Issue link: http://savannah.uberflip.com/i/939381
21 the state's population, up from 7.1 percent in 2000 and 2.7 percent in 1990. Georgia's population growth should benefit from an increase in number of births as people become more confident in the current situation and their expectations for the future. Small Business Expansion The lack of new business formation is one underappreciated reason why Georgia's job recovery initially lagged the nation's. New companies typically create almost all net new jobs. Business formation requires cash. The typical entrepreneur often obtains the funds needed to start, or expand, a business by borrowing, using their home as collateral. That was a problem for Georgia's entrepreneurs because home price depreciation was much more intense here than it was nationally; and Georgia led the nation in bank failures. Consequently, much of the home equity that people traditionally use to start a business evaporated. Meanwhile, Georgia's relatively high number of bank failures restricted relationship-based lending to small businesses and entrepreneurs, especially outside Atlanta's core. The good news is that Georgia's home prices have fully recovered from their lowest point, so home equity will be much more available to finance new business startups and small business expansion. Georgia's Greatest Weakness Georgia must adjust its priorities to emphasize educational achievement, which is crucial to improving productivity and competitiveness, and—ultimately— Georgians' standard of living. Success in recruiting new business and industry and retaining existing industry increasingly is dependent on the availability of skilled labor. The challenge is immense: Georgia trails many other states when it comes to K-12 education. According to the National Center for Education Statistics (2015 data), Georgia's eighth graders rank 36 among the states in math, 37 in reading, 29 in science, and 27 in writing. Only 28 percent are proficient in math. Ultimately, in a flat world a failure to educate our children lowers Georgian's relative standard of living. That is definitely showing up in the incoming data. In 2016, per capita personal income in Georgia measured at only 84 percent of the national average, and ranked 40 among the 50 states. Relatively low educational achievement is probably the main reason why Georgia's per capita income, productivity, and innovation ecosystem are below average. Bolstering education will go a long way towards assuring that Georgia's economic performance remains among the best in the nation.