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ECD Announces 5-Year Initiative to Make TN No.1 in Southeast for Quality Jobs

Press release from the Tennessee Department of Economic and Community Development; April 26, 2012:

NASHVILLE – The Tennessee Department of Economic and Community Development joined the Board of Directors of the Tennessee Technology Development Corporation (TTDC) to announce today the creation of a new, five-year strategic initiative: LaunchTN.

The initiative names TTDC as the lead advocate for the state’s innovation agenda. As a public-private partnership, TTDC will work with the department to see Tennessee’s potential on the innovation front realized.

“LaunchTN is another piece in our plan to make Tennessee the No. 1 location in the Southeast for high-quality jobs,” Haslam said. “This initiative will help set Tennessee apart as a state where entrepreneurship and innovation are valued as key economic development tools in our effort to make our state even more business friendly.”

“Entrepreneurship is the key to our state’s economy,” ECD Commissioner Bill Hagerty, who is also the Chairman of the Board for TTDC, said. “LaunchTN will allow TTDC to take the driver’s seat for innovation-based economic development and will bring new, exciting opportunities to our state.”

TTDC’s Board of Directors outlined four key areas of focus for LaunchTN:

1. Entrepreneurship, to include the oversight of the nine regional accelerators named by ECD in November 2011, and the organization and management of a statewide business plan competition;

2. Commercialization, including the creation of a new program to aid businesses with the development of business plans and management teams centered around emerging technologies from the state’s research institutions;

3. Capital, including partnering with the nine regional accelerators and existing angel networks to develop and expand angel capital networks across the state, and organizing opportunities for out-of-state venture capital firms to interact with early-stage Tennessee companies seeking funding; and

4. Outreach, to include growing the annual Innovation Conference into one of the leading innovation conferences in the Southeast, and hosting sector-specific events to bring together entrepreneurs, mentors, researchers and investors from across the state and the country.

In addition, under LaunchTN, TTDC will develop and begin a new Governor’s Fellows Program, bringing together high profile, successful business people with rising entrepreneurs for mentorship opportunities. The program will identify and recruit three to five individuals to voluntarily work with LaunchTN as a mentor and to work closely on venture capital and business recruitment for the state.

TTDC has long been a partner of the Tennessee Department of Economic and Community Development and has worked with the department to help the state compete in the global marketplace. TTDC is a legislatively created, non-profit organization created to encourage science and technology business development in the state. Designed to improve the statewide business climate for innovation and entrepreneurship, TTDC serves as a complement to ongoing business recruitment and expansion efforts of state and local officials.

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Press Releases

ACLU: Anti-Immigrant Bill Will Hurt TN Economy

Statement from American Civil Liberties Union; Jan. 24, 2012: 

As we move into the third week of the legislative session, we are already reviewing a number of bills that undermine fair treatment and due process for immigrants. First up this week: the Arizona-style copycat bill that encourages racial and ethnic profiling will be heard in the House General Subcommittee of Finance, Ways and Means on Wednesday afternoon.

HB 1380/SB780 requires all law enforcement to question the immigration status of any person they stop, regardless of whether the person is actually charged with breaking a law. The bill implies that police will be trained to ask people for their “papers” based on an undefined “reasonable suspicion” that they are in this country unlawfully. The criteria for assessing such a suspicion will inevitably be accent, attire, hair, jewelry or skin color.

Tell your lawmakers that this intolerant bill is completely out of step with our values of fairness and equality.

Economically, this bill will really hurt Tennessee. In addition to the loss of revenue from depressed tourism and economic development, as seen in Arizona, the bill’s fiscal note increases state and local expenditures by nearly $5 million in the first year alone.

Let your representatives know that they should stop wasting money to create a police state based on unconstitutional racial profiling.

Alabama, Tennessee’s neighbor to the south, passed a similarly egregious anti-immigrant bill last year that has faced legal challenges from the ACLU and our allies, as well as the Department of Justice. Additional states that have enacted Arizona-copycat laws such as Utah, Indiana, Georgia and South Carolina, have likewise faced legal challenges and had numerous provisions found unconstitutional. Not only do these laws preempt federal law by misappropriating immigration enforcement as a state power, they offend our values of fair treatment and due process.

Please contact your representative to let him/her know that HB1380/SB780 is bad for Tennessee and that s/he should oppose the legislation.

Thank you for using your voice in support of justice for all.

Hedy Weinberg

Executive Director, ACLU of Tennessee

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Press Releases

8.7% Unemployment Rate Lowest Since ’08

Press Release from Department of Labor and Workforce Development; Jan. 19, 2012:

RATE DROPS 0.4 PERCENTAGE POINT FROM NOVEMBER

NASHVILLE – Tennessee Commissioner of Labor & Workforce Development Karla Davis announced today Tennessee’s unemployment rate for December fell to 8.7 percent, down from the November revised rate of 9.1. The national unemployment rate for December 2011 was 8.5 percent, a decrease of 0.2 percentage point from the November rate.

“This is the lowest unemployment rate Tennessee has experienced since December 2008 when the rate was 8.4 percent,” Commissioner Davis said. “The drop in Tennessee’s rate is largely due to a notable increase of 11,200 employed persons from November to December.”

UT Economist Bill Fox states the Tennessee rate parallels the national picture. “The drop in Tennessee’s unemployment rate mirrors what is happening nationally, but Tennessee has had much stronger employment growth.”

Major Changes in Estimated Nonagricultural Employment

November 2011 to December 2011

From November to December, professional and business services increased 5,400 jobs; durable goods manufacturing was up by 1,000 jobs; and clothing and clothing accessories stores increased by 700 jobs. From November to December, leisure and hospitality decreased by 3,500 jobs; state government educational services was down 2,500 jobs; and mining, logging, and construction declined by 1,900 jobs.

Major Changes in Estimated Nonagricultural Employment

December 2010 to December 2011

Year-over-year increases took place in local government education services, up 11,200 jobs; mining, logging, and construction was up 7,100 jobs; and manufacturing increased by 6,900 jobs. Employment decreases took place in trade, transportation, and utilities, which were down by 5,500 jobs; information was down 1,300 jobs; and hospitals declined by 900 jobs.

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Business and Economy News

Governors Visit TN, Focus on Jobs

Governors attending a regional summit of the National Governors Association in Nashville Monday see themselves as being on the front line of job creation in America.

They also see a federal government that is not.

“Our states can be great laboratories for democracy at how we can solve some of our nation’s problems,” Gov. Mary Fallin of Oklahoma said. “I get really frustrated that Washington doesn’t always deal with solutions to the problems. They spend a lot of time being partisan, debating, but here in our states we’re able to work on those exact solutions to help bring some ideas forth.”

The official theme of the NGA initiative headed by Gov. Dave Heineman of Nebraska is “Growing State Economies.” Heineman is addressing what he says is the foremost issue facing the nation.

Gov. Haley Barbour of Mississippi went right at Washington for taking its eye off the ball, in his estimation.

“Governors are more focused on job creation and economic growth than anybody else in government because we deal with it on a daily basis,” Barbour said. “When jobs are lost in Mississippi or Oklahoma or Tennessee or Nebraska, the governor knows about it the day it happens.

“When jobs are created, we also are the first ones to try to get out there and pat the people on the back and tell them they need to do more of it. Unfortunately, the federal government is not focused enough on job creation. For the first few years of this administration, most of the time was spent on health care.”

Barbour said it is a case of a “more-than-one-year-long absorption of the federal government’s attention to create a government-run health care system that is going to make health care more expensive.

“Ironically, the effect of that on job creation, our No. 1 priority, is that when employers don’t understand and have no way of knowing the obligations and costs of providing health care for their employees, how do they create more jobs?”

Uncertainty has been one of the key elements of economic discussions across the nation. Tennessee Gov. Bill Haslam, who hosted the summit at the Loews Vanderbilt Hotel, has repeatedly noted a lack of confidence both among potential employers who would have to risk capital and consumers who are reluctant to spend in the current environment.

But there seemed to be agreement among the four governors at the summit that government’s role is not to create jobs but simply create an environment conducive to job growth.

That theme played out in references to too much government regulation and the value of tort reform. But in Haslam’s own state, there has been debate about the premise that government cannot create jobs.

Democrats have conducted a “jobs tour” across the statelooking for ideas on the heels of a legislative session in which they offered a package of jobs bills. The fundamental difference in approaches does not appear likely to go away. But neither will the overwhelming Republican majority in the General Assembly, meaning many of the Democrats’ efforts will be an uphill climb for them.

The governors did find other topics apart from bashing Washington. One favorable trend they see is that due to the price of transportation and a lessening of the wage gap, jobs that had gone overseas are beginning to return to the United States. They also see the ability of small businesses to grow as a key factor in job growth.

But then there was an old-fashioned sense of patriotic optimism as well.

“What was it, 20 years ago, Japan was going to take over the world? The United States was going to lose its competitive edge,” Heineman said. “We won that one. We’re going to win this one, too.”

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Business and Economy Education Health Care Liberty and Justice Tax and Budget

Haslam Expects Federal Belt-Tightening to Squeeze Tennessee

Gov. Bill Haslam said Thursday that state and local governments should be prepared for less money coming from Washington as Republicans and Democrats feud over federal debt issues. He reasoned that Tennessee will take a hit regardless of how the matter is resolved.

In a speech to the Rotary Club in Fayetteville, Haslam also left the door open for possible expansion of pre-kindergarten classes in Tennessee, although not soon. He pointed to reasons for his regional jobs approach in the state and said while he thinks the economy is improving it is still “a long way until we get out of the woods” financially.

After making brief remarks, Haslam took questions from the audience and was asked what impact the budget battle in Washington could have on the state.

“I do think it will get worked out, but there will be less money coming out of Washington than there used to be,” Haslam said. “There just will be. For all programs. Whether that’s money aimed toward education or health care or building roads or helping folks with mental health issues or workforce development issues. There will be less Washington dollars going forward.

“That’s why I say while we’re working our way out of some budget issues we’re not out of the woods yet, because we still have some economic challenges, and I’m not sure what the Washington changes will mean for us.”

President Obama and Democratic leaders in Congress have been deadlocked with Republicans over a debt-reduction plan.

Haslam pointed to warnings about the state’s bond ratings even though Tennessee has strong ratings from the three major bond agencies — Moody’s, Fitch and Standard & Poor’s.

“We would love to have three AAA ratings, because we have a great balance sheet as a state,” he said. “They kind of sent a warning out to all the states, saying, ‘We’re thinking about downgrading every state’s debt because we’re worried about the federal government.’”

Haslam said since states receive a large amount of revenue through federal funds, the federal budget issue would have a domino effect on all states. The governor will be traveling to visit the rating agencies in a few weeks.

After his appearance, Haslam said he had talked recently with both Sen. Lamar Alexander, chairman of the Senate Republican Conference, and Sen. Bob Corker, who has been especially vocal on getting the nation’s debt under control, about the impasse in Washington.

“It depends on what day you catch them about their optimism about where we are on it,” he said. “At times they get a little frustrated with the politics of that, but I don’t know that I have any insight there beyond what anybody else does.”

When asked Thursday about the state’s pre-K program, which currently operates on a limited basis, Haslam hinted he might like to add more pre-K classes.

“Right now, I’m in favor of leaving it where it is,” he said. “We funded it in the schools where it currently exists. I actually think there’s a chance we will expand it down the road. But I think we’re waiting for more data to come in and our revenue situation to change.

“To put it in every school would cost us about $300 million, and we just don’t have it right now.”

Haslam said the lack of funds makes the decision easy to wait for more information about the effects of pre-kindergarten classes. He said the delay could mean more time to figure out where pre-K is effective and where it may not be effective. The issue has become politically charged in Tennessee, with many Republican lawmakers wanting to draw the line on pre-K, pointing to a series of state-funded studies that indicate limited long-term impact on students’ performance.

Since Fayetteville, in Lincoln County, is in a border county with Alabama, about 30 miles north of Huntsville, Ala., the issue of sales taxes and how they apply across state lines came up Thursday. Further, Haslam said Tennessee loses an estimated $500 million-$600 million each year in revenue because of Internet sales.

“I’m confident everybody in this room has bought something off the Internet recently, and you probably bought more this year than last year, and you’ll probably buy more next year,” he said. “So we have to address that issue.”

He renewed his call for Congress to step in and settle the matter nationally.

Haslam pointed to Lincoln County’s proximity to Huntsville, saying in some ways the county has more in common with Huntsville than Nashville, which has implications when recruiting jobs. But he said he didn’t think borders should stop economic development partnerships.

“There are a lot of things happening in northern Alabama we can partner with them on, and we’ve had some very preliminary conversations about how we might make that happen,” he said.

Haslam’s comments came the same day House Minority Leader Craig Fitzhugh, D-Ripley, announced he had appointed a task force dedicated to creating more jobs in the state.

Haslam said when he speaks to business leaders they comment frequently on how nice people in Tennessee are but that the state’s ranking in the 40s among the 50 states in education is “the one drawback we have.”

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Press Releases

Ramsey Celebrates ‘Republican Session’

Statement from Lt. Gov. Ron Ramsey; May 25, 2011:

The Tennessee General Assembly has adjourned for the year.

What a relief to write that sentence.  While I can’t wait to spend this time with my new grandson and tend to the small business Sindy and I run, I’m also excited for Tennessee taxpayers.

The best part about the legislature adjourning is that it saves you money. The General Assembly has not adjourned earlier than this since 1998 – five weeks earlier than last year. Those five weeks would have cost the taxpayers an extra $450,000. Considering the transition of a new gubernatorial administration and new House Speaker, I am proud of how quickly and efficiently we attended to the peoples’ business.

I want to also thank the grassroots activists and stalwart Republicans who gave me the honor of finally serving in a General Assembly where a Republican governor was flanked by two Republican Speakers.  It was truly a historic legislative session.

Working closely with Bill Haslam and Beth Harwell, two people with whom I share not only party affiliation but a common view of how government should work, has been an honor and a privilege.

I’ll be honest with you – it was fun. It was a welcome relief to finally work with people who “get it.” The governor and Speaker Harwell understand our values and principles.  I believe together we have served the Great State of Tennessee well. I’m proud of what we have accomplished.

Smaller Government

Across the country, people are struggling. Governments, as well as families, are having trouble making ends meet.

Tennessee has seen its share of economic pain but we are doing far better than the rest of the nation. We are truly an island of sanity in a nation gone mad. I aim to keep it that way.

The federal government clearly doesn’t have its house in order. Tennessee does and will continue to as long as I have anything to do with it.

For the first time in three years, the budget is balanced on a recurring to non-recurring basis. The budget we passed over the weekend is not only balanced but reduced substantially over last year. Our budget, already lean and mean, is now 3.7% smaller.

In a nation where the federal government describes the lack of a budget increase as a cut, our accomplishment this year is huge.  This budget represents tangible, significant change.

That’s what this new Republican majority is about: making government smaller, more efficient and more responsive to citizens.

And unlike your average politicians, we started cutting with ourselves. Private businesses all across the State of Tennessee are being forced to maximize efficiency in the face of limited resources. It is only appropriate that we in government do the same.

I sponsored a bill this session which cut several redundant and unnecessary committees in the legislature. No services were cut, no oversight will be lost. The people of Tennessee will lose nothing with these cuts.  Nearly $850,000 dollars will be saved by this simple streamlining measure.

It’s the ability to do things like this, affect real change in the way government does business, which sustains me. It’s why I entered the political arena in the first place.

With Republicans now in power, I no longer have to focus on trying to mitigate the damage of backward Democrat policies, I can lead the charge for positive change. It is a tremendous feeling and I owe you a debt of gratitude for giving me the opportunity.

Cutting Taxes

Another outstanding accomplishment this session was the tax cut we were able to give our seniors.

Cutting taxes is a core conservative principle.  In a tough budget year, we found an effective way to roll back the tax burden on those who save for retirement.

I sponsored legislation with Sen. Ken Yager so more retirees will have more of their money exempt from the Hall Tax, Tennessee’s tax on investment income.

Working men and women of modest means who have saved wisely should not have to see their hard-earned dollars taxed.  This exemption will aid middle class people who live modestly get a break on their hard earned savings.

After last November’s elections, conservatives were expected to walk the walk and talk the talk on taxes – and we did.

Education Reform

A highly-paid, successful workforce is an educated workforce. Reform of Tennessee’s education system has been stifled for years by Democrat Party leaders. One union stood in the way of our children’s progress for decades in the General Assembly. Name a reform and the unions opposed it: school choice, merit pay, charter schools, tenure reform.

Our new Republican majority in the legislature not only supported and passed the Governor’s tenure reform and charter school agenda, we took the initiative in several areas of education reform.

Sen. Jack Johnson led the charge to eliminate the union monopoly in Tennessee’s education system. Teachers will now have a voice and teachers who exceed expectations and inspire students will be rewarded, as they should be. Mediocrity will no longer be encouraged in education in Tennessee.

The General Assembly also ended the scurrilous practice of social promotion. No longer will kids be passed along uneducated in Tennessee. If a child cannot read and write completely by 3rd grade, that child will be held back until they can.

We can no longer afford to be timid on education reform. The stakes are too high. The future of Tennessee is at risk. That is why we not only sought union and tenure reform we also made it easier for parents to choose alternatives to traditional education such as virtual schools and homeschooling. One size does not fit all. Parents need to be given as much choice as possible to ensure their children are educated.

Jobs

Something Democrats will never understand is that the government can not “create” economic growth. They say we have no jobs agenda. Nothing could be further from the truth. We simply have a different philosophy. Our entire agenda, everything we do, is about jobs. Our agenda is about removing barriers and creating an environment where business owners and entrepreneurs flourish.

For example, we passed comprehensive tort reform this year.  This protects businesses from frivolous lawsuits and manages their risk. This is the kind of thing that encourages business and makes job creation a reality.

It would be great if we could just wave a magic wand and make jobs appear. But we can’t. Even the recruitment of large corporations in the Bredesen years didn’t match the job growth that came from homegrown Tennessee companies.

The full recovery of our economy requires expansion and entrepreneurship within the state – not just relocation from without. This is why the new Republican majority and Gov. Haslam are focused on trying to make Tennessee the most business-friendly environment possible.

The government can’t create a good economy — but we in the legislature can get out of the way of business and create the environment that allows Tennessee’s entrepreneurial spirit to shine through.

Illegal Immigration

Everybody knows we have an illegal immigration problem in this country and President Obama has done nothing to help the states on this issue. That should not stop us from trying to fix the problem – and it hasn’t.

We were able to send legislation to the governor that requires Tennessee voters to show photo identification before they can cast a ballot. The integrity of our election system cannot afford to be compromised. Tennesseans need to know that their leaders are chosen by their friends and neighbors, not aliens who have broken the law by entering this country illegally.

I’m proud to note that we were finally able to pass E-Verify legislation which ensures that new jobs created by Tennesseans actually go to those here legally. E-Verify, an Internet-based system operated by the Department of Homeland Security in partnership with the Social Security Administration, allows participating employers to electronically verify the employment eligibility of their newly hired employees. It is free and over 97.4 percent accurate.

My primary goal in the legislature is to fight the regulatory burden on small business, but we simply cannot allow businesses to hire illegal aliens in Tennessee. This legislation will go a long way to stop it.

Looking to the future

That’s really just a sampling of the strides we made this year. Rest assured, there is more to come.  With their first legislative session behind them, Speaker Harwell and Gov. Haslam have become very effective partners in governance. Together, we will accomplish much in the future.

Tennessee Republicans have talked a lot about what we would do when we took power. Now we are showing what we can do. This year was just an appetizer. Next year, and in the years to come, you will see the main course.

I truly cherish your support. We have done remarkable things together. And I’m not stopping anytime soon. I hope you aren’t either.

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Business and Economy Environment and Natural Resources Featured Tax and Budget Transparency and Elections

Political Movement on Megasite

Gov. Bill Haslam presided over the first meeting of the governing body of the Haywood County megasite Monday in Jackson, but it was Deputy Gov. Claude Ramsey who offered the most pointed advice to the new board.

He spoke from experience.

“You will have a lot of highs and lows,” said Ramsey, who was Hamilton County mayor as Chattanooga pursued the Volkswagen plant that ultimately brought a $1 billion investment to the megasite there.

“This is a very patient process that a lot of people will be impatient about. It’s hard work. There will be times people will say that nothing is happening. I’ve been called a lot of funny names. There will be those days when it’s a little bit slow.”

But the message was perseverance, and Ramsey encouraged West Tennessee leaders to weather the down times as the site seeks a client like Volkswagen or Hemlock Semiconductor, which made its own $1 billion investment at a megasite in Montgomery County and has already announced a substantial additional investment there.

After the meeting, Ramsey visited the Haywood County site, accompanied by Rep. Jimmy Eldridge, R-Jackson, and Rep. Curtis Halford, R-Dyer, as well as other officials working on the project. The group included Haywood County Mayor Franklin Smith, whom the board elected chairman at its meeting on Monday. Haslam did not visit the site Monday but has been to the location on more than one occasion.

Haywood County is the last of the state’s three TVA megasites, designed to attract major business relocations, an issue that not only plays a role in the state’s economic future but has become a political football in its own right.

Haslam recently announced that the state will move away from the emphasis on attracting huge business re-locations and concentrate on feeding the growth of existing businesses in the state. But Haslam told board members Monday that the significance of the West Tennessee site has not diminished.

“I can assure you there are few things we care as much about as the proper development of the megasite,” Haslam told the group at a conference room at the McKeller-Sipes Airport in Jackson.

“I said back when I was campaigning, and I’ll say it again now, I think it is one of the best assets we have for the state when we look at economic development. We do not have a lot of pieces of property like this that are available.”

The site sits near Stanton, north of exit 42 on Interstate 40. At this point, the project remains only a conceptual plan. The site was originally certified to meet the potential needs of an automotive manufacturer. There is no indication that an auto maker will move into the site, but state officials hope a business will locate there that can attract numerous suppliers, as an automotive manufacturer would.

“We’re not pinning all of our hopes for job development on the megasite. We have some prospects right now in this part of the state we’re working hard to hopefully bring here,” Haslam said after the meeting. “But this is a great long-term project.”

Board members were briefed on where progress on the site stands now. It is in a vastly rural area, which creates challenges for infrastructure. Authorities told the board Monday the location would need 3 million gallons of water a day and that three wells are being dug into the Memphis aquifer to meet that need. Each well would draw 1.5 million gallons, and the board was given assurances Monday the amount of water would be adequate to meet the need. Waste water services will also be necessary.

The site will need a water treatment system, which will be on the property, and Highway 222, which runs through the middle of the site, will need to be re-routed. The board was told that while no specific funds were put into the budget just passed by the Legislature that flexibility is in place to make funding available if a client is found for the site. The state already has $34.7 million set aside in the Department of Economic Development for use on the Haywood County project.

The site includes 3,800 acres, with the core site comprised of 1,700 acres.

Democrats had criticized Haslam and other Republicans during the legislative session that ended Saturday for not putting more funds into the megasite at a time when the state is desperate for jobs. Several lawmakers from West Tennessee, including Democrats from the House and Senate, attended the meeting Monday in Jackson. But there seemed to be agreement and optimism among lawmakers from both parties that the project is on the right track.

Nevertheless, it still figures to be at least two years before a big business could be up and running at the site, the board was told Monday.

Rep. Craig Fitzhugh, D-Ripley, the House Democratic leader, Sen. Lowe Finney, D-Jackson, chairman of the Senate Democratic Caucus, and Rep. Johnny Shaw, D-Bolivar, had been critical of Haslam’s lack of attention to the megasite in his budget earlier this year. But all three attended the board meeting Monday and appeared upbeat about the project.

Smith’s selection as chairman was noteworthy in that he has been an integral player in seeking support for the megasite and made a campaign ad for Haslam in last year’s gubernatorial race, although Smith is a Democrat.

“We’ve been patient. I’ve been working on this almost seven years,” Smith said after the board meeting in Jackson. “Patience is something we’ve got.

“What people need to understand is this is a state project. There is statewide support for this project. I want folks to understand this is not a Haywood County project. It will benefit everybody in West Tennessee.”

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Press Releases

Text of Gov. Haslam’s Speech Announcing New Jobs Strategy

Gov. Bill Haslam’s speech to the Tennessee Technology Development Corp., May 5, 2011:

Thank you, it’s a pleasure to be with you here today at the TTDC NEXT conference. I know that much of the discussion here today and tomorrow is focused on the future …where the next wave of new ideas is coming from.

As someone who is highly interested in how innovation can impact Tennessee’s economy …I’m interested to hear your thoughts on that topic. Nearly four months into my administration, and I’ll tell you right now that I have the greatest job in the world. There’s no bigger honor, I think, than to be the governor of your home state, and I’ll always be grateful to Tennesseans for allowing me to serve them.

During this short period, my administration has spent a lot of time determining how best to move Tennessee’s economy forward.

A few weeks ago, ECD Commissioner Bill Hagerty and I traveled around the state rolling out our strategy for job creation, something we call Jobs4TN. It’s a strategy with a broad-based approach but it’s based on a few basic principles.

The first is that government’s role in job growth is to help create the type of business climate that gives the private sector the confidence to invest and hire people. The second is that no single approach to job creation will work for every region of the state.

That’s why we’ve set up nine regional “jobs base camps” across Tennessee … each with a regional director that will operate as a single point of contact – an ombudsman – for companies who want to interact with state government.

It’s also why we’re in the process of hiring an assistant commissioner for rural development at ECD … so that we can address the unique challenges of driving businesses growth and new investment to Tennessee’s rural areas. And the third is to focus our energy and efforts on those areas of Tennessee’s economy in which we have a competitive advantage.

That’s why you’ll see a renewed emphasis on reaching out to companies currently operating in Tennessee.

To be clear, we’ll continue to recruit businesses from out of state, but we’re increase our focus on Tennessee companies because that’s where the vast majority of the jobs in our state are created.

That’s been true in each year of the past decade ….and the most recent data we’ve been able to gather bears that out. ECD went back and looked at data released by the Bureau of Labor Statistics for 2009 and 2010 … and more than 95% of the new jobs created in Tennessee came from existing businesses … or Tennessee-based start ups.

Which confirms something many of us from the business community have long suspected: the entrepreneurial spirit in

Tennessee is alive and well. This brings me to the subject of our discussion today: how to capitalize on a robust innovation community here in Tennessee.

When we rolled out Jobs4TN …one of the key strategies we said we would emphasize was “investing in innovation” ….but we asked the folks we met with to stay tuned until today, when we would have more details to add.

So, I’m pleased to announce today that we will be launching a $50 million dollar initiative aimed at capitalizing on Tennessee-based innovation called INCITE — that stands for: INNOVATION…COMMERCIALIZATION…INVESTMENT…TECHNOLOGY and ENTREPRENEURSHIP. The basis for this initiative comes from a couple of areas in which Tennessee lags behind the rest of the country ….but has a strong potential to make up ground.

For example, we have some remarkable centers for research and development within our state (ORNL, St. Jude) …but, these research centers aren’t as closely aligned with the private sector as they need to be. Less than 3% of the R&D which takes place in Tennessee is funded by the private sector …about half the national average.

When it comes to patents per worker …Tennessee’s rate is only two-thirds the national average …and from 1998 to 2009, the total number of patents created in our state actually declined. Tennessee researchers are developing ideas that can find a way to the commercial marketplace …but, when that happens, it usually happens in another state.

Of the 140 licenses held by Tennessee research institutions …only 28 of those licenses have been purchased by Tennessee companies. Last year, that research spun off only 7 Tennessee-based companies.

If we’re interested in the bottom line, the bottom line is: We can do better.

We have an environment with many of opportunities to improve. We cannot expect to create high quality jobs …and to move our state’s economy forward relative to other states …if we don’t do a better job of capturing innovation created here in Tennessee …and moving it into the marketplace.

That’s why we’ve created the INCITE initiative to raise our game in several important areas. The first is coordination. As I said, part of our Jobs4TN strategy is to create nine economic regions across the state each with its own strategic plan for economic development. An innovation component will be part of each of those strategic plans. We’re also going to work more closely with TTDC to help us engage with key stakeholders on innovation on a more regular basis and to take the lead on staging an annual Governor’s Conference on Innovation.

The second area of emphasis for INCITE is research. When I submitted my budget to the legislature, I included $10 million dollars in funding for the Memphis Research Consortium. This allied effort includes the University of Memphis, the U-T Health Science Center, St. Jude Children’s Research Hospital, Memphis BioWorks and FedEx.

It’s a great model for building innovation networks and working with the private sector to translate R&D into high quality jobs. The health care and life science partners of the consortium alone are responsible for more than 30,000 jobs in the Memphis area. Leaders of the consortium believe that with proper capital investment, the number of jobs associated with research in Memphis can grow by nearly a third by the year 2020.

We will partner with MRC to achieve … and ideally surpass … that goal, and TTDC will help us track and improve Tennessee’s performance on research commercialization. The next area of focus for the INCITE initiative is entrepreneurship.

This part of our strategy is especially important because as a government serving the taxpayers we have to understand what it means to have capital at risk. Tennessee has a long and storied history of companies that went from start-ups to corporate giants as the result of a handful of determined entrepreneurs …whether it’s FedEx or AutoZone or HCA …we’ve seen the impact entrepreneurs can have on our state.

We will support them with a network for those people who are willing to build a growing company out of a great idea.

As part of the INCITE initiative, our plan calls for the creation or support of entrepreneurial incubators in each of the state’s regions. In some places, we’ll fund new incubators …in other areas, we’ll support existing incubators with a strong track record of success. But, our goal will be to create a statewide support network to help entrepreneurs … and to share best practices among the regional incubators across the state.

With that state support however come some responsibilities. Each of the nine regional incubators will have clear benchmarks for raising private capital to support the companies they’re helping to launch.

At the end of the day, we want make sure the people of Tennessee understand the role that individual entrepreneurs play in the economic health of our state. Of course, most of the people in this room understand that great ideas can never be translated into new jobs without capital …and that’s the 4th component of our INCITE initiative.

We’ll take $30 million of the $50 million we’re channeling into innovation …and focus it on enhancing Tennessee companies’ access to early stage capital. Part of that funding will go toward the creation of a pre-seed and seed capital fund that will align with the U.S. Department of Treasury’s State Small Business Credit Initiative. Our plan is to apply for a portion of the funds allocated to Tennessee last October to strengthen state lending programs for small business and small manufacturers.

This co-investment fund will be a perfect complement to other efforts to jump start early stage capital in Tennessee like TNInvestco and other early stage investment activities around the state. These funds will be channeled into broad categories … for example, we’ll create a co investment fund to make seed and early stage investments alongside other early stage investors.

These funds will be available to any qualified company that falls within the eligibility requirements of the Treasury program. We’ll also put additional dollars into the Small Business Opportunity Fund.

The goal of this effort will be to create a sort of “mezzanine” fund in which the state is not the first investor …but can provide capital for low interest loan funding to help a company build the critical mass necessary to succeed. Taken together, these steps can raise the level of energy around innovation in Tennessee.

But they can only be effective if we work together to make our state more competitive, and right now, the status quo is not acceptable. Tennessee currently ranks 35th among the states in the amount of industrial R&D currently underway, according to the 2010 New Economy Index report.

The same report suggests we also fall behind our competitor states in the number of skilled professionals who live and work in Tennessee …the type of people with the skills to take new ideas and develop them into working businesses. It ranks Tennessee 46th in the number of scientists and engineers. That’s why ramping up our educational performance is incredibly important to our future as a state.

It’s why you’re seeing so many school districts across our state focusing on STEM education. It’s why it’s so important for us to build the connections between university-based research …commercialization and tech transfer …and industry competitiveness. Developing these collaborative networks will help us create the types of jobs we need to move our state forward.

I truly believe that with INCITE, we’ve asked the right questions and brought the right people to the table to participate with us. I’m convinced TTDC can play a role in our efforts to translate innovation to high skill jobs. We can also develop strong partnerships in linking together our research assets …like we’ve done with the Memphis Research Consortium.

Earlier this week, Tennessee House Speaker Beth Harwell announced she’s asked State Representative Mark White of Memphis to study how the legislature can help universities in Tennessee commercialize new technologies …so, this is a topic that’s at the forefront of many people’s thinking right now.

I believe all of us working together can find ways to jump-start capital formation with new co-investment strategies. AND I think the time is right to take a hard look at how innovation Tennessee innovation – can drive progress in our state’s economy …and help make Tennessee the No.1 location in the Southeast for high quality jobs. Thank you for the opportunity to speak with you today … I look forward to continuing the conversation in the months ahead.

Categories
Business and Economy NewsTracker

Personal Income Rises 3.8 Percent in TN

Personal income in Tennessee rose 3.8 percent last year compared to 2009, putting the Volunteer State ahead of the nation, which saw incomes rise on average 3.0 percent.

Personal income, which includes earnings as well as other sources like dividends and interest, grew in Tennessee from $215.8 billion in 2009 to $224 billion last year, according to new statistics release by the Bureau of Economic Analysis.

The figures point to a continuing economic recovery, though the positive news was not shared by all industries. The construction and real estate industries continued to decline nationally, the Bureau reported, while health care grew through the recession and outpaced manufacturing to become the largest private industry in 2009. Health care represented 11.2 percent of earnings last year.

In Tennessee, health care and social services constituted $23.2 billion in earnings last year, compared to $21.6 billion from manufacturing and $24.9 billion in government.

Categories
Press Releases

January Unemployment Up a Hair

State of Tennessee Press Release; Mar. 3, 2011;

NASHVILLE – Tennessee Commissioner of Labor & Workforce Development Karla Davis announced today Tennessee’s unemployment rate for January was 9.5 percent, up 0.1 from the December rate.  The national unemployment rate for January 2011 was 9.0 percent, 0.4 percentage point lower than the December rate.

“Tennessee’s unemployment rate has remained stable since last July,” said Labor Commissioner Karla Davis. “Long-term employment growth is continuing, and our unemployment rate is much improved from last January’s 10.4 percent.”

Major Changes in Estimated Nonagricultural Employment

December 2010 to January 2011

According to the Business Survey, transportation equipment increased by 300 jobs; machinery manufacturing increased by 200 jobs; wholesale electronic markets increased by 100 jobs; and primary metal manufacturing increased by 100 jobs.  Major employment decreases occurred in trade, transportation and utilities, down by 17,300; professional and business services declined by 14,700; and leisure and hospitality declined by 10,400 jobs.

Major Changes in Estimated Nonagricultural Employment

January 2010 to January 2011

Year-over-year increases occurred in professional and business services, up by 10,900; educational and health services gained 8,600; and transportation and warehousing was up by 6,000.  Year-over-year decreases occurred in nondurable goods manufacturing, down by 4,300; arts, entertainment, and recreation lost 2,300; and financial activities decreased by 1,500.