In the spirit of celebrating the beginning of a new year, the focus of this article is on the pioneers of Lexington’s economy and the environment that supports their success. As you may remember, in December we highlighted numerous, record-breaking achievements made by the city’s entrepreneurial community and publicized a major state investment into the community that will lift Lexington innovation to new heights. All these indicators clearly demonstrated that the city has thriving entrepreneurial ecosystem. Building upon those indicators, according to StatsAmerica’s Innovation Index 2.0, the Lexington-Fayette Metropolitan Statistical Area (MSA) is the state leader in innovation and entrepreneurship.
StatsAmerica’s Innovation Index 2.0 quantifies a county, MSA, or Economic Development District’s (EDD) capacity for innovation and the amount of innovation already produced. The tool utilizes over 70 measures defined using academic research on how to measure and understand innovation. These indicators are grouped into five categories, two input indexes and three output indexes: Human Capital and Knowledge Creation (HC & KC), Business Dynamics, Business Profile, Economic Well-Being, and Employment and Productivity. Each of these categories are weighted equally and combined to form a summary measure, the Headline Index. The Lexington-Fayette MSA has the highest Headline Index score in the state with 111.1, compared to Louisville/Jefferson County KY-IN MSA’s 103.8 and Cincinnati OH-KY-IN MSA’s 110.5.
While there are many factors that have contributed to Lexington’s impressive score, none is more apparent than the city’s highly educated workforce. The MSA’s index for HC & KC far exceeded all other categories with 129.5, nearly 30 points higher than the U.S. metropolitan average and the highest result for all Kentucky metros. Lexington’s index is followed by Cincinnati and Clarksville metros with 122.6 and 106.2 respectively.
The major drivers of Lexington’s HC & KC index are the large percentages of the population who have at least a high school degree, at least a bachelor’s degree, and graduate degrees. According to 2017 Census Bureau data, 90.5% of Fayette County’s residents are high school graduates or higher, 41.8% have at least a bachelor’s degree, and 18% have graduate or professional degrees. Among cities with populations of at least 300,000, Lexington ranks 7th for high school graduates or greater, 14th for bachelor’s degree or higher, and 11th for graduate/professional degrees. See the accompanying tables and interactive map for more details.
For more information, visit http://www.statsamerica.org/ii2/overview.aspx and use the tool to search for the region of interest.