Gearing Up for Success

Today, the Tennessee Valley is ranked as one of the best places for general manufacturing. Why? Is it the low cost of living? Tax-friendly environment? Skilled workforce? Competitive utilities? Try all of the above.

The world knows the Tennessee Valley for its music and southern charm. While that rich heritage is alive and well, a new image of innovation and technology is attracting the attention of business leaders from around the world.

“Today the Valley is becoming known for economic development and manufacturing because of a mix of variables that includes its skilled workforce, strong infrastructure and low cost of living and doing business,” says Lee Johnson, TVA Economic Development target market specialist. “And that’s not to mention business the tax-friendly environment and affordable, reliable power provided by TVA.”

Johnson, who leads TVA’s efforts to attract general manufacturing companies to the Valley, says the region will continue to be competitive on manufacturing location decisions.

The facts support Johnson’s claim. TVA estimates there were over 10,000 manufacturing companies in the Valley in 2015, employing more than 600,000 Valley workers. These companies generated estimated sales to the tune of $218.7 billion last year. And today, the average Valley general manufacturing worker earns almost $64,000 annually.

Sites and Skills and Never Standing Still

As TVA’s general manufacturing target market specialist, Johnson works to recruit companies to the Valley. He focuses on industry sectors such as food and beverage, plastics, metal, chemical and other types of manufacturing—those businesses who can take advantage of the Valley’s central location in the Southeast, within a day’s drive of 75 percent of the United States population.

He attributes the success that the Valley has seen over the years to TVA’s very proactive approach to economic development. “TVA never stands still,” Johnson says. “It is refreshing to see that our company is constantly looking at the future in terms of ways to improve our communities and processes to continue to keep our competitive advantage.”

As an example of TVA’s competitiveness, he points to TVA Economic Development’s flagship InvestPrep™ program, through which TVA partners with communities to invest in Valley industrial sites and buildings on the front end in order to meet companies’ needs. “Most site selection consultants will tell you it’s a site elimination game, not a site selection game,” Johnson explains. “Site selectors are working with clients that have specific needs, and one of those is the growing trend of speed to market and the need of a property to be developed. Proactive communities know that having an inventory of product that is build-ready is of great benefit to companies and consultants.”

In addition, TVA works continuously with state, regional and local economic development partners to bring jobs and investment into the Valley. In 2015, TVA significantly exceeded 2014 results with a 15 percent increase in new and expanding companies in the region and a 20 percent increase in new and retained jobs. That means $7.8 billion in direct investment in the Valley in FY2015 alone.

The TVA Factor

Johnson explains that the Valley is in a great position as it relates to competition: “Site selection is as competitive as ever, but the Valley tends to rise to the top. Our region has several empowering factors—a highly skilled workforce, strong geographic position and transportation infrastructure, low cost electricity, pro-business climate and low cost of living and doing business.”

Three other selling points are unique to TVA: reliable, low-cost TVA electricity; a diverse generation portfolio; and continuing focus on sustainability of generation and minimizing its carbon footprint.

“Reliability and cost of electricity are very important factors to manufacturing companies”, says Johnson. For the past decade or more TVA companies have taken advantage of TVA’s 99.999% transmission reliability. “Companies need to meet the needs of their suppliers and customers, so needless to say they need reliable electricity to keep in operation.”

He also explains that TVA is in the top quartile in terms of electricity cost in the U.S. “Manufacturers are constantly looking at ways to keep costs low and TVA understands that rates do matter to companies.”

“We also have a great carbon story because of our diverse generation mix with a focus on reducing coal production and increasing other generation, our portfolio has one of the lower carbon impacts among our competitors,” Johnson says. “That's a real difference-maker for some companies who are really beginning to look at their individual carbon footprint.”

And then there is the water. “Readily available, affordable water is also important to industry, particularly those in my sectors,” he says. “Fortunately we are blessed with an abundance at affordable rates. Navigation through the waterways is also an advantage. The Tennessee River watershed draws many industries—it is the most heavily used in the U.S., and also the most heavily recycled.”

Building Tomorrow's Workforce

Despite all the benefits the Valley harnesses, Johnson determined that, “The Valley’s workforce is one of the best competitive advantages we have.”

The Tennessee Valley hosts 120 career and technical schools, 85 colleges and universities, and 28 community colleges to help meet industry workforce needs. The focus for education partners in economic development is tomorrow and the next generation.

Technology and automation have changed the way we manufacture in the U.S., and the Valley’s strong mix of state partners, local communities, utilities and educational partners have consistently helped communities innovate and grow in the region, Johnson explains. “What you see today are high-tech manufacturing facilities with skilled, educated workers that are well versed in technology,” he says.

Eighty years later, President Roosevelt’s vision for the Tennessee Valley Authority to bring economic development to a desperately poor area of the United States continues to be realized. Through the work of TVA’s Economic Development team—the lives of the now 9 million people of the Valley are better for it.