Kentucky is powered by small businesses.
And when I say small, I mean small. Ninety-four percent of small businesses in the state have less than 50 employees, and 74 percent have less than 10. This is part of the reason why increased investment in and support for entrepreneurs in eastern Kentucky can be a major boon for the region’s economy. In fact, it could become a very strong foundation upon which the region’s entire economy stands.
If only much of our leaders saw it that same way. Economic development in eastern Kentucky to this point has been almost exclusively about attracting and enticing large, industrial companies into the region with the promise of providing hundreds of jobs in one fell swoop. But the truth about the region’s economy is much more complex than that, and as Kentucky Center for Economic Policy Director Jason Bailey points out in this piece about supports for local entrepreneurs from Making Connections News, this strategy hasn’t really been that successful for the region, and the state’s time, effort and money could be better spent by investing more in small businesses:
The approach to economic development and the resources for economic development are really focussed on landing the big fish – on trying to lure companies into Kentucky that would potentially employ a lot of people. And that’s gotten harder and harder for the state. There are fewer and fewer of the big fish out there, and it’s always been difficult for eastern Kentucky. If we put more money and more resources and effort into helping all the little fish do a little bit better, you may not have as many high profile ribbon cuttings for politicians, but you potentially could have a more diverse, stronger economy over the long term.
There are several organizations who serve the needs of entrepreneurs in eastern Kentucky, including – but certainly not limited to – the Mountain Association for Community Economic Development (MACED), Kentucky Highlands, Southeast Kentucky Economic Development (SKED), Small Business Development Centers and the Kentucky Innovation Network. The trouble is, most entrepreneurs don’t know much about the resources available to them, and even if they do, many won’t reach out for help. According to Making Connections News, only 20 percent of small businesses reach out for business technical assistance help. However, of those 20 percent, 80 percent remain successful.
That’s why investing more in technical assistance for entrepreneurs is so important to the health of an economy balanced on the backs of small businesses. Homegrown entrepreneurs need help to keep their businesses open and become successful contributors to the larger community. A really good system of technical assistance providers helping entrepreneurs and entrepreneurs helping the community already exists in the region. And in order to ensure this system remains effective, more must be invested in it so that it can be expanded to help even more people. It could be the difference between keeping more people in the region, and watching them ride I-75 or I-64 out to other places where their skills will enrich another local economy instead of eastern Kentucky’s.
“Too many kids leave high school and college thinking they have to find jobs rather than create their own,” Kentucky Innovation Network’s Justin Prater said in the Making Connections Report. “We hope to be able to assist anyone looking to work for themselves or to turn their dream into reality.”
And there in lies the true importance of building up the support systems available to eastern Kentucky entrepreneurs. For so long, Appalachians have been told there’s no reason for them to stay or return home because all the jobs were outside the region. Now is the time to start telling a different story – one that begins with more investment in infrastructure for entrepreneurs, and ends with more of our people creating the jobs that will sustain our economy for generations to come.