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Posted on: Monday - Jan 4, 2016

By: Commissioner Randy Boyd

In 2013 and 2014, Tennessee won “State of the Year” for economic development by Business Facilities magazine, and in 2014 set an all-time job commitment record of 24,221 new jobs. I knew coming into this job that I had a hard act to follow. However, I discovered almost immediately that I had inherited an amazing team that had the talent to continue to set records. And they did! 2015 was literally the best year in economic development in the state of Tennessee’s history.

I am happy to report our department’s stellar accomplishments. In 2015, the business development team, led by Allen Borden, landed 161 company commitments which represented 25,837 new job commitments, setting a new record! Those companies are investing $5.5 billion in capital, also a new record. Foreign direct investments totaled $2.25 billion in capital and created 7,815 new job commitments. Investments by Japanese-based companies alone totaled $1.02 billion, followed by Canadian-based companies with investments of $478.8 million and Chinese-based companies of $298 million. TNECD’s 2015 projects have a forecasted direct economic output of $4.71 billion over the next ten years and a total economic output of $9.86 billion.

We were both effective and efficient with our state’s investments in recruiting these businesses. When we forecast net new revenues the projects will return back to the state treasury, our return on investment is projected to be 40.3 percent annually, providing a pay back in 2.4 years. I’m not sure what kind of return you are getting on your personal investments, but I think the state of Tennessee can be pretty proud of that rate of return!

But beyond all the records and rates of return, it is about families throughout the state. As a result of the success we had in 2015, over 25,000 Tennessee families will have great jobs and better lives.

I want to thank the General Assembly for making Tennessee such an easy state to sell. We have the lowest state debt per capita in the country and an exceptionally strong balance sheet making us the partner businesses can trust. Even more important, they want to be assured that the pipeline of future talent is strong, and because of programs like the Tennessee Promise and Tennessee Reconnect that our legislature passed in 2014, we can guarantee the skilled workers companies need now and decades into the future.

There were many other significant accomplishments and new initiatives in 2015. By every measure, this is the best time in the history of Tennessee. There are more Tennesseans working than ever before.  Unemployment is declining, and Tennessee’s labor force growth is outpacing that of the nation. Educational attainment is at the highest level it has ever been. As a result, personal income per capita in Tennessee is at the highest level ever (after adjusting for inflation), and the state’s GDP has met new records this year as well. However, we are not sharing the success equally, and while some parts of our state are booming, others are struggling. In fact, we have 21 counties classified as economically “distressed” by the Appalachian Regional Commission, a federal-state partnership, meaning they are in the bottom 10 percent of all counties in the country in income, unemployment and poverty levels. These distressed counties have at least twice the national poverty rate and a per capita market income of 67 percent of the national average, or a three year average unemployment rate that is twice the national average. This is unacceptable, and that is why Gov. Haslam created the Rural Task Force to find holistic solutions by bringing together key partners from agencies like the Tennessee Valley Authority, U.S. Department of Agriculture, and Tennessee Departments of Education, Tourist Development and Labor and Workforce Development, to name a few.

Within TNECD, we appointed our first ever Assistant Commissioner for Rural Development, Amy New, a determined and passionate leader who will keep us focused on this mission. Under her leadership, important initiatives have already been launched. At the 2015 Governor’s Conference in October, we announced a $6 million grant program to develop new and existing industrial sites across our state. But rural economic development does not focus solely on industrial recruitment, it also involves tourist development. Tourism is economic development. Thus, we partnered with the Tennessee Department of Tourist Development to create a $1 million grant program to develop tourism assets. Often the best driver of any economy is home grown entrepreneurs, so we created a new program in rural Tennessee to support entrepreneurs in those areas of our state.

We have also greatly enhanced resources to support our Main Street, Downtowns and ThreeStar programs. This is definitely a strong start, but there is so much more to do. We can only be successful as a state if we are all successful together. But when we come together as Team Tennessee, I’m confident we can solve any challenge, and we can certainly solve this one. Our goal is to have zero distressed counties by 2025, but we can’t wait until then to begin taking significant action.  

This past year saw the creation of the Center for Economic Research in Tennessee (CERT), which reorganizes our research department, led by Sally Haar, and will be doing valuable studies on economic policy, returns on investment and competitive positioning. CERT will be publishing regular white papers throughout the year and will be an indispensable resource to the entire state. 

All of us at TNECD are looking forward to 2016. On the jobs front, we have set a very ambitious target of 28,000 new job commitments. We expect 10 new Select Tennessee Certified Sites and will open five new international offices to greatly enhance our foreign direct investment opportunities. While we can’t guarantee landing an OEM on the Memphis Regional Megasite, we are planning over 30 sales presentations all over the globe. Landing a company there is critical and a top priority.

As chairman of the Aviation Revenue Task Force, working with Commissioner Schroer and his team at the Tennessee Department of Transportation, we hope to propose some recommendations for sustaining our world class airport infrastructure later this month. As chairman of the Workforce Sub-Cabinet, the great work of the very active members resulted in a set of impactful recommendations presented to Gov. Haslam at the end of the year. We will be at the ready to execute on any that are approved. 

One personal target I had for 2015 that I fell short on was visiting all 95 counties; I only made 64. It turns out that between all the responsibilities of the job, it’s hard to get the time to travel to all the places I want to visit. However, I will complete the quest in early 2016. Having the opportunity to meet stakeholders, economic development professionals and hardworking Tennesseans throughout the state is not only the most enjoyable part of the job, but also the most rewarding. It’s important because every salesman needs to know his product, and in our case, our product is our communities, both the land and the people. It is inspiring because with every county I visit, I discover unique and attractive resources, exciting businesses led by determined and talented teams and civic and government leaders that are passionate about their communities. There is not a single visit I don’t leave more energized, determined and inspired. I am honored to be able to promote our great state every day and work to accomplish amazing things with such a great team, a team that includes all state departments, federal, state and local leaders, business and education. Together we are Team Tennessee.

Other key results for the year 2015

Private Sector Job Growth

  • Tennessee’s private sector employment totals 2.46 million jobs (Nov. 2015). Private sector employment in Tennessee has reached new records each month since April 2015.
  • 40,400 net new private sector jobs have been created during 2015
  • 265,200 net new private sector jobs have been created since January 2011

Source: U.S. Bureau of Labor Statistics

Next release: December 2015 estimates will be released January 26

Unemployment and Labor Force

  • During 2015, Tennessee’s unemployment rate has decreased by a full percentage point from 6.6% in December 2014 to 5.6% in November 2015. This percentage point decline in Tennessee’s unemployment rate ranks among the top quartile of all states.
  • During 2015, Tennessee’s labor force has grown by 2.5%. This rate of growth ranks 6th highest in the nation. Nationally, the labor force has grown by 0.8%.
  • During 2015, the number of unemployed people living in Tennessee has declined by more than 26,500. This is the 12th largest net decline in the nation. Tennessee’s rate of decline in unemployed individuals (-13.5%) surpasses that of the nation (-8.6%) during 2015.

Source: U.S. Bureau of Labor Statistics

Next release: December 2015 estimates will be released January 26

Exports and Foreign Direct Investment

  • In 2014, Tennessee exported over $32.9 billion in goods worldwide. This is the 14th highest export volume among all states in the nation.
  • During Gov. Haslam’s administration, Tennessee exports have increased by 27.0%. (2010-2014)
  • In Tennessee, foreign direct investment totaled $2.31 billion in 2014 and contributed to more than 9,600 job commitments. $1.92 billion of this investment was from TNECD-worked projects.
  • In 2015 YTD, foreign investment commitments total $2.6 billion in capital and 7,772 new jobs.

Source: U.S. Census Bureau: Economic Indicators Division and Center for Economic Research in Tennessee (CERT), TNECD. Foreign investment captured from annual surveys and TNECD projects.

Note: 2015 totals do not yet include annual survey data.

 

Personal Income

  • Tennessee’s personal income in the third quarter of 2015 totals $278.96 billion.
  • From Q3 2014 to Q3 2015, total personal income in Tennessee has increased by 4.6% (after adjusting for inflation). This rate of growth ranks 15th highest in the nation.
  • Tennessee’s personal income per capita in the third quarter of 2015 was $42,215. After adjusting for inflation, this represents Tennessee’s highest level in history.

Sources: U.S. Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics CPI Calculator

Next release: Q4 2015 estimates will be released March 24

Educational Attainment

  • In 2014, the 25 and older population in Tennessee had its highest recorded number of people with an Associate’s degree or higher (1,416,023), and highest recorded percentage of people with an Associate’s degree or higher (32.0%).
  • In 2014, the 25 and older population in Tennessee had its highest recorded number of people with a Bachelor’s degree or higher (1,119,543), and highest recorded percentage of people with a Bachelor’s degree or higher (25.3%).

Source: U.S. Census Bureau

Next release: 2015 estimates will be released September 2016

Gross Domestic Product (GDP)

  • Tennessee GDP reached a new record in the second quarter of 2015 ($276.4 billion).

Source: U.S. Census Bureau

Next release: 2015 Q3 estimates will be released March 2