Image is everything, or so they say. But the traditional images of Kentucky's rolling fields, spacious horse farms and quaint southern charm don't exactly bring to mind a bustling economy, do they? Maybe in Kentucky's case, it's better to go with the ol' tried and true "don't judge a book by its cover," because although the Bluegrass State has all the beauty its mention conjures, it has also taken major steps forward and moved well beyond its horse farming days.

"The business climate here is pretty darn good," says Alan Fowler, vice president at James N. Gray Co., a construction services firm based in Lexington, Ky. "They've attacked some of the problems in the past legislatively, like workman's compensation rates, which have historically been pretty high. They've made major legislative efforts that have had excellent results."

The primary legislative focus has been on work-force issues like education and training. The Kentucky Education Reform Act (KERA), which rewrote the state's education standards in the early '90s, began the turnaround. Since that time, Kentucky has allocated US$621 million for technology in elementary and secondary schools, and 73 percent of all state schools are wired for voice, video and data.

More recently the state created the Kentucky Community and Technical College System to provide two-year technical degrees and work-force training. And through the Research Challenge Trust Fund, Kentucky also hopes to make its two key universities -- the University of Louisville and the University of Kentucky -- nationally recognized research institutions. "That's critical for both the technology-based business and the technology-oriented manufacturing," says Marvin E. Strong Jr., secretary of the Kentucky Cabinet for Economic Development.

Kentucky's turnaround in the education and work-force training arenas, as well as its continued efforts in infrastructure and financing improvements is a direct result, says Fowler, of its continuity in leadership. Gov. Paul Patton, for example, served the state as lieutenant governor prior to winning the gubernatorial race. He entered his second term as governor earlier this year.

"For the first time, we have a re-elected governor," Fowler explains. "He is very dynamic, very aggressive, and he was a leader of the original legislation that is now the basis of our incentives programs. He continues to develop new nuances to those programs. Continuity is a strong point for Kentucky."