Updated: Jan 29, 2022
After the recent record breaking financial decisions from a few of the world's largest tech companies it is clear to the businesses in the area that Big Tech likes the idea of making Nashville their next Silicon Valley. But the real question is, why are some of the largest companies in the world, companies like Amazon, General Motors, and even Oracle deciding on Nashville? After some digging and some a little detective work I can confidently tell you the reasons for this are threefold.
Location, Location, Location
While Nashville’s tech identity isn’t currently a very large one, it is becoming one of if not the fastest growing tech hubs in the entire country. The land surrounding Nashville has been sought after for a while now by large investment firms that have been scooping up hundreds of acres of land in the event that more tech companies decide to follow Amazon’s lead in picking Nashville as their new home to grow into. According to The Nashville Business Journal’s Adam Sichko the land that Oracle is currently under contract to buy is adjacent to Nissan Stadium on the East Bank of the Cumberland River immediately north of Topgolf.
GM announced on Friday April 16th that they will be breaking some state records by announcing that they will be building a $2.37 billion electric vehicle factory at its Spring Hill campus. This is all being added to their already massive facility so as to eliminate the transportation time and costs of having separate facilities. Spring Hill is not even an hour south of Nashville and therefore this project will have a massive ripple effect on our City of Music.
Amazon, the 1st of these three titans of industry to make the move to Nashville. The company has been on the move these past 2 years increasing their workforce by hiring over a thousand new employees according to Joel Stinnett of Nashville Business Journal. That first thousand is only 20% of the 5000 employees that Amazon has promised to employ. The higher average salary of these positions can be equated to them being a variety of higher end tech and HR centered positions rather than warehouse and driving jobs. Not to mention it was confirmed on April 12th that Amazon has signed the lease for the 2nd of its two planned office towers. The big reason for Amazon’s move to Nashville is no secret according to Murat Arik, director of the Middle Tennessee State University Business Economic. “Nashville is at the heart of population centers, and you can reach half of the US population within a single day drive.”
State Officials Are Incentivizing
While location, location, location is always a staple rule to any good business decisions, companies this large that are making this big of a resolution wouldn’t just come to Nashville because of the prime land. Our good state of Tennessee has had its officials chasing after these big tech companies to build their projects here in the interest of healthy growth. There were at least half a dozen trips to South Korea and Poland by State Officials to try and convince just GM alone that the area is too prime of a spot to pass up.
Oracle’s deal with these State Officials is looking to be one of the largest economic development grants in state history, according to multiple sources. For now Governor Bill Lee’s administration is not disclosing the total dollar amount. Spokeswoman for the state department of Economic and Community Development, Jennifer McEachern said “The incentives that we offer will be in line with the size of this project, location, and company’s capital investment and wages.” She goes on to urge local partners to do their very best to support the successful recruitment of this project to the state as “Tennessee would benefit greatly from a global company of this caliber choosing to operate here”.
Amazon received a $65 million state grant as a line-item in the state’s 2019-2020 budget. Which amounts to an average of $13,000 per promised job for that particular deal. As the deal with Oracle begins to finalize (hopefully in Tennessee's favor) State Officials are more likely to show a little more transparency. A lot will depend on the amount of jobs Oracle promises to bring to the area and what the average salary will be for those jobs. Amazon's average employee salary for their new Nashville base of operations will be over six figures.
All In Good Company
One of the primary reasons so many tech companies are now suddenly turning to Nashville is definitely the businesses that have already begin developing operation centers here. The past has shown a precedence for large competing tech companies having a convention of building their operation near each other. This is an important strategy for them because it accomplishes two goals at the same time. The first goal is concerning staffing, being around other tech companies allows for easier staffing acquisitions from their competitors. Not to mention the fact that once an area becomes a tech hub like Silicon Valley then start ups and entrepreneurs will begin congregating there as well. The second goal congregating together accomplishes is the building of communities and neighborhoods that allow for easier living accommodations for all of their future talented employees.
So all together these deals are beginning to look like just the beginning of a larger domino effect that will encompass the entire Nashville and middle Tennessee area in what is really a generational opportunity. The entire area is already buzzing about the potential these deals carry for all of Nashville and will undoubtedly bring more than just tech employees to our wonderful city of music. The East Bank of Tennessee was seen a flurry of proposed development over the last few years but local government has seen its potential for decades prior according to Drew Hutchinson from Bizjournals.com. Needless to say, regardless of the reasons for Nashville’s upcoming tech business boom many in the area are excited about the possibilities.