I recently heard an interview (https://www.bloomberg.com/news/videos/2019-07-31/tennessee-governor-bill-lee-sees-big-tech-as-growth-opportunity-video ) with Bill Lee, the Governor of Tennessee. The interviewer wanted to talk about Tennessee’s string of wins (including an Amazon Center of Excellence in Nashville) and how Tennessee was attracting the kinds of businesses that would help to ensure the continued notable economic development in his state.
The Governor had his talking points prepared and listed 6 attributes that he suggested are contributing to Nashville’s success. I took notes. The list included:
- No income tax— this makes the state attractive to high earnings potential individuals. The kind of individuals that are necessary (entrepreneurs, managers, technical leaders, etc.) to the success of startups and more mature, but high growth companies.
- Low business tax— this makes the state “business friendly”. It adds to margins and makes it a bit easier (from a financial perspective) to be successful.
- Being fiscally responsible— the first two items on the list aren’t possible without fiscal responsibility. Fiscal responsibility means spending money on things that count and minimizing waste. That means money needs to be spent (education, infrastructure, public services) to make a state attractive to investors.
- Being regulatorily friendly— another attribute that makes the state business friendly. While I am not personally convinced that regulations are as big a drag as some, an environment that mitigates against the wrong types of regulation makes the decision to locate in the state easier—because it is easier to operate there.
- Active workforce training programs— to ensure that the workforce has the skills necessary to make it easy to hire the well trained, highly motivated staff. That clearly means making investments and taking care to make sure that the training prepares the population for the work.
- Incentives—and while he didn’t go into details, I would suggest that incentives are most effective if they are well thought through (attract the prospects without breaking the bank) and formulated and agreed (by the stakeholders within the state) in advance of sitting down to negotiate with a prospect thereby avoiding the kind of embarrassing (and deal-killing) outcome New York had with the Amazon HQ2.
There were two areas where the Governor fumbled a bit:
- His answer to a question about public transit suggested the possibility that his policies and plans for infrastructure might be underdeveloped; and
- His (lack of an) answer to the question of whether big companies (like Amazon) are too big suggests that he might need to think this issue through as his position on this is likely of interest to companies that are considering locating in Tennessee.
Several closing thoughts:
- Several of my previous posts suggest that localities (states and/or cities, specifically Illinois and Chicago) need to work to attract the next generation of businesses, the ones that are going to keep them healthy through this century;
- We should think of the list that I “borrowed” from Governor Lee as a set of levers. Each one needs to be adjusted to account for the local situation and conditions, but they do provide a clean and simple framework for managing the process of attracting and retaining the next generation of business to a locality; and
- I was surprised that the Governor didn’t talk about the importance building an inclusive and highly motivated partnership; one that includes all of the stakeholders (the State’s communities, businesses, universities and various government entities) as this type of high performing team (which is most often defined by shared objectives and approach to achieving them) is essential to the obvious success Nashville/Tennessee seems to be enjoying.
So, for those of you who might not have thought the arguments that I made in previous posts weren’t supported by the evidence, consider this some evidence.
— you can find this (days earlier) and other posts at www.niden.com.
And, if you like this post: 1) please let me know; and 2) pass on your “find” to others.