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
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
44
33
22
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
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
Goals
• Understand the horse industry
• Recognize the scope of support industries through the economic cluster concept
• Learn how to leverage existing resources
11
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
Leadership
• When presented with information, ask yourself, “so what?”
• “The best and most efficient decisions are made with 80% of the information.” *
11
*Source: Leading From the Front by Marine Corps Captains Courtney Lynch and Angie Morgan
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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”
11
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
Decision-making behavior
Horsemen are passionate, but are they really rational?Answer: Yes!
Kimberly’s story: Deciding between the car and the horse…
11
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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
11
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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.
11
“So what?”
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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
22
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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.
22
$102billion
$39billion
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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.
22
Horses
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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
22
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
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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)
22
“So what?”
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
Economic Clusters
• A geographic concentration of firms and institutions whose activities are interconnected and interdependent within a particular economic sector
33
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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
33
“A traditional cluster such as agriculture should not be abandoned;
it should be upgraded.” - Michael Porter, Harvard University
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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?
44
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
Examples
• Grassroots Efforts– KEEP
• Horse-friendly Community– Norco, CA
• Land Development Study– Lexington, KY
• Economic Impact Study– Montgomery County, MD
44
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
Montgomery County, MD
Source: Montgomery County Horse Study
44
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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
44
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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.
44
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
“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
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
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.