AGENDA: Leverage Louisville’s assets to enhance its competitive position in the new economy.

In-Depth: Build on Assets

Louisville’s economic standing suffered badly in the national shift from a manufacturing economy, in which it excelled, to a knowledge economy, in which it did not. But the community retained many important assets on which a Competitive City Agenda, and a new era of economic and social prosperity, can be built.

Beyond Merger affirmed the wisdom of the strategy to target economic development efforts on sectors of strength, including healthcare and logistics, and added the dimension of a vibrant downtown and “package of amenities” as important selling points for the New Economy. 

It called on Louisville to step up those efforts even further. Gaining a foothold in the New Economy represents an uphill climb against stiff competition. That reality is demonstrated in the key graphic, which shows the relative strength of industry sectors based on number of firms, number of employees, and worker pay. To attain a higher level of prosperity, Louisville needs to grow into higher-wage sectors.

While the proportion of workers employed in technical and professional fields has grown to account for more than a third of all local workers, that gain was not sufficient to move Louisville up among its peer cities on that measure of New Economy strength.

Overall, Louisville Metro workers have continued to lose ground in average wages compared to their counterparts in peer cities, falling from 5th in 1980, when the dominance of its manufacturing base was in decline, to 12th by 2003.

Nevertheless, Greater Louisville Inc.’s bold goal to transform Louisville from “a nice place to live” to an “economic hot spot” and the local initiative to create a business climate more conducive to entrepreneurial activity have raised the community’s profile. Entrepreneur magazine recently named Louisville as the best city for small business growth and ranked it 15th nationally in terms of its entrepreneurial environment.

Efforts to open new channels for venture capital are also gaining momentum, as is the commitment to build the University of Louisville’s research base. While still substantially below major research universities in competitor cities, by 2004 research funding at U. of L. had grown to $82 million, almost triple the level five years earlier.

Other assets vital to Louisville’s competitive position have also been strengthened:

• An estimated $600 million in downtown investments approach the critical mass of activity that civic leaders have long sought.
• Demand for downtown housing continues to rise, improving the odds for achieving the goal of 5,000 new residents in ten years.
• Fourth Street Live! anchors a new entertainment district tailored to young adults.
• The final phase of the $95 million Waterfront Park that has dramatically reclaimed Louisville’s public landscape is underway.
• Vibrant art and retail districts along Main and Market streets, as well as Frankfort Avenue and Bardstown Road, grow in popularity.
• The new Frazier Arms Museum opened, with the Muhammad Ali Center and the African-American Cultural Center to follow.
• A first-ever Arts and Cultural Blueprint geared to protect and enhance the city’s cherished art institutions is being developed with the goal of reducing financial pressures.

Bottom Line
Louisville Metro Must Connect the Dots — Leveraging its Assets and Playing to Win in the Knowledge Economy