BUSINESS CLIMATE OVERVIEW
From Kentucky Economic Development Guide 2024
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How Kentucky Built a Record-Setting Machine

Cooperation at every level is the secret to success.

Business Climate Overview
Kentucky Gov. Andy Beshear visited the AESC site in September 2024, celebrating progress at the company’s $2 billion gigafactory in Bowling Green.
Photo courtesy of the Kentucky Office of the Governor

by RON STARNER
W

hen Andy Beshear took over as Governor of Kentucky in December 2019, he did not know that in less than three months he would be facing one of his administration’s biggest tests. By March 2020, COVID-19 had spread worldwide and was prompting lockdowns, school closures and business shutdowns around the globe.

Fast-forward to today. What has happened since isn’t just remarkable. It boggles the mind.

In the three years that followed the onset of the global pandemic, Kentucky has managed to break every single economic development performance record that had existed before it. Whether measured by projects, jobs or capital investment, the track record achieved by Beshear’s state reached a level of unprecedented performance.

In December 2023, the Kentucky Cabinet for Economic Development reported that since the beginning of his administration, Gov. Beshear has announced nearly 1,000 private-sector new-location and expansion projects totaling over $28.7 billion in announced investments, creating 51,265 jobs. The Cabinet stated this is the highest investment figure for any governor in state history.

 

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Existing Kentucky companies like Bullard in Cynthiana are a major part of the commonwealth’s recent success.

Photo courtesy of the Kentucky Cabinet for Economic Development

 

More importantly, the report noted, average wages had also reached an all-time high in Kentucky, as the average incentivized hourly wage in 2022 and 2023 topped $26 in consecutive years for the first time.

Others took notice. Site Selection Magazine ranked Kentucky No. 1 in the South Central Region in the 2023 Prosperity Cup rankings. These rankings recognize the overall competitiveness of the states as measured across a 10-point performance scale.

In July 2023, Kentucky earned back-to-back Gold Shovel Awards from Area Development magazine for the strong gains the state had achieved in attracting new businesses and growing the number of jobs. Kentucky also placed second nationally in Site Selection’s Governor’s Cup race for 2022, securing the second-most total projects per capita among all 50 states.

“Kentucky is an economic powerhouse,” Gov. Beshear said at the time. “The success we’re seeing is thanks to the people of the commonwealth who are welcoming these businesses with open arms and helping them succeed in communities across the state. These awards are a huge honor, and it’s exciting to see Kentuckians working together to secure that lasting prosperity so every child can chase their dreams right here in our commonwealth.”

Why Kentucky?

Kentucky garners these honors because of its ability to attract business growth from all types and sizes of companies in all corners of the state; and that does not happen by accident. It occurs because Kentucky offers the site selection factors that resonate with employers at growing companies. Chief among those factors are:

  • A business climate that is pro-growth and pro-business.
  • A regulatory environment that limits construction delays and expedites permit approvals.
  • A logistics network that has no equal in the U.S., as evidenced by the global logistics hubs of UPS, DHL and Amazon in the state.
  • A Central Mid-South location that makes most of the U.S. reachable by some form of transportation in less than a single day.
  • Reliable electric power that is priced at a point that makes it one of the lowest industrial electricity rates in the country.
  • A mild climate that offers all four seasons but none that are too harsh or that hinder transportation in any meaningful way.
  • A quality of life that offers world-class parks, waterways, nature trails, historic sites and museums, outdoor recreation, scenic mountains and valleys, and other attractions that appeal to people of all ages.

John Bevington, director of Business & Economic Development at LG&E-KU, added that collaboration at every level is a key to the commonwealth’s success.

 

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Kentucky is the exclusive home of the Corvette, as General Motors operates one of four automotive assemblies located in the commonwealth.

Photo courtesy of General Motors

 

“One of the main reasons Kentucky is so competitive in economic development is our ability to collaborate on opportunities and challenges together,” he said. “For projects, partners here work together on initial RFIs and use them as an opportunity to huddle up and learn together, not just answer questions. We generally have historic perspective on the best way to show community assets, using past experiences and a collective investment to tell our story.”

Many corporate executives in Kentucky echo this sentiment. They frequently note that nobody rolls out the red carpet for them quite like Kentucky does. This is one reason why Kentucky landed record-setting capital investment projects from Ford Motor Co., Toyota, AESC, and BlueOval SK, a joint venture of Ford and SK On.

“When things get to the negotiation stage, the economic development relationships here allow us to push each other to ensure the best result because we trust each other,” Bevington added. “Truly collaborative and meaningful relationships can sometimes determine the outcome for a project just as a good site, incentive package or workforce can. To me, our collaborative spirit is one of our best attributes.”ww

 

“The workforce piece of the equation is critical. We benchmark ourselves against the best.”

— Kristina Slattery, Commissioner, Kentucky Department of Business & Community Development

 

A case in point is production of the new 2024 Chevrolet Corvette E-Ray Hybrid at the GM Assembly Plant in Bowling Green. When Chevy decided the time was right to introduce its first-ever hybrid Corvette, the global car company wasted no time in choosing to build it in Kentucky.

Even before it hit the showroom floor, this all-new, all-wheel-drive Corvette E-Ray was the fastest production car GM had ever produced. 

Benchmarking Against the Best

Innovation like this does not take place in a vacuum. It happens where people are encouraged to test the boundaries of what is possible.

Tadge Juechter, executive chief engineer for Corvette, knew that the company had already achieved the upper limit of sportscar performance with the naturally aspirated, flat-plane-crank V8 engine. To go faster, he said, it needed to go electric — and so it did.

Kristina Slattery, commissioner of the Department of Business and Community Development for the Kentucky Cabinet for Economic Development, says that this is the kind of talent that Kentucky brings to the table. 

“The workforce piece of the equation is critical,” she said. “We compete with Canada, Mexico, Michigan, Ohio, Tennessee and the Carolinas for electric vehicle projects and battery projects. We benchmark ourselves against the best.”

Based upon the results of the past three years, it would appear as though the best is getting even better. 

Ron Starner
Executive Vice President of Conway, Inc.

Ron Starner

Ron Starner is Executive Vice President of Conway Data, Inc. He has been with Conway Data for 22 years and serves as a writer and editor for both Site Selection and the company's Custom Content publishing division. His Twitter handle is @RonStarner.

  





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