Tennessee: A new destination for small business success
July 29, 2019
It might be known as the Volunteer State, but Tennessee is quickly becoming known for something else. A hub for small business success.
Entrepreneurs and startups from various industries are increasingly choosing the southeast state as the place to build their business.
The shift is largely thanks to a vision that began in 2012 to make Tennessee the most startup-friendly state in the country. It was that vision that led to the creation of Launch Tennessee, a public-private partnership dedicated to helping entrepreneurs build companies and create jobs across the state.
In fact, Tennessee is one of the only states with an entrepreneur resource network operating at the state level. With Entrepreneur Centers in six regions, Launch Tennessee has created a system for statewide collaboration that is specifically geared to help entrepreneurs get the support they need at any stage of the process.
Among the 25 largest states, Tennessee moved from 18th to 10th in the Kauffman Index of Growth Entrepreneurship ranking from 2015 to 2017. According to the Kauffman Index on Startup Activity, in 2017, Tennessee had the best ranking for “opportunity share of new entrepreneurs” at 88.7%. “Opportunity share” is a measurement of new entrepreneurs who aren’t coming out of unemployment, meaning the majority of entrepreneurs in Tennessee are choosing to start their own business out of opportunity, rather than necessity.
“We’ve got the perfect storm that combines organic benefits like low cost of living and an extremely talented workforce produced from our world class universities, with a significantly enhanced early stage capital scene and a commitment from the highest levels of state government to make Tennessee the best place to start a new business,” Launch Tennessee’s former CEO, Charlie Brock, previously said in a press release.
Take the state’s burgeoning fashion industry as an example. Across Tennessee, the fashion industry contributes nearly $27 billion to the economy. In Nashville alone, the industry is expected to account for 20,000 jobs by 2020. According to Van Tucker, former CEO of Nashville Fashion Alliance, those numbers prove that the state is becoming a “new hub for independent fashion designers and emerging seed-stage fashion businesses.”
“There are some exciting things underway in Tennessee that weren’t here six and a half years ago,” said Tom Ballard, a Launch Tennessee board member, in a blog article.
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Silicon Valley of the southeast
Entrepreneurs in the fashion industry aren’t the only ones seizing the opportunity to capitalize on all that Tennessee has to offer.
Many tech entrepreneurs are choosing to build their business in Tennessee rather than the traditional hotspot of Silicon Valley.
While Silicon Valley might be known as the mecca of tech, Tennessee allows entrepreneurs the ability to grow their business in a much more affordable region with a similarly high quality of life – both of which can help attract and retain talent.
In fact, from 2012 to 2018, the tech job market in the Nashville area grew by 30%, outpacing national tech job growth by 10%. The region now has one of the fastest growing technology sectors in the country.
But the tech scene isn’t just booming in the state’s capital. A quick Google search will return tons of articles proclaiming Chattanooga as the newest tech hub and the next Silicon Valley. It’s even been referred to as one of the “most startup-friendly cities” in the US.
Chattanooga’s newfound popularity among tech startups didn’t come from just luck. Spurred by a desire to promote innovation, in 2010, Chattanooga was the first municipality to launch a citywide gigabit network. With speeds 200 times faster than the national average, the system kickstarted Chattanooga’s push to become a tech destination. A groundbreaking 10-gigabit network rolled out a few years later, giving the city an even greater competitive advantage.
And to make sure tech entrepreneurs had a place to set up shop, the city established an Innovation District – the first mid-size city in the US to do so – which is now home to more than 670 businesses employing around 14,000 people.
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The surge in startups setting up in Tennessee has also contributed to the state’s increasingly diverse population and industry.
The most recent data shows that around 5% of the state’s population are immigrants. That’s a substantial change from 1990, when immigrants accounted for just 1.2% of the population.
Nashville, in particular, has become increasingly diverse, thanks to its multitude of business opportunities and healthy economy. As of 2017, the region ranked 38th among the country’s largest metro areas for population of immigrants. In the Metro Nashville Public School district, 30% of students speak a language other than English at home, with more than 140 languages spoken by those students.
What’s more, Tennessee is ensuring that everyone has access to the resources they need to grow their business, with entrepreneur programs specifically tailored for minorities and veterans.
And with such a vast network of statewide resources, there’s no question that opportunities will continue to rollout to help more startups succeed. It’s safe to say that Tennessee is well on its way to achieving its vision of becoming the most startup-friendly state in the US.
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