Human resources are Kentucky’s future

I’ve always found it ironic that Kentucky was considered more innovative and successful in the early 1800s, when it was on the edge of the American frontier, than during the past century, when it was at the geographic center of a booming nation.

Maybe success isn’t so much about where you are physically as where you are mentally.

The Kentucky Long-Term Policy Research Center’s annual conference in Louisville on Thursday looked at the usual problems that vex this state: health, education and economic development.

But much of the discussion focused on new ways of thinking about and tackling those problems.

Doug Henton, a Versailles-born author and consultant who heads a California company called Collaborative Economics, said Kentucky’s economic future could be much different than its past.

Natural resources, such as rivers and mineral wealth, will be less important in the future. What will be much more important is how human resources are developed.

Globalization of the economy is changing the importance of place and the strategies that states must use to create economic success.

Economic development strategies that focus on tax breaks, cheap labor and low-cost energy will no longer work. That’s because industries that depend on those things have either moved work offshore or eventually will.

What will be important is “quality of life” — creating a place where the best and brightest people want to live and the most innovative companies want to set up shop.

That makes a clean environment important, as well as smart land use and growth strategies, good urban planning and good transportation systems.

The most successful businesses now tend to be small- and medium-size companies that embrace change and are good at networking. Because collaboration is important, companies tend to cluster in areas where ideas can feed off one another.

Local and state governments are often either too little or too big to effectively address issues that will be important in the future, such as growth strategies and transportation, Henton said.

Breaking down old political barriers and promoting regional collaboration will become essential.

Northern Kentucky has had some success with regional cooperation, as has the Louisville area since metro consolidation. Central Kentucky? Not so much.

From his work around the country, Henton said, he has observed that the most successful regional initiatives are bottom-up and collaborative. They are ones in which leaders from government, business, universities, non-profits and citizen groups work together across traditional political boundaries.

“Focus on people and relationships, and not organizations and structures,” Henton said. “It’s about group creativity and regional stewardship, and the regions around the country where this happens seem to have more vibrant economies.”

The basic foundation for any region’s success in the future will be a well-educated population that is able to seize economic opportunities.

“We need well-rounded people who are creative as well as having the basic skills,” he said.

Kentuckians must become more comfortable with change, and more innovative in how they deal with it. One good example is in the way Kentuckians approach energy and the environment.

Peter Meyer, an environmental expert and University of Louisville professor, said climate change is real, and further worldwide restrictions on the burning of coal are inevitable, whether we like it or not.

But while Kentucky faces many challenges, it also has some opportunities.

Kentucky state government is doing good work in improving energy efficiency, especially with the construction of new public schools. The state’s first “net zero” energy use school building will open in Bowling Green next fall.

But state government could be doing more to promote those projects as examples, he said.

Rather than pledging $300 million in state funds for a coal-liquefaction demonstration project, Kentucky officials should put that money toward conservation efforts.

Home electricity consumption is 24 percent above the national average, which means we have a lot of opportunities to do better.

But it will involve a mental shift from Kentucky’s devotion to coal — and to doing things the way they’ve always been done.

“We need to become risk-takers in this environment,” Meyer said.

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