By Chris Clark, President & CEO, Georgia Chamber of Commerce
Economic Dynamism is a term that refers to an economy’s adaptability, resiliency, competitiveness, and ability to respond to disruption. Georgia is no stranger to adaptability and resiliency, proven through our emergence from the COVID-19 pandemic with one of the nation’s leading economies. In the last four years, thanks to the leadership of Governor Brian Kemp, Georgia has attracted over 1,700 projects, more than $65 billion of investment, and 165,000 jobs for the citizens of the Peach State.
As we look forward and continue to seek expansion and development in every corner of the state, there are several areas where Georgia’s economy is not reaching its full potential. To maintain our competitiveness in both the short and long term, we must focus on specific areas of growth that will allow us to see continued record-breaking investment.
In Q1 of this year, 32,000 employers were competing for talent to fill over 357,000 jobs. In fact, overall state employment is expected to grow 46% by 2050. Currently, there is only 1 person seeking employment for every 3 job postings, leaving Georgia ranked 33rd in Labor Force Participation. The success of Georgia businesses and ongoing economic development efforts hinges on our state’s ability to provide companies with a skilled labor force.
Georgia’s tax structure is fiscally responsible and straightforward, both of which keep our state competitive. The economic development tools and incentives implemented have earned our state the title of “Best Place to Do Business,” for an unprecedented nine consecutive years. Unfortunately, our legal climate has earned us another title that I’m not proud to hold: “Number One Judicial Hellhole.” For perspective, we overtook California to win that designation.
The skyrocketing number of nuclear verdicts in our state is costing Georgia households an extra $4,157 dollars in price hikes and inflation annually. The impact of these costs on small businesses is detrimental and often forces them to increase prices or close their doors altogether. Florida was the only state who had higher tort costs than Georgia, and what did they do in response? They signed sweeping reforms into law earlier this year.
Legal reform has been at the top of the Georgia Chamber’s priority list for several years, but unfortunately, progress has been difficult to achieve. However, we are undeterred and encourage policymakers to take immediate action on this issue to continue attracting development to our state and supporting existing industries as they navigate operational and workforce challenges.
A key indicator of economic dynamism is churn, meaning a robust small business sector is paramount. Georgia is ranked 3rd in the nation for the number of adults becoming entrepreneurs each month. Our first-year business survival rate continues to increase and now sits at 80%, which is above the national average, but still leaves us ranked 35th. Greater access to capital and support for entrepreneurs to start and grow their small businesses will bolster our first-year success rate and ensure the long-term prosperity of Georgia’s economy.
We have made great strides in increasing research and development initiatives through various public-private investments and partnerships. In 2021 our state’s colleges and universities posted $2.95 billion in research expenditures, and Georgia startups increased venture capital investments by nearly $2 billion. However, we still lag behind competitor states like Texas and North Carolina.
The Georgia Research Alliance is partnering with our state’s universities to increase R&D investments and grow our economy. In 2022, GRA-related expenditures totaled almost $900 million. These competitive public and private research dollars come from outside the state and support Georgia companies in hiring employees, renovating spaces, and purchasing equipment necessary for research and development. Building on our already strong innovation ecosystem by seeking outside investment in Georgia through R&D as well as venture capital will be vital to foster a dynamic economy for years to come.
The data is clear that Georgia’s overall economy is strong, and the continued efforts of our elected officials and business leaders have helped our state achieve unprecedented economic success. By continuing to focus on competitiveness, infrastructure, and workforce, we can ensure that Georgia remains competitive, resilient, and innovative while providing opportunities for increased dynamism.
To learn more about dynamism in Georgia’s economy, visit gachamber.com/economic-dynamism.