Tennessee: Serving Up Southern Hospitality Industrial-Style
30 Jun, 2005By: Matthew H. Kisber
Taking a look inside Tennessee is like opening a box of chocolates. There’s an assortment and variety that can only be discovered when one takes a bite into it. It’s a state that’s growing by leaps and bounds and its central location and extensive resources position it as the ideal nucleus of the vibrant Southeast economy.
From biotechnology and auto manufacturing to distribution and transportation services, Tennessee is offering southern hospitality industrial-style with a new toolbox of incentives and plenty of strategic advantages that are attracting innovative, high-tech companies.
The state offers a unique approach to economic growth, unlike any other state in the nation. This strategy, known as the “Governor’s Jobs Cabinet,” was created by Executive Order in 2003 and facilitates cooperation between the various departments of state government as well as representatives from higher education and business trade groups concerned with the creation of better paying, higher skilled jobs. The Jobs Cabinet is focused on building viable partnerships and has been essential to achieving success in job recruitment and retention and work force training strategies. And companies relocating and expanding in Tennessee are taking notice.
“A number of business people from outside the state have told me that they really like the approach,” says Tennessee Governor Phil Bredesen. “I think the combination of the Jobs Cabinet and particularly some of the things that we’re doing to try to speed up the decision-making process have earned high marks from people who are looking at locating here.”
Commissioner Matthew Kisber, who leads the state’s economic and community development efforts, says the Governor’s Jobs Cabinet approach is creating unprecedented opportunities for the state of Tennessee and its local communities.
Kisber proudly shares a story about a collaborative pitch made by state and local officials to a Fortune 500 company that was considering Tennessee for a new plant location. After hearing the state’s pitch, Kisber said the president of the company closed the presentation book and said, “You know, what’s in the book in terms of incentives are nice. But what’s even nicer is seeing that when I talk to any one of you, I’m talking to all of you. That is unparalleled in any place we’ve done business, as well as our past experience in Tennessee.”
ECD is using this same powerful partnership approach in working with other diverse organizations, most notably those that have a vested interest in technology business development. By tapping into powerhouse centers such as Oak Ridge National Laboratory, the FedEx Institute, Vanderbilt Medical Center, St. Jude Children’s Hospital and dozens of other technological resources, the state is leveraging job growth opportunities and encouraging entrepreneurship.
Tennessee is home to an impressive base of existing technology resources representing some encouraging opportunities for the state to expand on. The diversity of the state’s research and technological strengths stretch all across the state from the Oak Ridge National Laboratory in East Tennessee to St. Jude Children’s Research Hospital in West Tennessee and Vanderbilt University Medical Center in Middle Tennessee. In addition, several biotechnology and life sciences companies are also finding success in the state. These important organizations and initiatives have the potential to put Tennessee in a healthy position for economic growth and development in the technology sector.
“We have a strong research base in Tennessee, and we need to support it and grow it,” says Eric Cromwell, Tennessee’s director of technology development. “Great research is happening at the University of Tennessee, Vanderbilt University, schools in the Tennessee Board of Regents system and others, and we need to make sure we leverage that for job creation. Tennessee also has Oak Ridge National Laboratory, the largest multi-purpose federal laboratory in the country, and that is a great asset to have.”
“Tennessee is working aggressively to attract industries from a wide range of sectors.” Kisber adds. “We are taking technology development seriously and we’re working hard at building communication and bringing together technology interests and resources that could support one another.”
Perhaps one of Tennessee’s greatest assets is the strong leadership it has in its governor. For the past two and a half years, Governor Bredesen, a Harvard-educated physicist with a successful record as founder and CEO of a NYSE-listed health care company, has led the state to a stable and growing economy in which to do business. Governor Bredesen, who served from 1991-1999 as Mayor of Nashville, came into the state office as an economic developer. He was responsible for bringing high profile companies such as Sprint PCS, Dell, HCA and Hewlett-Packard to Nashville during his tenure as mayor.
Since taking the helm as governor in 2003, more than 68,000 jobs have been created in Tennessee. In 2004 alone, the state successful recruited 80 new projects and 982 existing industry expansions creating over 30,000 new jobs and more than $3.6 billion in capital investment.
Governor Bredesen has been widely recognized for his efforts to create a climate that fosters good business, and successfully pushed for improvements in the state’s worker’s compensation system. Tennessee’s old workers’ compensation system became one of the biggest challenges in selling the state as a location for new and expanded projects. This meaningful reform has already resulted in significant reductions in premiums, and continued reductions are expected in the years ahead. Today’s reform package has helped to create an even more competitive and balanced environment for business in Tennessee and has resulted in increased activity and interest among the business community.
Most recently, International Paper, the world’s largest paper and forest products company, which has had a corporate presence in Memphis since 1987, announced that it would relocate its global headquarters to the city, making Tennessee home to now eight FORTUNE 500 companies. Other significant announcements have included new projects such as Toyota-Bodine Aluminum, Aisin Automotive Casting Tennessee, Inc. and PK USA as well as a number of major expansions including Brunswick Boat Group, Caremark, Perdue Farms and Nissan, to name a few.
The state has also reinvigorated its focus on community development and small business growth. The redesigned Three-Star Program is receiving national recognition as a best practices model for its guidelines and incentives for local communities.
“Communities need to have some basic things in place, such as a strategic plan, a leadership program, updated web site and a strong focus on education and health care,” says Joe Barker, ECD’s assistant commissioner of community development. “These are the things that need to be in place to have job creation.”
Small business is becoming a big topic in Tennessee as well. Through the Governor’s Office of Diversity Business Enterprise (GO-DBE) and the Department of Economic and Community Development’s Business Enterprise Resource Office (BERO) more assistance to small, minority and women-owned businesses is taking place. Last year, BERO assisted over 600 businesses falling in these categories.
Consistently dedicated to attracting new business, the state also offers a variety of incentives including jobs tax credits, job training and infrastructure development programs. With more than 80 percent of new jobs created by existing business in Tennessee, the state has also made its incentive programs available to existing industries to encourage new job growth.
“Let me make it clear. Incentives are not the fix-all solution to attracting businesses or keeping them here,” Kisber says. “We have made great progress in retooling the power and scope of our incentive tool box for new industry recruitment while expanding those opportunities to existing industry and into our community development efforts, but we know there are many aspects in Tennessee that differentiates us from other states.”
While the Tennessee industry base continues to diversify, manufacturing remains the largest single industry in the state representing 16 percent of the labor market, followed by health care and social services, at 12 percent.
“We’re fortunate in Tennessee to have a very diversified economic base with a very strong manufacturing component,” Kisber says. “Across the state, there are illustrations large and small of productive and efficient manufacturing operations that are at the top of their company’s productivity. That’s a testament to Tennesseans.”
“In Tennessee, we welcome the opportunity to demonstrate what we can do to encourage business growth and new investment,” Kisber says.
For more information on doing business in Tennessee, please visit www.tnecd.gov.