Location, Research, Strategic Targets

Clusters and Regional Strategy

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Q: What drives high-wage growth, higher patenting rates, and economic resiliency?

A: Industry clusters.

Clusters are a regional concentration of related industries in a particular location.  It isn’t just proximity that make clusters special, it’s that an entire value chain exists within a cluster: suppliers, manufacturers, distributors, academic institutions, researchers, and workforce training - which results in tight linkages, better market insights, larger spools of specialized talent, and faster deployment of new knowledge.

Clusters act as a catalyst for economic growth, enhancing productivity and spurring innovation. Consider the clusters that have blossomed around automobile factories in Kentucky. According to the Kentucky Cabinet for Economic Development (PDF), more than 460 “motor vehicle-related” facilities are now located in the state, employing more than 82,000 workers.

Recently launched, the U.S. Cluster Mapping Project is a national economic initiative that provides over 50 million open data records on industry clusters and regional business environments in the United States to promote economic growth and national competitiveness. The project is led by Harvard Business School’s Institute for Strategy and Competitiveness in partnership with the U.S. Economic Development Administration.

The U.S. Cluster Mapping tool provide a powerful understanding of the industry dynamics shaping a regional economy and highlights opportunities for coordination and join action.  It can also offer insights into new and emerging clusters in different regions. Charts and maps from the tool illustrate, for example, that the Lexington-Fayette MSA, generally regarded as the “Horse Capital of the World”, is also major center of biopharmaceutical development and printing services.

Lex_Clusters
Lexington-Fayette MSA Traded Clusters

Rather than chasing investment in generically “attractive” industries, Commerce Lexington has long worked to strengthen the region’s distinctive competitive position in light of its location, existing strengths and industry mix, and business environment qualities. With one of the nation’s most educated populations, a low cost of living, ideal location and infrastructure, and a rich entrepreneurial history, it’s not hard to identify the Bluegrass Region’s unique value proposition. Click here to learn more about our strategic industry sector targets.

- CLX Economic Development Team

Commerce Lexington Update

  • Commerce Lexington Inc. and Lexington Mayor Jim Gray announced that hydra, a manufacturer of aromatherapy and bath products to more than 2,000 retailers around the world, has moved its company headquarters from San Francisco to Lexington. Click here to read the press release.
  • The U.S. Small Business Administration has awarded a State Trade Export Promotion (STEP) Grant to the Commonwealth of Kentucky, which is designed to encourage and boost international trade among small businesses in the Commonwealth. The STEP program has two objectives: 1) increase the number of small businesses that begin to export and 2) increase the value of exports for small businesses that currently export.
  • Commerce Lexington will host Kentucky Secretary of State, Alison Lundergan Grimes for a Public Policy Breakfast on Wednesday, Oct. 15.
High-Tech, Start-up

The Social Side of Gaming

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59% of Americans play video games. – Entertainment Software Association

Driven by strong mobile gaming and video game console and software sales, the worldwide video game marketplace is forecast to reach $111 billion by 2015. Thanks to a growing community of local gamers and support from a host of local agencies, including Commerce Lexington and the Lexington Innovation and Commercialization Center, Lexington now has seven full-fledged game development companies that are increasingly bringing those dollars to the Bluegrass.

Last Tuesday, September 30, Commerce Lexington and the Kentucky Cabinet for Economic Development brought seven freelance journalists to town visit with local game developers at Awesome Inc., the tech business incubator on Main Street. For two hours, journalists played games and interviewed developers, gaining a sense of the excitement and passion surrounding Lexington’s gaming community.

Lexington Gaming
Freelance journalists visit with local game developers at Awesome Inc.

Game development companies located in Lexington include:

  • Gun Media
  • Super Soul
  • Frogdice
  • Purrody Games
  • Really Big Spiders
  • Only Slightly
  • All Messed Up Games

Cultivating the local gaming community is Run Jump Dev, a nonprofit that is committed to creating strong game developers and successful companies in the Bluegrass Region. Seeded with raw passion for creating games, Run Jump Dev hosts workshops, networking events, game jams, and helps connect local gaming entrepreneurs to funding and business development opportunities.

Could Lexington soon be known as “The Horse and Video Game Capital of the World?”

- CLX Economic Development Team

Commerce Lexington Update

  • Commerce Lexington released the October 2014 edition of Business Focus
  • One of Lexington’s newest residents, Seamus Carey, Ph.D., Transylvania University’s 26th president, will be headlining Good Morning Bluegrass on Tuesday, October 7th
  • Commerce Lexington will host Senator Mitch McConnell at a Public Policy Luncheon, Friday, October 10th.
Expansion, General, Location

From Ideas to Action

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No good idea succeeds simply because it is a good idea. Good ideas must have champions. – Colin Powell

As an economic development agency, Commerce Lexington is charged with creating an environment for the private sector to start new businesses, grow existing businesses, and invest in technology and workforce. We take a collaborative approach to strengthening the community and local economy, generally working behind the scenes to create opportunities, bridge divides, and eliminate barriers to investment and expansion. However, we occasionally have the opportunity to champion projects and lead the way.

A great example is the Blue Grass Business Park. Starting in 1997, Commerce Lexington has worked to develop the 100 acre park, taking bold steps to finance the land and fund infrastructure improvements of water, gas, sewer, and roads. Today, the Blue Grass Business Park is full, and is home to many advanced manufacturing companies employing 1,540 residents with an average annual wage of over $40,000. Per acre, the park generates more than $660,000 in payroll. Click here to learn more about the regional impact of the park.

Blue Grass Business Park

A proactive action-oriented mindset and a clear strategy are musts for effective economic development, and we’re fortunate to have a diverse network of partners and supporters that help move our ideas to action.

- CLX Economic Development Team

Commerce Lexington Update

  • Last week, LM Communications Broadcast Media Group was named 2014 Commerce Lexington Inc. Small Business of the Year during the Salute to Small Business Awards Luncheon presented by Forcht Bank.
  • The Lexington metro was named among the Top 25 Most Educated Cities in America by WalletHub.com
  • Commerce Lexington is hosting a journalist familiarization tour to showcase Lexington’s high-tech entrepreneurial community. They will conclude their day at this week’s Geeks Night Out at the Livery. Join the party for some great networking - register for free.
Expansion, General, Manufacturing

Big Ass Fans to Expand in Lexington, Add 150 Jobs

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[May 29, 2012] - Kentucky Governor Steve Beshear joined company and local officials to announce that Lexington-based Big Ass Fans will build a 72,000 square-foot facility in Lexington, adding 150 jobs and an $8 million investment.

“I’m delighted to see this expansion and witness the tremendous success of Big Ass Fans, a Kentucky-based company,” Gov. Beshear said. “These new jobs will have a positive impact for the community, creating quality jobs in the Lexington area. I’m glad the Commonwealth could play a role in making this growth possible.”

The expansion includes 56,000 square feet for office space and 16,000 square feet for storage/warehouse space on Jaggie Fox Way in Lexington, where the company has an existing 45,000-square-foot research and testing facility. Big Ass Fans also plans to maintain its Lexington campus location off Winchester Road.

Founded in 1999, the HVLS (High Volume Low Speed) Fan Company changed its name to Big Ass Fans in 2002 and has become a leading manufacturer of ceiling fans for industrial, agricultural, commercial and residential customers. The fans range in size from 5 feet to 24 feet in diameter and use low horsepower motors to generate energy-efficient air movement for large spaces. There are more than 65,000 Big Ass Fans installed worldwide in locations such as manufacturing facilities, distribution centers, horse arenas, dairy barns, stadiums, restaurants, health clubs and homes.

“While our name may be funny, we take our business seriously,” says President of Big Ass Fans, Carey Smith. “Our company’s success can be credited, in large part, to the quality employees we have attracted and maintained in central Kentucky. Combining this pool of talent with products that really work has led to enormous success, which we’re proud to now reinvest back into the community.”

To encourage the investment and job growth in Lexington, the Kentucky Economic Development Finance Authority (KEDFA) preliminarily approved the company for tax incentives up to $2 million through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.

KEDFA also approved Big Ass Fans for tax benefits up to $210,000 through the Kentucky Enterprise Initiative Act, which allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development, and electronic processing equipment.

“This announcement is good news for Lexington,” said Lexington Mayor Jim Gray. “We’re proud to be home to Big Ass Fans. They bring good jobs to our city, and we have citizens who need those jobs.”

“This is an exciting announcement for central Kentucky,” said Sen. Kathy Stein, of Lexington. “This investment by Big Ass Fans is an investment in our community. The 150 new jobs resulting from this expansion will provide a boost to our local economy and new opportunities for our workforce. Big Ass Fans continues to enhances our position as the prime location for innovative businesses to plant themselves, grow roots and be cultivated into the fertile soil we are developing to be the regional leader in excellence in our new economy. Gov. Beshear shows his continued leadership in job creation to seek out and support this excellent industry. This is the kind of leadership we need and have come to expect from Gov. Beshear. Thank you, Governor.”

“This is great news for our community and one of its signature businesses,” said Rep. Susan Westrom, of Lexington. “I want to thank the company for making this investment, especially for the jobs it will generate, and I’m glad that the state could play a role in helping to make all of this possible. Big Ass Fans has really put Lexington on the map, because of its name and certainly because of its quality work.”

“Commerce Lexington Inc. has always enjoyed working with Big Ass Fans, and we’re thrilled that they are expanding in Lexington,” said Bob Quick, CCE, president and CEO, Commerce Lexington Inc. “Big Ass Fans is a great example of a homegrown company that has an international reach. We’re proud they call Lexington home.”

For more information on Big Ass Fans, visit www.bigassfans.com.

General, Location

A&W Restaurants Relocates Corporate Headquarters Back to Lexington

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[May 16, 2012] - Mayor Jim Gray and Commerce Lexington Inc. officially welcomed long-time Kentucky corporate citizens A&W Restaurants, Inc., back to Lexington today with a ribbon-cutting ceremony at the company’s new headquarters at Coldstream Research Campus.

“We have been working hard to bring headquarter operations to Lexington,” Gray said.  “Headquarters bring strong leaders to Lexington who can help us build our reputation as a pro-business, progressive city. Headquarter operations support and strengthen our efforts to grow good-paying jobs.” A&W is the third corporate headquarters operation Gray has brought to town, or kept here.

Last year, A&W Restaurants, Inc., was sold by Louisville-based YUM! Brands to A Great American Brand, LLC.

The move to Lexington creates 30 jobs and represents an investment of nearly $1.9 million.

“A&W Restaurants, Inc. is happy to be back here inLexington. Thanks to the support of the Commerce Lexington economic development team, the city of Lexington, and the Kentucky Cabinet for Economic Development for their partnership in making this a great fit for the A&W team at our new World Headquarters at UK’s Coldstream Research Park,” said Kevin Bazner, CEO for A&W Restaurants, Inc. “We are very excited about the quality of staff we have been able to attract and look forward to becoming an integral part of the community as we grow our business from our new home here in Lexington.” Company Chairman Dale Mulder was also in attendance.

Bob Quick, CCE, President & CEO, Commerce Lexington Inc., said Commerce Lexington is proud that A&W Restaurants, Inc., is callingLexingtonhome again. “Our economic development team, in partnership with LFUCG and the Kentucky Cabinet for Economic Development, enjoyed working with A&W on their location to Lexington,” Quick said. “A&W is a great addition to our growing list of headquarters inLexington.”

The Urban County Council recently approved tax incentives for up to $600,000 through the Kentucky Business Investment Program. The performance-based incentive can be earned over the term of the agreements through corporate income tax credits and wage assessments by meeting specific job and wage targets.

With a history that dates back to 1919, A&W® Root Beer is still the number one selling root beer, mixed daily at hundreds of A&W restaurants. The company was once part of Yorkshire Brands, which was located inLexington in the 1990s.