< Previous18 KENTUCKY ECONOMIC DEVELOPMENT GUIDE S ince Gov. Andy Beshear took office on December 10, 2019, Kentucky has shattered record after record for economic development in state history. Quantifying the impact of Kentucky’s economic turnaround is an exercise in crunching eye-opening numbers. Whether measured by jobs, capital investment or number of corporate facility projects, the Bluegrass State has achieved unprecedented levels of success under the Beshear Administration. Consider the Tale of the Tape: • More than 1,100 private-sector new and expanded location projects have been announced in Kentucky during his tenure. by RON STARNER Setting records for economic achievement has become a habit in Kentucky. Building on a Foundation Of Success [ ECONOMIC OVERVIEW ]KENTUCKY ECONOMIC DEVELOPMENT GUIDE 19 • Capital investment into these deals has exceeded $35 billion. • More than 60,000 new jobs have been created by these projects. Not only is this the highest investment figure of any governor to serve Kentucky; it is $14 billion more than the next highest total. The new jobs pay better too. Since 2022, the average incentivized hourly wage in Kentucky has topped $26 in three straight years for the first time in state history. The jobs announcements often have come with transformative projects. Among them are the $5.8 billion, 5,000- job BlueOval SK Battery Park investment by Ford Motor Company and SK On in Hardin County; Toyota’s $1.3 billion investment in Scott County; Shelbyville Battery Manufacturing’s $712 million investment in Shelby County; and Ascend Elements’ nearly $1 billion investment in Christian County. Site selectors are taking notice. During this record-setting run, Site Selection Magazine has recognized Kentucky as one of the top states for economic development performance in attracting corporate facility investment projects. Just last March, Site Selection ranked Kentucky No. 3 in the nation and No. 1 in the South-Central Region for total projects per capita in the magazine’s annual Governor’s Cup rankings. Last April, Site Selection ranked Kentucky No. 2 in the South-Central Region and in the top 10 nationally in the publication’s annual Prosperity Cup rankings, which recognize state-level economic development agencies for their success in winning capital investment projects. The primary beneficiaries of these achievements are the people of Kentucky. Last year, Kentucky established a new record by tallying the longest period with the lowest unemployment rates in state history. Kentucky also secured the largest General Fund surplus and Rainy-Day Fund, giving taxpayers the assurance of a huge nest egg in Frankfort. Kentucky received rating increases from America’s major credit rating agencies Fitch Ratings, S&P Global Ratings and Moody’s Investors Service. On top of that, Kentucky established a new benchmark in exports during 2024 and marked the state’s most successful two years in tourism. Factors Driving Growth Kristina Slattery, commissioner for the Department of Business & Community Development for the Kentucky Cabinet for Economic Development, said that the record-breaking success “came from focusing on our core industries. We continue to let industry drive what the needs are for projects.” She then cited the following factors driving growth: • “Keeping relationships strong with core industries.” Gov. Andy Beshear shares good economic development news with the media recently at the State Capitol in Frankfort. Photo courtesy of the Office of the Governor20 KENTUCKY ECONOMIC DEVELOPMENT GUIDE • “Tracking new trends, challenges and opportunities in key markets.” • “Leaning into our advantages such as logistics.” • “Delivering a high level of service to companies.” • “Encouraging industry to help drive change.” “We punch outside of our weight class,” Slattery said. “We have been smart about supply chain development,, and we listen to our companies.” This strategy has enabled Kentucky to land projects such as Shelbyville Battery Manufacturing, the largest job creation project in Kentucky since 2022. Announced this past November, this project will create nearly 1,600 high-tech jobs. Gov. Beshear, in announcing the deal, said, “This is the single largest investment and job creation announcement we have on record for Shelby County, and it is the largest project Kentucky has seen this year. This project will solidify our role as a leader in the country’s energy storage sector and will transform our economy, creating opportunities for Kentucky’s families for generations.” Kentucky is not content to stop there. Rather, the Bluegrass State plans to build on this momentum by ushering in even more programs to help industry grow. For example, Gov. Beshear previously announced a Supply Kentucky initiative that will reduce costs and provide more security in the supply chains of Kentucky companies. He followed that up by announcing New Kentucky Home, a broad-based plan to increase economic investment, attain and attract talent, and increase tourism across the state. Why Leadership Matters Jeff Noel, secretary of the Kentucky Cabinet for Economic Development, said the governor’s strong leadership is the biggest factor behind the state’s long run of success. “I am a firm believer that everything begins with leadership,” Noel said. “The governor has great charisma. He takes seriously the commitment of Kentucky to these companies. We go through every project and everything that needs to be done for each project. He demands that we stay on top of things. That leadership from the governor and the process we use — that is the reason Kentucky is winning.” Noel cites changes like new investments into technical training, Build-Ready Sites, road construction, and improving speed to market as critical factors in perpetuating this Kentucky turnaround. “If you are going to be successful in economic development, you have to realize that all of these things are interdependent,” Noel added. “In a world changing so fast, sometimes you have to step back and understand that you can’t be successful with just a series of emails and conference calls. It takes personal relationships. The personal involvement of the governor is key. That is the hallmark of why Kentucky is successful.” Talent Migrating to Kentucky According to a recent demographic analysis, Kentucky is already showing gains in attracting the kind of talent that companies crave. Hamilton Lombard, demographic researcher at the Weldon Cooper Center for Public Service at the University of Virginia, analyzed the migration patterns of 25-to-44-year- olds around the country and found that Kentucky is a leader in attracting them. “Kentucky has seen a similar pattern as many Midwest states with migration trends reversing in recent years,” he said. “Most years during the 2010s, Kentucky had more people leave it for other states than move to it; but every year since 2020, Gov. Andy Beshear has made increasing foreign direct investment one of his administration’s top priorities. Here, he celebrates yet another big FDI win for the state. Photo courtesy of the Office of the Governorthe commonwealth has attracted more new residents from other states than it has lost. A disproportionate share of Kentuckians who left were younger adults, causing its population age 25 to 44 to shrink during much of the 2010s. During the early 2010s, Kentucky lost the seventh largest number of young adults among U.S. states. But between 2020 and 2023, Kentucky’s age 25 to 44 population has grown by close to 11,000, a larger number than in Minnesota or Massachusetts.” Lombard also found out where these younger adults are moving. By and large, he said, they are moving to counties heavily focused on manufacturing. “The resurgence in domestic manufacturing has helped reverse migration trends in most manufacturing- dependent counties,” he said. “In 2020, for the first time since the mid-2000s, more Americans moved to manufacturing- dependent counties than left them. This trend has continued each year since 2020, helping boost population growth in much of Kentucky.” This bodes well for Kentucky’s economic future, particularly as the state commits to an economic strategy aimed at growing advanced manufacturing sectors. “ We punch outside of our weight class. We have been smart about supply chain development, and we listen to our companies. ” — Kristina Slattery, Commissioner of Business & Community Development, Kentucky Cabinet for Economic Development KENTUCKY ECONOMIC DEVELOPMENT GUIDE 21A Collaborative Blueprint is being used by economic developers throughout Kentucky to lay the foundation for growth in every major region of the state and ensure that every Kentuckian has the opportunity to prosper from economic growth over the next five years. The Blueprint is a product of collaboration between the Kentucky Cabinet for Economic Development (KCED) and the Kentucky Association for Economic Development (KAED). In short, it is a strategic plan written by economic developers for economic developers in the Bluegrass State. While it does not lay out policy areas, the plan does identify key industries and prioritize the growth factors that will be pursued to make prosperity happen. Collaborative process identifies 5 target industries for the state. Drafting a Blueprint For Progress 22 KENTUCKY ECONOMIC DEVELOPMENT GUIDE [ BLUEPRINT UPDATE ] by RON STARNERTarget sectors identified by the Blueprint are: • Automotive • Manufacturing • Natural Assets • Professional, Financial and Business Services • High-Potential Opportunities (Aerospace, Agri-Tech and Life Sciences) The five priorities that will help Kentucky achieve growth in these sectors are: • Workforce • Competitive Products • Infrastructure • Placemaking • Entrepreneurs and Innovation Gov. Andy Beshear laid out the case for the Blueprint last year: “There is no denying the incredible economic success we have had over the past four years, with the most private-sector investment of any administration and several of the largest job-creation projects on record,” he said. “But we recognize there is still so much more we can achieve as a state, and the Collaborative Blueprint will help us navigate our future. We at Team Kentucky know what we can accomplish, and we will continue to work together to ensure we get there.” KCED and KAED engaged consulting firm McKinsey & Co. to develop the Blueprint. The plan was the result of outreach conducted by KCED and KAED over the past two years. Through regular meetings in local communities, input was gathered from local economic developers to help formulate a strategic economic development plan for each of four major regions of the state: West, Central, East and South-Central. KENTUCKY ECONOMIC DEVELOPMENT GUIDE 23 Source: Blueprint for Kentucky, Executive Summary, McKinsey & Company THE BLUEPRINT FOR KENTUCKY FOCUSES ON 5 KEY INDUSTRIES: AUTOMOTIVE MANUFACTURING NATURAL ASSETS PROFESSIONAL, FINANCIAL & BUSINESS SERVICES HIGH-POTENTIAL OPPORTUNITIES (AEROSPACE, AGRITECH & LIFE SCIENCES) OPPOSITE: Founded in 1904, Logan Corp. has grown into a leader in its industry east of the Mississippi, creating custom-built dump truck bodies and high-quality hauling solutions for the mining, aggregate and construction industries. With over 120 employees in Salyersville, Logan is an example of Eastern Kentucky’s industrial diversification, transitioning from mining to manufacturing. They also give back to the community by supporting the local high school’s welding program. Photo by Charity Hedges courtesy of Kentucky Cabinet for Economic DevelopmentAlignment on a Common Vision The target industries and priority areas were derived to bring cohesion and focus to economic development efforts at local, regional and state levels, said Jeff Noel, KCED secretary. “These priority areas are essential to help guide our decision-making as economic developers as we look to take that next step and move the commonwealth forward,” he said. “Not every priority will be a perfect fit for every community, because every community has its own goals, challenges and advantages. That diversity is what makes Kentucky special, but it’s also why the Blueprint is so important. We can align on a vision for success and help shape an even greater future for all Kentuckians.” Terri Bradshaw, president and CEO of KAED, said it was important to include leaders from small, rural counties in the discussion. “Improving infrastructure is being brought to the forefront,” she said. “Addressing public health concerns in every region of the state is important. Strengthening partnerships across county lines and across regions, and doing that with educators and business leaders too, is vital to our success as a state.” At the top of the list of priorities is workforce development. “There is no one single problem, and there is no one single remedy. We have to look at upskilling people who had jobs in the coal mines. We have to adapt their skills to new careers. People often think that can be done by offering training classes, but that is not the hard part. The hard part is encouraging those folks to participate in the process.” Bradshaw said she is encouraged by the progress that has already been made because of the Blueprint. “The Blueprint gave us the chance to put all of this on paper,” she said. “Thirty-five years ago, we were strictly industrial development. That is all we did. By getting out and meeting with folks at the local level, the state leadership found that a lot of things changed. In some communities, tourism is now the largest economic development initiative. In our Eastern Kentucky region, outdoor recreation opportunities are a large economic driver. This Collaborative Blueprint for Kentucky now reflects that.” Other positive changes are coming because of the Blueprint. Senate Bill 28 has been proposed to provide a framework for establishing forgivable loans for agricultural economic development; and new alliances are being formed to promote regional economic development strategies. Grassroots Strategy Pays Off Jason Sloan, president and CEO of the Morehead-Rowan County Chamber of Commerce in northeastern Kentucky along Interstate 64, said he has been very involved with the Blueprint initiative from day one. “The state has made this a grassroots initiative. It is a good and attainable 24 KENTUCKY ECONOMIC DEVELOPMENT GUIDE “ The Blueprint gave us the chance to put all of this on paper. Thirty-five years ago, we were strictly industrial development. That is all we did. By getting out and having even more in-depth conversations with folks at the local level, the state leadership found that a lot of things changed. ” — Terri Bradshaw, President & CEO, Kentucky Association for Economic DevelopmentKENTUCKY ECONOMIC DEVELOPMENT GUIDE 25 plan,” he said. “Making sectors like automotive a top state priority is a good thing. And when you look at our up-and- coming markets like agri-tech, we are poised for growth in multiple areas.” Sloan said Kentucky “is now in the implementation phase of the Blueprint. The grassroots component of that is still very much alive and well. We will bring people at the local level together from the various parts of the state.” Collaboration, he added, is the key to making the Blueprint work for all of Kentucky. He said going through this process has shown Kentucky what it must focus on for the next 20 years. Sloan said multiple issues rose to the forefront. They include housing, quality of life, community development, broadband connectivity and child care. “The needs for fiber and child care rose to the top,” he said. “For every spot we had in child care, we had two children who needed a spot. We knew we could not just put our hands in our pockets and do nothing. The same is true with broadband fiber. It is just like the Interstate. You can’t sit on the side of the road and watch the rest of the world go by. We have to make strategic investments.” Placing greater emphasis on tourism will also help Rowan County, said Sloan. “In 2023, we landed Eastern Light Distilling, a bourbon company that is making a $123 million investment here,” he noted. “That gives us an entirely new sector. We have a major lake that feeds tourism in three states. Tourism here will only grow in aspects like lodging, shopping, dining, distilleries and other attractions. The Blueprint gives us a chance to address our workforce needs in all of these sectors and grow our base of industry.” Eastern Light Distilling is a notable project going into Morehead in Eastern Kentucky. Joseph & Joseph Architects designed this unique bourbon distillery. Renderings courtesy of Joseph & Joseph ArchitectsExisting Locations New Industry Locations $ 16.08 B $ 19.22 B Total $ 35.3 B $ 5.8 B5,000 $ 941 M 1,300 925 $ 2 B 2,000 $ 711 M 1,572 $ 2.6 B Existing Locations New Industry Locations 29,473 30,342 Total Investments Announced Major Announcements by Investment Jobs Announced Major Announcements by Jobs 59,815 * New & Expanding Industry numbers refl ect the Beshear Administration Dec. 10, 2019 - Dec 2024 IN VEHICLE PRODUCTION per capita in the U.S. IN AIR CARGO BY WEIGHT IN AEROSPACE PRODUCTS EXPORTS 2020 - 2024* # 1 # 1 # 1 26 KENTUCKY ECONOMIC DEVELOPMENT GUIDE KENTUCKY BY THE NUMBERS Announced Jobs by Industry 2020-2024 Major Investments by Industry 2020-2024 Projects AnnouncedRural vs. Urban Investment Manufacturing 39,114 Automotive-related 17,974 Offi ce 12,421 Distribution & Logistics 11,324 Food & Beverage 8,961 Technology 6,254 Headquarters 5,436 Healthcare 4,052 Metals 3,956 Agribusiness 2,291 Plastics & Rubber 2,015 Aluminum-related 1,962 Spirits 1,866 Aerospace 1,707 Chemicals 1,260 Steel & Iron Production 874 Manufacturing $ 29.2B Automotive-related $ 16.3 B Food & Beverage $ 7.1 B Spirits $ 4.3 B Offi ce $ 3.8 B Distribution & Logistics $ 3.7 B Metals $ 3 B Technology $ 2.1 B Aluminum-related $ 2.1 B Headquarters $ 1.4 B Agribusiness $ 1.3 B Healthcare $ 1.1 B Chemicals $ 1 B Plastics & Rubber $ 840 M Aerospace $ 700 M Steel & Iron Production $ 468 M Total Projects New Locations Existing Locations 19 % 81 % % 1,158 Total Investment $ 35.3 B Urban Rural $ 18.6 B $ 16.7 B Average Incentivized Hourly Wages 2020 $ 21.93 2021 $ 24.01 2022 $ 26.87 2023 $ 26.67 $ 26.122024 KENTUCKY ECONOMIC DEVELOPMENT GUIDE 27Next >