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Do Kentucky Counties Support Their Entrepreneurs?

By James Allen IV and Shaheer Burney

Economic development often focuses on recruiting large companies that bring a lot of jobs all at once, so it is sometimes easy to forget that the vast majority of businesses in Kentucky are microenterprises with less than 5 employees (see CEDIK’s Small Business County Profiles for specific stats on your county). Given the significant role of small businesses in employment, it is important that we understand reasons for and challenges to entrepreneurship.

For this reason, CEDIK led the implementation of a USDA-funded Kentucky Entrepreneurship Survey, which collected data from over 1,400 Kentuckians on what makes an entrepreneur successful. The survey asked a series of questions to gauge individual’s perception of entrepreneurship in their county. In the sample, about 72% of respondents agreed that their county is generally supportive of entrepreneurs. The map below shows how this perception varied across Kentucky; Southwest Kentucky respondents mostly believe that their county is supportive of entrepreneurs, while many Eastern Kentucky respondents were less optimistic.

Map

What might cause a person to think that their county is or is not supportive of entrepreneurs? Follow-up questions about the political culture of a county provide some valuable insight. In the figure below, we look at statements agreed to by each group. Overall, responses suggest that supportive counties have strong Chambers of Commerce and civic groups, while unsupportive counties struggle with local governments that are fixated on economic development strategies to prioritize large companies over entrepreneurs. Additionally, of those respondents who are or had been entrepreneurs, about 35% of respondents indicated that dealing with government regulations was very or somewhat problematic—a higher percentage than those who said that acquiring startup funds was problematic.

Chart

These results call for local governments to reassess their policies toward entrepreneurs in order to help facilitate growth in the local businesses. Already, CEDIK has founded Grow Kentucky (in partnership with Kentucky’s Small Business Development Centers), an Economic Gardening network that prioritizes “growing our own” businesses in Kentucky. Since July 2014, we have worked one-on-one with 15 Kentucky companies and provided resources and expertise customized to their respective industries. With these new results from the Kentucky Entrepreneurship Survey, CEDIK plans to also focus on identifying which local policies can best support entrepreneurs.

References:

Burney, Shaheer, and Alison F Davis. 2015. Determinants of Entrepreneurship from the Kentucky Entrepreneurship Survey. CEDIK working paper. University of Kentucky.

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