The Chattanooga area is growing slower than many similar cities, and educating workers remains a worry, but a new growth plan calls for more air service, possibly expanding the city's business incubator and boosting the Gig City profile.
Chattanooga Area Chamber of Commerce Chief Executive Charles Wood said economic development is "a vicious competition" in the Southeast, adding that he's raising money for the updated five-year growth plan, dubbed "Chattanooga Climbs Higher," which will start next year.
Many goals in the current five-year plan that officially ends in mid-2024, called "Chattanooga Climbs," were met — such as exceeding $1 billion in capital investment in the region, Wood said in a telephone interview. He expects the existing goal of 5,000 new jobs to be topped by year's end, he said.
"We've hit a number of those targets," he said.
The Chattanooga area is growing its population, but not as fast as many of its peer cities with which it compares itself, said Tony DeLisi of the firm Ernst & Young, hired to help the chamber create the new plan.
The Chattanooga area's population growth of 2.2% from 2017 to 2021 trailed Huntsville, Alabama (9.2%), Knoxville (5.4%) and Charleston and Greenville, South Carolina, (both 2.7%), DeLisi told the city's Industrial Development Board recently.
Tennessee as a whole grew 4.3% over the period, according to Ernst & Young.
DeLisi also cited the importance of building a more inclusive local economy, noting the 24.2% poverty rate among Black households in Chattanooga is nearly three times the local poverty rate of 8.2% for white households.
"There have been some gains in this space the last five years," but issues still persist, he said.
Chattanooga Mayor Tim Kelly talks about "there's one Chattanooga and not two Chattanoogas," Wood said.
Even a small percent increase in Black residents moving out of poverty benefits the area, Wood said.
When it comes to education, DeLisi said, the Chattanooga area is at the bottom of a peer cities' list in the share of local population over age 25 with associate and bachelor degrees or higher.
"Education and access to talent remain top concerns," he said.
Share of population in Chattanooga area with a bachelor's degree or higher trails similar-sized U.S. cities:
— Charleston, South Carolina - 48%
— Huntsville, Alabama - 47%
— Lexington, Kentucky - 46%
— Boise, Idaho - 43%
— Knoxville - 41%
— Greensboro, North Carolina - 39%
— Chattanooga - 36%
Source: U.S. Census American Community Survey, Ernst & Young
Employers in the Chattanooga area indicate it's hard to find skilled workers, DeLisi said.
Education is "front and center. We're working hard to align with Hamilton County Schools," Wood said.
He mentioned County Mayor Weston Wamp's desire to invest in a new public school downtown to further vocational and technical education.
The updated plan calls for three broad strategic priorities — economic growth, education and workforce development, and technological innovation:
— In terms of economic growth, air service is seen as a potential "game-changer" in the plan.
"A transformative investment in the quality of air service ... could help Chattanooga become a true contender for headquarters and large professional service organizations," the plan said.
Air service in Chattanooga is "a limiting factor in support of international business recruitment," DeLisi said. The plan eyes development of an air service fund and a new marketing initiative in collaboration with the airport.
— One potential game-changer under education and workforce is building out 10 career pathways in collaboration with Chattanooga 2.0, which is aimed at education equity in the county. Pathways cited in the plan include information technology, advanced manufacturing, construction and logistics.
— Under technological innovation, a possible game-changer is redeveloping and potentially expanding the city's small business incubator to create a first-class facility, the plan said. It calls for partnering with Hamilton County to study options and reinvest in the center at Manufacturers Road and Cherokee Boulevard on the North Shore.
Tax-increment funding could be explored to support the center's expansion and redevelopment, the plan said.
There's a lot going on locally in terms of leading-edge technology, such as EPB's activation of the nation's first commercial quantum network to improve computing and cybersecurity, DeLisi said. There should be an effort "to amplify the Gig City profile," he said.
The plan shows the industry and business clusters that grew quickly from 2016 to 2021, such as automotive and freight services. While smaller, Wood said the research and software sectors saw robust growth in the period.
"On the education side, we need to make sure we're producing graduates who are ready to go into those sectors," he said.
Wood declined to immediately say how much money the chamber is trying to raise for the new plan.
According to the plan, some 25 community, business, education and nonprofit leaders were interviewed for the updated growth blueprint. Also, 118 people took part in focus groups, a 70-member steering committee was formed and a survey drew 1,200 responses.