Why Businesses Choose Tennessee: A State Built for Success

Jeff Adkins

With a central location, substantial investment in workforce development, business-friendly fiscal policies and an enviable quality of life, Tennessee has become an attractive destination for businesses of all sizes and industries. 

Tennessee’s history of economic success has helped make it a haven for globally known corporations, including Nissan, General Motors, Volkswagen, FedEx, HCA Healthcare, Dollar General and Bridgestone. 

“Many businesses are attracted to Tennessee because of our business-friendly tax environment and business-friendly regulatory environment. That’s where the bottom line hits their bottom line. They’re looking at what makes financial sense for their businesses,” says Stuart C. McWhorter, Tennessee Department of Economic & Community Development commissioner. 

Workforce Development: A Skilled and Talented Pool

Tennessee boasts one of the lowest state debts per capita in the nation, as well as some of the lowest state and local taxes paid per capita, making it cost-effective for operations. The state’s lack of a personal income tax on wages and salaries gives companies a competitive advantage when recruiting top talent. In fact, Tennessee’s focus on workforce development — buoyed by programs, such as Tennessee Promise, which provides free tuition for students attending community and technical colleges — is often a deciding factor for relocating and expanding companies. 

At the Center of Everything

McWhorter says Tennessee’s strategic location and robust logistics infrastructure also play a crucial role in the state’s efforts at promoting investment and expansion. Located within a day’s drive of 75% of the U.S. population, the state offers access to major markets, making it an ideal hub for manufacturing, distribution and supply chain management businesses. 

“We are a state that happens to be good at a lot of things, but we’re also really lucky because we just happen to be right in the center of the Southeast. We have three major interstates that run through our state. We have about 1,000 miles of river waterways that meander throughout the state as well as two major airport hubs that continue to grow,” McWhorter says. 

Courtesy of In-N-Out Burger

Making Major Moves: Companies Choosing Tennessee

Many West Coast businesses are recognizing the advantages Tennessee offers and are making significant investments in the state. Among them are the popular California fast-food chain In-N-Out, specialty fabrication company Lazestar and tech giant Oracle. The company is making a major investment in Nashville, where it is establishing a significant presence on the East Bank of the Cumberland River. This investment is expected to drive economic growth and create thousands of jobs in the region. 

“They made a commitment to our state a couple of years ago to bring 8,500 jobs to the East Bank. One of the reasons why I believe Nashville is so attractive for Oracle is because of our robust health care industry. Back in 2022, they acquired Cerner, which was one of the largest electronic medical records companies in the world. I think because of that, they have become even more interested in Nashville,” McWhorter says. 

Firestone

The Right Address

Elsewhere across the state, companies, such as TSM Metal Works, Firestone Industrial Products, Ford and Protomet Corp., are capitalizing on Tennessee’s business-friendly conditions to make significant investments. With three facilities in East Tennessee, Protomet designs, engineers and manufactures components for recreational boats and decided to build a fourth plant in Rockwood. 

“One of the things that attracted us to Rockwood is the workforce. Getting employees can be competitive in East Tennessee, but we felt there was a good opportunity to grow a new workforce in the Rockwood area,” says Jeff Bohanan, president of Protomet. 

Protomet

Bohanan says another reason his company has succeeded in East Tennessee is the affordable yet exceptional quality of life. 

“We’ve hired several folks from California post-COVID — people looking for a better quality of life,” he says. “One particular engineer we hired had made a spreadsheet of all the things he was looking for relative to quality of life, and East Tennessee checked every box. When you talk about the state’s business-friendly environment, it’s not just about taxes. It’s about employees and where they want to live.” 

Tennessee / Jeff Adkins

Thinking Globally

Foreign direct investment has become a significant driver of economic growth in Tennessee, with more than 1,000 foreign-based companies choosing the state for their U.S. operations. The Tennessee Department of Economic & Community Development (TNECD) has been instrumental in promoting the state as a top destination for investments from companies, including Korean-owned LG Chem America Inc. and Japanese-owned Bridgestone Americas Tire Operations. The TNECD actively engages with potential investors through its international offices, showcasing Tennessee’s strategic advantages, such as its central location, skilled workforce and pro-business environment. The state has five direct foreign investment representatives that cover Japan, South Korea, Ireland, Spain, Austria, Germany, Switzerland, Italy, the United Kingdom, Belgium, Luxembourg and the Netherlands.