Business Report: Businesses Are Finding It’s Better In The Bluegrass State
Most businesses have similar needs: a skilled, eager workforce, an affordable cost of doing business, an energizing entrepreneurial climate and the ability to easily export products. Kentucky is enjoying spectacular growth because the state meets those needs for companies that locate or start in KY.
The numbers back this up. In 2013, Kentucky announced 281 new projects in which companies are investing $3.3 billion and adding an estimated 14,000 jobs. These companies cover many different sectors: automotive, healthcare, logistics, and food and beverage among them.
The auto industry is huge here. In fact, Kentucky is the third-largest auto manufacturing state in the country, and our manufacturers continue to expand. Ford recently announced it will invest $80 million and add 350 new jobs to boost production capacity at its Kentucky Truck Plant in Louisville. Toyota is investing $530 million into its Georgetown, Ky., plant to launch the first-ever domestic assembly line for the upscale Lexus. When the line is operational in 2015, 750 newly-hired workers will produce some 50,000 Lexus ES 350s each year. A recent plant upgrade at the General Motors Bowling Green Assembly Plant led to the production of the 2014 Chevrolet Corvette Stingray, named the 2014 North American Car of the year at the North American International Auto Show in Detroit.
Small entrepreneurial businesses also thrive here. In the second quarter of 2013, Kentucky ranked first nationally in the number of new businesses reported—a six percent increase over the same period in 2012. The national average was under one percent, according to U.S. Bureau of Labor Statistics data.
Why do so many businesses invest or start in Kentucky? One reason is the state’s impressive logistical advantages. Kentucky is within 600 miles of over 65 percent of the nation’s population. Both UPS and DHL have massive, game-changing global air cargo hubs located within the state, and those hubs have helped make Kentucky the third largest state for air cargo shipments. If you prefer to ship by truck, 19 major interstates and highways lace the Commonwealth. What about trains? Kentucky has 2,760 rail miles and is a center for railroad giants: CSX, Canadian National, and Norfolk Southern.
The low cost of doing business is another strong factor in Kentucky’s favor. The Commonwealth’s industrial electric rates are the nation’s fourth lowest, and its overall business costs were ranked the lowest in the U.S. by CNBC in 2012.
Kentucky takes workforce training seriously. In early 2014, Kentucky Governor Steve Beshear announced a new workforce initiative allowing employers to service all their workforce needs—including training, recruiting, and certification—in one place, rather than through various agencies. This will only enhance Kentucky’s already massive workforce efforts that saw 83,000 Kentuckians receive training in 2013. In addition, pre-employment services were provided to over 92,000 Kentuckians last year.
Kentucky communities are working to prepare their residents for jobs of the future. In 2012, the Commonwealth launched its innovative Work Ready Communities program, where counties can be recognized for meeting goals for high school graduation rates, soft and social skills development, community involvement, and National Career Readiness certificate holders. A growing number of Kentucky communities have been certified either “Work Ready” or “Work Ready in Progress.”
Postsecondary education is joining with business and government to create innovative new skills initiatives, aimed at educating students so they will be trained on the latest advances. Eight public universities, 16 community colleges and 20 independent institutions of higher learning are all working to ensure Kentucky continues to field a qualified workforce for generations to come.
Our success is being recognized around the world. Foreign Direct Investment (FDI) accounted for 40 percent of announced new investment and 30 percent of new jobs in 2013. This includes exciting new investments from firms such as Dr. Schneider Automotive Services (Germany), L’Oreal (France), NHK Spring Precision of America Inc. (Japan), and Birtley (China).
While international companies are locating here, Kentucky-made products are being purchased in record numbers. In 2013, the state shipped a record $25.3 billion in goods worldwide. This number was a 14.3 percent jump over 2012, the second largest increase in the U.S. The top export categories showed Kentucky’s economic diversity: aerospace products and parts ($5.6 billion), motor vehicles and parts ($5.5 billion), and resin, rubber, fibers and filament ($1.4 billion). Distilled spirits were a big part of the story too, at $383 million, as Kentucky bourbon continued its worldwide upswing in popularity.
Looking ahead, Gov. Beshear sees a bright future for the Bluegrass State. “I’m confident the Commonwealth will be at the forefront in the informatics and other IT, life-sciences, healthcare, renewable energy and advanced manufacturing industries,” he says. “Kentucky has the skilled workforce and infrastructure to really become a key player in those fields.”