Nashville’s Star Rises as Midsize Cities Break Into Winners and Losers

Nashville’s Star Rises as Midsize Cities Break Into Winners and Losers

Ask Ralph Schulz, president of Nashville’s Chamber of Commerce, why this city has done so well and he begins with the Civil War. Nashville surrendered early, allowing it to avoid the destruction that befell many Southern cities. Union troops used the city as a logistics hub, which laid the groundwork for its postwar economy.

Nashville stood apart in other ways, too. The city was less dependent on manufacturing, in part because being Tennessee’s capital brought lucrative — and relatively recession-proof — public investments. Its colleges and universities, anchored by Vanderbilt University, earned it a reputation as the “Athens of the South.”

The music business, which grew out of a 19th-century publishing industry, gave the city an international reputation, while the growth of Hospital Corporation of America in the 20th century turned the city into a health care hub.

As a result, Nashville had a diversified economy and an educated work force that left it well positioned for the 21st century. But success wasn’t inevitable. As recently as the 1990s, the city was portrayed as a backwater on the variety show “Hee Haw.”

Ronald L. Samuels, a local banker and civic leader, recalled being asked about Graceland — which is in Memphis — when visiting New York with the Chamber of Commerce in the 1980s.

“We had to answer the ‘Where’s Nashville?’ question many times,” Mr. Samuels said.

Beginning in the early 1990s, though, political, business and nonprofit leaders tried to promote Nashville. State and local leaders adopted a regional approach to economic development to recruit companies such as Bridgestone, Nissan and UBS. Tennessee overhauled its community college system and work force development efforts to align better with the jobs being created.

Starting under Mayor Phil Bredesen, who later became Tennessee’s governor, the city invested in big projects that helped revive downtown, a key part of the city’s success.

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