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2007: Global Reach, Local Impact
Against a backdrop of moderation in the national economy, Tennessee took bold steps to continue its amazing success in the creation of higher skilled, better paying jobs in 2007. Looking toward job creation with a global view, the Tennessee Department of Economic and Community Development assisted Governor Phil Bredesen in staging a groundbreaking trade mission to the People’s Republic of China in 2007, establishing the state’s first ever economic development office in Beijing. But ECD’s efforts weren’t all beyond our borders. Tennessee launched an innovative series of new initiatives for rural communities over the past year, providing a broad range of economic development tools for communities in which quality of life is high, but for whom job growth has remained a challenge. The Rural Opportunity Initiative, as its
called, coupled with the Rural Opportunity Fund, seeks to bolster job growth by assisting companies in rural Tennessee, companies for whom access to capital remains a barrier. These new ideas are garnering attention for Tennessee. National publications like Forbes have labeled our state one of the most improved states in the nation for business and economic development. Publications like Site Selection named Tennessee a top ten state for business development for the third year in a row. In Tennessee, we’re clearly mapping our strategy for success. In economic development circles around the world, Tennessee’s success is getting noticed. The challenge comes in partnering with local communities to build on that success.
“We’re on the radar of expanding companies in growth industries around the world. We have a business climate, a quality workforce and a commitment to improving education which will help Tennessee sustain a competitive advantage in job growth.”
– ECD Commissioner Matt Kisber
MAKING THE CONNECTION...
Tennessee’s innovative approach to job creation can be seen in the success of the state’s largest economic development project in 2007. In July, Governor Bredesen joined Lieutenant Governor Ron Ramsey, CEO Brian Ferguson and the employees of Kingsport’s Eastman Chemical Corporation to announce the company’s plans to launch Project Reinvest, a $1.3 billion plan to expand the capacity of the chemical company and to combine company and state resources to invest in both people and new technology. Innovative new programs utilizing higher education and ECD training programs will prepare Eastman employees and young people in the community for the next generation of chemical manufacturing, in what could become a model for other companies across the state.
TENNESSEE TOP ECONOMIC DEVELOPMENT PROJECTS 2007 Company Eastman Chemical Co. General Motors Technicolor Videocassettes Verizon Wireless USEC Alstom Power Hydroserre Tennessee Nike, Inc Biomimetic Therapeutics Aisin Vought Industries Wright Medical Industries ThyssenKrupp Waupaca VIFAN USA Ethanol Grain Processors Jobs Created TBD 3,900 850 665 450 360 291 244 180 160 131 129 100 55 50 Location Kingsport, Sullivan Co. Spring Hill, Maury Co. Memphis, Shelby Co. Franklin, Williamson Co. Oak Ridge, Anderson Co Chattanooga, Hamilton Co Livingston, Overton Co. Memphis, Shelby Co Franklin, Williamson Co. Clinton, Anderson Co Nashville, Davidson Co. Arlington, Shelby Co. Etowah, McMinn Co Morristown, Hamblen Co Obion, Obion Co Industry Sector Chemical manufacturing Auto manufacturing Distribution Telecommunications & corporate HQ Centrifuge manufacturing Turbine generators Hydroponic agriculture Distribution Medical drug devices Automotive parts Aerospace manufacturing Medical devices Automotive parts Food packaging Alternative fuels Capital Investment $ 1.3 B 863 M 17 M 40 M 64.8 M 200 M 45 M 1M 19.5 M 67.4 M 63 M 61 M 162.5 M 70 M 170 M
Tennessee continued to market itself as an attractive location for corporate headquarters as well. Since 2003, 38 businesses have located their corporate headquarters operations to Tennessee, including Verizon in Williamson County and Alstom in Hamilton County. 2007 also marked Tennessee’s first significant Chinese manufacturing investment
when Fushi International acquired Fayettevillebased Copperweld with a plan toward additional capital investment in new technology and new job creation. Tennessee continues to be a valued market for foreign investors, with new expansion projects by the French-based Alstom, Germany’s ThyssenKrupp and Aisin of Japan.
uIn all, ECD-led projects created more than 23,998 new jobs
in Tennessee in 2007, resulting in more than $5.85 billion in new capital investment.
The past year also saw the launch of several significant initiatives which will pay dividends in 2008. At the 2007 Governor’s Conference on Economic and Community Development, Governor Bredesen announced the creation of the Rural Opportunity Initiative, a series of efforts aimed at bolstering job growth and providing new capital to spur job creation in Tennessee’s rural communities. In addition to an aggressive new series of tax credits for companies locating in areas with traditionally high unemployment and the Rural Opportunity Fund aimed at providing growth capital to successful rural companies, the Governor also announced the creation of the Orange Carpet Tour program. Communities who take part in an Orange Carpet tour will have the opportunity to market themselves to site selection consultants who only rarely visit small, rural communities. In addition to raising their profile, communities will receive feedback from consultants about their strengths and weaknesses relative to other communities. Governor Bredesen and Commissioner Kisber continued to shine the light on rural economic development through hosting a series of roundtable discussions with business and industry leaders in the state’s rural economies. These events resulted in engaging dialogue between local and state leaders, highlighting the unique barriers to economic development efforts in rural communities and discussing creative solutions.
Both Governor Bredesen and ECD Commissioner Matt Kisber have made job growth and business investment in rural Tennessee an area of focus in 2008. The idea resulted from a series of roundtable discussions held by the Governor with business owners and community leaders across Tennessee in the fall of 2007.
A COMPASS FOR JOB GROWTH
Tennessee’s innovative Three Star Community Development program has long been considered a model for states who seek to partner with communities to attract new jobs and investment. Following a redesign of the program in 2003 with new requirements around strategic planning and community assessment, Tennessee communities have embraced the Three Star program with more than 87 communities representing 329 separate municipalities seeking certification. Since the program was changed, nearly 50,000 community leaders across the state have undergone Three Star training. Tennessee communities acknowledge the vibrancy of their downtown business districts is a key factor in job creation success. That’s why Tennessee launched Main Street, a certification and training program aimed at helping community leaders revitalize their downtowns. uIn 2007, Economic and Community Development experienced strong growth with 21 communities becoming certified as part of the Tennessee Main Street program and more than 1,600 community leaders taking part in training classes.
provide basic economic development and leadership courses in a program called ROI-Training. The aim of the program is to combine the “best practices” of veteran economic developers into one program that is understandable and easily accessible to those responsible for job recruitment in their communities. ECD has also reorganized its people involved in economic development and leadership training, putting additional staff into field offices around the state and reducing territorial responsibilities, allowing ECD trainers to maintain closer ties with communities and to be more responsive to their needs.
For many of these communities, the development of basic skills in job creation and leadership is an essential first step toward community success. That’s why in 2008, the Department of Economic and Community Development will partner with the Tennessee Valley Authority to
The state’s Three-Star Communities were honored by Governor Phil Bredesen, Commissioner Matt Kisber and Assistant Commissioner Rick Meredith at a special ceremony during the 2007 Governor’s Conference in Nashville, Tennessee.
HOME GROWN JOB GROWTH
Large project announcements by mega-corporations often garner headlines and attention, but in Tennessee, the vast majority of businesses are small companies employing hundreds of thousands of Tennesseans. For a Governor who started a company at his kitchen table or an ECD Commissioner who grew up in a family business, developing programs to nurture Tennessee’s small, minority-owned and woman-owned businesses is a good way to diversify and strengthen Tennessee’s economy. That’s why Governor Bredesen led the way on worker’s compensation reform in 2004, knowing the business segment most likely to benefit would be small business. And it’s why the administration launched the Business Enterprise Resource Office (BERO) in ECD, as a way to provide assistance to Tennessee companies capable of the kind of growth that can become an economic engine driving job creation. Already, BERO’s impact can be seen in the creation of the ECD Rural Micro-loan Fund. Often, small companies have growth potential, but can’t find access to
capital. BERO provides small loans of a few thousand dollars to those minorityand woman-owned companies or sole proprietors who need capital to take an idea to the next level. Small companies also have a tough time getting that foot in the door to see a buyer for a major corporation or government agency. Through BERO’s Business MatchMaking events, entrepreneurs engage in brief 5 or 10 minute one-onone meetings with major customers to make their pitch. Called “speed dating for small business,” the Business MatchMaking program provided contracting opportunities for 904 small Tennessee firms in 2007, generating more than $565,000 in new contracts.
uBERO has also provided one-on-one business counseling
for 1,811 Tennessee companies in 2007, a 6% increase over the previous year.
Companies can also take advantage of an online small business resource directory created by BERO at www.tnecd.gov/bero.
Through BERO’s Business MatchMaking program, entrepreneurs are given the opportunity to meet one-on-one with procurement officers for government and large corporations. In 2007, more than 900 Tennessee companies were awarded contracts as a result of Business MatchMaking.
FUELING JOB GROWTH
2007 marks a watershed for Tennessee’s role as a leader in the development of alternative fuels. It began with Governor Bredesen’s creation of the Alternative Fuels Working Group, a panel of experts representing Economic and Community Development, Agriculture, Environment and Conservation and other areas of state government, charged with reducing energy consumption within state government. For the first time ever, Tennessee now has a Director of Energy Policy within ECD. Governor Bredesen has also brought together some of Tennessee’s brightest minds to develop new technologies around the creation of ethanol from cellulose. With more than $75 million dollars in start-up funding from the state, the University of Tennessee and Oak Ridge National Laboratory will collaborate on the creation of a pilot refinery for ethanol from plants like poplar trees, wood chips and switchgrass in an effort to create a marketable process for economically creating fuel from non-foodsource products.
uTennessee’s efforts culminated in 2007 with the decision by
the U.S. Department of Energy to award one of three national biofuels research centers and $125 million dollars in federal funding to the Oak Ridge National Laboratory.
Below, Governor Bredesen pumps the first tank of Tennesseemarketed biodiesel fuel as part of the first-ever ‘BioFuels Day’ in June 2007. The initiative is part of BioTENN, the state’s campaign to expand the availability of alternative fuels in Tennessee. As a result of BioTENN, a growing number of stations in Tennessee are offering either E85 (ethanol), B20 (biodiesel) or both. A map of participating stations can be found at www.BioTENN.org.
G ME ERSH IP FOR HO
Through ECD, state funds are also being utilized to create BioTENN, a program aimed at expanding the infrastructure for the next generation of flex fuel vehicles. Expanding the number of alternative fueling stations across the state will ultimately help the market for fuel efficient vehicles expand, putting new capital in the hands of Tennessee companies producing alternative fuels and placing Tennessee at the forefront of the next generation of automobile technology.
SHARING TENNESSEE’S PROGREss
By all standards, Tennessee’s job growth since 2003 has been remarkable, but in 2007 Governor Bredesen raised the bar for economic development by addressing the stark reality of the state’s success: much of the job creation has been centered around the state’s six largest urban areas and much of rural Tennessee has not shared in that growth. To meet the challenge, the Governor announced ECD would launch the Rural Opportunity Initiative or ROI, a series of steps designed to jump start rural economic development. Working closely with the Tennessee Department of Revenue, ECD developed a series of aggressive new tax credits for companies expanding or locating in rural communities with traditionally high unemployment. ECD also developed the Tennessee Tool Kit, the state’s first ever comprehensive, publicly available overview of incentives and tax credits. Within weeks of its publication, more than 5,000 copies of the Tennessee Tool Kit were made available to local chambers, industrial development boards and economic development agencies across the state. An important part of the ROI initiative has been the creation of the Rural Opportunity Fund, a combination of state and private dollars which will be used to help successful rural businesses expand and create new jobs.
“We’ve received very positive feedback from our launch of ROI and the publication of the Tool Kit. Local recruiters now have a great way to explain why locating a business in rural Tennessee makes good economic sense and they have the marketing materials they need to reinforce that story.”
– ECD Commissioner Matt Kisber
Governor Bredesen holds a roundtable discussion with business owners in Weakley County, Tennessee to discuss ways of improving job growth and workforce quality in rural communities. In a series of conversations with rural community leaders, the Governor has started a dialogue with community leaders about making Tennessee economically competitive.
RURAL OPPORTUNITY INITIATIVE
In 2007, Tennessee launched the Rural Opportunity Initiative or ROI. The program is aimed at addressing the challenges of creating higher skilled, better paying jobs in rural Tennessee. Depending on the county in which it locates, a company can take advantage of ROI’s tiered system of expanded Jobs Tax Credits. The credits can be used to reduce corporate franchise and excise tax liability.
Governor Phil Bredesen talks about jump starting small business growth during a visit to Fayetteville, Tennessee.
REACHING WORLD MARKETS
Tennessee’s place in the global economy took a significant step forward in 2007 with the creation of the Governor’s Award for Export Excellence (GATE) and a broader emphasis on the success enjoyed by Tennessee companies in expanding to foreign markets. The clear emphasis was on expanding trade to Asia with a trade mission to China and the opening of the Tennessee China Development Center in Beijing in October. With full year export figures yet to be released by the U.S. Department of Commerce, it is expected the state of Tennessee’s shipments to foreign markets will roughly equal 2006’s record setting figure of $22 billion dollars. The inaugural GATE presentations took place in September at the Governor’s Conference on Economic and Community Development and winners were announced in the large (250 or more employees), medium (25 to 250 employees) and small (25 or less employees) business categories. The large business winner was Astec Underground of Loudon, a maker of underground construction equipment and entrenching machines. In the medium sized category, the GATE went to FujiFilm Hunt Chemicals of Dayton, a manufacturer of chemicals and emulsions for photographic papers and in the small business category, the winner was Rosalee WomanSize Apparel of Clarksville, a manufacturer of apparel for plus-sized women that has developed a significant overseas business using E-Bay and the Internet.
TOP TEN TENNEssEE EXPORT COMMODITIEs
1. Industrial machinery, including computers 2. Motor vehicles and parts 3. Optical or photographic medical equipment 4. Electrical machinery and parts, audio television 5. Plastic and plastic parts 6. Aluminum and aluminum parts 7. Aircraft, spacecraft and component parts 8. Cotton, yarn and woven fabric 9. Organic chemicals 10. Beverages, spirits and vinegars
At right Rosalee Bellamy of Rosalee Apparel, Angela Fox of Astec Underground (middle photo) and John Sidenstick of Fuji Film accept GATE awards from Governor Phil Bredesen and Commissioner Matt Kisber at the 2007 Governor’s Conference.
TENNESSEE TOP ECONOMIC DEVELOPMENT PROJECTS 2006 Country Canada Mexico China Great Britain Japan Germany Netherlands Belgium Singapore Australia 2006 Total 2007 Through Q3
$6.9 billion $2.2 billion $1.8 billion $866 million $872 million $773 million $711 million $319 million $407 million $456 million
$5.6 billion $2 billion $955 million $732 million $656 million $640 million $512 million $461 million $444 million $442 million
“Global trade in Tennessee is growing at an amazing rate, to the extent that we determined it worthy to create an annual award and shine a spotlight on some of the best examples in the state. These winners show that expanding the market for Tennessee products can be done by any size company. We hope that by showcasing their best practices, other companies will be encouraged to expand their operations in the global marketplace.”
– ECD Commissioner Matt Kisber, 2007 Governor’s Conference award ceremony
BUILDING GLOBAL PARTNERSHIPS
The state of Tennessee’s job creation efforts took on a uniquely global perspective in 2007 with the opening of the state’s first ever international trade office in the People’s Republic of China and the first governor-led trade mission to the Asian nation in more than a decade. Governor Bredesen and Commissioner Kisber led a delegation of more than 100 prominent Tennesseans from business, education and government, including Lieutenant Governor Ron Ramsey and House Speaker Jimmy Naifeh in a nine day visit to Beijing, Shanghai and Hong Kong. During that time, Governor Bredesen and Commissioner Kisber held talks with Deputy Commerce Minister Ma Xiu Hong and formally opened the Tennessee China Development Center in Beijing’s Silver Tower.
“I was told by our Chinese friends that this delegation was one of the largest the Chinese government hosted in 2007, and in a country where numbers count, our willingness to bring more than a hundred of our highest ranking citizens to China to learn and to discuss opportunities to expand trade sends a clear signal that Tennessee is serious about our economic ties to China.”
– Governor Phil Bredesen
Governor Bredesen and Commissioner Kisber also attended the Southeast U.S.-Japan Association meeting in Tokyo continuing a relationship between Tennessee and the Japanese business communities that extends back more than two decades. Meeting with executives from Japanese companies located in Tennessee such as Bridgestone-Firestone, JTEKT, VIAM and Nissan. The Governor and Commissioner also participated in the signing ceremony establishing the Southeast U.S.-Canada Association as well. Modeled after the successful SEUS-Japan organization, SEUS-Canada seeks to expand the trade relationships between Tennessee, five neighboring states and the region’s largest trading partner.
Above, Governor Bredesen addresses the Tennessee Delegation in Beijing, October 2007. A left, Governor Bredesen and Commissioner Kisber attend the signing ceremony creating the S.E.U.S.-Canada Association.
2007 ECD TIMELINE
17 JAN 23 25 1 FEB 7 9 12 12 20 20 7 MAR 9 20 21 22 28 APR 6 11 8 MAY 15 16 31 31 ECD Launches Main Street Innovation Grants ECD Launches Three Star Innovation Grants Japan External Trade Office announces investment seminar in Jackson, TN Governor Bredesen awards $3.5 million in Alternative Fuels grants ECD co-sponsors workshop on wind energy generation Governor’s Three Star Advisory Council meets to discuss program changes Federated Department Stores facility breaks ground in Portland, TN HydroSerre announces operations in Overton County Business MatchMaking event in Jackson, TN Starplex Scientific announces in Cleveland, TN ECD selects Tennessee Tech to hold energy assessments Mi-Jack expands in Obion County Main Street Summit held in Franklin, TN Federated Dept Stores project wins Trade & Industry Development award JETRO sponsors two Tennessee companies in Japanese exploratory visit TN Film Commission announces new filmmaking incentives JessEm Tools announces operations in Greeneville, TN Trade delegation from Quangdong, China visits TN Governor Bredesen awards $200,000 in Main Street Innovation grants ECD announces trade mission to China Tennessee hosts Automotive News Manufacturing Conference in Nashville, TN ECD co-sponsors first BioFuels Conference ECD and General Assembly work together to pass MegaSite Authority bill
7 JUNE 8 27 27 JULY AUG 19 27 22 31 12 SEP 13 24 12 OCT 16 17 18 22 DEC 11 12
BERO holds Business MatchMaking event in Franklin, TN ECD announces Governor’s Award for Trade Excellence TN’s first director of Energy Policy Madem USA locates first U.S. plant in Chattanooga Eastman Chemical announces $1.3 billion investment in Kingsport, TN Connected Tennessee releases statewide broadband inventory Verizon Wireless announces HQ in Franklin, TN Aisin announces expansion in Clinton, TN Tom Oreck keynotes 2007 Governor’s Conference on Economic and Community Development Governor Bredesen announces Rural Opportunity Initiative ThyssenKrupp Waupaca announces expansion in Etowah, TN Governor Bredesen and Commissioner Kisber attend SEUS-Japan Association meeting in Tokyo Governor Bredesen and Commissioner Kisber launch China Trade Mission Tennessee China Development Office opens in Beijing Phenotype Screening Corporation of Seymour, TN strikes agreement with Chinese government West Clinic of Memphis, TN opens new facility in Shanghai Alstom announces expansion and regional headquarters in Chattanooga, TN Novita Technologies announces operations in Hendersonville, TN
THE NUMBERs 2003-2007
Job opportunities Created in tn
132,161 $19.1 billion 3,683
new Capital investment in tn
Job Creation proJeCts tennessee workers trained bY eCd, FasttraCk and tennessee Job skills programs value oF tennessee produCts exported state and Federal grants administered CommunitY leaders involved in three star program
$90 billion $244 Million 49,468
The Economic and Community Development 2007 Playbook was conceived, written and designed by the department’s Communications & Creative Services staff. Creative Services serves as an in-house design, marketing and graphics agency for the State of Tennessee. To learn more about ECD visit us on the web
Tennessee Department of Economic & Community Development, Authorization #330969 - 7,500 copies, February 2008. This public document was promulgated at a cost of $.38 per copy.