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Greater Louisville benefitting from public and private emphasis on risk taking

Innovation propels entrepreneurship

By Abby Laub

Louisville Mayor Greg Fischer, second from right, helped cut the ribbon with Kindred Healthcare executives in January 2018 at Kindred Healthcare’s new $40 million, six-story downtown office building.

Sebastian Alvim recalled his first trip to Louisville from Portugal. The innovator brought his MyNurse mobile healthcare concept to the U.S. by way of Kentucky’s largest city and was able to quickly hit the ground running, partly by seeking out the right partners, mentors and a solid support network in Louisville – a city welcoming to internationals and supportive of founders with great ideas.

Alvim’s success story is an example of Greater Louisville’s dedicated emphasis on entrepreneurship. In fact, Greater Louisville Inc. dubbed 2018 “The Year of the Entrepreneur.”

“It’s been pretty easy to get going here in Louisville,” Alvim said. “People were really welcoming to us, and it’s been a really good experience. We had no idea about Kentucky; it was a really good surprise. We discovered Louisville has a natural healthcare hub with a lot of companies, and so this is the spot to be in America.”

Alvim is a recent graduate of GLI’s all new Mentor Louisville program, which matched MyNurse with top-level executives in Humana, among others. MyNurse is a mobile tech platform for home healthcare services. In Portugal it operates with about 600 caregivers and 800 patients, directly connecting the former with the latter with the objective to quickly and more cost effectively get qualified caregivers, skilled nurses and therapists into patients’ homes.

“Almost three years ago with my great aunt, my family and I had to hire a caregiver,” Alvim recalled. “This was really difficult to pull off. You never are able to connect directly with the caregiver. And that is really uncomfortable because you want to make sure you trust who’s going inside your loved one’s home. We found that it wasn’t just our problem, this is a global problem. In the U.S. alone, there are 46 million Americans over age 65. From this group, 90 percent prefer to age in place, in home. So they need to find the right way to make that possible.”

Compounding this problem is the question of how to pay for care.

Growth in the economic clusters

Louisville Forward Chief Mary Ellen Wiederwohl said Lifelong Wellness and Aging Care – one of Louisville Metro’s five key business clusters – is a sector ripe for the innovation that firms like MyNurse can pour into it for better outcomes all around.

“Louisville has an opportunity to be a global center for aging care,” she said. “We all know about the ‘silver tsunami.’ We’re still a good 10 years out (from the crest of this age wave), and we have the chance because of our density of aging care and lifelong wellness companies to really be a leader in how America deals with its aging population. This is going to be a tale of the country, and we hope Louisville is sitting at the center of that. It’s the intersection of the traditional aging-care products with technology; this is focused on aging in place and being in multigenerational settings.”

MyNurse, which fully rolls out in the U.S. this summer, eliminates steep agency fees for both patients and caregivers and “allows patients and caregivers to schedule based on their needs,” Alvim said.

Greater Louisville’s other clusters are also hopping. The other four are: advanced manufacturing; business services; food and beverage; and logistics. Wiederwohl predicts that business services probably has the biggest growth opportunities right now.

“Knowledge economy jobs are what will drive the U.S. in the future,” she said. “We have incredible organic growth in this space.”

Some of that recently includes Computershare, which moved its back office operation to Louisville and has more than 600 employees. And Ernst & Young and Hogan Lovells also opened up shop in the city.

At the Kentucky Cabinet for Economic Development (also known as Think Kentucky), Secretary Terry Gill notes the emerging “knowledge economy” and Louisville’s opportunity to harness the entrepreneurial spirit in this burgeoning space. He points to new entities in Louisville like The 1804, an entrepreneur center serving Louisville and Southern Indiana, as an example of success.

“One of the things I think is exciting about what’s happening right now is there’s a focus relative to the need to bring some alignment to the entrepreneurial community,” Gill said, adding that creating a sense of place – physical places – for innovators and creatives to thrive is crucial to the mission. “We recognize the importance of (the entrepreneurial) community. Not only is it widely recognized as the source the most net job creation, we see it as this new opportunity for us to take advantage of a number of new federal programs that are just being unveiled. The state has taken a different, more deliberate view of supporting the entrepreneurial community. And then we have the state’s largest city declaring it as The Year of the Entrepreneur, so we’re all kind of pushing it in that direction.”

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Think Kentucky’s Executive Officer Vivek Sarin also notes that Louisville’s existing foundational businesses continue to thrive, and that they’re challenged to “stay on the offense” as many prepare to transition their companies to the next generation of leadership.

“In my experience, what makes the business community in Louisville special is the presence of family owned and operated businesses and privately owned companies in the small business and middle market space,” Sarin said. “Succession planning at the ownership and CEO level is really critical to retaining these businesses in the Louisville community, to ensure that all the jobs they provide are retained locally.”

The cabinet also wants to see these businesses embrace risk and think seriously about growth.

“There is a truism in business that either you’re growing or quietly liquidating,” Gill said. “I think one of the challenges in order to grow is you have to think about financing that growth. How do you capitalize and leverage that business to make an acquisition? At some point these second-generation middle market businesses often reach the threshold of their organic growth, and the danger Louisville faces is if that second generation doesn’t think big and more broadly about their business being the platform business and then acquiring other competitors regionally or nationally … We need to be more comfortable with risk.”

Growing the city

Taking risk also might mean reshaping the culture of a company in order to attract more qualified workers.

“We constantly hear from every single employer the challenges of the workforce,” Sarin said. “Businesses today, especially the small and middle ones, have to be incredibly creative in providing a unique experience with building a unique company culture that will enable the folks they employ to just love being there, and therefore that company’s turnover may go down. You have to go after employees today almost moreso than customers.”

This sentiment is echoed by Wiederwohl, who said “talent is the single biggest challenge for everyone.”

“It’s both having people with the right skills for the jobs being created and the jobs you want to recruit to Louisville, and it is also just raw numbers,” she said. “We are growing as a city, but we need to be growing faster.”

It’s an issue that city leaders are tackling head on. Their efforts include making the city a fun, vibrant and livable place, having a deep housing stock, and improving infrastructure and services.

Louisville Forward public information specialist Jessica Wethington notes the career help available to natives and non-natives alike, through entities like KentuckianaWorks and others. Services include manufacturing training for English-language workers, outlined career pathways, credentialing, career calculators in other languages and improved job searches. With more than 25,000 jobs still open in the community, said Wethington, more work is still to be done.

Sustainable growth, authentic Louisville

Louisville officials are excited about the growth in foreign in-migration, but Wiederwohl said recent changes in federal immigration policy present new challenges in raw numbers. However, that doesn’t stop them from chasing “second movers.” They contribute to Louisville’s recent population growth of about 0.5 to 1 percent per year.

“We’d like to double that, but we’re not going, overnight, to lose a sense of who we are,” Wiederwohl said. “We are not going to lose that authenticity.

Nashville and Austin; those are two breakout mid-sized cities, and they lament some of that. One of the things they lost that we’ll be careful not to lose is affordability. If you grow too fast, it’s basic supply-and-demand economics. What we’re looking for instead of hyper growth is sustained annual growth. Annualized 2 percent growth would be great.”

The city is working hard to actively recruit workers from around the country, and getting the current population more involved in the workforce.

A vibrant place to call home

Attracting innovators, risk takers, entrepreneurs, youth and families alike will keep the train moving, and public and private leaders work hard to give these people a vibrant place to call home.

“You have to build a city that has all of the attractions and things that interest folks who are in their 20s, 30s, 40s who are willing to move,”

Wiederwohl said. “We take ‘placemaking’ very seriously. You see that attention to things we give to parks, arts, street projects, downtown activities, all the things we have going on to make Louisville a very livable place. You can’t attract talent until you have an attractive city. We are there, and we’re super excited about that.”

This, and livability, are some of the reasons SmartAsset rated Louisville as No. 8 nationally for best cities for new college graduates.

Wiederwohl is excited by all of the prospects and momentum.

“Louisville is experiencing wonderful momentum in all of our economic clusters, and that plus other activity is contributing to a beautiful renaissance in our built environment and capital construction,” she said. “We have this wonderful confluence of activity across our economy that’s really buoying our economic performance and providing great opportunities for people and literally changing our skylines.”

Sarin adds that the fact that all of Louisville’s sectors and neighborhoods are rising is good indication of a successful future, building on its rich history.

“In order for Louisville to become the best version of itself and reach its full potential, all sections of Louisville have to be on offense, have to be developing,” Sarin said. “The entire community has to all be rowing in the same direction for Louisville to reach its full potential. We’re excited to play whatever role we can in all of that.”

Cheering Louisville on

Greater Louisville has cheerleaders at the state level, but it’s also working to develop its own internal cheering section. Greater Louisville Inc.’s Vice President of Regional Economic Growth Deana Epperly Karem said GLI is working in partnership with Leadership Louisville to pilot a program called City Champs.

“We are working on some programs and advertising to really build up pride of place, and get people bragging about Louisville more, showcasing it to friends and family living outside the region,” Karem said. “We want to build up that attitude of, ‘I chose to live here, it’s a great place.’ ”

GLI President and CEO Kent Oyler added, “We need everyone in Greater Louisville to be an active ambassador of our regional assets. That is what will propel Greater Louisville to the next level and best our peer cities.”

Such support will ensure sustained growth in the entire region, Oyler said, and “push investment to record-breaking levels in terms of business and workforce attraction and expansion.”

Greater Louisville already has many accolades in the business world.

Economic development achievements from 2017 alone include the identification of 17 “Million Dollar Babies,” companies GLI identified that have either raised at least $1 million in a single equity round of investment or crossed the $1 million sales revenue threshold for the first time. According to Forbes magazine, only 5 percent of startups worldwide achieve $1 million in revenue.

“This is a metric that reflects the health of our startup community. No other city is using it currently, but we are starting to see significant interest in benchmarking from our peer cities,” explained GLI’s Vice President of Entrepreneurship and Talent and Executive Director of EnterpriseCorp Lisa Bajorinas about the “Babies.” “2017’s goal was only 10 of these companies, 2018’s is 12 and we are already beginning to see local companies crossing that line.”

In total last year, EnterpriseCorp, the entrepreneurial arm of GLI, assisted 39 startup companies that generated $19.9 million in venture capital and angel investment. They created 178 new jobs with average annual salaries of $55,744.

It also launched several pilot programs to assist entrepreneurs in 2017 whose startups are growing this year, including Mentor Louisville; RevIt, a program that connects startups with marketing professionals to offer specialized advice; and the Sales Intensive Workshop for companies looking to increase their early customer acquisitions.

“It is already shaping up to be a transformative year for both our organization and the entrepreneurial community on the whole in Greater Louisville. There are clearly big things ahead, and we will be there every step of the way to make sure they reach their full potential,” Bajorinas said.

Gill has no doubt Louisville will keep thriving, and its history of creative thinking will help its future.

“There’s a close linkage to innovation and creativity,” he said. “Think about the creative arts in Louisville, a Midwest – or Southern – city that has a ballet and an orchestra and a theater company that’s internationally known, so the arts community is very important. You can even make the argument that the culinary and bourbon scene are even extensions of creativity. We have the basic building blocks because of the creativity we have in the city, and innovation is really just an extension of that.”

To business, an arts community represents problem-solving capability.

“It’s a creative solution to a problem that either exists and is a known issue, or it’s an entirely new concept that hasn’t been fully realized yet,” Gill said. “I think that’s one of the reasons why we have the ability to attract more innovation to the community.”

He touts the presence in Greater Louisville of heavy hitters in the global business community like Ford, ResCare, PharmaCord, LINAK, WireCrafters and now Ernst & Young who are providing solid leadership. To grow additional important presences, Gill said, more innovators and risk takers are being welcomed in a supportive business community, and ambitious workers are finding a place to call home.