nalysis of Kentucky's economic prospects inevitably includes consideration of the "Golden Triangle" of Louisville, Northern Kentucky and Lexington, where the air hubs of United Parcel Service and DHL Worldwide Express and several interstate highway crossroads serve as lures to a wide range of industries. But while the gleam of that power zone has only grown brighter, domestic and international companies alike are discovering just how deep and wide Kentucky's business climate ranges.
        The "second-tier" communities of the Commonwealth are emerging as key players in supporting and building such industries as steel making, e-commerce distribution, houseboat manufacturing and biomedical research, not to mention the ever-growing network of automotive industry manufacturers and their many tiers of suppliers.
        "The larger auto manufacturers, such as Toyota, GM and Ford, want a supply network close enough to accommodate their just-in-time systems, but not close enough to compete with the labor supply," says Kentucky's Secre tary of the Cabinet for Economic Development, Gene Strong.
        "You can have the best infrastructure in the world, and people who don't know what to do with it," says James Navolio, the state's Commissioner for the Dept. of Business Development. "Our successful local communities all have highway access, water and sewage systems, all the necessary infrastructure. But they have one other thing -- a consistently high quality of local leadership."
        Another reason for development in non-urban areas is, of course, land prices, which in the prime horse grazing land of central Kentucky have almost doubled in the last three years, according to Steve Rohlfing, chief appraiser for Realty Research in Lexington.
        "From an industrial standpoint, central Kentucky is a real tight market," he says. "So companies go to neighboring counties that have bought large tracts, where they can sell it for US$15,000 to $20,000 an acre."
        "The advantages Kentucky has experienced over the last five or six years have been due to the aggressive economic development policy of the state government," says E. Phillip Scherer III, president of Grubb & Ellis/Commercial Kentucky, a Louisville-based commercial real estate brokerage. "The KJDA [Kentucky Jobs Development Act] benefits are competitive with surrounding states, and are directly related to occupancy costs. It's an opportunity to reduce occupancy costs by 50 percent over a 10-year period. So when a prospect starts checking off criteria, Kentucky is going to win on that side of the equation."