State of Tennessee: Jobs4TN: A New Approach to Economic Development in Tennessee

8 Sep, 2011

By: William F. Hagerty, IV


Gov. Bill Haslam (left) and Economic and Community Development (ECD) Commissioner Bill Hagerty (right) speak with press after the announcement of the INCITE initiative, an ECD led initiative designed to raise Tennessee’s profile in innovation-based economic development and drive growth in the creation of knowledge-based jobs.

When Governor Bill Haslam appointed me as commissioner of Economic and Community Development (ECD) for the state of Tennessee in January 2011, I knew the job ahead would be challenging. Governor Haslam ran on a platform of job creation, and he was ready to fulfill those promises.

My department was tasked by the Governor’s office to conduct a top-to-bottom review of our policies and programs, with the ultimate goal of creating an economic development plan that would accomplish the top priority of the governor: To make Tennessee the Number 1 location in the Southeast for high-quality jobs.

We set out to talk to the citizens of the state; business owners, both large and small; and economic development professionals to get an idea of what was working – and what wasn’t. Then, we came back to the office and asked some of the top consultants we could find to dive deep into the inner workings of ECD.

What resulted from this 45-day, comprehensive, analytical look at the function, structure, budget and staff of ECD, interviews with more than 300 stakeholders, community leaders and national experts, and seven roundtables across the state was the Jobs4TN plan.

Jobs4TN focuses on prioritizing the strategic recruitment of target cluster industries and assisting existing Tennessee businesses in expansions and competitiveness, supporting regional and rural economic development strategies, investing in innovation and reducing business regulation.

By leveraging our existing assets in each region, we will be able to attract new businesses to the state while helping our existing businesses expand and remain competitive. We will also be making significant investments in innovation to position Tennessee as a national leader well into the future.

The Jobs4TN plan includes four key strategies:

1. Prioritizing target clusters and existing industries. Economic research suggests the ability to develop clusters of related industries within a state or region will be increasingly important to economic competitiveness in the 21st century. Tennessee will focus its recruitment efforts on six target clusters in which the state has a clear competitive advantage: automotive; chemicals and plastics; transportation, logistics and distribution services; business services; health care; and advanced manufacturing and energy technologies.

According to the most recent Department of Labor data, nearly 300,000 Tennesseans, nearly 14 percent of total employment within TN are

Gov. Bill Haslam, joined by First Lady Crissy Haslam and ECD Commissioner Bill Hagerty, tour the Volkswagen facility Chattanooga, an automobile manufacturing facility which is producing the all-new 2012 Passat sedan.

employed at one of the 6,625 establishments in the state that operates in the manufacturing sector. In 2009, the average annual wage for Tennesseans working in the manufacturing sector was $48,646.

The state’s largest manufacturing subsectors, based on employment, are Transportation Equipment Manufacturing, Fabricated Metal Manufacturing and Food Manufacturing. These three subsectors account for 35 percent of the total Tennessee manufacturing employment. A number of manufacturing subsectors make up Tennessee’s manufacturing story and represent a total 2010 manufacturing GDP output of nearly $40 billion, nearly 16 percent of Tennessee’s total GDP.

2. Establishing regional “jobs base camps” across the state. ECD has fundamentally restructured its field staff to establish a “jobs base camp” in nine distinct economic development regions across the state. Each base camp will work with local partners to develop and/or revise a region-specific economic development strategic plan and align existing federal and state resources around that plan.

3. Investing in innovation. In a global economy a focus on innovation along with raising our achievements in education is the best approach to moving our state’s economy forward. In May, Gov. Haslam introduced the INCITE initiative, named for its focus on innovation, commercialization, investment, technology and entrepreneurship. INCITE’s goal is to raise Tennessee’s profile in innovation-based economic development and drive growth in the creation of knowledge-based jobs.

The INCITE initiative includes four areas of focus:

• Innovation Coordination – Each of the regional economic development plans must incorporate a strategy for developing innovation using the region’s unique assets. The Tennessee Technology Development Corporation (TTDC), a non-profit that works to increase the formation and expansion of science and technology businesses in Tennessee, will play a key role in assisting with the development of these plans.


Gov. Bill Haslam speaks at one of the seven economic development roundtables held across Tennessee.

• Commercialization – ECD is launching a series of initiatives designed to help move new products and technologies from the research lab to the marketplace faster. As a first step in enhancing commercialization partnerships, Gov. Haslam awarded $10 million in funding to the Memphis Research Consortium, an innovative public-private partnership designed to leverage and enhance strategic research and development assets in West Tennessee.

• Entrepreneurship – ECD will fund a new or existing business incubator in each of the state’s nine economic development regions. In June, Gov. Haslam and I announced Startup Tennessee – public-private partnership designed to connect and align entrepreneurial efforts across Tennessee. This statewide incubator network will help entrepreneurs share best practices and support efforts to raise private capital.

• Co-Investment Funds – Tennessee will target $30 million toward the creation of early stage, seed, and mezzanine capital co-investment funds. These funds will be designed to be self-sustaining and to compliment Tennessee’s existing state-sponsored venture capital TNInvestco program and the programs offered by Pathway Lending, a nationally recognized economic development lender focused on business expansion loans in support of job creation initiatives. ECD expects the co-investment fund to be operational by fall 2011, pending federal funding.


4. Reducing business regulation. Gov. Haslam and I believe that government does not create jobs, but instead, creates an environment that gives private sector businesses the confidence to invest. Burdensome regulations can often inhibit a business-friendly environment, so Gov. Haslam asked ECD to lead a review of state and federal laws that could negatively affect job growth. Those laws and regulations identified as troublesome will undergo a cost-benefit analysis to determine if they are indeed meeting their true intent. The recommendations will then be evaluated on the state level and also presented to our state’s congressional delegation in fall 2011.

Jobs4TN is one component of this administration’s comprehensive jobs plan to support and encourage investment of new business and

Gov. Bill Haslam (second from right) and Economic and Community Development (ECD) Commissioner Bill Hagerty (third from right) tour Alstom Power facility in Chattanooga, Tenn.

existing business in Tennessee. Our jobs plan also includes education reform initiatives that focus on children in the classroom and a well-educated, quality workforce in Tennessee, which is the most important long-term strategy for successful economic development. A quality workforce will drive good, long-term jobs to Tennessee. Another piece of the plan is ensuring a business-friendly environment in Tennessee that is strengthened through less cumbersome rules and regulations on business along with tort reform to curb lawsuits and provide certainty around corporate legal issues. I am excited about our new strategy and believe Jobs4TN is the right plan for Tennessee.

About the Tennessee Department of Economic and Community Development
The Tennessee Department of Economic and Community Development’s mission is to develop strategies which help make Tennessee the No. 1 location in the Southeast for high quality jobs. The department seeks to attract new corporate investment in Tennessee and works with Tennessee companies to facilitate expansion and economic growth. To find out more, go to www.tn.gov/ecd.