by Dr. Douglas Scarboro
Memphis is hot in the innovative technology space and is poised to get even hotter.
As Brookings noted, the vitality of this advanced-industries sector — a group of 50 R&D- and STEM-worker intensive industries — are crucial for future U.S. economic growth and prosperity.
Of particular interest to me in the Brookings report was the 8 percent increase (2,693 jobs) in the category of computer systems design and related services jobs in Memphis. This not only bodes well for legacy computer and information systems jobs here, but also for the potential development of new technology products in the financial arena, now dubbed “fintech.” Fintech was considered by Inc. to be one of the most promising industries of 2015.
Overall fintech funding in the U.S. remains on track to surpass 2015 levels in 2016, with traditional financial institutions and banks increasing their activity as venture-capital investments have faded, according to auditor KPMG’s quarterly The Pulse of Fintech. In 2015, total investment in financial technology companies around the world skyrocketed to $19.1 billion, up 56 percent from $12.2 billion the previous year. In the U.S. alone, fintech investment reached $7.7 billion, up 75 percent from the previous year.
While the top technology innovation synergies so far have been fostered by Memphis’ strong healthcare and transportation sectors, could Memphis be a fintech hub as well?
Memphis already has a strong startup ecosystem with a number of highly regarded incubator and accelerator programs such as Start Co. and Emerge Memphis. Another key, especially for cities in the South, is having engaged university-centered innovation, and Memphis has this, too, with a growing number of resources and programs available through the FedEx Institute of Technology and the Crews Center for Entrepreneurship at the University of Memphis.
Finally, the presence of a strong and innovative banking sector in Memphis means there is the potential to grow partnerships and collaborations. At this year’s Banking Growth Forum, several sessions highlighted how cooperation and partnerships between established financial institutions and tech newcomers — rather than competition between them — has been the more pervasive direction of the past year.
Across all sectors, we need to scale up and capitalize on this extraordinary innovation energy so these startups end up in Memphis, creating more jobs and opportunities over the long term.
Dr. Douglas Scarboro is regional executive/VP of the Memphis branch of the St. Louis Federal Reserve Bank.
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