Boosting High Tech Critical Mass
Innovate Birmingham is a citywide initiative to boost technology enterprise as the core of the city’s urban resurgence.
Birmingham doesn’t just want a place at the table of technological ingenuity; it wants ownership of that table on a national scale. The plan includes pulling up as many chairs for innovators as are needed. Building on the city’s steel foundation, a new development initiative called Innovate Birmingham envisions a technological renaissance.
The catalyst for the project came when the Community Foundation of Birmingham hosted Bruce Katz, of the Brookings Institution’s Metropolitan Policy Program, who sees a national trend for metropolitan areas reinventing themselves around urban cores. From his perspective, Birmingham is uniquely poised to level up.
“He said this community has an incredible opportunity to do something unique and innovative,” says Devon Laney, president and CEO of Innovation Depot Inc. “He said not many communities have the resources you have within a few blocks. We have all of these resources. He threw out a challenge that when he comes back, he hopes to see progress.”
Dr. Ray Watts, president of UAB and chairman of Birmingham Business Alliance, picked up the gauntlet.
“We realized UAB has been a tremendous driver of innovation,” Watts says. “We have everything around us to grow technology and knowledge-based companies.”
With UAB’s footprint in education and research, it was natural for Watts to be part of a project to foster high-tech development.
“We wanted to build a brand around Innovate Birmingham,” Watts says. “Revitalization of downtown is part of that initiative. We wanted to make sure we are empowering our young people through workforce development. They can have great careers here and stay in Birmingham.
“As we developed the plan, we realized it would need the depth and breadth of firepower at UAB,” Watts says. “We have 2,300 employees and 21,000 students. We needed to harness the person power. That’s one reason I got involved early.
“Almost every major company has been part of building this partnership,” Watts says. “We all asked, ‘How do we recruit outside talent to come to Birmingham? How do we recruit start-ups? How do we build infrastructure?’”
UAB answered that question in late 2016, when it launched internet speeds of 100 gigabits per second, boosting available bandwidth on campus by 10 times the previous capability and up to 10,000 times many standard home internet speeds. That same speed has been extended to Innovation Depot and eventually will extend to the innovation district, and Laney says that’s the kind of real incentive businesses need to choose a locale for growth.
“That is mind blowing,” says Laney. “Innovation Depot will have access to run on that connectivity, which is a huge benefit. It means a lot to technology companies to have the right bandwidth, the right infrastructure, the right capabilities and workforce right here. They can walk in, sit down, plug in and go to work.”
Robert Crutchfield, executive director of Innovate Birmingham, had been involved with development initiatives for the city for several years as a senior partner with Harbert Growth Partners, a venture capital firm. Technology-based growth was intriguing enough to encourage him to take the next step.
“I got more and more interested in what was possible and what could be driven by taking the venture capital discipline,” Crutchfield says. “I had experience with what happens when the right amount of investment capital is put to work with high-quality entrepreneurs.
“We’re focused on helping our technology companies start up and grow, and not just to grow but grow rapidly with a steep up and to the right growth curve.”
Crutchfield says the program is building on the success of multiple factors, including a $6 million grant from the Department of Labor to fund the Innovate Birmingham Regional Workforce Partnership. The grant proposal was led by UAB’s Josh Carpenter, Ph.D., to train underemployed and undereducated young adults, age 17-26, for 925 high-wage jobs.
Crutchfield says the players have identified the need for access to capital, economic development and the real estate component necessary to grow. There’s only one Silicon Valley, but Birmingham is carving out its own niche.
“Birmingham has the opportunity to define itself uniquely as a high-tech growth city, but with attributes unique to our city,” Crutchfield says.
Watts has plenty on his plate leading Alabama’s largest single employer, but he doubled down on his commitment to the cause when asked to serve a second term as chairman of the project to continue to usher it to success.
Birmingham is home to the largest high-tech business incubator in the Southeast — Innovation Depot — 140,000 square feet of office and lab space housing 100 client companies with a sales impact of $1.25 billion during the past five years.
“True initiative is a partnership between all organizations coming together,” Laney says. “We needed someone to shepherd it. We had pieces of what we all were doing fitting together and realized we needed one person to serve in that role as coordinator — someone who wakes up and thinks about this every day. That’s what Bob (Crutchfield) has done in leading and driving the effort.”
“One of the beautiful things about Birmingham is we have a very large urban core — from Avondale to Southside and Parkside to uptown, it’s a very diverse urban core,” Crutchfield says. “As I look at the landscape over the next five years, I see a good mixture of high-growth technology companies.”
He sees growth being led by entrepreneurs such as David Gray, CEO of Daxko; Tony Summerville, CEO of Fleetio, and Bill Smith, CEO of Shipt.
And as young entrepreneurs emerge, so does the interest of venture capital firms, Crutchfield says.
He says Birmingham businesses like TicketBiscuit, an online ticketing company, are under the radar, high-quality entrepreneurs whose name recognition will grow nationally and internationally in coming years.
“We want this district to center in downtown Birmingham,” Crutchfield says. “Real estate and buildings are available, and we have living space and mixed-use retail. We can reshape Birmingham. It’s already happening.”
Progress on the initiative has been moving quietly, but key players decided it was time to make the trajectory known with Innovate Birmingham.
“We’ve worked behind the scenes to make tangible progress along the way,” Watts says. “We just stood it up in May of this year as an independent organization. Now with full time executive director Bob Crutchfield and the workforce development, we see Innovation Depot pulsating with energy and ready to burst at the seams.”
One of the earliest leaders on board was Brian Hilson, president and CEO of Birmingham Business Alliance, the regional Chamber of Commerce for the seven-county metropolitan area.
“We recognized the importance of technology-based businesses that can emerge from newly developed technology,” Hilson says. “With leaders like UAB and Southern Research, we have a strong climate for organically grown business establishment. Innovation Depot is ranked number one as a business incubator, and we have a number of locally developed technology-based businesses. It was a recognition many shared that we could do more.”
Hilson says the BBA decided to give the innovation project its own driving force.
“This would give Birmingham a high profile recognizable place for the first time,” Hilson says. “It’s essentially a business park in downtown Birmingham.”
The BBA and other principals agreed it would be best to create a new organization to address the unique issues involved in transforming an area from underused warehouses to high-tech hub.
“We were not trying to reinvent the wheel, but we wanted to add a level of responsibility and daily focus for the development of the organization — with that as its sole mission rather than one of its priorities,” Hilson explains. “Innovate Birmingham emerged. This has been a need in Birmingham for a long time. We have a community very rich in technology-based resources. We won’t be at our best until we fully accentuate our technological capabilities.”
In advancing technology in Birmingham, Laney says it’s critical to have a roadmap toward a true innovation ecosystem and be sure the pieces align. Working with a consulting group brought into clear focus that an area was needed with access to capital and community engagement.
“We had to make sure all these organizations — Innovation Depot, the BBA, Tech Birmingham — were working in this space but not duplicating efforts,” Laney says. “We aligned behind these core areas to move everything forward. In my 10 years in Birmingham, this is the most aligned I’ve ever seen the community — around innovation and understanding how an innovation ecosystem can really be a driver for the community, region and state.”
Hilson says many of the buildings in the area will need to be repurposed — and many are older structures that could potentially qualify for historic tax credits and redevelopment.
“If you look at cities growing around the country, most are doing so in older buildings,” Hilson says. “We have a real opportunity to do so here and to do so in a cost-efficient way, repurposing spaces.”
Laney says the technology emphasis provides an opportunity for everyone in the community to benefit.
“We have an incredible opportunity to overlay innovation technology with civil rights history,” says Laney. “We can showcase what this opportunity means and what the ecosystem brings to the community as a whole. It’s an example to the rest of the country. No one else can say they have a civil rights district that overlaps with a technology core.”
Laney points to Shipt, a success story dating back to 2014 in the Magic City. Seeded by Harbert Venture Partners, the company employs a user-friendly app and professional shoppers to provide families with their daily bread. Even a behemoth like Amazon is looking over its shoulder at the burgeoning upstart from Alabama.
“They started locally and have raised close to $60 million,” Laney says. “A startup company in Birmingham has raised that kind of money and has their logo on the skyline.”
He also points to Fleetio, another homegrown Alabama company with a web-based software platform that helps businesses manage vehicles and drivers.
“These are software-as-services companies,” Laney says. “We are hearing from people on the east and west coasts. Those markets are saturated, and the cost of doing business and cost of living is so high. If I’m an entrepreneur or investor and I raise $3 million for a startup, that $3 million will last nine months in San Francisco or two years in Birmingham. We can really differentiate ourselves, becoming a true technology hub in the country.”
Crutchfield says the key to the initiative is the level of community commitment from big businesses to politicians and 501c3s, which have played a critical role in the success of the initiative.
“It’s impressive to see the high-quality leadership of all these disparate entities coming together ... to create value,” Crutchfield says. “I’ve very grateful to be a small part of this. It really is a magical time in the Magic City.”
Cara Clark and Cary Norton are freelance contributors to Business Alabama. Both are based in Birmingham.