Snapshots: 60 Seconds… With Bill Hagerty, Commissioner, Tennessee Department Of Economic And Community Development
By the Business Facilities Staff
From the July/August 2014 issue
BF: Tennessee has been cited by the U.S. Department of Education as the state most effectively implementing the Race to the Top program. What steps has Tennessee taken to achieve this result?
BH: Tennessee has been making great strides in education thanks to Gov. Haslam’s intense focus on the state’s education system. Tennessee’s K-12 system is the fastest improving of any state in the nation and with the Drive to 55 and Tennessee Promise initiatives, high school graduates will have free access to two years of community college, post-secondary technical school or the equivalent to reach the governor’s goal of 55 percent of our workforce possessing post-secondary education degrees or certificates by 2025.
We’re the first state in the nation to offer this type of program, eliminating the hurdle of tuition and fees, in an effort to raise the bar to ensure that an appropriate number of our citizens are workforce ready.
As numerous states continue to grapple with long-term budget woes, many are turning to a quick fix with a seemingly guaranteed return: the expansion of all forms of gambling. Since 2008, a dozen states have held a total of 30 statewide referendums proposing to expand gambling.
When so many states are jumping into the casino business or expanding it, what happens to the locations who long ago staked their existence on a monopoly over the slots and tables racket?
The answer can be found in Reno, NV, which bills itself as “The Biggest Little City in the World.” Reno is busy planning a future beyond gambling. The Biggest Little City still plans to focus on chips, just not the kind you sweep off the table after a winning hand: Reno has put down a marker that it intends to be one of the leading U.S. high-tech hubs.
Instead of trying to replicate Vegas’ famous Strip, Reno is opting for Startup Row, a string of e-Commerce ventures that is drawing from an overflow of techies flocking to the city’s biggest recent prize—Apple’s new data center. One example is Zulily, an e-Commerce firm that sells home decor and women and children’s clothing, which announced plans in May to double the size of its warehouse and hire 600 people.
Reno also is vying to become a leading test center for drones and is in the running for what likely will be the biggest economic development prize this year: Tesla’s lithium battery plant, from which the electric carmaker intends to supply batteries to the entire U.S. auto industry.
To lure new high-tech ventures, Reno is emphasizing its proximity to Silicon Valley (the city is a four-hour drive from San Francisco) and the fact that Nevada has no corporate or inventory taxes. The seeds for the city’s high-tech future actually were planted nearly a decade ago, when a Microsoft licensing unit and an Amazon distribution center chose to locate there.
Reno got clobbered by the Great Recession, hit by a double-whammy of shriveled tourism and a decimated housing market. Unemployment in the city peaked at 13.4 percent in 2010. But, as anyone who has ever pushed a few chips across a felt table in the Biggest Little City surely knows, eventually the bad luck will turn and that last card will deliver a royal flush. Today, Reno’s unemployment rate has dropped to 7.1 percent, its housing prices are rising and just about every week brings the arrival of a new tech company.
It says here that Reno is holding a strong hand which will be rewarded with the jackpot of a bright and prosperous future. Bet the farm on it.
BF: You recently announced that software player ForceX is putting its operations center in Nashville, a $1.8-million investment. Can we expect the Nashville region to develop as an IT/software hub?
BH: I certainly think the stars are aligning in that direction. In the Nashville area specifically, the WorkIT Nashville initiative was created to recruit technology workers to the Nashville region and help technology companies find qualified candidates. The program is a collaborative community initiative supported by the Nashville Area Chamber of Commerce, local governments and the Nashville Technology Council. Several area private employers have sponsored WorkIT Nashville, including Asurion, Bank of New York Mellon, Caterpillar Financial, Emdeon, HCA, Ingram Content Group, UBS and Vanderbilt University.
Additionally, Tennessee ranks within the top 10 R&D states in the nation. Our companies have easy access to ORNL, the largest science and energy lab in the country, Vanderbilt University and the UT Space Institute/Arnold Engineering Development Complex. Private sector R&D activity in Tennessee is increasing, with R&D employment growing by 10 percent during the past five years alone. Not only Nashville, but our state as a whole can offer IT companies a capable workforce to help their companies perform and succeed.
BF: Hatch Stamping, a Michigan-based auto components maker, is investing $17 million in a new plant in Robertson County. Are other Rust Belt parts suppliers considering relocating to or expanding in Tennessee?
BH: As a state, Tennessee has a lot to offer to a variety of industries, and that is evident with automotive manufacturers. A critical advantage we like to showcase is our central location. Tennessee’s strength in transportation and logistics offer unparalleled access to all markets within the U.S. and around the world. For industries focused on just-in-time inventory and working capital management, there is no better location. Another driving force is our talented, quality workforce. To date, we’ve spent more than $80 million on automotive workforce training and, as a consequence, have a robust pool of specialized automotive manufacturing workers. I think these advantages make Tennessee attractive to not only Rust Belt suppliers, butto suppliers throughout the U.S. and around the world.
BF: You recently selected six TN communities to participate in the Tennessee Downtown program, a competitive improvement program for cities and counties seeking to revitalize traditional commercial or historic districts. How does this program work and what are the goals?
BH: The goal of the Tennessee Downtowns program is to revitalize historic downtown commercial districts using the four-point approach of the National Main Street Center: design, promotion, organization and economic restructuring. The six new communities that were recently announced will undergo a two-year mentorship program. The first year is primarily organization and training, and the second includes a $15,000 grant for a downtown project. Communities that meet all requirements and are selected to participate in the program are also eligible for additional services, grants and training going forward.
BF: Tennessee has been ahead of the curve, especially in Chattanooga, of providing access to high-speed broadband. Does TN have a statewide program to expand high-speed Internet service? Are any big fiber-optic networks being installed?
BH: Tennessee is a nationwide leader for providing our citizens with access to the world’s fastest Internet speeds. We are a Top 10 state in gigabyte per second access speed, and Chattanooga is ahead of the curve being North America’s first residential gigabit community. AT&T GigaPower and Google Fiber are exploring the possibility of providing high speed broadband network build-outs in Nashville and neighboring Middle Tennessee communities which would give our citizens and business community a clear advantage in today’s competitive global economy.
Tennessee has also invested in a public-private partnership that develops and implements effective strategies for technology deployment, use and literacy in the state. New statewide research unveiled in June shows that nearly 1 in 10 Tennesseans now have broadband speeds of 1 Gbps (“gigabit”) or greater available to their home or residence, which is around 100 times faster than today’s average residential broadband Internet download speed. Basic broadband availability in Tennessee (768 Kbps download/200 Kbps upload) is now at 96.29%, not including mobile wireless services.
BF: The airport in Memphis is one of the world’s busiest air cargo facilities, home to FedEx’s North American shipping hub. How critical is logistics infrastructure to maintaining the strong growth potential of Tennessee?
BH: Tennessee has a distinct competitive strength in transportation and logistics. Our state is one of the foremost transportation hubs in the world with a network of eight interstate highways, railroads, international and regional airports, and navigable waterways. Memphis is home to the busiest cargo airport in the Western Hemisphere giving companies access to a broad spectrum of cargo routes and favorable rates.
These advantages not only make it easier for Tennessee companies to ship their products quickly and efficiently throughout the U.S., but it allows them valuable exporting opportunities that can’t be found in other states.