TENNESSEE SPOTLIGHT
The Biotech Bet
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ike many states laying the groundwork for future business expansion activity, Tennessee is betting on biotech and the broader life sciences sector as the industry with the best long-term shot at luring capital investment into the state. But companies in other industries see the state playing a role in their future, as well.
A key challenge for the state business developers is to foster clusters in the emerging industry sectors while keeping the resources in place that make the state attractive to such traditional industries as automotive suppliers and manufacturing, computer systems and logistics and distribution. For now, that balance appears to have been achieved.
The Tennessee Economic and Community Development agency recently certified a US$28.6 million, 964-acre (390-hectare) expansion of the Clarksville-Montgomery County Corporate Business Park, which could attract up to $1 billion in new investment. The park currently occupies 750 acres (303 hectares) and is home to 15 manufacturers and more than 3,100 employees.
And a $20 million industrial complex is under development in Cocke County, in eastern Tennessee. The first of three phases involves construction of two 144,000-sq.-ft. (13,400-sq.-m.) buildings and development of a 55-acre (22-hectare) tract zoned for industrial use.
Whether new tenants at these locations are from traditional industries, emerging industries or a combination of the two remains to be seen. Both industrial spheres are seeing plenty of activity in Tennessee these days.
Bridgestone/Firestone Americas Holding (BFAH) plans to occupy 210,000 sq. ft. (19,500 sq. m.) of space for its headquarters in Nashville's Highland Ridge Tower. The move will let the tire and rubber company consolidate 800 employees in four Nashville locations into one site. President and CEO John Lampe says the company's presence in Tennessee has been a factor in the company's past growth. "[This] allows us to remain in Nashville, in one building, with a financial package that addresses our need to control costs while at the same time achieving the team-building atmosphere that will be so important to our continuing growth," Lampe noted on July 3rd.
Just a week later, Bridgestone/ Firestone North American Tire, a subsidiary of BFAH, broke ground in Lebanon, Tenn., on a 750,000-sq.-ft. (69,675-sq.-m.) distribution center. "Our primary motivation for selecting Lebanon was that from this location, we'll have the ability to provide overnight delivery service to more than 98 percent of our customers within a 500-mile radius," says Nelson Miller, director of distribution.
The so-called New Economy has labor challenges and others -- access to risk capital, for instance -- that just now are coming into focus. Just as their counterparts 20 or so years ago did when they identified automobile manufacturing as the ticket to job creation and investment, the state's business-development officials today are mapping out strategies for luring life science workers and companies to Tennessee. Synergies are being esta blished between the higher education community, existing biotech players, national research agencies and the medical infrastructure. Even at this early stage in the process, the private sector is taking notice.
"We looked at Boston, Long Island [N.Y.], St. Louis, Cincinnati and Nashville," says Dr. Samuel Lynch, chairman and CEO of BioMimetics Pharmaceu-ticals, describing his search for a suitable location for the company, which develops protein therapeutics for organ and tissue regeneration. Lynch worked for years in the Boston biotech community before locating on Long Island, where he has been based for the past five years. But he wanted a new home for the new company. The search uncovered an opportunity to not just select a location for the new enterprise, but to help establish an industry cluster by leveraging the area's biotech-related attributes.
"We chose Nashville, because we think there is a wealth of technical resources in Tennessee, with Oak Ridge National Laboratories, Vanderbilt University and St. Jude's Hospital, among other facilities," Lynch relates. "In addition, there is a stable business tax structure, and the cost of living is very favorable for us. You relocate people to the Nashville area [from New York], and they automatically get a 15 or 20 percent increase in their salary."
A key challenge for the state business developers is to foster clusters in the emerging industry sectors while keeping the resources in place that make the state attractive to such traditional industries as automotive suppliers and manufacturing, computer systems and logistics and distribution. For now, that balance appears to have been achieved.
The Tennessee Economic and Community Development agency recently certified a US$28.6 million, 964-acre (390-hectare) expansion of the Clarksville-Montgomery County Corporate Business Park, which could attract up to $1 billion in new investment. The park currently occupies 750 acres (303 hectares) and is home to 15 manufacturers and more than 3,100 employees.
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And a $20 million industrial complex is under development in Cocke County, in eastern Tennessee. The first of three phases involves construction of two 144,000-sq.-ft. (13,400-sq.-m.) buildings and development of a 55-acre (22-hectare) tract zoned for industrial use.
Whether new tenants at these locations are from traditional industries, emerging industries or a combination of the two remains to be seen. Both industrial spheres are seeing plenty of activity in Tennessee these days.
Bridgestone/Firestone Americas Holding (BFAH) plans to occupy 210,000 sq. ft. (19,500 sq. m.) of space for its headquarters in Nashville's Highland Ridge Tower. The move will let the tire and rubber company consolidate 800 employees in four Nashville locations into one site. President and CEO John Lampe says the company's presence in Tennessee has been a factor in the company's past growth. "[This] allows us to remain in Nashville, in one building, with a financial package that addresses our need to control costs while at the same time achieving the team-building atmosphere that will be so important to our continuing growth," Lampe noted on July 3rd.
Just a week later, Bridgestone/ Firestone North American Tire, a subsidiary of BFAH, broke ground in Lebanon, Tenn., on a 750,000-sq.-ft. (69,675-sq.-m.) distribution center. "Our primary motivation for selecting Lebanon was that from this location, we'll have the ability to provide overnight delivery service to more than 98 percent of our customers within a 500-mile radius," says Nelson Miller, director of distribution.
New Challenges for Manufacturers
Manufacturers in the Volunteer State have a fairly new set of challenges before them, most of which they likely share with their counterparts in other states. Until quite recently, work force recruitment and development were the top challenges for manufacturers. According to a recent survey of 360 Tennessee manufacturers organized by the state's Dept. of Economic & Community Development and Deloitte & Touche, 46 percent consider economic cycles to be their most pressing challenge, followed by operational efficiency (39 percent), competition (36 percent), work force recruitment (33 percent) and cost cutting (29 percent). The work force recruitment point bears watching, because 47 percent of employees at the responding companies are between 36 and 50 years of age; 35 percent are 50 and older. Just 18 percent are 35 or younger.The so-called New Economy has labor challenges and others -- access to risk capital, for instance -- that just now are coming into focus. Just as their counterparts 20 or so years ago did when they identified automobile manufacturing as the ticket to job creation and investment, the state's business-development officials today are mapping out strategies for luring life science workers and companies to Tennessee. Synergies are being esta blished between the higher education community, existing biotech players, national research agencies and the medical infrastructure. Even at this early stage in the process, the private sector is taking notice.
"We looked at Boston, Long Island [N.Y.], St. Louis, Cincinnati and Nashville," says Dr. Samuel Lynch, chairman and CEO of BioMimetics Pharmaceu-ticals, describing his search for a suitable location for the company, which develops protein therapeutics for organ and tissue regeneration. Lynch worked for years in the Boston biotech community before locating on Long Island, where he has been based for the past five years. But he wanted a new home for the new company. The search uncovered an opportunity to not just select a location for the new enterprise, but to help establish an industry cluster by leveraging the area's biotech-related attributes.
"We chose Nashville, because we think there is a wealth of technical resources in Tennessee, with Oak Ridge National Laboratories, Vanderbilt University and St. Jude's Hospital, among other facilities," Lynch relates. "In addition, there is a stable business tax structure, and the cost of living is very favorable for us. You relocate people to the Nashville area [from New York], and they automatically get a 15 or 20 percent increase in their salary."