Interesting tidbits buried in annual Kentucky economic report

March 22, 2015

When the University of Kentucky’s Gatton College of Business publishes its annual Kentucky Economic Report, most people just pay attention to the front of the book, which predicts whether the state’s economy will rise or fall, and by how much.

But I think the rest of the book is more interesting. It is filled with great bits of information that not only tell us about the economy, but offer some clues about the state of Kentucky society, too.

Here are a few gleanings from the 2015 report, published last month by Christopher Bollinger, director of the college’s Center for Business and Economic Research:

CBER■ Kentucky’s landscape may be mostly rural, but its economy is all about cities. The “golden triangle” bounded by Lexington, Louisville and Cincinnati contains half the state’s population, 59 percent of the jobs and 54 percent of the businesses.

■ Wages in metro counties in 2012, the most recent figures available, were 29 percent higher than in “mostly rural” counties and 20 percent higher than in “somewhat rural” counties.

■ How can rural counties improve wage rates? The report offers advice from Mark Drabenstott, director of the Center for the Study of Rural America: encourage home-grown entrepreneurs, “think and act regionally” and find a new economic niche in high-value, knowledge-based industries that leverage the region’s strengths.

■ If you feel like you haven’t had a raise in years, you are probably right. Kentucky’s average weekly wage, when adjusted for inflation, is about the same as it was in the first quarter of 2007.

■ Kentucky’s poor and lower middle-classes have gotten 4.4 percent poorer since the late 1970s, while the state’s middle class has lost 7.5 percent in inflation-adjusted household income. Upper middle-class Kentuckians have seen household income rise 7.7 percent, while the richest 10 percent have seen a rise 16.7 percent. All segments of Kentuckians did much worse than their peers nationally.

■ Kentucky’s earned income per-capita relative to the national average increased steadily from 1960 to 1977 and peaked at 80 percent. But it has fallen since 1977 and is now at 75.4 percent, ranking Kentucky 46th among the states.

■ Lexington and Louisville have seen steady employment gains since 2010 or early 2011 and have returned to or exceeded their pre-recession highs.

■ The disappearance of family farms isn’t news, but the report has some interesting statistics. Kentucky has roughly one-third the number of farms it had in 1950 and the average farm size has doubled. Kentucky lost 8,196 farms during the 2007-2012 recession, the largest decrease of any state. Most of that decline was likely farms going “idle” rather than being developed, the report said.

■ There has been a marked increase in value-added farm products such as jams, salsa, wine and jerky. The production of value-added foods, adjusted for inflation, has risen from $3.34 billion in 1993 to $5.1 billion in 2011.

■ While tobacco has declined sharply, the value of the state’s other major crops — corn, soybeans, hay and wheat — has improved considerably. The most dramatic growth has been in poultry. Broilers (chickens raised for food) are now Kentucky’s most-valuable farm commodity; chicken eggs are 10th and farm chickens are 12th.

■ What Kentucky industry sector has lost the most jobs in the past 25 years? If you guessed coal, you’re wrong. Kentucky in 2013 had 45,000 fewer manufacturing jobs than it did in 1990, a 16 percent decline. The sector that gained the most jobs was educational and health services: 103,700 more people work in those areas, a 67 percent increase.

■ There were 364,000 more Kentuckians employed in 2013 than in 1990, a 25 percent increase, beating the population increase of 19 percent. About 95,400 Kentuckians work for companies that are majority foreign owned.

■ In various measures of “community strength,” Kentucky is on par or better than the national average. Crime rates are lower. Kentuckians tend to trust their neighbors more. They report higher levels of “emotional support and life satisfaction.” But they give less to charity and volunteer less than the national average.

There’s more good stuff in the 2015 Kentucky Annual Economic Report. To download a full copy, click this link.


UK Venture Challenge helps college entrepreneurs refine their ideas

March 1, 2015

150228UKVenture0178Mark Manczyk explained his idea for re.3, a company that would sell sustainable consumer goods, Saturday at the UK Venture Challenge. His presentation won first prize, a $1,500 scholarship, and he will go on to the next level of competition.  The second-place winner was Phillip Gordon, below. Photos by Tom Eblen

 

It takes more than a good idea to create a successful business. But the best way for an entrepreneur to start is to make his or her idea as good as it can be.

That is the focus of the University of Kentucky’s Venture Challenge, a competition for student entrepreneurs. The fourth annual challenge was held Saturday morning at the William T. Young Library auditorium.

Ten teams pitched business ideas to a panel of three judges, who chose three winners to share $3,000 in scholarship prizes. The first- and second-place finishers advanced to regional and state competitions sponsored by the Kentucky Cabinet for Economic Development.

“It’s a great exercise, because learning how to develop ideas is so important,” said Randall Stevens, a Lexington technology entrepreneur who was one of the judges.

“Rarely is your first idea the one that’s going to make it.”

Judging with Stevens were Shirie Hawkins, director of UK’s Bluegrass Small Business Development Center, and George Ward, executive director of UK’s Coldstream Research Campus.

The winner, who received a $1,500 scholarship, was architecture student Mark Manczyk, 23, of Taylor Mill. He pitched his idea for a company called re.3.

150228UKVenture0030The company would sell consumer products with short use cycles — such as non-prescription sunglasses and iPhone cases — that are made by environmentally sustainable methods. The added touch would be that once a product had outlived its usefulness, the company would take it back for recycling.

The judges liked his idea because it was a creative approach to an issue that consumers are increasingly concerned about.

“It’s all about ‘Can you build that brand?'” Stevens told Manczyk, suggesting that he consider a “subscription club” sales model to better engage customers for repeat purchases.

“I think that was a fantastic idea,” Manczyk said afterward, because it could help create a customer community. “It’s about rethinking recycling: the object is in some ways less important than the idea of being able to continually recycle and reuse.”

The second-place winner’s business idea also came from a personal passion, which developed after Phillip Gordon was pickpocketed in Spain. Gordon wants to create Nomad Apparel, a line of travel clothing with a zippered and radio-frequency-protected pocket for safeguarding credit cards and other valuables.

Gordon, 22, from Louisville, has designed jeans with a special secure pocket. He wore a prototype to his presentation, which got high marks from the judges.

“It really gave me an opportunity to hone my presentation skills and public speaking,” Gordon said of the Venture Challenge.

Taylor Deskins and Jessica Shelton pitched an idea for a stock market-themed bar in downtown Lexington, where drink prices would fluctuate throughout the night to engage patrons. They had seen a similar place in Spain.

After they presented, Stevens suggested that rather than open their own bar, they first develop and market the concept to existing bars to use perhaps once a week, as a way to gauge the concept’s popularity with less investment.

Maged Saeed and Alexander Hamilton pitched The Bar Hop, a smartphone app that would leverage social media data to help users decide which bar to go to based on how many of their friends were there and the ratio of men and women in the place.

The students also envisioned tie-ins with ride services, such as Uber and Lyft, and functions for buying drinks. The judges thought it was a creative idea, but was trying to do too many things. Focus on the core idea, they said, and build from there.

Afterward, Saeed and Hamilton spent some time talking with Ward, whose business career has focused on the hospitality industry. He had several suggestions for rethinking their app to increase its likelihood of success.

Warren Nash, director of UK’s Von Allmen Center for Entrepreneurship, pointed over to them and smiled.

“That’s what I like,” he said. “Watching the after-discussions, talking about how do you get there, how do you make the connections.”

Sponsors of the UK Venture Challenge include UK’s Gatton College of Business and Economics and Innovation Network for Entrepreneurial Thinking, as well as the Bluegrass Business Development Partnership, a collaboration of UK, Commerce Lexington and the Lexington-Fayette Urban County Government.

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