The current manufacturing boom taking place in the southeastern U.S. promises to keep the data center and IT networking infrastructure industry on their toes. Lured by the promise of lower tax rates and real estate prices, expanding companies are edging away from costlier markets like California and New York, and moving south.
In their piece The Large Cities Where Manufacturing Is Thriving 2018, Forbes pulled statistical data from 373 cities based on manufacturing employment numbers from the Bureau of Labor and statistics. In the top 15 alone, they list Raleigh, NC (13), Atlanta, GA (11), and three Florida cities, including Orlando Kissimmee, FL (1), roughly one-third of the top cities for growth.
Living up to its nickname as the Gate City to the South, Atlanta offers a corporate tax rate of six percent. This city has long boasted a thriving range of Fortune 500 companies. SunTrust, First Data, Home Depot, UPS, Coca-Cola, Mercedes Benz, and Delta Airlines, as well as, some of the region’s premier healthcare companies base their operations here. SAP and Sprint, also, find their home nestled among the half a million residents living in the metro area. These organizations and a coming wave of technology startups, financial services, and other business eco-related industries are driving the demand for world-class network connectivity.
In 2017, Atlanta was named #17 as one of the nation’s top 25 cities for technology by Cushman Wakefield. With nearby Georgia Tech as a source for bright-minded employees, Atlanta shows no signs of slowing down.
Other cities in the south driving the need for high-performance data center infrastructure are Chattanooga, Memphis, and Huntsville.
Chattanooga, TN, also known as Gig City, is home to some of the fastest Internet in the western hemisphere. This Tennessee town made history back in September of 2010 when it became the first municipality to offer the only 10 Gigabit-per-second Internet service (10,000 megabits) in the U.S. to its then 150,000 residents by making use of its fiber-optic network. Today, the town has grown to around 180,000. A business tax rate of 6.5 percent combined with the fact that workers pay no income tax on paychecks, makes Tennessee very attractive to established companies like Unum, Aramark, Aflac, and JB Hunt.
Well-established companies aren’t the only sources of business here. Technology is also very much on the rise. In 2017, Fortune cited Chattanooga for the third-highest wage growth in the country for a mid-sized city. One way city developers helped was to design a 140-acre innovation cluster centered in the downtown area. This area is home to startups, non-profits, and government offices. Having ultrafast Internet doesn’t hurt either, especially when you’re trying to attract innovators and engineers.
Chattanooga isn’t the only Tennessee destination on the upswing. Memphis, TN, Home to the Blues and Birthplace of Rock ‘n Roll is experiencing a renaissance as witnessed to by the hundreds of millions of dollars pouring into its burgeoning luxury real estate development downtown. Enjoying the same tax and payroll incentives, this population of 652,000 is enjoying a $13 billion dollar wave of revitalization that began four years ago and was punctuated in April by the relaunch of its Main Street Trolley Line. This glittering renewal is not only attracting residential growth, but it is also drawing businesses of every size including Service Master, which moved its corporate headquarters in the this lively downtown area.
The final city featured in this spotlight on businesses driving IT networking and data center growth in the Southeast is Huntsville AL, also known as Rocket City. This town of roughly 200,000 residents earned its nickname back in the 1950s when the military was developing rocket and missile systems during the cold war. Alabama has a business tax rate of 6.5 percent, an attractive benefit to doing business here.
Presently, Huntsville is experiencing an automotive boom. U.S. automobile manufacturers like Honda and Mercedes Benz already have plants in the state, and Toyota-Mazda is preparing to open a $1.6 billion operation in the city of Huntsville giving rise to 4,000 jobs.
This Southeastern business boom by no means stops with Huntsville. The cities of Birmingham, AL; Raleigh and Charlottesville, NC; Charleston, SC; and both Orlando and Tampa, FL, are also in their ascendance as major league technology and business hubs.
What’s also true is that there is a second tier of businesses on the rise – not so visible but very much in motion.
According to Crunchbase, a substantial number of the top ten southern venture capital deals took place between 2017 and 2018, which they list by city: Atlanta, Raleigh, Miami, Tampa, and Nashville. The total of funded startups per city respectively were 154, 125, 82, 41, and 39. That’s a combined total of 441 separate funding events.
The Crunchbase team also listed the top ten southern venture capital deals by dollar over the same period. In U.S. millions, they were $1,065; $766; $683; $337; and $208. These totals represent the cities of Atlanta, Raleigh, Ft. Lauderdale, Charlotte, and Tampa respectively with a combined total is $3,059 in U.S. millions. Startups tend to be less visible to the public, but if these Southeastern startups are anything like those in Silicon Valley, their rise should be fun to watch.
About DC BLOX
DC BLOX is a multi-tenant data center partner offering the infrastructure and connectivity essential to power today’s digital business. DC BLOX’s, software defined network services enable access to a wealth of providers, partners and platforms to businesses across the Southeast. DC BLOX data center locations are in Atlanta, GA, Chattanooga, TN, and Huntsville, AL. Its newest location is under construction in Birmingham, AL.