Trend Radar: January 2008
Georgia’s Got Game: Since 2005, an emerging sector of the Georgia economy has tiptoed its way to importance, barely getting a glance from trend watchers. “It’s very, very low under the radar,” says Georgia Department of Economic Development Deputy Commissioner Bill Thompson. “We’re still getting our arms around it, but we believe there are over 70 companies in the state of Georgia involved in the creation of video games. It is a very immature industry right now, but it is very, very hot.”
Thompson says his office has tracked some $100 million injected into the state’s economy over the last three years by the video and online game industry. But for some online subscription games, $100 million is monthly income. The state’s millionaire entrepreneur population could be set to increase.
“Video games are about a $14 billion a year industry in the U.S.,” he says. “And we have a real opportunity here in Georgia to take a lead role in the Southeast in that area.”
Georgia’s colleges and universities may be the main attraction for video game entrepreneurs. The young industry appears to be strongly attracted to the Savannah College of Art and Design (SCAD). “Evidently SCAD is a big part of the growth,” Thompson says. “I think they are graduating about 100 students a year with bachelor degrees in video game development. And there are another dozen or so other colleges and universities in the state that are teaching it.” Thompson says Atlanta and Athens also are attracting video and online game developers.
Video game development companies also qualify for generous tax breaks through Georgia’s Entertainment Industry Investment Act. And the state is benefiting from a growing reputation among video gamers. “Being in a state that already has some of this activity going on tends to attract more of the same,” Thompson says.
To make sure Georgia stays in the game, Thompson hired a full-time video game development project manager in 2006. “Just since he came on board, we have had two international game companies relocate to Georgia,” he says. “One of those companies is going to hire 170 people in the next two years. And I think the best is yet to come.”
Portuguese Investment: When Effingham County Chamber of Commerce President and CEO John Henry was working with a Portugal-based company looking for a site near the Port of Savannah, the least of his concerns was the difficulty of that nation’s language.
“The biggest obstacles we had to overcome were the competing counties in the region, including one in South Carolina that was offering a lot more incentives,” Henry says. “Another big hurdle was coming up with enough land to ensure they had room for expansion.”
But the challenges were met and Portuguese manufacturer EFACEC has begun building its first U.S. plant in Effingham County. The facility will employ 600 highly skilled and well-paid workers. EFACEC will invest $100 million in its plant, and that’s just the beginning. “This project will have hundreds of millions of dollars in local impact,” Henry says. “The fiscal impact to the local government is going to be a 215 percent rate of return, about $25 million over a 20-year period.”
Yes, the jobs were important, Henry says, “but we did a reverse here; we looked at the governmental impact.” EFACEC will begin production of power substations for its U.S. market in the fourth quarter of 2009. Worldwide, the company employs some 3,000 people in 60 countries, and about half its production is exported.
Broadband Boost: Nearly 2,000 square miles of an economically hard-pressed region of rural Georgia is getting an important technology upgrade that locals say will make their communities more competitive in the quest for landing new businesses and industries. A OneGeorgia grant of $2.7 million to the Southwest Georgia Regional Information Technology Authority (SGRITA) will provide wireless broadband internet service to the counties of Baker, Early, Calhoun, Miller and Mitchell, and is a first-of-its-kind project for Georgia.
“This is going to move us into the 21st century,” says Lisa Collins, project manager for Early County 2055, a nonprofit economic development initiative. “It will raise the quality of education, healthcare and public safety, and boost tourism. It also will allow us to be more competitive with larger urban centers in the creation of new jobs.”
Another benefit: allowing farmers to more precisely monitor their irrigation systems via the broadband infrastructure. Total cost of the SGRITA project is $3.77 million, with $1 million from the Flint River Soil and Water Program already in the bank. The balance is to come from local contributions.