By Lindsay Hiatt, Director of Economic Development, Chattanooga Chamber of Commerce
Is there a particular industry that has historically defined your community? That’s not necessarily a bad thing, but in today’s rapidly changing world, it is crucial to your community’s prosperity to have a diverse industry base. In many communities, what once worked in terms of business recruitment has not kept pace with an evolving, more technology-driven world.
As a result of the Great Recession in 2008 and COVID’s more recent impacts on the economy, some communities are reevaluating their traditional economic development models and shifting away from the industry that has defined them for decades in an effort to prepare for future economic downturns. But when the pendulum swings back and the local economy recovers, it can be challenging to convince political leadership that a change in direction is still necessary.
Read on to discover how two cities retooled their economic development offerings to attract new types of businesses. Both communities had a common goal: to create jobs, attract businesses and stimulate economic growth. The results speak for themselves.
Dalton, Georgia: No Longer Just the “Carpet Capital of the World”
About an hour north of Atlanta lies Dalton, Georgia, known colloquially as the “Carpet Capital of the World.” The nickname reflects the city’s historic prominence as a carpet manufacturing and production center. Early in the 20th century, entrepreneurs in Dalton began to explore more efficient methods of weaving and tufting carpets, and the city’s carpet industry began to flourish. By the 1950s, the city had become a hub for carpet production, with many companies operating factories in the area.
Today, Dalton remains a major center for the floor covering industry which employs tens of thousands in the region, with many of the world’s largest carpet manufacturers such as Shaw and Mohawk Industries maintaining a presence. Even though Dalton’s economy remains heavily reliant on the carpet industry, the city began efforts in the early 2000s to diversify its industrial base and attract new companies and industries to the area.
Carl Campbell, executive director of the Dalton-Whitfield Joint Development Authority says, “following a community economic development plan is vital but it isn’t always easy” when trying to make bold, transformational changes in a community that’s used to a specific type of industry.
Following the Great Recession, the greater Dalton community sought diverse industries to help it weather future downturns. As they began investing in a new, publicly owned industrial park, economic development leaders knew they could easily land carpet projects and claim success. Yet, in a bold move, leaders decided to reserve the park only for investments in industries other than floor coverings. As the nation began to recover from the recession and parcels in the industrial park sat empty, the economic development leadership had to defend its decision to focus on diverse industries — but they stood firm.
“In the early years of the new plan with a new business park, we found ourselves seeing lots of opportunities for expansions and new companies in the floor covering and even housing product industries, but not much else. Resistance to bringing those companies and investments to our community wasn’t popular, especially as time passed by, but our resolve eventually paid off,” Campbell says.
In 2019, Dalton/Whitfield County attracted Hanwha Q CELLS to the Carbondale Business Park, where the Korean-based company invested $150 million to build the largest solar manufacturing center in the Western Hemisphere. With a 300,000-square-foot facility and over 600 employees, this announcement was the first in a series of diverse industry wins for the community.
Other businesses followed and in 2020, German automotive parts manufacturer GEDIA selected the Carbondale Business Park to build a 180,000-square-foot facility, where the advanced manufacturer has already hired 100 workers and invested $85 million. GEDIA’s focus on the automotive industry, specifically electric vehicles, was another win for Dalton’s diversification efforts.
Recently, Dalton landed food manufacturer Essentia Proteins in the park, and Hanwha Q CELLS just announced a major expansion of their facility, bringing their total investment in Dalton to over $500 million and more than 1,500 jobs.
Campbell plans to continue to recruit a variety of industry types to the community. He says Dalton’s focus on new business sectors will help secure high-paying jobs for future generations and support a strong economy.
“We now have approximately 2,000 new diverse industry jobs that should add resilience for our citizens in the event of another housing downturn.”
Clark County, Nevada: Bright Beyond the Lights
Las Vegas is known as one of the most popular tourist destinations in the world. Each year, millions visit the city to try their luck at the slot machines and gaming tables at its many casinos and resorts. But in recent years, Las Vegas and Clark County have undergone a significant transformation, and business and community leaders are fully committed to diversifying their industry mix. But that wasn’t always the case.
In the 1930s, Nevada legislators legalized commercial gambling to attract more business and industry to the state. Their gamble proved to be successful – hotels emerged, restaurants opened and casinos thrived. Business was booming and community leaders supported the continued development of the hospitality industry. In fact, those leaders were so comfortable that according to the Las Vegas Review-Journal, a 1970 study commissioned by local businessmen concluded that Las Vegas neither needs “nor should ever expect to attract any sizable non-gambling industries.”
Shani Coleman, director of the Clark County Office of Community and Economic Development, believes the exact opposite.
“We know people come to Vegas using discretionary income, and we started having this conversation after the 2008 recession,” Coleman says, noting that when people have fewer expendable funds, travel and leisure take a back seat.
Much of Nevada’s economy depends on tourism, gaming and retail. In times of economic expansion, these industries have helped the state prosper, while at the same time making it vulnerable to market volatility and recession. One example: Before the pandemic, approximately 30 percent of the Las Vegas area’s labor market worked in leisure and hospitality, compared with 11 percent nationwide. When COVID hit, the county’s unemployment rate skyrocketed.
Formulating an economic development strategy that focuses on industry diversification can take years of planning, and headlines like “Experts say Vegas Economy is Booming Back from Great Recession” (Las Vegas Business Press) can make it difficult to remain focused on industries outside of what has traditionally worked so well for a community.
But Coleman encourages other economic developers and city leaders to stay the course. Of her county’s economic development priorities, she says, “We’re now focused in earnest on the technology and advanced manufacturing industries, as well as creative services.
“One of the places we’ve seen the greatest amount of economic activity is in the manufacturing sector, and we’re leaning into that in a number of ways – marketing to advanced manufacturing and biotech manufacturing companies.”
Recently, Wilen Las Vegas, LLC expanded its advanced manufacturing facility in Clark County bringing with it 60 high-paying jobs. Additionally, popular shoe manufacturer Crocs is investing $85 million in a 600,000-square-foot distribution center and creating 325 jobs in the community.
Clark County is also targeting the creative services sector as an alternative to traditional recruitment methods.
“We’re the entertainment capital of the world,” says Coleman. “We believe there is an opportunity for the artistic and creative community here to expand beyond the traditional employer-employee relationship and build an economy around the creative professions.”
This, she hopes, will help creatives flourish even in times of economic downturn.
Looking toward the future, Coleman says, “We are at an inflection point with innovation that is forcing some of this change,” stressing that Clark County’s efforts toward industry diversification aren’t slowing down anytime soon. She feels a responsibility for ensuring
industry executives know Clark County is “bright beyond the lights” and offers more than just the glamorous Las Vegas Strip.
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To remain competitive and thrive, communities must be open to new types of business and industry. Government and business leaders should collaborate in times of prosperity to develop strategies for business attraction in diverse industries. This type of long-term planning will create a thriving local economy that is resilient to external disruptions and supports the wellbeing of all community members.
