copyright © kimberly brown 2007 horses as an economic factor in local development kimberly brown,...

Copyright © Kimberly Brown 2007

www.KimberlyBrown.com

Horses as an Economic Factor in Horses as an Economic Factor in Local DevelopmentLocal Development

Kimberly Brown,Kimberly Brown, MBAMBA

Presented at the Presented at the Indiana Equine Economic Indiana Equine Economic Development (INEED) SummitDevelopment (INEED) Summit

October 2007October 2007



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11 The Horse IndustryThe Horse Industry

Why Horses are ImportantWhy Horses are Important

Horses as an Economic DriverHorses as an Economic Driver

Making Informed DecisionsMaking Informed Decisions

Overview



Goals

• Understand the horse industry

• Recognize the scope of support industries through the economic cluster concept

• Learn how to leverage existing resources

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Leadership

• When presented with information, ask yourself, “so what?”

• “The best and most efficient decisions are made with 80% of the information.” *

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*Source: Leading From the Front by Marine Corps Captains Courtney Lynch and Angie Morgan



Communication

• What do you see?– Old woman or

– Young lady

• The Lesson– Effective

communication comes from seeing all sides.

– Talk in the “language of the listener”

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Decision-making behavior

Horsemen are passionate, but are they really rational?Answer: Yes!

Kimberly’s story: Deciding between the car and the horse…

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What is the horse?

• A Companion– 3.9 million recreational horses– 2.7 million competition horses

• A Teacher and motivator– 4-H and Pony Clubs

Kimberly’s story: Mom calling the barn owner to assign more chores. The result was that ‘a tired teenager was a good teenager’ and the lessons of motivation, dedication and empowerment came naturally…

• An Economic driver– $39 billion direct econ impact– $102 billion generated in total

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Who are the horse owners?Distribution of Horse Owners by Household Income

22%

16%

10%

5%

9%4%

11%

23%

$0 to $24,999$25,000 to $49,999$50,000 to $74,999$75,000 to $99,999$100,000 to $124,999$125,000 to $149,999$150,000 +Not Reported

Source: American Horse Council’s comprehensive study by Deloitte, 2005.

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“So what?”



Why horses are important• Intangible reasons

– Personal development

• Public interest– Medical breakthroughs – FEI World Equestrian Games– Animal welfare concerns

• Economics– National level: $102 billion economic impact

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National Economic Impact• Spending activities (direct expenditures in billions):

$7.6 Goods $2.875 Transportation$9.4 Services $8.238 Capital Expenses$4.46 Overhead $6.427 Wages, taxes, land,

other

• Dollars generated from activities (in billions):$32.0 from recreation$28.8 from showing$26.1 from racing$14.7 from other segments

Source: American Horse Council’s comprehensive study by Deloitte, 2005.

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$102billion

$39billion



Top 15 horse states based on horse population

0

100,000200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

TX CA FL OK KY OH MO NC PA CO WA VA MI TN IN

Horse Population Source: American Horse Council’s comprehensive study by Deloitte, 2005.

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Horses



Same top 15 horse states, now arranged by horse density

0

100,000200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

KY FL OH VA IN PA TN NC OK CA MO TX WA CO MI

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Horse Population Source: American Horse Council’s comprehensive study by Deloitte, 2005.State area information compiled from independent state data on size in square miles. Density determined by evaluatinghorse population in relation to state area in square miles for the top 15 most heavily populated horse states

Horses



Industry Participation

• 9,223,000 horses in America– 1,291,800 Thoroughbreds

– 3,288,300 Quarter Horses

– 4,642,700 Other breeds

• 4,659,000 people involved with horses• 1,411,300 total jobs (453,600 direct jobs)

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“So what?”



Economic Clusters

• A geographic concentration of firms and institutions whose activities are interconnected and interdependent within a particular economic sector

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Economic Cluster Concept

Equine Economic ClusterEquine Economic Cluster

Professional ServicesProfessional Services

Equine Health Equine Health ServicesServices

Related Related BusinessesBusinesses

Professional AssociationsProfessional Associations

TransportationTransportation

Farm Related Farm Related ServicesServices

TourismTourism

Activities(“enjoying the horse”)

Farms(“producing the horse”)

CommercialCommercial

PrivatePrivate

Professional & Professional & CompetitiveCompetitive

Personal UsePersonal Use

Physical Environment

Cultural Traditions

Built Environment(Parcel size, clean fence rows, ground cover/trees, shade, painted fences, etc)

Dr. Lori Garkovich, University of KentuckyPresented by: Kimberly Brown, MBA



Economic Cluster Details

Horse FarmsHorse Farms

Commercial PrivateBreedingSalesTrainingShow FacilitiesRentalTherapeuticBoarding Lay up Long Term

PleasureMixed usePersonal

Professional Professional ServicesServices

Equine Health Equine Health ServicesServices

Related BusinessesRelated Businesses

Professional AssociationsProfessional Associations

TransportationTransportation

Farm Related ServicesFarm Related Services

TourismTourism

Tack shops Leather makers Dry Cleaning – Blankets Horse Farm Tours Horse gifts – Jewelry,

art, clothing Horse care products

(Shampoos, Coat conditioners, mane/tail)

Insurance Sales/Marketing Advertising Publications Accounting Tax services Education Development Financial Services Real Estate

Veterinary Equine Dentists Equine Podiatry Farriers Horse Hearse Labs Vet Supply Equine Therapy Sports Medicine

Van Services Trailer Sales/Repair

Breed-based (ie. NCAHA) Performance-based (ie. FETA, NCHJA) Sector-based (ie. KEEP) Service-based (ie. AAEP) National Associations (I.e. USEF)

Barn Construction Barn Renovation Fencing/Fence painting Landscaping Muck Hauling/Disposal Feed Production/Sales Hay Production/Sales Farm Supplies Pond Const./Reconstruction Pasture Renovation Equip. Sales/Service

Horse Farm Tours Equine experience Horse rentals

Lori Garkovich, Ph.D.Presented by: Kimberly Brown, MBA



The business basics of a successful economic cluster

• Build critical mass via– Competition AND coordination– Productivity, innovation and supportive policy

• The whole is greater than the sum of its parts

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“A traditional cluster such as agriculture should not be abandoned;

it should be upgraded.” - Michael Porter, Harvard University



Making Informed Decisions

• Think about the horse economics in the context of your community– What do you already have?– Who are the stakeholders?– What is the vision for your community?– What resources are needed?

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Examples

• Grassroots Efforts– KEEP

• Horse-friendly Community– Norco, CA

• Land Development Study– Lexington, KY

• Economic Impact Study– Montgomery County, MD

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Montgomery County, MD

Source: Montgomery County Horse Study

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Source: Montgomery County Horse Study and Montgomery County Government Offices

Montgomery County, MD

• Great use of technology: – Geographic Information System (GIS)

• “The program has reduced the time it takes to evaluate a land parcel from 40 hours to less than 20 minutes”

• Result: More acres protected

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Final Thoughts

• Find synergies between economic development and the local horse industry

• Be proactive• Form grassroots alliances• Leverage the collective knowledge • Involve local universities• Create a strategic plan• Keep asking yourself, “So What?”• Remember, Indiana already has what it takes.

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“So what” will you do next?

The USDA found that “recreation and tourism development contributes to rural well-being, increasing local employment, wage levels, and income, reducing poverty, and improving education and health.”

Photo series from the Alltech FEI World Equestrian Games



Kimberly Brown, MBA, is a former Consultant for the PricewaterhouseCoopers Global Management & Technology Consulting Unit. Her clients have included Fortune 500 corporations such as NASDAQ/NASD, Duke Energy, and Office Depot.

An avid horsewoman since childhood, Kimberly has successfully shown hunters and jumpers, trained with a U.S. Olympic coach and established a horse transportation business. Combining her expertise in corporate business consulting and her interest in the equine industry, she moved to Lexington Kentucky to specialize in equine business consulting.

She started her venture in Kentucky at world-renowned WinStar Farm, the 1,500 acre private farm that is famous for producing winners, such as the 2003 Kentucky Derby victor, Funny Cide, who is the son of the WinStar Farm stallion named Distorted Humor. At WinStar she applied her knowledge in marketing, information technology, and special events management. Her equine industry accomplishments have included producing a charity auction that raised over two million dollars for the benefit of the Kentucky Equine Education Project (KEEP) and being an Equine Initiative pioneer at the University of Kentucky (UK). In 2007, she was the Keynote Speaker at the National Equine Econoimc Development Summit.

Kimberly provides consulting services and also focuses on economic analysis of the equine industry. She is pursuing her Doctorate in Agricultural Economics at UK, where she isinvolved in ground breaking equine research in the fields of animal welfare economics,the economics of breeding, and economic clusters.

copyright © kimberly brown 2007 horses as an economic factor in local development kimberly brown,...

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