Kingsport needs to develop a Competitive Strategy

                Kingsport stands at the edge of precipice. We must make a choice. This will occur either by contentious decision or it will happen as momentum randomly drives us off the edge. But make no mistake, things will be different. The only question is whether we choose to be the masters of our destiny or we will leave the matter to fate.

                The forces pushing upon us are numerous. Outside government regulation and interference is creating costs, hardships and uncertainty for business. This is particularly true in the energy and medical sectors. Market forces are impacting those same sectors. Consequently, the coal industry is in rapid decline. The medical community is being driven towards consolidation. The negative “trickle-down affect” is potentially more devastating. This situation creates uncertainty and risk for the community.

We have been perhaps lulled into a false sense of complacency. Despite its recent investments, Eastman’s prosperity is not significantly tied to Kingsport or the region in general. It lives and dies in the global economy and the current leadership has made it clear that growing the company and building shareholder value is their priority (as it should be).

In the past, we have attempted to bring the necessary population into the City through annexation. While propping up our statistics, this approach has hurt the neighboring County and not solved the fundamental problem. We are not growing jobs or net population.

Where does this leave Kingsport? We find ourselves in a rather confusing and somewhat uncomfortable position. We must do something, but what?

We can stay the course. Kingsport is a great community. I love it here. It has good amenities and the basic requirements of life. Personally, I would be happy living in a community without much traffic; without much crime; and without many of the detractors of larger cities. If I want something more or different, I can visit other places.

However, it would be difficult professionally and I suspect most other small businesses owners would feel the same. Furthermore, it would exacerbate the hemorrhage of our best and brightest, our children, from the region.

The sad truth of the matter is that left alone, the momentum of current trends will lead us away from the path to prosperity. The strategy of building up the necessary prerequisites, like education and workforce enhancement and quality of life amenities, has simply not been enough to attract the type of businesses that create high-paying jobs. Without those, we simply will not attract talent or resources necessary to maintain a vibrant community.

Another alternative is to meet our competition head on. We can try to out match our rival communities, both locally and regionally. As I have stated before, it would be an uphill battle to reverse the trends and it is not clear that we have the resources to do so, even if such a policy was implemented.

This leaves us with one clear alternative. We must develop a competitive or asymmetric strategy. Simply put, we should capitalize on our advantages and exploit our adversaries’ weaknesses. We must recognize that we face significant resource constraints, so our plan
must involve more than just trying to outspend the other guy. We need to be efficient in attaining our goals at less cost than they incur in pursuing theirs. Furthermore, we must understand that competition is enduring and our plans must address the long-run as well as the short-term.

Our competitors’ relative strengths are in conventional retail, hospitality and residential housing. This also gives them a potential advantage in tax revenue that arise from them.

Our relative strengths lie in our heritage. We were created as a planned industrial community and we have a stable employment base and natural beauty. Now the question is how we exploit those advantages.

First, we must undertake a comprehensive community-wide planning process. Above all else, we must gain consensus on our goals. There is great resistance to such activity since spurious ideas are likely to creep in and plans by their nature constrain our actions. We need new ideas and we certainly need constraints so let’s proceed!

Second, we need to exploit our industrial prowess and workforce training programs. We should turn that focus to the future. In the past, our economic development efforts have had an emphasis on businesses “upstream” to Eastman – suppliers and subcontractors. Instead we should look at “down-stream” activity – businesses that use their products.

For example, Eastman produces very sophisticated materials that are the feed-stock for 3D printing. This is the future of manufacturing and the logical descendant of our heritage. It also takes advantage of training programs already in place.

We should develop an alternative economic development initiative that focusses on additive manufacturing. We should also advance our efforts to create a true entrepreneurial infrastructure. In fact, our real focus should be on entrepreneurship.

This closely dove-tails into the naturally-occurring demographic changes. Our employment base is transitioning from Baby Boomers toward Millennials. Research shows that seventy percent of Millennials believe they will either work for themselves or start a business. This would help spur diversity as well. Over forty percent of small businesses are started by minorities.

However, entrepreneurship is not confined to the younger generation. Almost fifty percent of all new businesses are started by people over forty-five. There is a growing pool of active retirees, and therefore potential entrepreneurs, in our community. Attracting new retirees to the region is not incompatible with job growth. In fact, it enhances it.

These are the areas of Kingsport’s strength. They are the tools to build our community’s future. However, they are currently under-appreciated and under-utilized. We must develop new strategies to exploit these resources. If we do, we will start down a path that will make us stand-out and prosper. That is how you create a brand that attracts attention.

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