In our economic system, nothing stimulates the economy more than capital investment. It is the fuel for the engine of business and the financial well-being of our country. Very little constructive happens except for men and women with funds to invest deciding to take risks for an attractive return on their money.
Several megatrends that have impacted our country since the start of World War II have served to shift capital investment from small communities to urban areas. Government tax policy, the explosion of business regulation at all levels, and cultural sentiments that have steered us away from capitalism to socialism are some of the factors that have reduced the amount of capital investment in rural America and in our economy as a whole. More recently, our government has made energy production by traditional means less attractive, discouraging capital investment and disproportionately impacting rural America. You don’t see oil wells in the urban core of our cities.
As proof, consider that between 1980 and 1989, business investment in equipment, software and structures grew by 2.7% per year on average and by 5.7% in the decade of the 1990s; between 2000 and 2011, this number was only 0.5% per year, less than a tenth of the amount of the previous decade. Also, as a share of gross domestic product, business investment has declined over 3% since 1980. If we had the numbers broken down between rural America and urban areas, I’m sure they would show that we supported much more to decrease it in percentage.
The most obvious example in Bourbon County is the dearth of new construction in recent decades. You simply cannot create value by building something new, as evidenced by the gap between expertise and construction costs. This is also the case for new homes. Nothing holds back capital investment more than the potential for an immediate double-digit percentage loss on that investment. Naturally, an entrepreneur will build his building and his business in a place where value is created.
Instead, many of Bourbon County’s men and women have stepped up and purchased struggling buildings and converted them to productive use, opening the doors to new enterprise. These people love Bourbon County and are willing to risk the negative return on investment to see us move forward. The next time you pass a newly renovated place of business, stop and thank them by buying something.
Bourbon County REDI has this capital investment gap in our sights, looking for ways to close the value gap and help facilitate the growth of our business community; this sometimes involves grants, creative funding or angel investments. If you love Bourbon County, be part of the solution by helping us break down barriers to entrepreneurial success and supporting the men and women who have invested their