My column last week about Kentucky’s economic prospects for the coming year prompted interesting emails from two businessmen with insightful thoughts about issues that need more attention.
I followed up in interviews with Christopher Coleman, finance director for a Charleston, S.C., technology company, and Hampton “Hoppy” Henton, a Woodford County farmer who was state director of the U.S. Department of Agriculture’s Farm Service Agency in the 1990s.
Coleman and his wife grew up in Pike County and earned bachelor’s and master’s degrees from the University of Kentucky. He joined Lexmark in 1998 and moved to Kansas City in 2011 when the company acquired Perceptive Software.
After four years as finance director at Perceptive, Coleman left for Charleston and a similar job at Blackbaud, which makes fundraising software for non-profits. Another director at his company also is a UK grad, he said.
Coleman and his wife miss Kentucky and being close to relatives here. But he thinks returning would limit his career potential, because he doesn’t see the right kind of entrepreneurial environment in Lexington or Louisville.
“When I was in Kansas, I came to a realization,” he said. “No one in Kansas City talks about some outside source bringing jobs to the region. It is local KU, Oklahoma State, Missouri, and Nebraska graduates that start local companies that grow and then create new startups.
“In Kentucky, we always seem to be waiting on Superman to save the day; some company might come ‘here’ and ‘give’ us jobs,” he said. “I often wonder why that is the case. I think our two flagship universities hold some of the blame. Do UK and U of L work closely enough? We’ve got to put our differences in basketball aside and focus on what matters.
“In addition, local and state government sets its sights far too low,” he added. “While manufacturing jobs are useful, they are not nearly as high-paying as what is paid to software developers, accountants, sales and marketing leaders. These are the kinds of jobs that come when a region participates in the full economic development of America, not just the working-class roles which are often placed in our community.”
Coleman thinks Lexington and Louisville should honestly compare themselves against more entrepreneurial cities of similar size.
“Something has to change,” he said. “And I don't mean the normal discussions about coal, or getting another auto plant. It seems like the focus is on maintaining the status quo rather than on where the economy is moving. There is a real, wonderful economy out there that Kentucky should be participating in. We must figure out why we are not.”
In Kentucky, we always seem to be waiting on Superman to save the day; some company might come ‘here’ and ‘give’ us jobs.
Henton worries about how the changing economy is affecting agriculture, one of the state’s oldest, largest and most broad-based business engines. Globalization keeps posing new challenges.
Most recently, America’s economic recovery has strengthened the dollar’s value. That has both made it harder to export Kentucky agricultural products and depressed domestic prices because there is too much supply.
“There are no margins left in commodity agriculture,” he said. “If the price goes up we want to raise more and if the price goes down we have to raise more. There’s a collapse in all these agricultural prices; people have no idea.”
Henton is surrounded by Thoroughbred farms, and his daughter is moving their family’s diverse 400-acre farm more toward equine businesses. “In horses, you can hit a home run every now and then,” he said.
The best way for crop and livestock farmers to do well now is by developing special niches and convincing consumers that high-quality local food is worth some extra cost. But that is time-consuming and difficult, and markets are limited.
Henton sells most of his wheat to Weisenberger Mill in Midway, which is famous for high-quality products. Other wheat is being grown for Bluegrass Bakery, which wants local “hard” wheat to make baguettes.
“It’s a chicken and egg thing,” he said. “I need a market first before I grow it.”
Henton sells corn to nearby Woodford Reserve distillery, but that began only after the company sought permission to build more warehouses in Woodford County and felt pressure to buy local corn.
With the bourbon whiskey business booming, Henton wonders, why don’t more distilleries feel more pressure to buy Kentucky corn, rather than getting it from big suppliers in Indiana and Illinois?
“We always have to find some way to find an angle,” he said. “That’s the future.”