Although we normally think in terms of Michigan (Detroit) when talking about the auto industry in the United States, a new report by the Metropolitan Policy Program at the Brookings Institute shows that Tennessee has the potential to develop a “ first-rate workforce and an innovation-nurturing environment to become a premier global destination for automotive production now that peer states and low-cost countries can compete on costs.”
“At a time when wages are converging across all U.S. locations, competing on wages alone will be a losing proposition,” said Mark Muro, a co-author of the report. “Tennessee needs to complement its cost appeal with new production efficiency, top-flight workforce training, and a flare for product and process innovation.”
According to Muro, Tennessee’s auto sector has generated more than 12% of all job created in the state since the recession and “more than 1/3 of the manufacturing sector’s output growth since 2010,” making it the South’s largest source of employment. In addition, its share of the automotive manufacturing job market jumped from 2.9% in 2010 to 3.3% 2012.”
The Brookings report, titled, “Drive! Moving Tennessee’s Automotive Sector Up the Value Chain,” also recommends targeted efforts to address specific challenges facing the auto industry. The recommendations call on industry and the public sector to work together ways for Tennessee to propel continued industry growth by developing a workforce pipeline to strengthen Tennessee’s advanced industry skills base, and focusing on innovation among individual companies (regardless of size) throughout the supply chain and placing more emphasis on “international engagement to encourage the development of new technology.
Munro also goes on to outline how he feels the federal government can do more to provide a more solid platform for national growth in the automotive industry by “promoting trade liberalization and expanded market access to increase exports, create a “Race to the Shop” competition challenging states and regions to develop cohesive programs to develop the manufacturing workforce, and invest in R&D for cross-cutting advanced industries technologies.”
“States and regions are on the front lines in working with their local advanced industry clusters to build competitive advantage but they can’t do it alone—they need a modicum of help from Washington,” he exclaimed.