Above: Discussion panelists Alan Levine, Bill Greene, Mark Costa, Jerry Caldwell and Scott Niswonger
by Scott Robertson
From the outset, the inaugural Regional Economic Forum at the Millennium Center in Johnson City Sept. 10 focused on a single message: Northeast Tennessee and Southwest Virginia’s economy has not kept up with the national economy for the last decade, and though it may prove painful at times, public, private and social sector organizations must jointly commit to the changes necessary to improve that economy or face dire consequences.
Chambers and governments
In the opening statements by former Bristol and Johnson City Chamber of Commerce Chairs Jerry Caldwell and Andy Dietrich, a tone was set. Dietrich quoted author Robin Sharma, who said, “Change is hard at first, messy in the middle and gorgeous at the end.” Caldwell added, “We are going to hear things today – some we know or may not know – and some we may not like – but they’re the truth, and the most important thing is, ‘How do we move forward from here?’”
“We all know we cannot continue to do the same old things the same old way and expect to get better results,” added Washington County, Tenn., Mayor Joe Grandy, reporting on the progress of the Mayors’ Blue Ribbon Task Force.
Grandy harkened back to October 18, 2018, when the Washington and Sullivan County commissions met in joint session for the first (and to date only) time. The two commissions adopted a joint resolution at that meeting in which both bodies agreed to cooperate where appropriate, particularly in the area of enhancing economic development. Toward that end, Grandy and Sullivan County Mayor Richard Venable created a Blue-Ribbon Task Force with five workgroups (entrepreneurial business development and recruitment, existing business development and retention, workforce excellence, regional tourism and primary job recruitment) to examine the potential benefits of taking a regional approach where work is already being done on local levels. “The preliminary indications are that existing programs will be greatly strengthened through a regional focus,” Grandy said. A full report from the Task Force is expected in the next few weeks.
The wasted decade
With the fact that regional efforts to grow prosperity are already underway at both the Chamber and government levels established, the program turned to the question of “Why now?” For that, ETSU’s Dr. Brian Noland and Dr. Jon Smith tag-teamed a presentation of facts regarding the regional economy as it stands today.
Put simply, the economy of this region suffers in comparison to the nation and other comparable markets in most metrics of comparison. Education level, earnings and likelihood of addiction to opioids all paint a gloomy picture of the region’s economy. With respect to addiction, Noland pointed out the fact that half the children in the neonatal intensive care unit at Niswonger Children’s Hospital suffer from neonatal abstinence syndrome – meaning they were born addicted because of the mother’s drug use. “That’s the future workforce of this state,” Noland said, “unless we’re able to make some significant interventional actions.” The addiction issue, he said, is a parallel to the economic problems the region faces. Unless significant interventional actions are taken, it’s highly likely economic issues such as population decline will continue.
Smith compared the post-recession recoveries of the economies of the Johnson City and Kingsport (which includes Bristol) MSAs with those of communities including Asheville, Chattanooga, Knoxville and Nashville. Using real GDP and GDP per capita as measures, both of the Tri-Cities MSAs pale in comparison to the other MSAs. While other MSAs recovered nicely, the Johnson City MSA showed no rebound while the Kingsport MSA showed what Smith referred to as, “a negative growth path.”
Just so, civilian employment showed disappointing data for both MSAs. “The Northeast Tennessee workforce is shrinking,” Smith said. “This is a bad picture. We have a problem with workforce declining. We have a problem with people not coming into our communities to try to replace that with.”
“This is painful information,” Noland concluded, “but it’s reality in the world we call home. This has been the most prosperous decade in my lifetime for the state of Tennessee, but that decade passed us by.”
How to improve
More than a year-and-a half ago, executives from Eastman sought out Mark Fuller, the retired founder of the Monitor Group, now running a firm known as Rosc Global. Fuller has consulted on economic development and prosperity initiatives around the world, with clients ranging from towns to nations. Their hope was that Fuller would assign a team from Rosc to study the regional economy and make recommendations. Instead, Fuller decided to handle the task personally. What drew him to the region was its culture, Fuller told the 300 attendees at the forum. “I have never seen such a strong culture outside of Japan,” he said.
After almost two years of interviews, observation and study, Fuller made a simple but stark statement to open his remarks at the forum. “Our economic development system in this region is not delivering.”
What has been expected of the region’s economic developers, Fuller said, has not aligned with outcomes that would have produced greater prosperity. “Every system is perfectly designed to deliver the results that it delivers,” Fuller said. Since, in this case, those results have fallen short of producing prosperity, a radical overhaul of the system is called for, Fuller suggested. “And I use the term radical in its original sense: going to the root.
“If you look at the precisely defined economic governance system here,” Fuller said, “it’s quite complex. It’s very fragmented and insufficient. Most of the institutions that have been attempting economic development lack scale. There’s been far too much destructive local rivalry, far too little adequate productive cooperation. In addition, there has also been, from my perspective, a far-too-limited definition of what economic development constitutes, an insufficiently big toolbox of tools to help on economic development and an absence of relevant metrics and therefor relevant accountability.”
The good news, Fuller said, is that the untapped potential of the region’s economy creates what in military parlance is known as a target-rich environment. “Frankly, there are too many opportunities, too many possibilities for the region to exploit all at the same time.”
In addition, the region already has buy-in from the three key sectors necessary to produce prosperity beyond that generated by what has traditionally been defined as economic development: government, the private sector and the social sector.
While his mandate included the suggestion of general areas for next steps, those three key sectors should define the specific next steps in the process, Fuller said. “There needs to be voice. There needs to be transparency. There has to be engagement. This cannot just be mandated.”
Fuller’s recommended general areas for next steps were:
• Building and sustaining competitive clusters around existing strengths such as advanced materials manufacturing, health care and tourism
• Reform the existing economic development system with an umbrella organization to address issues of collaboration, entrepreneurship and marketing
• Engaging relevant regional actors in relevant ways
• Upgrading the workforce
• Encouraging entrepreneurship
• Improving the marketing of the region
University of Virginia – Wise Chancellor Dr. Donna Price Henry moderated a panel discussion featuring five private sector leaders who have played a role in promoting regional prosperity efforts, Ballad Health Chairman and CEO Alan Levine, Bank of Tennessee founder Bill Greene, Eastman CEO Mark Costa, Bristol Motor Speedway General Manager Jerry Caldwell, and philanthropist and retired Chairman of Land Air and ForwardAir Scott Niswonger.
Caldwell pushed back against the notion that a regional effort would somehow lessen the value of individual communities. “Say we’re all a football team. We have to realize that we’re all playing our different positions. When the offense does their job and the defense does their job, we’re going to win the game. But, if one’s not accomplishing it, then we’re all going to fail.”
When Henry asked Costa what he would tell another CEO looking for advice on whether to move to the region, Costa answered bluntly. “The reality is, the way we’re configured today, it’s not feasible to really productively and efficiently interact with this region to try and do business here. That’s why we’re sitting here. We have a phenomenal set of resources. We have a great workforce. But we are not remotely configured to compete and win, and we’re so far from it that if we don’t do something radically different, we’re not going to actually succeed. It’s just that simple.”
Costa then went on to pre-empt the fact that NETWORKS Sullivan Partnership and the Northeast Tennessee Regional Economic Partnership are close to signing a non-binding document declaring their intent to collaborate more closely in the future. “It’s not, ‘we’re going to try a little harder. We’re going to have agreements across a couple of agencies that we’re going to collaborate together and it’s all going to be okay.’ If you’re interpreting…why we’re having this meeting today (as us) just asking for a little bit more collaboration, then you’ve missed the point.”
“We’re here because we as different leaders of the community came to recognize that this region is fundamentally, deeply important to us and that if we don’t do something, then the statistics we heard earlier are going to pick up momentum to where they will not be turned in a positive direction,” Costa said.
Elevating the conversation
Tennessee Governor Bill Lee then addressed the forum, focusing his remarks on rural economic development in general and Northeast Tennessee in particular. “Your real strength lies in being a region that has a great group of really valuable assets. When those are brought forward together, it’s going to be not only a powerful marketing tool, but also a really powerful operational tool for bringing about real change.”
“I think it’d be beneficial to have a collaborative structure too, in the way that you engage so that there’s unified voices,” Lee said. “Unified voices are much more powerful than 15 different voices coming from 15 different directions.”
In his closing remarks, Costa reiterated his support for an umbrella organization to scale up economic development efforts, “Because right now as we sort of all pursue our own individual interests, we’re all chasing things and getting 100 percent of nothing or something very small. If we come together, I have no doubt, you know, we’re all going to get a share of something really big and we’re all going to be a hell a lot better off that way.”