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The Battery Belt is taking shape, and it's creating a new economic development model where a college degree won't be the ultimate qualification for jobs.
In 2022 we saw industrial policy passed by Congress intersect with investment plans from major manufacturers and start-ups, all emphasizing the future need for batteries for energy storage. But unlike the urban employment centers we've seen emerge in the last several decades, the regions now being dubbed the "Battery Belt" don't feature college graduates clustering together in office buildings in a handful of expensive cities to create internet- and software-related products. It's more geographically diverse, with different economic and infrastructure needs than the prior era that was so heavily influenced by Silicon Valley.
An obvious difference between building batteries and building software is that batteries for electric vehicles and other large-scale industrial uses can weigh more than 1,000 pounds. The production and warehousing requirements for that kind of equipment rules out urban knowledge centers - the economic winners of the past 40 years - as the focus for this new wave of industrialization.
A year ago I foresaw that the electrification of the auto industry would be a boon for the South. While that's certainly been the case, the Midwest has also seen its share of wins this year. With an additional year of data to analyze, there are patterns emerging in the kinds of places being chosen for new battery plants.
The most important feature for sites is large tracts of land available near the right kind of physical infrastructure and major population centers. Here in Georgia and adjacent South Carolina, five multibillion-dollar battery plants have been announced over the past few years. Two of them are in the counties next to the ports of Charleston and Savannah, and the other three are about an hour outside of Atlanta next to both railroads and highways.
After that, softer factors come into play: the quality, size and cost of the local workforce, proximity to future customers, the ability of local officials to woo manufacturers, and whether there are other related production facilities close by. For instance, Stellantis NV is building a battery plant in Kokomo, Ind., in large part because it already has a plant there that produces vehicle motors (gasoline and hybrid for now, electric in the future).
While the Battery Belt will need a trained workforce, it won't be as reliant on workers with elite educations as the Silicon Valley economy was. In the four counties in Georgia where battery plants exist or are being built - Jackson, Bartow, Coweta and Bryan - the percentages of adults with at least a bachelor's degree are 23.5%, 19.8%, 33.3% and 33%, respectively. That compares with 50% for the main two counties encompassing Atlanta: Fulton and DeKalb.
Reading through press releases and articles with details on the plant announcements, a different role for government officials also stood in contrast to the internet and tech economy that we're used to. We think of Apple as the company that was started in a garage, and Facebook being started in a college dorm room, and that's contributed to the cult of the founder. Only if a community is lucky enough and suitably "cool" enough to attract young and talented people might it become the place where the next hundred-billion-dollar company is founded. The governor of California in the 2000s had very little to do with Facebook moving to California, even if in prior decades the government played an important role in creating and shaping Silicon Valley.
The Battery Belt isn't like that. Once a community has enough of the above key factors, the question of whether it gets a billion-dollar plant comes down to whether its governor and economic development officials can work out a deal with manufacturing companies like Stellantis, Hyundai Motor Co., General Motors Co. or Ford Motor Co.
It's perhaps noteworthy that Georgia and Ohio, with their more restrained Republican governors, have had more success in winning battery plants than the bombastic, attention-seeking governors of Texas and Florida. This should shift the priorities of both voters and politicians toward being more grounded and pragmatic rather than ideological and emotional.
It's still early days in this trend - Battery Belt is a term that's only caught on over the past several months, and most of these plants have only recently been announced or started construction. But it looks like the economic center of gravity in America, after being overly concentrated in communities full of college graduates, is finally broadening out as we set out to build the industrial economy of the future.
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Previously:
• 09/10/24 Americans have a new piggy bank to raid --- their houses
• 10/03/23 America's greatest public policy success is now in jeopardy
• 09/12/23 The housing market is tilting in favor of renters
• 08/18/23 RIP recession. Is it time to worry about
• 05/24/23 This Goldilocks economy has an end date
• 05/24/23 Bye-Bye, New York. Hello, Fayetteville
• 04/04/23 What makes this economic slowdown different from the others?
• 02/15/23 Higher mortgage rates is what the housing market needs now
• 01/06/23 The January inflation bump Americans should welcome
• 01/04/23 Why millennials are following boomers to the South
• 10/24/22 Two bright spots in a cooling housing market
• 08/18/22 Future remote workers need to network more --- in college
• 06/17/22 Housing market cooldown will only lead to more dysfunction
• 05/27/22 Welcome to our be-careful-what-you-wish-for economy
• 05/04/22 The Amazon economic indicator says inflation is easing
• 01/20/22 Don't call me on Friday. That's my 'me time'
• 01/06/22 2022 is the year to buy your first luxury electric car
• 06/03/21 The post-pandemic boom will have a sequel in 2022
• 05/31/21 Florida may lose some of its boomer shine
• 01/11/21 Colleges bet on football in their own K-shaped recovery
• 12/31/20 Just send the bigger bucks already
• 08/24/20 Young people can't buy homes until older owners . . . move on
• 08/18/20 Our pandemic love affair with e-commerce could soon sour
• 08/10/20 Booming 'zoom towns' should ease city housing costs
• 07/11/20 With a Biden economy, will America be condemned to relive the '70s?
• 07/14/20 Renting and homebuying swap roles in the covid-19 market
• 07/13/20 Markets may have a reason to rise along with covid-19 cases
• 04/27/20 U.S. economy may have hit the coronavirus bottom
• 11/12/19 The 2020 economy should feel a lot better: What to, realistically, expect
• 04/23/19: Gen Z is likely to temper aging socialist millennials
• 03/25/19: All signs point to a housing boom ahead
• 02/19/19: Trump's economic gamble might make sense
• 02/15/19: Scaring off Amazon will backfire for the Left
• 01/29/19: The 2020 election will shred the Obama coalition
• 11/15/18: Amazon proving the 'rich get richer'?
• 11/13/18: How gerrymandering can reduce the partisan divide
• 10/22/18: The politics of the next recession will be a disaster
• 08/02/18: The future of the US looks a lot like ...
• 05/05/18: Brick-and-mortar stores may start to make sense again
• 05/05/18: College admissions season is about to get much easier
• 05/03/18: Changing housing needs of millennials will change economic development
• 02/13/18: The big idea for Middle America is to think small
• 02/07/18: Dems are caught in a tax bill trap this year
• 10/25/17: Good times have come to Trump-leaning states
Sen is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.