Optimism Abounds for Tennessee’s Economy

When Brian Fuente launched Nashville’s first mobile bar, he had a vision to create more than just delicious drinks.

He wanted to help others grow.

“I wanted to start something big and build a community, to make a larger impact," he said.

A musician turned entrepreneur, Fuente quickly found his rhythm when he launched The Aero Bar within Nashville’s bustling events industry.

His unique Shasta-style camper soon caught the attention of other mobile businesses, inspiring him to launch Aero Build in 2017.

The company has become a successful mobile business trailer manufacturer catering to entrepreneurs throughout the U.S.

“The influx of people moving here because of the event side is huge,” Fuente said. “When people hear we build in Nashville, they want to come visit.”

Today, he remains confident in the trajectory of not just his business, but the region's economy.

And countless other Tennessee business owners agree with him.

About 75% of business leaders in Tennessee believe the state’s economy is headed in the right direction, according to a University of Tennessee study.

With resilient infrastructure, no personal income tax and regional entities like the Tennessee Valley Authority working to create powerful partnerships, there’s ample reason for optimism.

Nashville-area entrepreneur Brian Fuente.

Positive Outlook

About 70% of respondents in the University of Tennessee study believe Tennessee’s economy will perform better than the national economy over the next 12 months.

The vast majority of state business leaders also say Tennessee’s government is doing a good or excellent job of creating a solid business environment.

These findings reflect other trends that speak to a booming business climate in Tennessee.

Over the past year, about 1.4 million people moved into Southern states, with Tennessee ranking in the Top 10 for population growth and fifth on U-Haul's destination list.

The TVA region as a whole is experiencing upswings, outperforming the U.S. economy in post-pandemic recovery and gross domestic product growth.

While the national unemployment rate hovers at 4%, the Valley region’s rate is about 3%.

Signs of strong economic growth abound, and businesses are reaping the rewards

In 2023, CGI, a global IT and business consulting services firm, opened its 37,000-square-foot delivery center in Knoxville, Tennessee.

The company was drawn to Tennessee by strong communities, economic development programs, partnerships through organizations like TVA and Oak Ridge National Laboratory, and access to top talent from nearby universities.

As one of the largest independent IT consulting firms in the world, CGI also found the tech ecosystem around east Tennessee helps drive investments that contribute to industry success.

“You’ve got TVA, Oak Ridge and the University of Tennessee. That triumvirate drives a lot of innovation and investments into this ecosystem that are particularly interesting to us,” Matthew Kittrell, director of CGI’s Onshore Delivery Center in Knoxville, said.

“It not only gives us opportunities to work with those three partners to drive innovation, but also with the firms, startups, entrepreneurs and talent they’re attracting into this region.”

CGI is tapping into that talent ecosystem as it looks to hire 300 people into its Knoxville center by 2026.

Through partnerships with the University of Tennessee and career-focused high school programs like 865 Academies, CGI has created a direct line for retaining quality talent.

“Our clients operate on a global scale,” William LaBar, vice president of CGI Federal said. “We’re doing great work in cloud engineering, artificial intelligence, business consulting and systems integration consulting that spans the gamut. And we’re doing that with talent we find in Knoxville.”

They’ve also found that the high quality of life in the area makes it easier to recruit and attract outside talent.

“When we’re talking to people about relocating, they recognize and appreciate the quality-of-life components that led us to pick Knoxville. We see those value propositions manifesting themselves without a doubt,” LaBar said.

Small companies like Aero Build are also taking advantage of local talent pools to grow their business.

The company has 24 employees, with plans to hire an additional 40 people over the next five years to help meet orders for a new all-electric camper.

Since its launch, the company has delivered more than 250 campers to entrepreneurs across the country. Businesses with Aero Build campers have injected an estimated $170 million into the economy, according to Fuente.

Many of its camper components are sourced locally, with frames made in Soddy Daisy, Tennessee, and axles from Winchester, Tennessee.

The geographical advantages of operating in-state come in handy when it's time to deliver a finished product nationally.

“We live in a booming city that’s great for logistics,” Fuente said. “It’s as easy to go to Atlanta as it is to Chicago. From a distribution point of view, it’s a great centralized location.”

Academic institutions and career-focused programs help ensure area employers have a direct line to top talent.  

Powerful Partnerships

Partnerships are a leading benefit of operating a business in the Valley region.

Companies like CGI look for long-term collaboration through regional partners like TVA and Knoxville Utilities Board, which provide affordable, reliable power and resources to help with economic development.

CGI also looks to innovative partners like Oak Ridge National Laboratory and EPB’s quantum network for technology that is not found anywhere else in the world. And partnering with local universities offers access to quality talent and top minds that are working on answers to questions in their field.

The company has found it simple to make connections in these and other areas.

“It’s a very welcoming network,” Lori Ortega, director of CGI’s Onshore Delivery Center in Knoxville said. “Everybody talks about six degrees of separation, but here, it’s more like two or three.

“Everybody is open to meeting new people and making introductions. And even though it can be a competitive market, it’s a very collaborative market and a tight network that’s easy to get into,” she said.

As part of its mission of service, TVA’s Economic Development team also leverages partnerships to support local businesses in Tennessee and across the Valley region.

TVA’s regional representatives, who live and work in the communities they serve, work with local developers and economic experts to support new and existing businesses.

When projects are in development, they work with elected leaders, local power company partners and the area's economic development professionals to prepare for that next opportunity.

“People always say that economic development is a team sport,” Adam Murray, target market specialist manager for TVA Global Business, said. “TVA works well with local entities and government officials. We’re a pretty good team – and a very successful team, too.”

Livability and quality of life have made Nashville one of the destination cities for Valley-region newcomers.

The Road Ahead

Throughout its history, TVA has helped businesses expand across industries, including manufacturing, food and beverage, battery suppliers and more.

Over the past five years, TVA has assisted in projects that account for nearly 43,000 new jobs, over 235,000 jobs retained and over $28 billion in capital investments.

TVA’s reliable, diverse, affordable and clean energy portfolio is a selling point for many companies when deciding where to open a plant or office.

Jim Farley, Ford Motor Co.’s President and CEO, said one of the reasons the automaker based its manufacturing campus in Tennessee is because the Tennessee Valley Authority is one of the largest clean-energy providers in the U.S.

The state’s lower energy costs also attracted Ford, he said.

These companies are looking for a skilled workforce, too.

About 3 in 4 respondents of the University of Tennessee study said Tennessee needs more trained workers, and about half of respondents believe that improved training and education would help expand the supply of workers.

In Tennessee and throughout the Valley region, TVA and its partners are powering forward, building tomorrow's workforce through programs like STEMReady and investing in workforce training at high schools, colleges and specialized training facilities.

TVA also works with local partners to bridge digital divides in regions of need through programs like Connected Communities.

“This is what TVA was created for, not just to generate electricity but to create opportunities for the region,” said Joseph Burchfield, senior strategic consultant at TVA Economic Development.

PHOTO AT TOP OF PAGE: A view of downtown Knoxville, one of the fastest-growing cities in Tennessee

Booming Business in the Valley Region

• Stanton, Tennessee: Ford Motor Co.'s BlueOval City, a $5.6 billion investment, is expected to create 6,000 direct jobs.
• Marshall County, Mississippi: Amplify Cell Technologies invested $1.9 billion in an advanced battery cell manufacturing facility that’s expected to create 2,000 new jobs.
• Clarksville, Tennessee: LG Chem’s $3.2 billion investment in an EV battery manufacturing facility is expected to create 860 jobs.
• Lawrence County, Alabama: First Solar recently opened a $1.1 billion facility expected to create 700 jobs.
• Lowndes County, Mississippi: Steel Dynamics’ $2.5 billion plant is expected to create a minimum of 1,000 jobs.
• Sumner County, Tennessee: Shoals Technologies has invested $80 million in an expansion project expected to create 550 jobs.
• Chattanooga, Tennessee: Novonix created about 300 new jobs through a $160 million expansion.
• Dalton, Georgia: Hanwha Qcells’ $383 million expansion is expected to create 985 jobs.
• Oak Ridge, Tennessee: Kairos Power is investing at least $100 million and creating more than 55 full-time jobs to support the construction and operation of its Hermes low-power demonstration reactor.
• Clinton, Tennessee: Type One Energy is expected to create 330 new jobs as it invests $223.5 million to establish headquarters in the Knoxville region and expand its fusion research and development operations.