Deputy Secretary's Speech

David A. Sampson Acting Deputy Secretary of Commerce
2005 Tennessee Valley Corridor Summit
Washington, D.C.

Good afternoon. I appreciate Senator Frist and Congressman Wamp’s invitation to join you here at this year’s Washington Summit.

Thank you for the introduction, Congressman Wamp. As the congressional representative for the world-famous Oak Ridge National Laboratory (the Energy Department’s largest science and energy laboratory) you know well the catalytic impact of technology on driving economic development. Promoting regional “Technology Development” and “Economic Development” – those are the twin missions of the Tennessee Valley Corridor.

President Bush is absolutely committed to these missions, I am committed to missions, and so is the entire Bush Administration. As a nation we have learned since the earliest days of the republic that innovation is the secret to creating wealth and opportunity for our citizens.

The Tennessee Valley Corridor serves as a model for communities across the nation as many “rethink” strategies for economic growth in the 21st century global economy. These new strategies begin with rethinking the “spatial” context for economic development, as you yourselves have done.

This rethinking is necessary because the geography of our 21st century global economy and the geography of political boundaries established in the 19th century have become increasingly, and fundamentally, misaligned.

As most of us will agree, economic development policy has traditionally been, for the most part, the province of state and local governments. This kept policy goals limited to jurisdictional lines.

However, the 21st century economy doesn’t respect political boundaries. It doesn’t look at cities, counties, and states separately. Today it’s all about what regions have to offer, regardless of political boundaries.

Today, successful economic development strategies focus on the rigorous pursuit of a competitive edge in a global market. The critical path for success is seeking “regional competitive advantage,” which requires the identification of: regional assets of physical; scientific and intellectual infrastructure; market opportunities; and a strategy for exploiting those market opportunities.

While the development of “regional competitive advantage” is ultimately driven by the private sector, the public sector does play an important role in helping to establish strategies and circumstances conducive for regional innovation and economic growth.

Typically, innovative regions require:

• Effective governance by key players in higher education, government, business, and non- profits;
• Innovative capacity that looks beyond the “economy of the present” to the “economy that can be.” This is a new frontier for many regions, as they must take an economic journey from sole reliance on a single industry or a commodities-based economy to a knowledge-driven economy. And technology innovation, the fuel for that journey, is scarce in far too many regions—though not in this one; and
• The development of a world-class entrepreneurial climate. If innovation is the “fuel” of 21st century economic growth, then entrepreneurs are the “engine” of 21st century economic growth. Building “regional competitive advantage” probably means less focus on recruiting companies from other communities and more emphasis on growing your own entrepreneurs. Entrepreneurship has been studied in great detail at some of our leading academic institutions and there is strong evidence that entrepreneurs are not necessarily born, but are “made” – given the right education and opportunities.

Having said that, it’s obvious that you’ve discovered this formula for yourselves by working with your neighbors in Alabama, Kentucky, Virginia, and Tennessee to form a regional powerhouse: the Tennessee Valley Corridor. Your strategy for technology-led development is a model for the rest of the country.

As a matter of fact, I was serving as the Assistant Secretary of Commerce for Economic Development in 2004, when the Economic Development Administration recognized the Tennessee Valley Corridor with the “Excellence in Enhancing Regional Competitiveness” award.

As you probably are aware, the Department of Commerce has a long history of engagement and support for your region.

In 2003, we partnered with TVA through its Valley Advantage Program to partially finance water system and electrical substation improvements for the City of Loudon. This was to support expansion of an existing manufacturer in a venture with DuPont to develop a new corn-based synthetic material for sports apparel. This unique partnership was expected to result in new, higher skilled, higher wage bioengineering and chemical engineering jobs as well as $101 million in private sector investment.

In 2000, EDA awarded the City of Oak Ridge $1.5 million to help finance the construction of an electric substation and distribution lines to serve the 957-acre Horizon Center Technology Park. TVA’s Valley Advantage Program provided a portion of the matching funds for the investment. An emerging technology company that produced medical isotope implants to treat prostate cancer was the anchor tenant of the park.

It’s clear that the goals of the Tennessee Valley Corridor are closely aligned with this Administration’s goals of increasing the productivity and wealth of the economy, and ensuring that all communities share in economic opportunity.

The Tennessee Valley Corridor, as originally envisioned by Congressman Wamp in 1995 and supported by Senator Frist and the other members of the region’s congressional delegation, has demonstrated great foresight.

Your strategy of leveraging the region’s enormous assets—in technology, in academia, and in R&D, achieved what I was talking about: “regional competitive advantage” in a global economy.

To dedicate this summit to regional economic development alone is a worthy goal. But to couple it with homeland security and energy issues, shows your exceptional leadership and organization in seeing the future, in seeing that you can become a national leader in multiple areas of critical national importance.

It’s exactly this kind of partnership model that helps keep America a “headquarters of innovation” by embracing exciting new technologies and facing challenges and opportunities in an increasingly global economy.

Speaking of “rethinking” strategies, we are doing some of our own.

For example, President Bush is committed to creating the best, most efficient, and most effective mechanism for delivering critical federal resources for community and economic development to America’s most distressed areas.

That is why the President has proposed the Strengthening America’s Communities Initiative (SACI). SACI targets resources to communities that need and deserve more assistance so that they can keep pace with a dynamic and changing economy. It also streamlines the administrative process and widely increases flexibility in how federal funds are spent to address particular local and regional economic challenges and opportunities.

It also holds us, the federal government, accountable to the taxpayer to ensure that hard-earned taxpayer dollars are achieving results. For economic and community development, this means minimizing poverty and creating wealth.

The goal of creating an updated, improved and effective federal economic and community development system is good for America’s distressed communities, good for American taxpayers, and is just plain good government.

So, we look forward to working with Congress—and with you —as the authorizing legislation for SACI makes its way through Congress this summer. This legislation is based largely on the recommendations of the Strengthening America’s Communities Advisory Committee, which is expected to send its report to Secretary Gutierrez later this month.

We will be sure you get a copy when the report is completed. And we’ll look forward to your input on their recommendations.

In closing, I would like to relate something from my own economic development background.

When I was President and CEO of the Arlington Texas Chamber of Commerce, one of the relevant lessons that I learned and took with me to Washington was the importance of creating truly collaborative, action-oriented, and market-based strategies that position local economies not just to compete and survive, but to thrive in today’s’ 21st century global economy.

As aptly demonstrated by your ability to build “regional competitive advantage” in the Tennessee Valley Corridor, this is an effective and proven strategy for achieving successful results.

I wish the Tennessee Valley Corridor continued success, as it sets an example for our entire nation, as a region that works together to meet the challenge of re-inventing a future we all want to live in.

Thank you.