Survey Says Innovation Key to Georgia's Manufacturers

By Martha Dalton

Atlanta – Georgia's manufacturing industry is one of the sectors hit hardest by the recession. A recent survey looked at how manufacturers in the state are responding to the economic downturn. WABE's Martha Dalton has more.

The survey included almost 500 Georgia companies.
It was conducted by Georgia Tech, Kennesaw State University, and local accounting firm Habif, Arogeti & Wynne.
Richard Kopelman is [that firm's] HA & W's partner in charge of Manufacturing Practice and one of the study's authors. He says companies that focused on innovation were able to sustain more growth in the weak economy than their peers:
"Companies that are innovating new product generally are able to charge a premium because they're bringing something new to the market. So, they're first movers or they're bringing something new and innovative to the market."
Kopleman says because the economy is recovering slowly, manufacturers have time and opportunity to meet with clients, understand their needs and then innovate toward that.
Andy Lewis agrees. He's the Vice president of RLR Industries, one of the companies included in the survey. They make plastic fixtures for lighting companies. Three years ago, they had to make layoffs due to a drop in demand. But Lewis says they're starting to see signs of recovery:
"In the last year, it's somewhat turned around and where we were able to go back to a full schedule and we were able to hire a few more people the last few months. "
Although they haven't been immune to the recession, Lewis says bringing new product ideas to clients has helped them stay afloat:
"We see the market and we see what's happening manufacturing. And you can't produce the same product like you're just going to keep going with the same profit level."
Kopelman says a surprising result of the survey is that more than 80 percent of companies that are eligible for tax incentives aren't taking advantage of them:
"Many companies either think they don't qualify, aren't educated about the opportunities or think it's too difficult to obtain the credits."
He says in this economic climate, those credits can make a big difference:
"Someone who's operating at maybe a 10 percent margin, if they can find, you know 100-thousand dollars in tax credits, that's like adding a million dollars in sales."
The Georgia General Assembly created a tax council this year, charged with rewriting the state's tax code. Kopelman worries that they could do away with existing tax incentives if not enough companies use them:
"To companies that are growing, and that are training their employees, that are investing in machinery and equipment and growing their workforce in this state, they're a tremendous help and assistance to those companies."
For those reasons, Kopelman says, he hopes the council decides to keep them around.