The resurgent automotive sector in Tennessee has been easily outpacing the overall economy since the Great Recession and now employs almost 94,000 people, according to a new report from the Brookings Institution. But the study also says auto makers, their suppliers and state officials should rev up their efforts to improve workforce quality, innovation and the marketing of the state as a global industry hub.
Report authors Bruce Katz and Mark Muro write that Tennessee's share of the North American car industry stood at 3.3 percent last year, up from 2.9 percent just two years prior. Auto makers such as Nissan, General Motors and Volkswagen and their suppliers grew their payrolls by 35 percent over that time to 93,900. Those companies, Katz and Muro write, "appear extremely well-positioned to expand the state's standing as one of the most competitive platforms for automotive production in the world." The state's relatively low costs and strong infrastructure have played a big role in producing "considerable momentum" for a part of the state economy that is "more expansive, diverse, and diffused than is commonly understood."
But to continue to attract investment in an industry that increasingly emphasizes both costs and innovation, the industry and state government will need to up their game, the Brookings researchers write. Workforce development already is an issue, with shortages of skilled labor cropping up in a number of places. And a wave of new technologies that advance fuel efficiency, vehicle weights and in-car gadgets appears unlikely to subside soon.
"Mastering the current moment will require new thinking and urgent action — and it will challenge all stakeholders to act differently," Katz and Muro wrote.
On the innovation front, the authors are critical of what they call the state's overemphasis on the needs of large companies to the detriment of their supply chains. They say there isn't enough attention being placed on getting the various stakeholders to the table to collaborate and exchange ideas. The same dynamic applies to efforts to develop a higher-quality workforce.
"Today, the state is surely lean but on a number of points lacks a truly strategic approach," they wrote. And speaking to the workforce issues, they added that, "rather than possessing a fully intentional and [advanced industries]-focused workforce, the state instead has a set of cutting-edge, often state-supported one-off programs superimposed on top of a disparate patchwork of regional initiatives."
Among other things, Katz and Muro say industry and state officials should join forces to address more complete workforce training initiatives, find better ways to invest in and commercialize new technologies and set up a more vocal trade association. (For more on that topic, read "Cluster question" from our Innovators magazine published earlier this year.) That, they say, will enable Tennessee to capitalize on the next leg up in auto manufacturing — just as the state did more than 30 years ago when Nissan broke ground in Smyrna.
Check out the full Brookings study here.
Where the jobs are in Tennessee's auto sector
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