Back to Goal 14From Measures and Milestones 2002
p. 46-47, published 2002
While globalization has clearly resulted in adverse consequences for those who have relied on low-skill jobs in the U.S. economy, its overall benefits are believed to far outweigh its negative consequences. As low-skill industries move offshore, they are gradually creating new wealth and fueling a growing demand for American products and services. In spite of its importance to economic growth, citizens rank this goal as the second least important for our future, and, as shown, they have lost confidence in our progress toward its realization. Relative to the other goals, however, they rank our progress the eighth highest.
Table 1: Where Citizens Think We Stand
In the economy of today, U.S. businesses have learned that their comparative advantage lies not in low-cost production but in providing increasingly more advanced and higher-quality products and services. In recognition of this attribute, firms have begun to commit to internationally recognized quality processes which help establish their place in the global market economy. One way of doing so is to achieve ISO 9000 status, a production management protocol demonstrating that a firm has a rigorous quality control process in place. The number of Kentucky firms that meet this test of preparedness for the international marketplace increased substantially over the past decade. Moreover, Kentucky achieved the ranking of eighth in the nation in 2001 in the number of ISO 9000 firms per 1,000 establishments.
Figure 1: Number of Registered ISO 9000 Companies in Kentucky, 1992-2000
Workers in Kentucky benefit greatly from foreign affiliates, which have created thousands of jobs across the South and the nation. In addition, these jobs, on average, tend to pay more than those created by domestic businesses. While many of these new firms are branch plants that make their most significant economic contributions to cities and regions that host their U.S. headquarters and are subject to move again, their presence has helped improve the economic circumstances of many families in the Commonwealth. During the 1990s, Kentucky has seen a rising amount of foreign direct investment, which has increased substantially from the early 1980s.
Figure 2: Foreign Direct Investment in Kentucky
Kentucky’s rising export market shows how, despite some associated negative consequences, the Commonwealth has benefited from globalization. The value of Kentucky exports has more than doubled during the 1990s, rising from $4.1 billion in 1992 to $10.3 billion by 2000. Manufacturing exports account for $9.7 billion, or 94 percent of the state’s 2000 exports.
Figure 3: Value of Kentucky Exports
Not surprisingly, Kentucky has continued to gradually ascend in the rankings of states by the value of their exports. Rising exports have helped Kentucky-based firms stay competitive and increase profitability and market strength. In turn, the economic position of communities and families that rely upon them has been strengthened.
Table 2: Kentucky’s National Ranking in Exports, 1993-1999
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