Tennessee Well Versed in the Knowledge-Based Economy

13 Jan, 2014

By David Hodes

Bill Hagerty, the commissioner of the Tennessee Department of Economic Development and Community Development, says state officials have created a new business development fund to continue to fuel the development rising out of the economic malaise from 2008.

“There have historically been two tools of funds that I have to work with outside of tax credits,” Hagerty says. “One of those tools is aimed at infrastructure, essentially for industrial parks and for general improvements that steps the infrastructure up to the level a company needs to support its operations.”

The new business development fund goes further with this tool, allowing the economic development department to offset direct costs associated with relocation — such as moving, setting up temporary offices and retrofitting the space inside the building — rather than just the infrastructure leading up to the building, Hagerty says. “That allows us to get a property and a company much more tangibly moved in.”

One requirement for the new fund is that the company has to have a significant, meaningful, long-term and durable impact on the community. Hagerty explains: “For example, if a company came in and reopened a factory that had been shuttered for a long time, and brought with that a high level of employment, that would be meaningful. So it depends on the circumstance.”

Hagerty says that the state’s administration also has a renewed focus on export development, relying on Tennessee’s strength as a logistics hub — represented by the FedEx global “Super Hub” at the Memphis International Airport — which has attracted major distribution facilities for Nike, Sharp and Hewlett Packard.

Industries and Innovations

The industry focus in the northeast Tennessee Valley is centered on the attraction of automotive suppliers, notes Alan Bridwell, executive director, Northeast Tennessee Valley Regional Industrial Development Association (NETVRIDA).  The organization is teaming with Rainer Heumann, a German-born European business representative for the state, to assist the area in growing the cluster. Heumann was a consultant for NETVRIDA on the $1 billion Volkswagen plant in Chattanooga, which opened in 2011.

This area of the state has become an automotive corridor. Last year, German-owned Huf North America announced a $20 million expansion to its Greeneville plant. The company, which says its experiences with the local workforce was a factor in its decision making, plans to add 100 new jobs.

Bridwell says Heumann will identify suppliers in the northeast because the area is in reasonable proximity to both the Volkswagen plant in Chattanooga and the BMW plant in Greenville, S.C. “We have quite a bit of German automotive players in this region,” Bridwell says. “We are really trying to beef that up and support that. We think that is our best niche to be working within.”

Midway down the eastern border of the state of Tennessee is Blount County. Bryan Daniels, president and CEO, Blount Partnership, says that the partnership is heavily involved with knowledge-based economy projects, and research and development utilizing the 58-square-mile Oak Ridge National Lab, managed for the U.S. Department of Energy by University of Tennessee-Battelle LLC. “The assets of the lab are numerous,” Daniels says. “From high speed computing to the genomics research to the new energy initiatives — all of those things are really driving our economy.”

The partnership recently announced ProNova Solutions will make a $52 million investment in a two-phase development on 26 acres at Pellissippi Place, and bring 521 jobs with pay in the $100,000 a year range. ProNova Solutions is the anchor tenant at Pellissippi Place, a R&D park located on the Oak Ridge corridor in Alcoa.

Talent and Education

The state has some of the best educational institutions in the country, including Belmont University in Nashville, a highly ranked master’s degree level institution; Tennessee Tech University in Cookeville, with studies in nursing, business and engineering; and Vanderbilt University in Nashville, with highly ranked programs in law, medicine and business.

Daniels says his organization has a robust relationship with the University of Tennessee and Roane State Community College, among others in the area. “These institutions are actually teaching classes within some of these research and development disciplines to get a trained workforce into this knowledge-based economy,” he says.

A new science, technology, engineering and math (STEM) school — the Clayton-Bradley STEM Academy — just opened adjacent to the Pellissippi Place. “We are already seeing a capped-out enrollment in that STEM school,” Daniels says. “We are very fortunate because of the influence Oak Ridge Labs has on our entire region. It’s helping even the workforce development piece of the economy.”


Daniels says that Pellissippi Place is the partnership’s second regional technology property. The region’s first, Stock Creek Development Centre, is a 300-acre R&D park built in 1984 and is near capacity, home to companies such as Siemens (making PET scanners); Microbial Insights Inc., an environmental biotechnology company; and the Southern Impact Research Center, which does testing and research for sporting goods and other types of personal protective products.

In Fentress County, which is positioned along the mid-northern border of the state, economic development officials have added a new industrial park to the inventory. The Clarkrange Regional Business Park is 13 miles from Interstate 40. The initial phase of the park consists of 244 acres, with an option on another 750 acres, says Walt Page, executive director, Fentress County Industrial Development Board. Eighty acres have been cleared at the site, and the Tennessee Department of Transportation will be putting in a paved road soon.

Page says one of the biggest projects underway is the application process for an Appalachian Regional Commission grant to install gas lines for the park. “Once we get that park situated with those plans, we will be in fair shape,” he says. The park is ideally suited to support Tier I and Tier II automotive suppliers, particularly those providing services and products to the Volkswagen plant in Chattanooga, which is located about 100 miles away.

The county’s existing industrial park in Jamestown has an empty 60,000-square-foot building that had been used by Camel Manufacturing (makers of military tents) on 70 acres of available land with infrastructure in place.

NETVRIDA’s Bridwell says that in the northeast part of the state, a small aviation park is under development at the Tri-Cities Regional Airport. Officials are working to attract aerospace and advanced manufacturing businesses to the park.



The Tennessee lifestyle is a very rural, laid back experience with highlights in mountain hiking, world-renowned music centers in Memphis and Nashville, and one of the country’s best and most affordable qualities of living.

“The public education system in Blount County is always ranked No. 1 or No. 2 in the state,” Daniels says. “And that is even against private institutions.”  He also touts the activities at the Smoky Mountains.

Tennessee has transformed itself from a textile and furniture manufacturing legacy business state to a knowledge-based economy using the assets that have now shifted to fast-track development. But they don’t want to interrupt the momentum, which is why the focus for long-run survivability is on jobs.

Hagerty says that officials constantly look at how many jobs their projects produce. Last year they created 20,000 jobs; and 22,000 jobs had been created by the end of October 2013. Hagerty’s been warned that there’s no time to rest. “Gov. Haslam says ‘keep moving.’ Because what we have done is move the state forward. Success begets success.”

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Illustration by Stuart Miles at Free Digital Photos.net

Down to Business 

  • Tennessee is ranked second in the country for the lowest cost of living, according to a CNBC survey.

  • The finance, insurance and real estate services group ranks third in contribution to Tennessee’s service economy. Nashville and Memphis are Tennessee’s leading banking centers. Nashville is also home to a large health care related cluster.

  • Tennessee is ranked as the fourth best state for state and local taxes, according to the Tax Foundation.

Outdoors and Recreation

Located in the southern Appalachian Mountains of east Tennessee, the 650,000-acre Cherokee National Forest is divided into northern and southern sections by the Great Smoky Mountains National Park. The park has more than 600 miles of trails, including 150 miles of the Appalachian National Scenic Trail, seven whitewater rivers, and three large lakes managed by the Tennessee Valley Authority.

David Hodes

David Hodes is a freelance writer living in Washington, D.C. He can be reached at dhodes11@gmail.com.

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