Lexington, KY - An increase in entrepreneurship is a bright spot in Kentucky's economic downturn.
Commissioner Deborah Clayton of the Department of Commercialization and Innovation reported that 660 new entrepreneurial jobs were created in the commonwealth between July 1, 2008, and June 30, 2009.
"New salaried jobs created by high-tech clients generated an estimated $1.7 million for the commonwealth from personal state income tax revenue," said Matt McGarvey, vice president of commercialization and venture finance for the Kentucky Science and Technology Corporation.
Many of these entrepreneurial projects are in high-tech industries. Richard Stump, vice president of operations at the bio-medical start-up Transposagen Biopharmaceuticals, joined the company's management team when it moved to Lexington from Philadelphia. Transposagen Biopharmaceuticals provides unique animal models of human diseases for drug discovery and development, and the company's Web site claims Transposagen is the worldwide leader in the creation of knockout rat lines (laboratory rats with a single gene disruption).
Stump is also the founder of the Entrepreneurs Foundation of Kentucky. The foundation enables entrepreneurs to get involved in nonprofit philanthropy early in the process of establishing their companies. He said the start-ups can set up a system to donate equity to get them involved early in giving back to the community.
Unemployment is definitely a driver in the rising trend of entrepreneurship. Individuals are striking out on their own. Jobs in these situations grow one-by-one on a need basis, unlike the job growth created by a larger manufacturing firm.
There are other economic reasons to choose Kentucky. Richard Stump said that the founder of his company was lured to Lexington from Philadelphia by state-federal matching funds programs and small business research grants. While many high tech start-ups are attracted to Silicon Valley and Boulder, Colo., Lexington makes a lot more economic sense, Stump said. The cost of lab space in Lexington, for example, is one tenth the cost of lab space in Philadelphia, and the average rent is about a third of the Philly cost. Top people might make a little less here, but their dollars will go farther. Transposagen now employs nine people, and plans to add more.
Pat Lawless, another entrepreneur, was frustrated with the typically slow pace of moving pharmaceutical compounds from the laboratory to market. He has improved that with his own Equithrive, a new product to ease inflammation and pain and improve the joint function of horses. Lawless holds a doctorate in biology from the University of Kentucky. His botany background and previous job experience as a bioprospector for a plant-based discovery drug company led to work with a start-up in an incubator lab at the University of Kentucky. He launched Biological Prospects in 2007, and so far, most of his marketing has focused on the local equine industry. Biological Prospects is also marketing a product line called petsoothicals for dogs.
The growth of BC Wood Properties is an example of real estate entrepreneurship. Brian Wood keeps a floor-to-ceiling map of the world on his office wall. Wood said he wanted a global view to keep his world in perspective. He currently is not doing business internationally, but specializes in small strip mall shopping centers like Eastland Shopping Center in Lexington - commerce on a more basic scale. The founder of B C Wood Properties was sweeping out houses for contractors 16 years ago. Now his company owns and operates 28 shopping centers in three states. He said these centers are filling a niche enhanced by the sluggish economy, supplying the everyday goods to middle- and moderate-income people. Brian said his typical center has a Big Lots, Dollar General, and Tractor Supply, probably a barber shop, restaurant and drug store. He is also surprised by the number of high-end vehicles in his parking lots these days.
The Transylvania grad said his company is a lean operation, employing 25 people, but he wants to keep growing. Currently ranked 71st in the country by size, Brian Wood said his goal is to be in the top 50 within the next three years. There are no plans to move, Wood said; central Kentucky is his home. In the hall outside his office, a shadow box contains an old Centre College letter sweater, earned by his grandfather on the football fields.
In addition to the economic benefits, quality of life is also a factor for entrepreneurs who come to the commonwealth. Stump said projects like the Distillery District development are critical to making the city a place where people want to live.