churn in these industries, with Metro Atlanta every year adding on average about 2,815 establishments through starts and move ins while losing approximately 2,450 firms to closing or leaving the region. More than 95 percent of gains and losses come from new business starts and business closures, with only a small portion resulting from business move ins or move outs.

More recently, between 2013 and 2015, Metro Atlanta has experienced a decline in total establishments in Innovation Industries due to both a slowdown in new business starts and an acceleration of business closures. The total number of establishments in these industries declined by nine percent from 18,870 in 2013 to 17,150 in 2015, reversing a five-year trend in which business starts exceeded business closures in Innovation Industries every year.

Metro Atlanta added about 20,300 Innovation Industry employees between 2012 and 2015. Growth in the absolute number of Innovation Industry employees placed Metro Atlanta third behind San Diego and Boston.

Metro Atlanta Innovation Indicators

66

Innovation Indicators Dashboard

How Does Metro Atlanta Compare?

In rank relative to Comparison Regions?• = lowest • = middle • = highest

To its priorperformance?

To Comparison Regions over time*?

INN

OV

ATIO

N

RES

OU

RC

ES

Higher Education Attainment

STEM Degrees Awarded

Concentration of High-Tech Occupations*

INN

OV

ATIO

N P

RO

CES

SES

Academic Research and Development (R&D) Expenditures

Patent Production

Academic Licenses

Academic Research Productivity (Licensing)

Startups Spinning Out of Universities

Academic Research Productivity (Startups)

Small Business Innovation Research and Tech Transfer Grants (SBIR/STTR)

Angel and Seed Funding

Venture Capital Investment

Total Private Investment

Merger and Acquisition Activity

IPO Activity

INN

OV

ATIO

N R

ESU

LTS

Rate of New Entrepreneurs

Innovation Industry Employment as Share of Total Employment

Innovation Industry Wage Growth*

Prior Performance

Improvement

About the same

Slippage

Over Time

Gaining Ground

Little Change

Losing Ground

*The dashboard evaluates Metro Atlanta’s recent performance over time and relative to other regions, i.e. within the last one to two years and no more than five years, depending on available evidence. Due to the availability of evidence, two indicators marked by an asterisk were evaluated over ten years: Concentration of High-Tech Occupations, and Innovation Industry Wage Growth.


7

Resources: The wellspring of innovation is people. A region’s talent base of scientists, researchers, entrepreneurs, and other professionals are the key to creating new ideas, turning ideas into technologies and products, and building innovation-based businesses. A highly-educated population and the concentration of talent in high-tech occupations are important indicators of whether a region has the human resources to drive innovation. Also important is a region’s commitment to expanding and replenishing the talent pool, particularly individuals in science, technology, engineering, and mathematics (STEM) fields.

Results: Strong innovation resources and processes do not always translate into regional benefits, as talented people and promising companies can move or grow elsewhere. It is important to track measures such as job creation and wages, particularly in innovation-based industries, to determine if innovation resources and processes are translating to regional benefits. Strong performance in these areas has a positive ripple effect on the rest of the economy, including increasing public revenues that enable continuing investment in innovation resources and quality of life. Also critical is the level of new business formation and entrepreneurship, tangible evidence that the impacts of innovation are being captured locally.

Processes: A highly-educated population by itself does not guarantee high levels of innovation. How effectively a region is able to generate and commercialize ideas and move them to the marketplace is the key. At the front end, important indicators of idea generation include levels of academic research and patent activity. Measures such as university licensing and startups, early-stage investment, and venture capital show us how well promising ideas are moving into the commercialization stage. Initial Public Offerings (IPOs) and mergers and acquisitions (M&A) are signs that regional innovations are valued by the marketplace.

INNOVATIONPROCESSES

INNOVATIONRESOURCES

INNOVATIONRESULTS

Why and How Innovation is Important for Metro Atlanta

Innovation is the most important catalyst driving regional prosperity. In Metro Atlanta—like other regions—innovation is the result of a complex interaction of inventors, entrepreneurs, companies, investors, universities, service providers, and government leaders. It is an “ecosystem” that is at once difficult to measure and indispensable for economic success. In fact, in an era of rapid technological change and fast-moving global markets, innovation increasingly determines which regions prosper and which places fall behind.

The innovation ecosystem can be viewed as a dynamic interplay of resources, processes, and results (see figure). The Metro Atlanta Innovation Indicators Project is an ongoing effort to identify and track measures that reflect these three dimensions. Innovation resources (people, ideas) are the fuel for innovation processes (R&D, commercialization, investment) that produce innovation results (jobs, businesses).

The good news is that innovation is neither a finite commodity nor a fixed advantage for a select few: it is something that is substantially shaped by local decisions. While the level of innovation ebbs and flows with federal and state policy and investments, regional differences exist because some places are better than others at building up their innovation resources, accelerating their innovation processes, and capturing the results. While there is no artificial limit on the number of regions that can have a strong innovation ecosystem, some regions have made innovation a priority by increasing investment in education and research, expanding connections between entrepreneurs and investors, and focusing on other aspects of their innovation ecosystem that need attention. This is why it is important to measure not only Metro Atlanta’s changing performance over time, but also its performance relative to other regions that have chosen the innovation path—places like Austin, Boston, Denver & Boulder, Research Triangle, and San Diego.


8

Population Change

Population ChangeCore Atlanta*, Metro Atlanta and Select Innovation Regions - 2005, 2010 and 2015

PopulationPopulation Change

(2005-2015)

Region MSA(s)** 2005 2010 2015 Absolute Percent

Core Atlanta* - 3,746,895 4,121,651 4,450,487 703,592 19%

Metro AtlantaAtlanta-Sandy Springs-Roswell, GA Metro Area

4,770,870 5,303,758 5,710,795 939,925 20%

AustinAustin-Round Rock-San Marcos, TX Metro Area

1,453,358 1,727,627 2,000,860 547,502 38%

BostonBoston-Cambridge-Quincy, MA-NH Metro Area

4,418,046 4,565,410 4,774,321 356,275 8%

Denver & BoulderGreeley, Boulder and Denver-Aurora-Broomfield, CO Metro Areas

2,835,869 3,104,620 3,418,876 583,007 21%

Research TriangleDurham-Chapel Hill and Raleigh-Cary Metro Areas

1,653,047 1,922,137 2,117,103 464,056 28%

San DiegoSan Diego-Carlsbad-San Marcos, CA Metro Area

2,938,375 3,104,386 3,299,521 361,146 12%

*Core Atlanta is comprised of Cherokee, Clayton, Cobb, DeKalb, Douglas, Fayette, Fulton, Gwinnett, Henry, and Rockdale Counties.** The U.S. Office of Management and Budget updated Metro Area definitions in 2013. The 2013 definitions have been used to sum population figures for all regions over 2005-2015 to ensure a consistent data series.Data Source: U.S. Census Bureau, Population DivisionAnalysis: Collaborative Economics

Metro Atlanta’s population has grown 20 percent over the past decade, ranking it in the middle of comparison regions in terms of population change between 2005 and 2015. Austin (38 percent), Research Triangle (28 percent), and Denver & Boulder (21 percent) grew faster, while San Diego (12 percent) and Boston (8 percent) grew more slowly. Metro Atlanta's growth has slowed from about 11 percent during 2005-2010 to eight percent from 2010-2015. Yet Metro Atlanta's population change of 939,925 represents the largest absolute population gain among the comparison regions.

Introduction to Comparison Regions


9

Adult Education LevelsAdult* Education LevelsCore Atlanta, Metro Atlanta and Select Innovation Regions, 2014

Boston ResearchTriangle

Austin Denver &Boulder

CoreAtlanta

SanDiego

MetroAtlanta

Bachelor’sdegree orhigher

Perc

ent o

f pop

ulat

ion

25 y

ears

and

old

er b

y ed

ucat

ion

leve

l

Somecollege orassociatedegree

High schooldiploma orless

45% 44% 41% 41% 39% 37% 36%

22% 27% 28% 28% 27% 31% 28%

32% 29% 31% 30% 34% 32% 36%

*Adult population 25 years and older Data Source: U.S. Census Bureau, American Community Survey Analysis: Collaborative Economics

With 39 percent of adults holding a bachelor's degree or higher, Core Atlanta continues to outpace San Diego (37 percent) but trails other comparison regions. At the other end of the spectrum, both Core Atlanta and Metro Atlanta continue to have the highest percentage of adults with educational attainment at the high school level or less among comparison regions. Since 2012, Metro Atlanta increased its share of adults with bachelor's degrees or higher (+1 percent).

*Adult population 25 years and olderData Source: U.S. Census Bureau, American Community SurveyAnalysis: Collaborative Economics

Relative Growth of Adult* Population by Education LevelMetro Atlanta, 2005-2014

95

100

105

110

115

120

125

Bachelor’s degreeor higher

Some collegeor associatedegree

High schooldiploma or less

Adult population*

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Rela

tive

grow

th o

f pop

ulat

ion

25 y

ears

and

old

er fr

om 2

005

(200

5=10

0)

Adult Population Growth by Education Level

Metro Atlanta's adult population became more highly educated as it grew 18 percent between 2005 and 2014. The proportion of adults with some college or an associate degree rose 24 percent and adults with a bachelor's degree or higher climbed 23 percent.

In the last 10 years, Metro Atlanta’s highly educated adult population grew 23 percent.

Innovation Resources


10

Metro Atlanta

Boston

Austin

San Diego

Denver & BoulderResearch Triangle

+51,816+4.1%

+0.6%+1.4%+2.1%

Core Atlanta

Absolute change in adult population with a bachelor's degree or higher

Percent change in adult population with a bachelor’s degree or higher

Percent change in adult population with some college or associate degree

Percent change in adult population with a high school diploma or less

Percent change in total adult population

+7,566+1.5%

+6.4%+0.6%+2.5%

+31,782+2.2%

+1.1%+0.1%+1.3%

+21,987+4.3%

+4.1%+4.6%+4.3%

+26,998+3.0%

+0.4%+4.0%+2.6%

+72,563+9.9%

+0.4%-3.3%+2.4%

+42,759+4.0%

-0.3%+2.1%+2.1%

Change in Adult Population* by Education LevelCore Atlanta, Metro Atlanta and Select Innovation Regions, 2013-2014

Change in Adult Population by Education Level

Metro Atlanta added more than 50,000 adults with a bachelor's degree or higher between 2013 and 2014. Metro Atlanta added far more adults with bachelor's degrees than any other comparison region except San Diego–almost 40 percent more than Boston, close to 50 percent more than Denver & Boulder, approaching 60 percent more than Austin, and about 85 percent more than Research Triangle.

*Note: Change in adult population 25 years and older includes persons who become 25 years old and regional net migration of adults 25 years and older.Data Source: U.S. Census Bureau, American Community SurveyAnalysis: Collaborative Economics

Between 2013 and 2014, Metro and Core Atlanta's highly-educated population grew roughly twice as fast as the region's adult population. Among comparison regions during this period, only San Diego's higher educated population grew faster relative to total population than Metro and Core Atlanta.

Metro Atlanta added far more adults with bachelors’ degrees than all but one comparison region between 2013 and 2014.


11

*Metro Atlanta includes the University of Georgia and Mercer University**STEM degrees include bachelor’s degrees and higherData Source: National Center for Education Statistics, Integrated Postsecondary Education Data SystemAnalysis: Collaborative Economics

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Boston Metro Atlanta* Research Triangle Denver & Boulder San Diego Austin

2005 2012 2014

Tota

l num

ber o

f STE

M d

egre

es a

war

ded

Total STEM Degrees AwardedMetro Atlanta* and Select Innovation Regions2005, 2012 and 2014 Percent Change in STEM Degrees Awarded

2005-2014 2012-2014

Boston 45.2% 15.4%Metro Atlanta 40.5% 15.4%Research Triangle 47.0% 10.4%Denver & Boulder 33.7% 9.3%San Diego 39.4% 6.8%Austin 28.8% 9.4%

STEM Higher Education

In 2014, Metro Atlanta recorded the second-highest number of STEM degrees awarded among comparison regions, with about 9,960. This represents a 40 percent increase in the number of STEM degrees awarded annually compared to a decade earlier, ranking Metro Atlanta third in growth rate among comparison regions.

Between 2012 and 2014, Metro Atlanta's growth rate in STEM degrees awarded accelerated. It was the fastest growth rate over this two year period among the comparison regions at 15.4 percent, even with Boston.

High-Tech OccupationsConcentration of High-Tech Occupations*Metro Atlanta and Select Innovation Regions, 2006-2015

2.0

1.9

1.8

1.7

1.6

1.5

1.4

1.3

1.2

1.1

1.0

Denver &Boulder134,210

Metro Atlanta163,180

Regi

onal

em

ploy

men

t con

cent

ratio

n re

lativ

e to

U.S

., 20

15

-10% 0% 10% 20% 50%40%30%

Change in employment concentration, 2006 - 2015

Boston225,110

Austin93,430

San Diego112,430

ResearchTriangle83,880

*Employment concentration is calculated as (Regional High-Tech Emp/Regional Total Emp)/(National High-Tech Emp/National Total Emp). The U.S. employment concentration = 1.0.Data Source: U.S. Bureau of Labor Statistics, Occupational Employment StatisticsAnalysis: Collaborative Economics

How to Read a Bubble ChartThis bubble chart presents three dimensions of high-tech occupational employment: size, current year employment concentration*, and growth in employment concentration over time. The bubble's size corresponds to employment in high-tech occupations in 2015. The y-axis is the region's 2015 employment concentration relative to that of the U.S. The x-axis is the change in employment concentration between 2006 and 2015. A concentration of 1.0 is equal to the U.S. average.

Metro Atlanta has one of the largest pools of regional high-tech talent.The region employs nearly 163,200 individuals in high-tech occupations, ranking second-highest among comparison regions. Boston, which employed more than 225,100 individuals in high-tech occupations in 2015, is the only region that outpaced Metro Atlanta.

The region has 17 percent more high-tech workers as a share of all workers than the national average. However, Metro Atlanta’s concentration of workers in high-tech occupations is the lowest among comparison regions, including Austin (79 percent more than the national average), Research Triangle (75 percent), Boston (52 percent), San Diego (48 percent) and Denver & Boulder (45 percent). Nevertheless, Metro Atlanta’s concentration grew the fastest of the comparison regions, increasing by 30 percent between 2006 and 2015.


12

Academic R&D Expenditures by Source, in Billions of DollarsMetro Atlanta* and Select Innovation Regions, 2014

Federal government

State and local

government

Institution funds Business Nonprofit

organizationsAll other sources TOTAL

Boston $1.75 $0.02 $0.50 $0.22 $0.28 $0.13 $2.90

Research Triangle $1.36 $0.13 $0.49 $0.34 $0.14 $0.03 $2.49

Metro Atlanta* $1.07 $0.06 $0.54 $0.09 $0.07 $0.02 $1.85

San Diego $1.05 $0.06 $0.25 $0.10 $0.11 $0.10 $1.66

Denver & Boulder $0.65 $0.02 $0.07 $0.07 $0.06 $0.01 $0.87

Austin $0.35 $0.02 $0.13 $0.07 $0.04 $0.01 $0.63

*Metro Atlanta includes University of Georgia and Mercer UniversityData Source: National Science FoundationAnalysis: Collaborative Economics

Academic Research and Development (R&D) Expenditures

IDEA GENERATIONMetro Atlanta’s total academic R&D expenditures were $1.85 billion in 2014, up 1.3 percent since 2012 when the region’s expenditures were $1.83 billion (after adjusting for inflation). This total places the region well behind Boston and Research Triangle, but well ahead of San Diego, Denver & Boulder, and Austin whose total R&D expenditures all declined since 2012. However, between 2013 and 2014, Metro Atlanta and all comparison regions except the Research Triangle experienced a drop in academic R&D expenditures.

Innovation Processes

Among the comparison regions, Metro Atlanta ranks first in the amount and proportion of academic R&D funding that was provided by the institutions themselves. This level of self-funding ($540 million) is comparable to that of the top regions (Boston $500 million) and Research Triangle ($490 million) and makes up to 30 percent of Metro Atlanta’s total academic R&D expenditure.

One of the biggest differences in the academic R&D investment pattern between Metro Atlanta and top regions such as Boston and Research Triangle is the amount of funding coming from the business community. In 2014, Research Triangle ($340 million) and Boston ($220 million) far outpaced Metro Atlanta ($90 million) and other comparison regions ($70-100 million). In fact, the share of total academic R&D funding that businesses provided to Metro Atlanta’s higher education institutions was the lowest among the comparison regions. Just five percent of Metro Atlanta's academic R&D funding came from business compared to 14 percent in Research Triangle, 12 percent in Austin, 8 percent in Boston and Denver & Boulder, and 6 percent in San Diego.

Relative Growth of Academic R&D ExpendituresMetro Atlanta* and Select Innovation Regions, 2005-2014

90

100

110

120

130

140

150

Rela

tive

grow

th o

f R&

D e

xpen

ditu

res

from

200

5 (2

005=

100)

in 2

014

dolla

rs

Research Triangle

Metro Atlanta*

San Diego

Austin

Boston

Denver & Boulder

2005 2006 2007 2008 2009 2010 2012 2013 20142011

* Metro Atlanta includes University of Georgia and Mercer UniversityData Source: National Science FoundationAnalysis: Collaborative Economics

Investment in academic R&D in Metro Atlanta has increased 24 percent between 2005 and 2014, outpacing only San Diego and Austin. A concerning trend is the decline in academic R&D investment in recent years in all comparison regions except Research Triangle.


13

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Austin

Research Triangle Metro Atlanta

Boston

Num

ber o

f pat

ents

issu

ed

San Diego

Denver & Boulder

Num

ber o

f pat

ents

issu

ed

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

0

500

1000

1500

2000

2500

Other

Supply ChainLogistics

AdvancedManufacturing

Bioscience &Health

Telecommunciations

Technology

10%

16%

13%

14%

24%

24%

Data Source: USPTO, includes utility patents onlyAnalysis: Collaborative Economics

Total Patents IssuedMetro Atlanta and Select Innovation Regions, 2006-2015

Patents

Metro Atlanta’s patent production fell eight percent from 2,433 in 2014 to 2,250 in 2015. Patent production also slipped in Austin and Denver & Boulder between 2014 and 2015 by only two percent in both regions. In comparison, the number of patents issued grew by two percent in Boston and San Diego and held steady in Research Triangle since 2014.

Metro Atlanta’s patent production increased 63 percent between 2006 and 2015. All other comparison regions except Austin outpaced Metro Atlanta in this measure. San Diego experienced the highest patent activity growth over the past decade at 135 percent, followed by Denver & Boulder at 78 percent, and Boston and Research Triangle, both at 69 percent.

Total Patents Issued by Major Technology AreasMetro Atlanta, 2006-2015

Data Source: USPTO, including Utility Patents OnlyAnalysis: Collaborative Economics

A majority of Metro Atlanta’s patents are concentrated in Telecommunications (24%) and Technology (24%), a broad category which includes computing and data management (storage, security & processing). Three additional areas—Bioscience & Health (14%), Advanced Manufacturing (13%), and Supply Chain Logistics (10%)—account for most of the remaining patent production.

The number of patents has grown the most in Metro Atlanta’s Technology and Bioscience & Health sectors over the past decade. Together, they comprised 37 percent of all patents produced in Metro Atlanta between 2006 and 2015. Between 2014 and 2015, Metro Atlanta’s patenting activity increased most in Supply Chain Logistics (+45%).


14

Academic Licenses*Metro Atlanta** and Select Innovation Regions, 2010-2014

0

100

200

300

400

500

600

700

Tota

l num

ber o

f lic

ense

s

Metro Atlanta** Denver & Boulder Boston

20102011201220132014

Research Triangle

Academic Licenses

COMMERCIALIZATION

In 2014, Metro Atlanta universities executed 208 licenses for intellectual property created at their institutions, down from 282 in 2013 and a high of 406 in 2012. Meanwhile, the number of academic licenses from Research Triangle institutions continued to grow, while Boston and Denver & Boulder experienced a one year set back before resuming their growth trajectories.

Relative Growth of Academic Licensing Activity*Metro Atlanta** and Select Innovation Regions, 2005-2014

0

50

100

150

200

250

300

2006 2007 2008 2009 2010 2011 2012 2013 20142005

Boston

Metro Atlanta**

Denver & Boulder

Rela

tive

grow

th o

f aca

dem

ic li

cens

ing

activ

ity fr

om 2

005-

2014

(200

5 =

100)

Research Triangle

*Data for licensing and startups comes from a survey that the Association for University Technology Managers (AUTM) administers to its membership. The response rate from participating institutions varies across innovation regions and regional information for both San Diego and Austin is not available. The University systems of California and Texas report their licensing activity at the state level so that the individual contributions of UC San Diego and UT Austin cannot be extracted. San Diego and Austin have been excluded from the analysis as a result.**Metro Atlanta includes University of GeorgiaData Source: Association of University Technology Manager's Statistical Access for Tech Transfer (STATT) DatabaseAnalysis: Collaborative Economics

*Data for licensing and startups comes from a survey that the Association for University Technology Managers (AUTM) administers to its membership. The response rate from participating institutions varies across innovation regions and regional information for both San Diego and Austin is not available. The University systems of California and Texas report their licensing activity at the state level so that the individual contributions of UC San Diego and UT Austin cannot be extracted. San Diego and Austin have been excluded from the analysis as a result.”**Metro Atlanta includes University of Georgia Data Source: Association of University Technology Manager's Statistical Access for Tech Transfer (STATT) Database Analysis: Collaborative Economics

Over the past decade, the number of licenses executed by Metro Atlanta research universities grew by 38 percent, compared to Research Triangle’s 123 percent, Boston’s 12 percent, and Denver & Boulder’s six percent.

Metro Atlanta’s academic licensing activity has grown over the long term, though experienced a decline in recent years.


15

*Data for licensing and startups comes from a survey that the Association for University Technology Managers (AUTM) administers to its membership. The response rate from participating institutions varies across innovation regions and regional information for both San Diego and Austin is not available. The University systems of California and Texas report their licensing activity at the state level so that the individual contributions of UC San Diego and UT Austin cannot be extracted. San Diego and Austin have been excluded from the analysis as a result.**Metro Atlanta includes University of GeorgiaData Source: AUTM Licensing Activity SurveyAnalysis: Collaborative Economics

Startups Spinning Out of UniversitiesMetro Atlanta and Select Innovation Regions*, 2005-2014

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Metro Atlanta** 15 12 18 14 16 16 15 19 21 16

Denver & Boulder 10 10 10 12 11 10 13 13 9 11

Research Triangle 9 15 8 17 9 14 16 19 31 26

Boston 51 57 60 67 51 48 73 59 66 67


The number of startups spinning out of universities in Metro Atlanta averaged 16 per year between 2005 and 2014, totaling 162 spinoff companies over the decade. Annually, the number of spinoffs varied from as few as 12 in 2006 to as many as 21 in 2013.

Metro Atlanta was competitive with other regions on this measure of academic intellectual property commercialization. The region performed better than Denver & Boulder, which averaged 11 university startups annually and produced a total of 109 university startups between 2005 and 2014. Metro Atlanta was about even with Research Triangle, which spun out 16 startups on average annually, and 164 total. Boston far outpaced other comparison regions with an average of 60 spinoffs annually and a total of 599.

Productivity of Academic Research Dollars

Research Expenditures per Academic License

Research Expenditures per University Startup

Productivity of Academic Research DollarsMetro Atlanta and Select Innovation Regions - 2006, 2010 and 2014

$0

$3

$6

$9

$12

$15

Rolli

ng a

vera

ge o

ver f

our y

ears

of r

esea

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expe

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$9.5 $1

0.1

$8.8

$12.

0

$7.5

$7.9

$7.6

$10.

9

$10.

4

$10.

5

$5.5

$14.

1

MetroAtlanta**

Denver &Boulder

ResearchTriangle

Boston

Average of2003-2006

Average of2007-2010

Average of2011-2014

$0

$50

$100

$150

$200

MetroAtlanta**

Denver &Boulder

ResearchTriangle

Boston

Rolli

ng a

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ge o

ver f

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ears

of r

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ions

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$86.

9

$80.

7

$108

.7

$105

.8

$88.

8

$80.

6

$160

.7

$82.

3

$90.

6

$96.

9

$90.

9

$91.0

*Data for licensing and startups comes from a survey that the Association for University Technology Managers (AUTM) administers to its membership. The response rate from participating institutions varies across innovation regions and regional information for both San Diego and Austin is not available. The University systems of California and Texas report their licensing activity at the state level so that the individual contributions of UC San Diego and UT Austin cannot be extracted. San Diego and Austin have been excluded from the analysis as a result.**Metro Atlanta includes University of GeorgiaData Source: AUTM Licensing Activity SurveyAnalysis: Collaborative Economics

Metro Atlanta academic institutions are more productive with their research dollars than the other comparison regions when measured in terms of licenses executed. The region spent about $5.5 million per academic license executed in 2014, as compared with $14 million in Denver & Boulder, and over $10 million in Boston. Research expenditures per license executed have continued to decline in Metro Atlanta, from $9.5 million per license in 2006 to $5.5 million in 2014, indicating increased research productivity over time.

Metro Atlanta’s research productivity when measured in terms of university startups declined by five percent from 2006 to 2014 (after adjusting for inflation). In comparison, expenditures per startup remained steady in Denver & Boulder, and fell 18 percent in Research Triangle and 15 percent in Boston during this time period. In 2014, research expenditures per university startup were comparable for all regions ($90-91 million per startup), except Denver & Boulder which performed better on this measure ($82.3 million per startup).


16

Metro Atlanta and Research Triangle are the only comparison regions that experienced an increase in federal SBIR/STTR funding over the past decade. The inflation-adjusted value of Metro Atlanta’s SBIR and STTR awards grew 14 percent from $23.7 million in 2005 to $27.1 million in 2014. In sharp contrast, the value of SBIR and STTR awards dropped in Austin (-33 percent), Boston (-29 percent), and Denver & Boulder (-20 percent), while remaining about the same in Research Triangle and San Diego. While the gap narrowed over the past decade, Metro Atlanta’s SBIR and STTR funding remains the lowest of the comparison regions.

Data Source: U.S. Small Business AdministrationAnalysis: Collaborative Economics

SBIR/STTR Funding in Millions of 2014 DollarsMetro Atlanta and Select Innovation Regions2005, 2010 and 2014

2005 2010 2014

Metro Atlanta $23.7 $27.8 $27.1

Austin $47.1 $40.9 $31.4

Boston $337.4 $324.6 $240.2

Denver & Boulder $103.1 $104.4 $82.3

Research Triangle $43.2 $44.0 $43.4

San Diego $117.0 $106.3 $115.5

Small Business Innovation Research andSmall Business Technology Transfer Grants (SBIR/STTR)

Metro Atlanta experienced an increase in SBIR/STTR funding over the past decade while most other regions experienced declines, but total funding remains the lowest among comparison regions.


17

Metro Atlanta

Boston

Austin

San Diego

Denver & Boulder

Research Triangle$225M -8%

$0.9B-11%

$390M -24%

$1.4B-7%

$351M +25%

$1.5B-48%

$260M -50%

$2.8B-18%

$102M +37%

$0.6B+139%

$936M +8%

$8.2B+27%

Total Angel and Seed Funding, 2006-2015Percent change - Angel and Seed, 2014-2015

Total Series A Investment, 2006-2015Percent change - Series A, 2014-2015

Metro Atlanta recorded more than $146 million in combined Angel and Seed, and Series A investment in 2015. The average amount of Angel and Seed and Series A investment was $211 million between 2013 and 2015, which represents a 3-fold increase in early stage funding over the 2006 to 2012 average of $70 million.

Series A investment in Metro Atlanta totaled $900 million between 2006 and 2015. Series A investments fell in four of six regions between 2014 and 2015, including in Metro Atlanta where it declined by 11 percent.

Angel and Seed investment in Metro Atlanta totaled $225 million between 2006 and 2015, more than double Research Triangle’s investment in this category, but below that of the other comparison regions. Metro Atlanta's Angel and Seed investment slid eight percent to $62 million in 2015 from more than $67 million in 2014.

Angel and Seed, and Series A FundingMetro Atlanta, 2006-2015

Angel and Seed investment increased substantially and reached 42 percent of total early stage funding in 2014 and 2015.

Data Source: CB InsightsAnalysis: Collaborative Economics

Angel and Seed, and Series A InvestmentMetro Atlanta and Select Innovation Regions


$0

$50

$100

$150

$200

$250

$300

$350

Ang

el a

nd S

eed,

and

Ser

ies

A F

undi

ng

in m

illio

ns o

f 201

5 do

llars

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$80 $78

$39

$74$96

$65 $62

$324

$162$146

Angel and Seed

Series A

Early Stage Funding


18

VC InvestmentMetro Atlanta and Select Innovation Regions, 2006-2015

$0

$1.3

$2.6

$3.9

$5.2

$6.5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Austin $855M Denver & Boulder $760M Metro Atlanta $735M

Boston $5.9B

Vent

ure

Cap

ital f

undi

ng in

bill

ions

of 2

015

dolla

rs

San Diego $1.4B

Research Triangle $635M

Metro Atlanta companies raised $735 million in venture capital funding in 2015, up 45 percent from 2014. All but one comparison region experienced increases in venture capital funding between 2014 and 2015, including Boston rising 117 percent to $5.9 billion. Metro Atlanta lagged all other comparison regions except Research Triangle in total venture capital raised in 2014 and 2015.

Metro Atlanta's average private investment deal size was highest among the innovation regions at $16 million in 2015.

In 2015, Metro Atlanta ($3.5 billion)ranked second among comparison regions in total private investments, behind Boston ($9.5 billion) and ahead of Austin and San Diego (both $2.6 billion), Denver & Boulder ($2.2 billion), and Research Triangle ($800 million). Metro Atlanta's total private investment spiked in 2014 with a large private equity investment in First Data and then declined 31 percent in 2015.


*Total private investment does not include IPO or M&A deals.Data Source: CB InsightsAnalysis: Collaborative Economics

Total Private Investment*Metro Atlanta and Select Innovation Regions, 2006-2015

$0

$2

$4

$6

$8

$10

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Austin $2.6B

Denver & Boulder $2.2B

Metro Atlanta $3.5B

Boston $9.5B

Priv

ate

fund

ing

in b

illio

ns o

f 201

5 do

llars

San Diego $2.6B

Research Triangle $800M

Venture Capital and Total Private Investment

Metro Atlanta’s total VC investment doubled between 2010 and 2015 and its total private investment was second-highest of all the comparison regions in 2014 and 2015.

Average Private Investment Deal Size**Metro Atlanta and Select Innovation Regions 2015

Region Millions of Dollars

Metro Atlanta $16.0

Boston $10.5

Austin $9.1

San Diego $7.6

Denver & Boulder $6.0

Research Triangle $5.0

**Excludes M&As and IPOs, includes debtData Source: CB InsightsAnalysis: Collaborative Economics


19

Funding Sources


Data Source: CB Insights Analysis: Collaborative Economics

Funding SourcesMetro Atlanta, 2010-2015

Funding SourcesMetro Atlanta and Select Innovation Regions,2010-2015

0%

20%

40%

60%

80%

100%OtherGrantsVCPrivate Equity,CorporateDebt

2010 2011 2012 2013 2014 2015

Perc

enta

ge o

f fun

ding

per

inve

stm

ent c

ateg

ory

54%

18%

23%

4%1%

0%

20%

40%

60%

80%

100%OtherGrantsVCPrivate Equity,CorporateDebt

Boston SanDiego

Austin ResearchTriangle

Denver &Boulder

MetroAtlanta

Perc

enta

ge o

f fun

ding

per

inve

stm

ent c

ateg

ory

27%

33%

34%

4%2%

In Metro Atlanta, the share of investment from different funding sources has been shifting towards a combination of private equity, corporate, and debt financing. These sources accounted for an average of 50 percent of total investment from 2010 to 2013, and about 80 percent between 2014 and 2015. Venture capital as a share of total investment in Metro Atlanta declined from 2010 to 2015.

Metro Atlanta’s investment pattern looks different from most comparison regions, with much more reliance on private equity, corporate and debt financing and less on venture capital. Sixty percent of the region’s investment between 2010 and 2015 came from private equity, corporate, or debt financing sources, while the proportion from these sources in comparison regions ranged from 23 percent to 44 percent. Only one-third of Metro Atlanta investment is venture capital, versus 45 percent to 66 percent in comparison regions.

Metro Atlanta has the most diversified portfolio of funding sources among comparison regions.


20

Mergers & Acquisition Activity

Mergers & Acquisition ActivityMetro Atlanta and Select Innovation Regions, 2010-2015

0

50

100

150

200

250

Boston Denver & Boulder San Diego Austin Research TriangleMetro Atlanta

Num

ber o

f M&

A d

eals

201020112012201320142015


Metro Atlanta-based companies continue to experience high rates of merger and acquisition (M&A) activity, second only to Boston in each of the last five years. The region's M&A activity increased substantially from 84 deals in 2013 to 134 deals in 2014, then sustained that gain with 136 deals in 2015. San Diego and Boston experienced declines in the amount of M&A activity between 2014 and 2015, while Denver & Boulder, Austin, and Research Triangle experienced gains.

BUSINESS INNOVATION

U.S. M&A activity was strong in 2015, surging 43.3 percent above comparable 2014 levels, according to Thomson Reuters. In the M&A Trends Report for 2015, Deloitte projected that high levels of cash on corporate balance sheets, and a positive economic outlook are contributing to companies' interest in acquisitions.1

1 Deloitte. M&A Trends Report, 2015. April, 2015; and Thomson Reuters. Mergers & Acquisitions Review, Full Year 2015. 2 2015 U.S. IPO Annual Review. Renaissance Capital. December 18, 2015.

IPO Activity

0

5

10

15

20

25

Boston Metro Atlanta Denver & Boulder Austin Research TriangleSan Diego

Num

ber o

f IPO

dea

ls

201020112012201320142015

IPO ActivityMetro Atlanta and Select Innovation Regions, 2010-2015


Metro Atlanta produced three initial public offerings (IPO) in 2015, competitive with Denver & Boulder, Research Triangle, and Austin. The leading comparison regions (Boston and San Diego) experienced steep declines in the number of IPOs in 2015 compared to 2014, a trend mirrored across the U.S. in 2015 according to Renaissance Capital.2 Only Metro Atlanta and Austin increased their number of IPOs between 2014 and 2015 among comparison regions.


21

$10

$9

$8

$7

$6

$5

$4

$3

$2

$1

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200

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15, i

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201

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0 20 40 60 80 100

Bubble size is the average value per o�ering 2006-2015, in millions of 2015 dollars

Boston$92M

Austin$177M

San Diego$80M

ResearchTriangle$148M

Denver &Boulder$271M

Metro Atlanta$399M

Total number of IPOs 2006-2015


Total Number and Value of IPO Offerings, and Average Value per OfferingMetro Atlanta and Select Innovation Regions, 2006-2015

Metro Atlanta produced 13 IPO deals between 2006 and 2015, with an average value per offering of $399 million, the highest average IPO value of the comparison regions. While Metro Atlanta had the fewest IPOs among comparison regions between 2006 and 2015, the average value of its IPOs was much higher than these regions. The total value of Metro Atlanta's 13 deals was $5.2 billion, third behind Boston ($8.3 billion) and Denver & Boulder ($6.2 billion).


22

Innovation Results

Innovation Industry Churn

Components of Innovation Industry Establishment ChurnExpansion, Start, Move in, Move out, Closure, and Total Metro Atlanta, 2007-2015

Components of Innovation Industry ChurnMetro Atlanta, 2013 - 2015

0

1,000

2,000

3,000

4,000

5,000

-5,000

-4,000

-3,000

-2,000

-1,000

0 10,000

12,000

14,000

16,000

18,000

20,000

8,000

6,000

4,000

2,000

0

2007 2008 2009 2010 2011 2012 2013 2014 2015

Start

Expansion

Move In

Closure

Move Out

Totalestablishments

Inno

vatio

n In

dust

ry e

stab

lishm

ents

by

cate

gory

of c

hurn

Total Innovation Industry establishments

NOTE: Innovation Industries are based on the BLS definition of high-tech Industries, and also include additional scientific industries. A list of the 4-digit NAICS codes included in this definition are provided in the Appendix. Data Source: Business Dynamics Research Consortium and InfogroupAnalysis: Collaborative Economics

INNOVATIONINDUSTRY

ESTABLISHMENTS

18,870 in 2013to

17,150 in 2015

2013-2015 CLOSURE-8,140 establishments

2013-2015 MOVE OUT-240 establishments

2013-2015 MOVE IN270 establishments

2013-2015 START5,930 establishments

2013-2015 EXPANSION210 establishments

A small number of Innovation Industry establishments switched their primary industry code in each year. These switchers are not captured in the components of churn but are captured in the total number of innovation industry establishments in each year. Therefore readers may note differences (of < 1 percent of total number of Innovation Industry establishments) between the net Innovation Industry churn obtained by summing the components of churn, and the total number of Innovation Industry establishments in the subsequent year.

Over the long term, Metro Atlanta has experienced a net increase in the number of business establishments in Innovation Industries: from 2007 to 2015, it gained about 3,300 more business establishments in these industries through starts and move ins than it lost in establishment closures and regional move outs. There has been a constant churn in these industries, with Metro Atlanta every year adding on average about 2,815 establishments through starts and move ins while losing approximately 2,450 firms to closing or leaving the region. More than 95 percent of gains and losses come from new business starts and business closures, with only a small portion resulting from business move ins or move outs.

More recently, between 2013 and 2015, Metro Atlanta has experienced a decline in total establishments in Innovation Industries due to both a slowdown in new business starts and an acceleration of business closures. The total number of establishments in these industries declined from 18,870 in 2013 to 17,150 in 2015. The number of business starts dropped 21 percent, while the number of business closures more than tripled during this period, reversing a five-year trend in which business starts exceeded business closures in Innovation Industries every year.

The total number of Innovation Industry establishments in Metro Atlanta contracts or expands over time, depending on how many establishments move out or close, and how many start, expand, or move in to the region. Metro Atlanta’s Innovation Industry establishments contracted from roughly 18,870 in 2013 to 17,150 in 2015 as the number of establishments that moved out (-240) or closed (-8,140) exceeded the number that started (5,930), expanded (210) or moved in (270).*


23

Entrepreneurship

*Adults include members of the population between twenty and sixty-four years of age.**Data are available only for the largest Metropolitan regions by population size, which excludes Research Triangle; and Boulder, CO; and Greeley, CO; which are components of the Denver & Boulder region.NOTE: The rate of new entrepreneurship is a three-year moving average measuring the percentage of a region’s population that became entrepreneurial in a given month.Data Source: Kauffman FoundationAnalysis: Collaborative Economics

*Adults include members of the population between twenty and sixty-four years of age. **Data are available only for the largest Metropolitan regions by population size, which excludes Research Triangle; and Boulder, CO; and Greeley, CO; which are components of the Denver & Boulder region. NOTE: The rate of new entrepreneurship is a three-year moving average measuring the percentage of a region’s population that became entrepreneurial in a given month. Data Source: Kauffman Foundation Analysis: Collaborative Economics

Rate of New Entrepreneurs per 100,000 Adults*Metro Atlanta and Select Innovation Regions**, 2008-2014

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014

Austin

Denver Metro Atlanta

Boston

Mon

tlhy

rate

of n

ew e

ntre

pren

eurs

per

100,

000

adul

ts

San Diego

Opportunity Share of New EntrepreneursMetro Atlanta and Select Innovation Regions**, 2010-2014

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

2010 2011 2012 2013 2014

Austin

Denver

Metro Atlanta

Boston

Perc

enta

ge o

f new

ent

repr

eneu

rs m

otiv

ated

by

oppo

rtuni

ty

San Diego

The rate of new entrepreneurship in Metro Atlanta was the highest of the comparison regions between 2008 and 2012. However, the share of adults starting a new business on a monthly basis in the region declined by 34 percent between 2010 and 2014. San Diego and Denver also experienced a downward trend starting in 2010, but Metro Atlanta recorded the steepest decline. In contrast, entrepreneurship rates actually increased in Austin and Boston between 2010 and 2014.

Metro Atlanta's rate of new entrepreneurship rose three percent from 2013 to 2014, the first increase since the 2010 recession. The rate rose to 0.37 percent in 2014--meaning that roughly 370 of 100,000 adults in Metro Atlanta started a new business every month in that year. Among comparison regions, Austin had the highest rate of new entrepreneurship in 2014 at 0.55 percent, with about 550 of 100,000 adults starting a new business in every month that year.

Approximately seven of every 10 entrepreneurs in Metro Atlanta started a business based on opportunity rather than necessity in 2014. Because opportunity entrepreneurs were employed or in school prior to starting a new business, they are more likely to be pursuing a market opportunity rather than choosing entrepreneurship as an alternative to unemployment. Thus, the rate of opportunity entrepreneurship is a proxy measure for new business formations with growth potential.

Reversing a decline, Metro Atlanta's rate of opportunity entrepreneurship increased from over 63 percent in 2013 to 69 percent in 2014. Metro Atlanta's rebound still left the region behind comparison regions in 2014. Between 2010 and 2014, the rate of opportunity entrepreneurship increased in Boston, San Diego, and Denver and fell in Austin and Metro Atlanta.


24

Employment

Metro Atlanta reached approximately 190,000 in Innovation Industry employment (189,300 in 2015), second only to Boston among comparison regions. As of 2015, nearly 10 percent of the region’s employment was in Innovation Industries, up from 8.4 percent in 2012, with a somewhat higher percentage in Core Atlanta (10.4 percent), up from 9 percent in 2012.

Both Metro and Core Atlanta have smaller proportions of Innovation Industry employment than the comparison regions. While absolute Innovation Industry employment is much smaller in Austin and Research Triangle, for example, the share of Innovation Industry employees is much higher at 18.5 percent and 17.5 percent, respectively.

Innovation Industry EmploymentMetro Atlanta and Select Innovation Regions

NOTE: Innovation Industries are based on the BLS definition of high-tech Industries, and also include additional scientific industries. A list of the 4-digit NAICS codes included in this definition are provided in the Appendix.Data Source: U.S. Census Bureau, Quarterly Workforce IndicatorsAnalysis: Collaborative Economics

Metro Atlanta added about 20,300 Innovation Industry employees between 2012 and 2015. Growth in the absolute number of Innovation Industry employees placed Metro Atlanta third behind San Diego and Boston. However, the rate of Innovation Industry employment growth in Metro Atlanta was 12 percent between 2012 and 2015, slower in comparison to the other innovation regions with the exception of Boston.

Metro Atlanta

Boston

Austin

San Diego

Denver & Boulder

Research Triangle189,300 9.9%

+20,292+12%

Core Atlanta173,395 10.4%

+18,073+12%

117,276 18.5%

+16,851+17%

152,004 12.3%

+19,090+14%

155,402 15.5%

+23,991+18%

112,997 17.5%

+13,833+14%

269,429 14.2%

+20,970+8%

Total employment in Innovation Industries, 2015Percentage of total jobs that are in Innovation Industries, 2015

Absolute change in Innovation Industry employment, 2012-2015

Percentage change in Innovation Industry employment, 2012-2015

Innovation Industry Employment

Change in Innovation Industry Employment, 2012-2015

Metro Atlanta has one of the biggest pools in Innovation Industry talent among comparison regions.


25

Average Annual Wage by ClusterMetro Atlanta, 2005 and 2014

$0

$20,000

$40,000

$60,000

$80,000

$100,000

2005 2014

Average Annual Wages,All IndustriesBioscience and Health ITSupply Chain andAdvanced ManufacturingCorporate Operationsand Business ServicesTechnology

$58,

205

$58,

023

$67,7

62

$67,

514

$67,

075 $7

5,57

7

$86,

000

$99,

139

$82,

495

$96,

977

Ave

rage

ann

ual w

ages

, adj

uste

d to

201

4 do

llars

Data Source: U.S. Census Bureau, Quarterly Workforce IndicatorsAnalysis: Collaborative Economics

*Boston data is available for 2011 and after.Data Source: U.S. Census Bureau, Quarterly Workforce Indicators Analysis: Collaborative Economics

Average Innovation Industry Annual Wages in 2014 DollarsMetro Atlanta and Select Innovation Regions, 2005 and 2014

2005 2014 % Change 2005 - 2014

Metro Atlanta $92,143 $93,247 1%

Core Atlanta $95,117 $96,191 1%

Austin $100,530 $95,935 -4%

Boston* - $126,390 -

Denver & Boulder $90,242 $92,898 3%

Research Triangle $102,845 $106,589 4%

San Diego $87,672 $115,700 32%

Having weathered the impact of a major recession, inflation-adjusted wages for Innovation Industry employees in Metro and Core Atlanta changed little over the past decade. Comparison regions, with the notable exception of San Diego, also experienced little change in wages, or worse, such as inflation-adjusted wage decline in Austin.

While inflation-adjusted wages in Metro Atlanta were flat for all industries combined as well as for the Bioscience and Health IT Innovation Industry cluster, other Innovation Industry clusters experienced gains over the last decade. Wages in the Supply Chain and Advanced Manufacturing cluster increased by the greatest amount, rising 13 percent between 2005 and 2014 to $75,577. Inflation-adjusted wages also increased in Metro Atlanta's Corporate Operations and Business Services cluster (up four percent to $86,000) and Technology clusters (up two percent to $99,139).

Wages

Wages have increased in Metro Atlanta’s Supply Chain & Advanced Manufacturing cluster over the past decade, but wages for all Innovation Industries combined have remained flat.


26

Chart Name Data Source

Population ChangePopulation Division of the U.S. Census Bureau, County Population Estimates

Adult Education Levels

U.S. Census Bureau's American Community SurveyRelative Growth of Adult Population by Education Level

Change in Adult Population by Education Level

Total STEM Degrees AwardedNational Center for Education Statistics' Integrated Postsecondary Education Data System (IPEDS) Completions Survey

Concentration of High-Tech OccupationsU.S. Bureau of Labor Statistics' Occupational Employment Statistics (OES)

Academic R&D Expenditures by Source National Science Foundation's (NSF) Higher Educaation Research and Development Survey (HERD)Relative Growth of Academic R&D Expenditures

Total Patents IssuedU.S. Patent and Trademark Office (USPTO)

Total Patents Issued by Major Technology Areas

Academic Licenses

Association of University Technology Manager's Statistical Access for Tech Transfer (STATT) Database

Relative Growth of Academic Licensing Activity


Productivity of Academic Research Dollars

Small Business Innovation Research and Small Business Technology Transfer Grants (SBIR/STTR)

Small Business Administration's (SBA) Award Listing database

Angel and Seed, and Series A Investment

CBInsights. www.cbinsights.com

Venture Capital Investment

Total Private Investment

Funding Sources

Mergers & Acquisition Activity

IPO Activity

Total Number and Value of IPO Offerings, and Average Value per Offering

Components of Innovation Industry Establishment Churn Business Dynamics Research Consortium and Infogroup

Rate of New Entrepreneurship Kauffman Foundation's Kauffman Index of Startup Activity for Metropolitan Area and City TrendsOpportunity Share of New Entrepreneurs

Innovation Industry EmploymentU.S. Census Bureau's Quarterly Workforce Indicators (QWI) dataset

Average Annual Wage by Cluster

Average Innovation Industry Salaries in 2014 Dollars

Appendix*

*A detailed Appendix is available upon request from the Metro Atlanta Chamber


27

Metro Atlanta · Special thanks to members of the Innovation Advisory Group: Sam Adams Invest Atlanta Troels Adrian ... Mergers & Acquisition Activity ... degrees than any other comparison

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