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by Joe Sullivan

Anyone who doubts that Knoxville's economy needs a boost should check the latest employment statistics. Despite a remarkably low unemployment rate that's less than half the nation's 6.1 percent, the number of Knox County residents with jobs has actually declined over the past year.

According to the state Department of Labor and Workforce Development, Knox County employment fell to 209,110 in September, 2003, from 211,640 in September, 2002. This seeming anomaly is explained, at least statistically, by the fact that Knox County's labor force shrunk over the same period by about the same number of people as the ranks of those with jobs. And what accounts for this shrinkage? The best that the state department's Lee Grant can offer is that only people who are actively seeking work are included in the labor force and that, especially in a weak economy, some number of jobless people get discouraged and stop looking for work.

In any event, the employment decline dramatizes the need for job creation efforts that top elected officials and the Knoxville Area Chamber Partnership are championing. While the health of the overall economy is largely beyond their control, they are determined to make a difference through recruiting companies to locate in the Knoxville area and facilitating expansion on the part of existing employers.

Knox County Mayor Mike Ragsdale has made economic growth his top priority from the day he took office a little over a year ago. One of his first steps was to harmonize relations between the chamber and the Knox County Development Corp. by making Mike Edwards the CEO of both entities. Previously, chamber recruiters had been chafing over the pricing of property in the county's business parks, which are controlled by the Development Corp. As a further inducement to companies locating or expanding here, the county mayor introduced property tax abatements under a formula that ties the amount of the tax break to the size of a company's investment and the number of jobs created. In addition, Ragsdale got County Commission to approve a $400,000 contribution to the chamber's Jobs Now! initiative, atop the $140,000 that the chamber has been getting annually from the county for several years.

Even before he takes office in December, mayor-elect Bill Haslam is bringing job creation to the forefront with his plan to hold a jobs symposium tentatively on Nov. 24. He envisions assembling economic development officials from the state, the East Tennessee Economic Development Agency, TVA, the chamber and "a lot of other people who've been involved in job creation around here" for a critique of the effectiveness of current efforts. The goal, he says, is "to develop a coherent economic development strategy between the city, the county, the chamber partnership and anybody else who needs to be a player."

The Jobs Now! initiative is supposed to embody such a strategy and involves the ETEDA, the chamber, and its Blount County and Oak Ridge counterparts. Its goal is to raise $10 million over five years for a campaign that will lead to the creation of 35,000 jobs in the Knoxville metropolitan area within that span of time. In addition to local governments, more than 60 companies have contributed to the $7 million that's been pledged to date.

With $700,000 in funding from Jobs Now!, Edwards has been able to more than double the chamber's economic development budget for the current fiscal year. That's permitted a totally different approach to relating to the site selection consultants who guide corporate decisions in where to locate new plants or other facilities. "When I came in [in 2002] we were fairly passive. We were getting leads from the state and from ETEDA, but we didn't have the resources to go after prospects and sell them." Now, Edwards says, the chamber's two principal recruiters, Rhonda Rice and Doug Lawyer, "will be out of town more than they'll be in town."

Rice's travels include participation in site selector conferences, trade shows of target industries (plastics, electronics and automotive supplies) and direct calls on prospects. Next week, for example, the chamber's executive vice president will be in California, along with TVA representatives, for visits to a number of companies. Why would a California-based manufacturer want to locate in the Knoxville area? "The cost of doing business is so much higher out there, and TVA power is both cheap and reliable," Rice allows.

While the chamber has only landed one new plant, Republic Plastics, with 80 jobs so far this year, Edwards insists the recruitment process has long lead times, and the competition is intense. "We've got some serious prospects, but I don't know if we'll land them or not." What he does know, Edwards says, is that, "Every other community is out there hustling like crazy in showing their community, and if we're not in the marketplace, we'll never get anywhere."

Rice believes the community's political leadership will help tip the scales in Knoxville's favor. "With Ragsdale, we have a very aggressive county mayor who wants to know who we are courting and will follow up with prospects." And she looks forward to having a city mayor who will do the same. "The most important thing is that we now have the leadership in place, and we're ready to do the deals," Rice says.

In the last analysis, though, job creation in Knoxville will be much more dependent on economic growth from within than from without. Fostering a business climate that's conducive to expansion on the part of existing enterprises and the creation of new ones is something else that Ragsdale and Haslam are both committed to. But there's no substitute for a national economic upturn—just as the job losses of the past year are reflective of a national downtrend.