- A new report shows 1,870 entrepreneurial businesses in Northern Kentucky generate more than $7 billion in revenue each year.
- The businesses contribute nearly $800 million in state income taxes, underscoring their role in the regional economy.
- High-growth companies, including Motus Freight and Prolocity, account for the largest share of revenue and tax generation.
Following the recent opening of SparkHaus, Northern Kentucky’s economic development leaders have a renewed focus on marketing the upsides of the region’s entrepreneurial community.
To align with SparkHaus’ opening, BE NKY Growth Partnership, Northern Kentucky’s leading economic development organization, commissioned a report with Blue North, Northern Kentucky’s key entrepreneurial resource and advocacy group.
The report highlighted the impact of the region’s entrepreneurial businesses, categorized into four groups: Main Street businesses, new businesses, venture capital-backed businesses and micro-businesses.
Digging deeper, the report examined the performance of each category of entrepreneurial businesses over the past five years and explored how the region is leveraging entrepreneurship to diversify its economy.
On Tuesday, an audience assembled in SparkHaus’s first-floor event space to hear a presentation of the report’s findings. Jonathan Faris, senior director of community impact partnerships at consulting firm TPMA, compared Northern Kentucky’s entrepreneurial ecosystem to those of comparable regions such as St. Petersburg, Florida, northwest Arkansas, and Durham, North Carolina.
Faris stated that these areas were intentionally selected to highlight the key assets of their entrepreneurial ecosystems and demonstrate how Northern Kentucky can leverage its assets to enhance its own position.
“We have a situation where there are a lot of things available right now and we need things to align together–think about how we’re looking at this, this race that we’re part of, so it’s going to go a lot of different ways, and really be thinking about how we have the resources available to support that entrepreneurship,” he said.
Based on the data, 1,870 businesses in Northern Kentucky fall into one of the four specified categories. These businesses produce over $7 billion in revenue and contribute nearly $800 million in state income taxes, along with total taxes on production and imports across local, state and federal levels.
The largest tax-generating category is high-growth firms, which are defined as businesses that have experienced significant revenue growth over the past three to five years. The 133 high-growth companies in Northern Kentucky have generated about $6.6 billion in total yearly earnings.
Some examples of regional high-growth businesses include Bellevue-based Motus Freight and Covington-based Prolocity. Moreover, high-growth companies generate between $138 and $184 billion in annual tax revenue.
In addition to high-growth companies, Blue North Executive Director Dave Knox emphasized that the region needs to bolster its support for venture capital-funded businesses, which he noted is falling behind compared to other leading metros. Each year, 56 venture capital-backed companies in Northern Kentucky generate $158.5 million in earnings.
For Knox, increasing investment in an entrepreneurial ecosystem focused on venture capital-backed businesses can enhance the sustainability of the local entrepreneurial ecosystem. Venture capital-backed businesses can demonstrate traction and demand, thereby enhancing the overall reputation of the entrepreneurial ecosystem.
“You know, in this room, we have some great programs that do that work,” Knox said. “We need to keep that support going, because that’s the lifeblood of what we look at, but then we also need to double down on what we do with venture.”
On a small scale, Main Street businesses, defined as those over five years old with 50 or fewer employees, generate $439.2 million in annual earnings. These small local businesses are often seen as the defining feature of the region’s economic character.
“The goal that we have with this, of breaking down into these four areas and bringing it to light, was showing that we think about support for all of them, but we can’t just bucket it as one big word and think we checked a box,” Knox said. “What are the efforts when we think about venture capital? What are our efforts for high-growth? What are our efforts for Main Street businesses? All of those are going to be very, very important when we think about what those needs are.”
Ultimately, Faris and Knox concluded that while Northern Kentucky has strong core assets within its entrepreneurial ecosystem, such as support organizations and universities, it must continue to expand its infrastructure and community support for different types of entrepreneurs.
