Report Outlines Trends and Issues
That Will Dominate the Future Agenda

CONTACT: Michael T. Childress or Michal Smith-Mello

FRANKFORT, KENTUCKY (January 3, 2001) — The Kentucky Long-Term Policy Research Center today released its fourth biennial report on trends influencing the future of the Commonwealth. Challenges for the New Century examines how Kentucky is faring in the New Economy, persistent inequalities, implications of an aging population and policy options for managing the change ahead.

As envisioned by the Kentucky General Assembly, the 122-page report offers citizens and policymakers alike a body of information about opportunities, problems, and uncertainties on the horizon that can be used, in the words of 2000 Center Board Chair Dan Hall, "to move our state’s economy ahead fast enough to enable more citizens to capture a greater share of the promise of the future."

Kentucky’s performance in the New Economy is mixed, according to the Center report. For example, job growth in the state has been fueled in large part by global trade and foreign direct investment, which have helped to narrow the per capita income gap between Kentucky and the nation. But while Kentucky has participated in the New Economy and benefited from doing so, the state faces some real barriers to making the transition to a fuller participation in the economic benefits of a technology-driven economy. The state has more poor and undereducated than do many others, and these problems have to be addressed. Consequently, any transition to a knowledge-based economy has to break down cultural as well as educational barriers.

The state’s determined efforts to prepare its citizens for and move its businesses to the New Economy bode well for many. However, the blessings of the New Economy have been bestowed unequally. By speeding the processes of globalization, information technology is

changing our industries and businesses, and consequently is making brains increasingly more valuable to employers than brawn. The rising demand for what might be termed "knowledge workers" is polarizing wages and increasing inequalities. These inequalities include a persistent income gap, uneven access to information technology, a health care gap, and an education divide along income lines. These gaps combine to curtail opportunities for those on the bottom side of the divide. The success of the Commonwealth in meeting the challenges of the next century will depend on how well we address the opportunity gap. Having a large population of high school dropouts, adults who cannot read, and disadvantaged children can and will have widespread societal consequences. Indeed, according to Dr. Gordon Davies, President of the Council on Postsecondary Education, “If we try to move … into a New Economy with 40 percent of the workforce having difficulties with fundamental literacy, it’s like going sailing with your anchor down. You will sail in a circle around your anchor.”

Other changes in our society—most notably the aging of the population—will add to the financial obligations of the public sector. Consequently, the federal government is shifting some responsibilities to state and local governments, which in turn are relying more on the private and the nonprofit sectors to provide services. This is requiring governments at all levels to forge public-private partnerships and to strive toward greater efficiencies.

The report concludes with a number of policy options designed to enable the state to compete more effectively in the New Economy, reduce income inequality, close the digital divide, plug the gaps in health care, invest in education, build our social capital, and manage the impending demographic challenge. As State Representative Steve Nunn, the incoming Center Board Chair, observes, “The promise of the new millennium is great; the problems remain many. But Kentucky has the wherewithal to address them. However, it will not just happen. It will take creative leaders, dedicated civil servants, and a concerned and committed populace. Fortunately, Kentucky has all three.”

Citizens may obtain a free copy of the report from the Kentucky Long-Term Policy Research Center. The report is available online at www.kltprc.net. To request a copy, contact the Center by mail at 111 St. James Court, Frankfort, KY 40601; by phone at 502-564-2851 or 800-853-2851, extension 19; by fax at 502-564-1412 or 800-383-1412; or by e-mail at ltprc@lrc.state.ky.us.