Feb 24, 2023
by: Becky Gillette, Mississippi Business Journal
Mississippi is a technology state, says Joe Donovan, director of the Mississippi Development Authority Office for Technology, Innovation and Entrepreneurship.
“We just forgot to tell ourselves and the rest of the world,” Donovan said. “There are technology gems across the state. The Coast has done an amazing job with the Blue Economy. There is a lot going on in aerospace. If it flies in space, it was tested at the Stennis Space Center. Mississippi universities are doing a lot of practical development with autonomous air, ground, and water vehicles. We are developing a plan to capitalize on everything that is going on.”
Recently the Mississippi Economic Development Council and its partners at the Mississippi Research Consortium released plans to develop the Mississippi Strategic Innovation plan. This is a comprehensive state plan that includes input from the four research universities in the state — Mississippi State, University of Mississippi, Southern Miss and Jackson State University — and economic development officials across the state. The hope is to have the plan completed in time to present to the 2024 Legislature.
“There is a broad coalition involved,” Donovan said. “We will have an overarching plan, and an in-the-trenches plan. We are working with a consulting firm out of Austin that has done this type of work across the country.”
Donovan said InnovateMS has been a tremendous partner in putting together angel funds across the state and is attracting outside capital from Louisiana, Colorado and Connecticut.
The coalition is interested in growing the technologies and companies already in the state, but also recruit new companies from out of state including startups including spinoffs from large technology companies. One selling point is the much lower cost of living in Mississippi compared to traditional tech heavy areas like Silicon Valley, New York and Austin where a majority of venture capital is now invested.
Another thing that has benefitted Mississippi is remote work. When people can work anywhere there is a high-speed internet connection, they have the choice of places where housing is affordable, crime is low and there is less traffic congestion.
Natchez has a program where remote workers who buy a home in Natchez can get $6,000.
“You wouldn’t think a town as cute and Southern as Natchez would be that progressive, but they are,” Donovan said.
Small software companies are one of the most common types of tech companies, but areas like advanced materials and sensors are also good growth sectors.
“Southern Miss has an amazing polymer group; the University of Mississippi the Medical Center in Jackson Mississippi State has the CAV Center in Canton,” Donovan said. “Jackson State University is our only metropolitan school. MDA has great relations with all of our research universities, that help significantly in economic development. There are a lot of opportunities here with our military research labs. The Department of Defense has a directive that if their products developed don’t go bang in the night, they want them to be commercialized in the private sector.”
Donovan said the U.S. Army Engineer Research and Development Center in Vicksburg is one of the largest military research centers in the country. The Naval Research Lab and Keesler Air Force Base on the Coast also does a lot of important research.
“We partner with all these groups to commercialize civilian applications that come out of their research,” Donovan said. “Nissan is going to produce electric vehicles at its plant in Canton, and there will be a lot of spin-off activities from that. We just want to make sure we have developed the ecosystem to support that. One of the great things is all our research universities have areas of specialty, and they work so closely together, which is amazing.”
Educational systems from kindergarten through college are preparing students to work in tech industries.
“The K-12 educational system has done an exceptional job in dramatically improving science, technology, engineering and mathematics education across the state,” Donovan said. “Our eighth-grade math scores went from 50th in the country to the mid-20s. We have also installed career consultants in all high schools in the state which will help direct students early into STEM-related careers. State community colleges have rewritten a lot of curriculums to focus on STEM activities including entrepreneurship.”
The Mississippi Council for Economic Education trains teachers in the best methods to teach entrepreneurship and financial literacy in the high schools. Also, there are now computer coding academies, the MS Coding Academy, across the state that Donovan said take high school grads whose career track was in the fast-food industry and, in 11 months, turn them into full stack coders.
“It is the code that powers everything else,” Donovan said. “The state supports that at five locations and is looking to expand. Universities have all ramped up engineering and science programs with a strong focus on economic development.”
Tony Jeff, president and CEO for InnovateMS, agrees that there needs to be greater awareness of the strides Mississippi has made in technology innovation.
“People are surprised, but technology really is a major area of growth in our state,” Jeff said. “We need to tell the story better about how the many great companies we have here that are centered around interesting technologies and good jobs. There are lots of opportunities out there.”
InnovateMS generally is not directly funding tech companies. Instead, they have an angel investor network that helps new companies create an investor-ready deal.
“We set up one-on-one and group pitches in person or on Zoom between companies and investors,” Jeff said. “In that aspect, it looks a lot of like the television program Shark Tank. We actually have 300 investors statewide who are interested in investing in Mississippi startups.”
Some have been organized into regional funds such as ones in Northeast Mississippi and South Mississippi, and now groups are being put together in Oxford, the Delta and the River region (Natchez, Vicksburg and Greenville). Individual investors are brought together, which Jeff said enhances their ability to organize, screen and invest.
“That is our niche in the whole economic development space,” Jeff said. “We don’t try to attract new industries. We get about 100 pitches for companies each year, and it leads to eight or ten being able to attract investors. We help these startups grow up to be real companies.”
There is a lot that goes into creating an investor-ready deal. Help is needed from attorneys and marketing firms. Jeff said they are seeing more of these companies centered around the universities and the Jackson and Coast metropolitan areas.
College towns are often quite attractive for younger professional workers because of quality-of-life such as dining, entertainment and cultural opportunities.
InnovateMS typically helps companies raise up to $1 million for the first round of capital. Then companies go on to raise even more.
“We just finished our numbers for 2022, and 16 companies we worked with raised $43.8 million last year,” Jeff said. “One company alone raised $20 million. Those companies have created about 300 pretty awesome jobs. I don’t think people appreciate how many jobs are available in these cool companies and how important they are to the economy. We never know which company is going to be the next Bomgar or Next Gear Solutions, companies that sold for hundreds of millions. We never know which company will be the next big hit. If you look nationwide, almost all the new job creation in the U.S. has been new companies. Older firms are still doing well, but are not creating new jobs as fast.”
Once companies grow big enough to have significant jobs and capital, there are state incentives available.
