Jason Kelly

A regional magazine with its finger on the pulse of Southern business innovation, digitalsouth concentrates its editorial attention on the burgeoning digital economy in cities such as Atlanta, Raleigh-Durham, and Austin. Concerned with high-tech and business innovation brewing south of the Mason-Dixon line, digitalsouth is widely respected as an authority on the New Economy of the New South.

In the following interview, digitalsouth Editor Jason Kelly discusses the clash between tradition and innovation in the South, promising areas of economic growth, and the necessity of coopitition.

New South = Same Old Strife
digitalsouth defines the "South" as an area stretching from Baltimore or Northern Virginia down to Florida and west to Texas. The New South really is a region where so-called traditional businesses are colliding with the Internet economy. As is the case with any collision, the resultant friction has the potential to break things apart.

Some big companies are suffering because their employees have "option envy." They see friends and former colleagues being lured away to more flexible and potentially lucrative startup opportunities. Atlanta and Charlotte are struggling with the New Economy because, on the surface, they are embracing it, but they are implicitly resisting it at the same time. These are cities that were built on the backs of traditional industries -- banking (in both cities), telecommunications (especially in Atlanta), and real estate (especially in Atlanta). Industries such as these require a different approach to growing and maintaining a business. While an experienced executive at a large company like Coca-Cola or First Union may have great management skills, she may not easily transition to a startup culture.

Education First
The biggest challenges for the South are recovering from collisions between traditional business and the new economy. In parts of San Francisco and New York, little time is wasted talking about new business models and new business practices. In many parts of the South, a certain amount of education still has to occur in terms of the building and financing entrepreneurial ventures. We hope to see a continued expansion -- both in sheer numbers and in sophistication -- of the service providers surrounding high-tech companies.

Growth Sectors
Because financial services and telecommunications always have been important industries here, the best opportunities are related to those fields. In effect,each individual community needs to focus on core competencies. Atlanta, for example, claims the headquarters of BellSouth, as well as major hubs for AT&T and MCI Worldcom. MindSpring Enterprises is both a beneficiary of that heritage and a contributor to that trend. Quite honestly, I think there's a tendency to focus too much on billing a city as "the" place for a certain industry or a certain segment. A city can best differentiate itself by being a place where all kinds of business can succeed.

Lawyers, public relations firms, and accountants are becoming more prominent and respected in many local areas across the South. Companies aren't necessarily looking to San Francisco or New York City for representation, and Silicon Valley Silicon Valley law firms have begun establishing satellite offices in this region. Brobeck Phelger Harrison's Austin office is a great example. Other times, law firms are grown locally, as is the case with Hutchison & Mason in Raleigh, or Morris, Manning, and Martin in Atlanta

We also hope to see a continued proliferation of high-profile, publicly-traded technology companies, ones that go from cocktail napkin to the Nasdaq. MindSpring Enterprises in Atlanta is a great example. Red Hat software in Durham, North Carolina is one example. Public companies provide intangibles -- mindshare on Wall Street, more press, etc. -- as well as tangibles. Public company stock is a much sought-after commodity for making additional acquisitions, and it often leads to wealthy, active angel investors, and entrepreneurs.

But the South has something of an identity problem to overcome. Outsiders sometimes view the region as everything from "a little slow" to downright "backwater." That's changing, and clearly isn't true across the board, but it's an issue.