There have been many ideas for the future of Northern Kentucky.
They’ve had names like Vision 2015 and Quest: A Vision for Northern Kentucky.
They come in the form of growth organizations like BE NKY, meetNKY and the OneNKY Alliance.
And they come in the form of people with an idea.
People like Chad Summe.
Summe, Covington-based eGateway Capital’s co-founder and managing partner, sees it as a multi-state economic corridor centered around existing transportation, manufacturing and finance infrastructure.
Envision a collection of states, interstates, airports, companies and population centers — all with similar attributes — that can help leverage each other.
Northern Kentucky would sit right at the center of, and serve as a catalyst for, the so-called Corridor of Commerce.
Venture capital firm eGateway – which funds technology companies that are past the startup stage — coined the term.
Long referred to as flyover country, the Midwest was the heart of the American manufacturing industry. Due to economic changes in the late 20th century, the region declined into the Rust Belt; a nickname detailing the de-industrialization of the region resulting in pervasive job loss and urban decay.
But where some see rust, others, like Summe, see opportunity.
“We view the next 20 years to be as attractive as ever from the middle of the country,” Summe told LINK nky.
So how can Northern Kentucky cement itself at the center of the Corridor of Commerce?
“The Corridor of Commerce is just simply telling the story of the region,” Summe told LINK nky. “At its core, it’s playing to your strengths.”
There are hurdles to clear, including differing opinions on how to achieve the goal — socially, economically and politically. Regional challenges, like housing affordability and demographic decline, loom as well. Competition for workers is becoming increasingly fierce.
“There’s competition for people, there’s competition for business, and being known and marketing yourself in both spaces is becoming critically important,” said Lee Crume, CEO of BE NKY Growth Partnership.
So, Crume said, a cohesive economic narrative and branding are essential when advertising the region as an economic destination.
“If you go back 50 years ago – 60 years ago – it’s not like Northern California started calling itself Silicon Valley,” Crume said. “There wasn’t an organized group who said ‘We’re going to become Silicon Valley.’ They became Silicon Valley.”
Where is it?
The Corridor of Commerce isn’t strictly limited to Cincinnati and Northern Kentucky. To the northwest of Greater Cincinnati is Indianapolis – with 11 counties and a population of nearly 2.1 million.
The Indianapolis International Airport is the eighth-largest cargo airport in the United States and is home to the world’s second-largest FedEx air hub.
To the north, Columbus – a metropolitan area of approximately 2.1 million people – serves as a key retail, educational and technological manufacturing hub within the Corridor of Commerce.
To the south of Greater Cincinnati sits Louisville, the largest city in Kentucky with a metropolitan population of 1.4 million located within a 15-county region in both the bluegrass and Indiana. Like Greater Cincinnati, it is also located directly on the Ohio River.
Louisville’s Muhammad Ali International Airport is home to the UPS Worldport, the largest UPS air hub in the world.
Why now?
One thing that propelled Northern Kentucky forward in the digital commerce field was the skyrocketing of online ordering during shutdowns amid the COVID-19 pandemic.
From Summe’s perspective, the pandemic served as a paradigm-shifting economic event. Everyone from local, state and federal political leaders; Fortune 500 CEOs; to everyday citizens were forced to think about the systems that impacted their everyday lives. COVID-19 exposed the vulnerabilities in many critical industries’ supply chains. Companies and consumers were forced to adapt, further accelerating the American economy’s integration into the digital age.
“I would say over the next 10 or so years, you’ll see a lot more change through technology and geography around supply chains,” Summe said. “COVID simply exposed that weakness.”
Global business-to-consumer e-commerce revenue is expected to grow to $5.5 trillion by 2027, according to an analysis published by the International Trade Administration. The markets projected to aid that growth include consumer electronics, fashion and pharmaceuticals, among others.
Summe argues that no region stands to benefit more from this growth than those within the Corridor of Commerce. As supply chains digitize, the Greater Cincinnati region specifically can position itself as the central hub along the Corridor of Commerce because of its geography, infrastructure and manufacturing prowess.
Why here?
When considering the viability of a future Corridor of Commerce, one must first consider the existing conditions that provide the foundation for such an undertaking.
The Greater Cincinnati region’s most obvious asset is the Ohio River — the 10th-longest river in the U.S. Over 184 million tons of cargo are transported on the Ohio River annually, according to the Ohio River Valley Water Sanitation Commission.
In the financial sector, despite being considered a midsize city with an urban basin population of approximately 6,000 residents, downtown Cincinnati features four Fortune 500 companies including Procter & Gamble, Kroger, Fifth Third Bank, and the Western & Southern Financial Group. Another Fortune 500 company, Cintas, is located just 20 miles up Interstate 71 in Mason.
These legacy companies give the region an important economic cachet when it comes to fundraising. Their presence, at least from a capital fundraising perspective, is a benefit because it shows the region has a track record of fostering the growth of multiple Fortune 500 companies.
“Our strengths as a region have been the big companies and the wealth accumulation that has occurred here in Cincinnati,” Summe said.
While Northern Kentucky is not home to any Fortune 500 headquarters, it does have CVG. Sitting on 7,700 acres of land in Boone County, CVG has attracted German shipping giant DHL Express and Amazon — the world’s largest e-commerce company.
“We don’t call it supply chain; it’s bigger than that,” Summe said. “The future economy is what we’re interested in. Commerce is changing.”
As Amazon grows, so, too, Summe sees opportunities for suppliers, vendors and other businesses associated with advanced logistics growing with it.
“This is simply raising all of these assets into an understandable narrative of why it matters,” Summe said.
Now what?
For proponents of the Corridor of Commerce such as Summe, the time to act is now. The digital commerce market is expected to grow to $5.4 trillion by 2026, according to Morgan Stanley research.
“We have to be able to connect the dots to what industries matter most to be around this corridor,” Summe said. “Who should we be talking to? What are these other variables? What companies? What workforce do we need to seize this opportunity? I think we’re in the very early stages of building awareness.”
eGateway’s plan, as outlined in a recent white paper, lays out specific actionable steps for regional leaders.
The first step is to attract more capital into the region. To accomplish this, Summe outlines the need for Cincinnati and Northern Kentucky to formulate a capital strategy.
Summe argues that access to capital is essential to scale businesses and foster growth. By creating a cohesive narrative about the potential of the Midwestern economy — specifically the Corridor of Commerce — Summe said he believes the pitch will help captivate lukewarm investors on the coasts who may be unaware of the region’s investment potential.
“There’s a ton of industries sitting here, but none of the capital,” Summe said. “We believe these two worlds can collide a lot more effectively because we think there’s a ton of opportunity to invest in the Midwest, and there’s just not as much competition.”
But it won’t just be coastal venture capitalists who need to be sold on a narrative to invest. Summe said local investors will also play a crucial role in making the Corridor of Commerce a reality. Like the legacy Fortune 500 companies that call the Greater Cincinnati region home, there is also legacy capital. In the past, Summe said those who control the region’s legacy money, whether from generationally wealthy families or financial firms, have been more conservative when investing their dollars back into the region.
“Capital is either oriented toward preservation, or it’s oriented toward growth,” Summe said.
His personal goal, and the goal of the report, is to help persuade regional investors to adopt a growth mindset when it comes to investing back into the Greater Cincinnati economy. The promise of a multibillion-dollar Corridor of Commerce stretching across three states could make the pitch more enticing, because there is an outlined vision behind it.
Private investments aren’t the only money that will need to be courted to make the Corridor of Commerce happen. Public money is the second step and is also a key part of the equation.
Locally, this can be seen through the federal funding going to the Brent Spence Bridge Corridor project. With the passing of the Bipartisan Infrastructure Deal in late 2021, Cincinnati and Northern Kentucky secured $1.6 billion in funding for the critical project.
The third step is to recruit more vendors and suppliers associated with the largest companies in the region — like Amazon, DHL, Kroger and Procter & Gamble — so that they could enjoy proximity to their suppliers, giving them a clear advantage as supply chains evolve.
This is an area where Crume and BE NKY play a key role, as the organization is one of the drivers of recruiting company relocations into Northern Kentucky. The types of industries being recruited to relocate or expand in Northern Kentucky include supply chain management and support services, advanced manufacturing, life sciences and information technology.
Fourth is to redouble efforts to attract talent into the region. This strategy is something Northern Kentucky leaders continue to focus on. However, like other metropolitan areas across the country, Northern Kentucky’s workforce is facing a demographic drought.
Northern Kentucky already has a skilled manufacturing trade gap. As the population ages, expect this gap to widen. To become the Corridor of Commerce, every region included in the plans must have the proper workforce to support the growth – especially in the manufacturing industry.
To combat that, regional leaders are formulating strategies to help Cincinnati and Northern Kentucky stand out above other similar areas. Automation is only a partial solution. Last September, Ernst & Young Economic Development Advisory Services Leader Amy Holloway told a group of Northern Kentucky leaders that the region must continue investing in health, education, transportation and community vibrancy to attract more workers.
“What do we do with fewer people in our communities, and how important it is now to be investing in those quality-of-life assets, in those programs that make us an attractive place for people — (enable us) to retain the population that we have, and even attract more people,” Holloway said.
The last recommendation is for the different metropolitan areas along the Corridor of Commerce — Cincinnati and Northern Kentucky, Columbus, Indianapolis and Louisville — to begin to think and act regionally, or even mega-regionally for growth and investment purposes, instead of as separate political and governmental jurisdictions.
The report says leaders in all of these areas should build upon prior regionalism efforts, including working together on regional tax policies.
“Politics and business play very differently in both arenas,” Summe said. “My argument is, you’re going to need both to win. Sometimes politics will lead; sometimes business will lead. They need to get comfortable pushing each other.”
However, other regions have their own best interests in mind, coupled with different strategies on how to achieve their goals. Down the road, coordination among these regions will be a key factor in the realization of the Corridor of Commerce.
Right now, Summe said eGateway Capital is in the “building awareness” phase, or marketing the Corridor of Commerce as a viable economic future to work toward.
‘The next stages will be a coordinated effort to drive action at every level — local, state, multistate,” Summe said.
With the vision in place, execution is the next key step. To Summe, the Corridor of Commerce is a commitment to reshaping the economic future of the Greater Cincinnati region, and the broader Midwest.
