Kentucky's efforts to encourage entrepreneurship are paying off, evidenced by the commonwealth climbing a remarkable 45 places in just the past year in a national ranking.
After a 49th place finish for in the State Entrepreneurship Index for 2012, Kentucky cracked the top five with a fourth-place ranking for 2013. Created by economists at the University of Nebraska-Lincoln, the SEI is a measure of states' ability to create new business. Kentucky showed by far the largest improvement of any state in the rankings in the past year.
"Small businesses are the backbone of our economy," said Gov. Steve Beshear in response to the ranking.
"Over the past several years, this administration has focused in developing innovative programs and offering dynamic services to help these growing companies every step of the way. Even though this is a significant jump, I'm not surprised we're producing great results. Kentucky is a tremendous place to grow a business."
The SEI, first published in 2008, is based on five components: a state's net growth in business establishments, per capita growth in business establishments, business formation rate, number of patents per thousand residents and average income for non-farm proprietors.
To assist Kentucky's small businesses, the Kentucky Cabinet for Economic Development created the Office of Entrepreneurship last year to enhance the state's existing efforts to help businesses at every step of the growth cycle. The goals of the office are to develop an entrepreneurial climate in the state, provide guidance and support to startups, and assist small businesses with growth opportunities.
"The governor and cabinet have really led the charge to help spur small business growth and encourage entrepreneurial startups," said Chuck Sexton, director of EntrePaducah.
"They've done it in several ways, by developing new programs for small business, tax credits and financing programs through local banks."
Another way the commonwealth assists entrepreneurs is with the Kentucky Innovation Network, which consists of 13 offices throughout the state offering extensive resources for small and new businesses, as well as innovative and high-tech companies.
Last year, the Office of Entrepreneurship supported more than 2,000 small businesses, "and that number is growing," according to Mandy Lambert, commissioner of business development in the cabinet. "We are seeing more and more startup companies getting off the ground and small businesses growing. As a result, more Kentuckians are starting to realize they have the opportunity to become entrepreneurs."
Two of the KIN offices are located in western Kentucky.
"We have two local (KIN) offices, one at West Kentucky Community & Technical College and one at Murray State University," Sexton said. "They house those as close to colleges and universities as they can. They have a lot of different abilities and processes there to help someone who wants to create a prototype, or do patent work, that sort of thing."
While EntrePaducah focuses on helping small business startups and entrepreneurs in Paducah and McCracken County, the KIN offices cover a multi-county region. They, along with the Murray State University's Small Business Development Center, are all working toward the same goal, according to Sexton.
"What the ranking shows is that what we are doing on a local, regional and state level is working together to make the area and state more friendly (to small business and entrepreneurs)," he said.
Contact David Zoeller, a Paducah Sun staff writer, at 270-575-8676.