BusinessTN

A Japanese bureaucrat was about to learn a new word over breakfast last August. When Nashville businessman Ed Nelson described Music City as entrepreneurial, his interpreter struggled to find the appropriate word in Japanese, so Nelson said “hot city” instead. The Japanese finance official, according to Nelson, lit up and repeated “hot city,” excitedly. The two exchanged bottles of Jack Daniels and sake. Soon thereafter it became known that Nashville is the first city in Tennessee to host a full-service foreign consulate.

Nearly 25 years had passed between last year’s exchange at Nashville’s Radisson hotel and then-Tennessee-governor Lamar Alexander’s first trip to Japan in the early 1980s. One after another, major Japanese companies decided that Tennessee is good for business: Toshiba, Sharp, Brother, Bridgestone/Firestone, and, of course, automaker Nissan, which last year moved its North America headquarters to the Nashville area from California, in part to be closer to its manufacturing plant in Smyrna. It only made sense for Japan’s increasingly irrelevant consulate in New Orleans to relocate to a more vibrant locale. The Japanese government picked New Orleans in 1922 because of its busy port, but access to open water matters less in 21st-century business. What’s more, roughly 80% of Japan’s U.S. population now resides in Tennessee and Kentucky.

“Nashville looks at this as a ‘good housekeeping’ seal of approval,” says Nelson, who has been involved in U.S.-Japan relations for decades. At one point he advised the Industrial Bank of Japan, and in 1992 was named Japan’s honorary consul. Nelson is convinced that the consulate’s move will boost job creation in Tennessee. The state currently has 160 Japanese entities registered to do business here (with 40,000 Tennesseans in their employ), and the Japan-America Society boasts 800 members.

When the Japanese consulate and Consul General Masaru Sakato relocate to Nashville this December, they will also serve Japanese nationals in Arkansas, Kentucky, Louisiana and Mississippi. But Tennessee officials say the move’s significance stretches beyond U.S.-Japan relations. Tom Jurkovich, chief of economic development in Nashville, says that having a foreign consulate in Tennessee shows other countries that the state has become a dominant international player in the region.

Tennessee’s aspirations on the Pacific Rim do not end with Japan. The Nashville Area Chamber of Commerce undertakes its first trade mission to China in April, with hopes to foster Chinese investment in Tennessee. “They are sitting on an awful lot of cash now,” Jurkovich says. Some of that cash has been earned by making home supplies for Dollar General, farming equipment for Tractor Supply and pianos for Gibson Guitar. Naturally, those Middle Tennessee companies, along with Nashville’s HCA, are sending top executives to China to rub more elbows and see what happens. With 15% GDP growth between 2004 and 2005, China’s economy is roughly where Japan’s was in the 1980s, when it made early investment on America’s soil. A possible harbinger of future Chinese investments here: Wei-Chuan recently opened its dumpling factory in Goodlettsville. Perhaps in 20 years, company owner Robert Huang will be named China’s consul general.