Lexington’s Innovative Population

Lexington earned a 106.2 on StatsAmerica’s Innovation 2.0 index, indicating a “very high relative capacity for innovation” and ranking among the top 10% in the country.

The overall score is based on five equally weighted component indexes.

Lexington performed particularly well on the Human Capital and Knowledge Creation Index, which measures a region’s ability to innovate based on population characteristics and knowledge infrastructure, using factors such as educational attainment, knowledge creation, technology diffusion, and STEM education and occupations. In fact, Lexington’s score of 148.1 ranks the city first in Kentucky and among the top 3% in the country!

The Human Capital and Knowledge Creation Index is made up of three components.

Educational Attainment – As expected, Lexington performed well here in bachelor’s degree and advanced degree attainment. According to the latest Census Bureau data, 41.6% of Lexington residents over age 25 have a bachelor’s degree, ranking Lexington 11th in the country among cities with 300,000+ people, and 18.9% have an advanced degree, ranking Lexington #9 in the country.

Knowledge Creation and Technology Diffusion – This measures the spread of knowledge and creativity through networks and support structures, specifically patent technology, university-based knowledge spillovers from ongoing research and development, and business incubators. Although data was not disclosed, we can guess at factors that helped Lexington score highly in this area. In 2016, there were 215 patents issued to Lexington inventors, and in 2015 the University of Kentucky’s R&D expenditures were over $330 million. Also, entrepreneurs can find guidance and support from many sources in Lexington. To name a few, the Kentucky Innovation Network, the Bluegrass Business Development Partnership, the Bluegrass Small Business Development Center, Awesome Inc., SPARK, 5Across, and Lexington SCORE have helped many entrepreneurs build their startup business.

STEM Education and Occupations – STEM fields produce new technology and drive innovation, and this measures looks at both the existing and future STEM workforce. Again, although the actual data used by StatsAmerica is not available, let’s look at several influencing factors. In 2015 alone, the University of Kentucky contributed to the STEM workforce by graduating over 1,100 students in the STEM degree majors identified by Innovation 2.0, including 567 engineering degrees (441 bachelor’s degrees, 79 master’s degrees, and 45 doctorates) and 322 biological and biomedical sciences (249 bachelor’s degrees, 30 master’s degrees, 10 post-grads, and 33 doctorates). As for the current STEM workforce, Innovation 2.0 looks at an area’s technology-based occupations and the high-tech industry. About 10,000 Lexingtonians work in the STEM industry areas identified by Innovation 2.0, and another 6,700 work in a similar field. In total, about 11% of Lexington’s workforce is in the STEM industry or related employment.

 

Measuring Innovation in Lexington

Last January we looked at StatsAmerica’s Innovation Index, a measure of an area’s innovation capacity and output. The updated Innovation 2.0 incorporates new research and 50 new variables that better measure innovation, such as knowledge spillovers, technology diffusion, and foreign direct investment.

Last year, Lexington scored a 101.8 on the Innovation Index. This year, Lexington has scored a 106.2!

The Headline Index is the overall innovation score, made up of five equally weighted component indexes, with an optional Social Capital Index. In total, over 80 variables go into the Innovation Index. There are three measures of innovation inputs and two measures of innovation outputs.

Innovation Inputs promote innovation and create knowledge:

  • Human Capital and Knowledge Creation – the population and labor force’s ability to innovate, based on educational attainment, knowledge creation, technology diffusion, and STEM education and occupations. Specific measures include patent technology diffusion, university-based knowledge spillovers, business incubation, STEM degrees, technology-based occupation clusters, and high-tech industry employment share.
  • Business Dynamics – the region’s competitiveness and the entry and exit of individual firms, based on establishment formation, dynamics, and venture capital dollars and deals.
  • Business Profile – local business conditions and resources available to entrepreneurs, based on FDI attractiveness, connectivity, industry profiles, and proprietorship. Specific measures include FDI employment and investment, high-speed internet connection of residents and farms,  young high-tech firms, proprietor rate, and capital availability.

Innovation Outputs are the direct outcomes and economic improvements.

  • Employment and Productivity – measures economic growth, regional desirability, and direct outcome of innovation based on industry performance, GDP, and patents.
  • Economic Well-Being – the population’s standard of living, including personal income and growth, income inequality, poverty rate, unemployment, and other measures.

Additionally, the Social Capital Index measures the regional benefits of collaborative networks that help a community meet challenges, based on measures of altruism, formal organizational membership and participation, information interaction, shared norms, and trust.

The Index is configured so that the national average is 100. Scores lower than 100 indicate performance lower than the national average and scores higher than 100 indicate performance better than the national average.

Lexington’s 106.2 Headline Index indicates “very high relative capacity for innovation,” according to StatsAmerica, and ranks Lexington #265 out of 3,110 counties. This means that Lexington is in the top 10% of innovative counties in the country!

Check back next week for more in-depth information about Lexington’s Innovation!

Lexington’s 2016 Rankings

Lexington received numerous rankings and accolades this year, praising our high quality of life, educated workforce, business climate, and other assets.

Our most prominent ranking was Chamber of the Year! Commerce Lexington Inc. was named Chamber of the Year in the large chamber category by the Association of Chamber of Commerce Executives (ACCE), recognizing the dual role chambers have in leading businesses and communities and honoring excellence in operations, member services, and community leadership.

Business Climate

Quality of Life

Highly Educated Population

According to the most recent Census data, Lexington ranks among the most educated communities in the country! 41.6% of Lexingtonians age 25 and over have a bachelor’s degree or higher, ranking our city #11 in the nation among cities with at least 300,000 people. Equally impressive, 18.9% have an advanced degree, ranking Lexington #9 in the nation. Another 60.1% of Lexington residents aged 18 through 24 are currently enrolled in college or graduate school (ranking Lexington #10 among large cities), ensuring that Lexington will continue to have talented, highly educated people for all industries in the years to come.

The opportunities for higher education are limitless in the Bluegrass. There are ten colleges and universities within 40 miles of Lexington enrolling nearly 70,000 students every year. There are also multiple community and technical colleges in the region bolstering Lexington’s educated population.

Lexington’s skilled and innovative workforce provides the human capital that companies need to thrive and grow in the Bluegrass Region, and helps Lexington continue to receive recognition for its education population, favorable business climate, and high quality of life.

For a complete list of Lexington’s rankings, click here.

Lexington’s Population Growth

Lexington’s population has reached over 314,000!

The most recent Census Bureau data puts Lexington’s population at 314,488 people, ranking Lexington the 61st largest city in the country.

Lexington’s population has steadily grown over the past few years. On average, 3,500 people moved to Lexington every year over the past five years, representing a population growth of 1.18% every year. In total, over 17,700 people have moved to Lexington since 2010, a population increase of 6%.

Over the past ten years, Lexington’s population has grown by nearly 60,000 people, or 23%.

Lexington consistently receives praise as a great place to work, live, and play, and the city’s increasing number of residents supports these accolades. Just this year, Lexington has been ranked:

Business and Professional Services

The business and professional services industry provides services and support for other businesses in various industries. Primary services are highly technical and specialized services, such as legal, architectural, engineering, and consulting, that require expertise and extensive training. Secondary services are routine basic services that support daily activities, such as back-office support operations, accounting, and processing facilities. These services help companies operate, and the business and professional services industry is a targeted industry for Lexington’s economic development. In 2015, approximately 28,200 people were employed in Lexington’s business and professional service industry, earning an average of $49,268 per year. Average salaries ranged from $75,100 for primary services such as management of companies and enterprises (averaging $120,500) and professional and technical services (averaging $66,300) to $26,800 for secondary services such as administrative and support services.

businessprofessionalservices2016Companies engaged in providing business and professional services tend to concentrate in metropolitan areas near their clients, such as cities like Lexington. Back-office and support services companies tend to prefer lower-cost locations in proximity to major metropolitan areas. Lexington is one of the lowest cost-of-business locations in the country and has a business friendly environment. In fact, Lexington was named #8 City with the Lowest Startup Costs by SmartAsset in 2016 and #16 Best Place for Business and Careers by Forbes in 2015.

Check back to learn about Business and Professional Services Industry Leaders in Lexington!