The Progression of Jobs Now!

Innovation Valley picks up the mission of local work-force development

When Knoxville-area economic boosters launched a heralded Jobs Now! program in 2002, their goal of creating 35,000 new jobs in the six-county area over the next five years seemed ambitious at first blush.

So when the five-year results that met the goal were announced at a proverbial power breakfast, the booster group was predictably proud of them. But at the risk of raining on their $11 million parade (the cost of Jobs Now! recruitment and promotional efforts), the results weren't really all that rosy.

From an employment base of about 369,000 in 2002, per the Federal Bureau of Labor Statistics, the 35,000 job increase to about 404,000 in 2007 amounts to 9.5 growth. That's a compounded annual growth rate of a little over 1.5 percent during a period when the national economy was surging.

According to a recently released study by the respected Milken Institute, the Knoxville area ranked 76th among the nation's 200 larger metropolitan areas in job growth over that five-year span. That's better than average, to be sure—and also better than the state of Tennessee as a whole—but not by very much.

By the way that the Knoxville Chamber and its Jobs Now! partners prefer to measure it, job growth in the area over the five-year span slightly exceeded 40,000. But this way applies a multiplier to "direct" jobs created by new business locations and expansions to calculate "indirect" employment growth derived from them. The chamber's consulting scorekeeper, Sharon Younger of Younger Associates in Jackson, says these multipliers are constructed by the U.S. Bureau of Economic Analysis and have good predictive value. But she goes on to acknowledge that it may be better to utilize net job growth data that also takes into account job losses from layoffs and the like; and her measure of the area's net job growth from 2002 to 2007 just about equals the BLS' 35,000 increase in employment for that period.

All of this is not said to belittle the efforts of the Knoxville Chamber's economic development team, led by Rhonda Rice and Doug Lawyer, or their counterparts in surrounding counties. Rice and Lawyer have worked intensively to recruit businesses to locate here and to hold onto existing ones. They've also been instrumental in branding the area as Innovation Valley and getting it recognized by publications such as Forbes as one of the best places in the country to do business.

Without their efforts, it's a safe bet Knoxville wouldn't have fared as well as it has in achieving Jobs Now! goals that also included increasing average worker pay by more than $5,000 to about $37,000 last year. This compensation growth placed the Knoxville area 62nd in the Milken Institute rankings, and the area improved its overall Milken ranking, which includes other measures of economic growth, to 60th in 2008 from 79th in 2007.

The main purpose of the recent power breakfast was to launch a new five-year campaign under the aegis of Innovation Valley, Inc. Some $16 million in corporate and local governmental contributions is being sought to support the efforts that will include goals similar to Jobs Now! but also broader ones.

Strengthening education and work-force development heads this list, and 25 percent of the funding has been dedicated to this area. Jennifer Evans has become the chamber's full-time director of work-force development and education. One initial step is developing a management information system that will enable Knox County Schools to track attainment of its goal of a 90 percent high school graduation rate with 90 percent of graduates taking the ACT test and 90 percent of them scoring 21 or higher—which is the benchmark for success in college. More broadly, Evans says, "We're gearing up to make sure the work force has the skills we need." Canvasses of employer needs will be linked to worker training and career counseling programs, but none of the money is due to go directly to school systems.

Lawyer calls the Innovation Valley, Inc., agenda, "Jobs Now! on steroids. We'll be doing more marketing, more outreach with more emphasis on attracting higher paying, high-tech jobs."

Where recruitment efforts in the past have been concentrated on landing manufacturing plants and distribution centers, Lawyer says, "We're now exploring more technology related trade shows and also ways to attract more corporate headquarters."

Paradoxically, a 30,000 job growth goal over the next five years is down from the 35,000 attained over the past five. One might suppose that this is due in part to a weakening economy that's brought layoffs to the Knoxville area, especially in the automotive sector at parts suppliers such as Panasonic and ARC Automotive. But Lawyer ascribes the drop to something else: "You're seeing a lot more capital-intensive projects on the part of companies looking to get more output with fewer people. A company may invest $100 million and only hire 75 people, but it needs a higher skilled, higher quality workforce."

Quality, not quantity, is becoming Innovation Valley's mantra, and is manifest in an ambitious goal to raise average worker pay by more than 20 percent to $45,000 over the next five years.

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