Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
Horses as an Economic Factor in
Local Development
Kimberly Brown, MBA
Presented at the
Indiana Equine Economic
Development (INEED) Summit
October 2007
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
1
The Horse Industry
2
Why Horses are Important
3
Horses as an Economic Driver
4
Making Informed Decisions
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
1
Goals
• Understand the horse industry
• Recognize the scope of support industries
through the economic cluster concept
• Learn how to leverage existing resources
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
1
Leadership
• When presented with
information, ask
yourself, “so what?”
• “The best and most
efficient decisions are
made with 80% of the
information.” *
*Source: Leading From the Front by Marine Corps Captains Courtney Lynch and Angie Morgan
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www.KimberlyBrown.com
1
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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www.KimberlyBrown.com
1
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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www.KimberlyBrown.com
1
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
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
1
Who are the horse owners?
Distribution of Horse Owners by Household Income
4%
9%
11%
$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
5%
23%
10%
16%
22%
“So what?”
Source: American Horse Council’s comprehensive study by Deloitte, 2005.
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www.KimberlyBrown.com
2
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
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
2
National Economic Impact
• Spending activities (direct expenditures in billions):
$7.6 Goods
$39
$9.4 Services
billion
$4.46 Overhead
$2.875 Transportation
$8.238 Capital Expenses
$6.427 Wages, taxes, land, other
• Dollars generated from activities (in billions):
$102
billion
$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.
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
2
Top 15 horse states
based on horse population
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
T X CA
FL
OK
KY
OH M O NC
PA
CO WA
Population Source: American Horse Council’s comprehensive study by Deloitte, 2005.
VA
MI
TN
IN
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2
Same top 15 horse states,
now arranged by horse density
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
KY
FL
OH
VA
IN
PA
TN
NC
OK
CA M O
Population Source: American Horse Council’s comprehensive study by Deloitte, 2005.
T X WA CO
MI
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www.KimberlyBrown.com
2
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)
“So what?”
3
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www.KimberlyBrown.com
Economic Clusters
• A geographic concentration of firms and
institutions whose activities are
interconnected and interdependent
within a particular economic sector
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www.KimberlyBrown.com
Tourism
Professional Services
Related
Businesses
Equine Economic Cluster
Farms
(“producing the horse”)
Commercial
Private
Activities
(“enjoying the horse”)
Professional &
Competitive
Personal Use
Physical Environment
Cultural Traditions
Built Environment
(Parcel size, clean fence
rows, ground cover/trees,
shade, painted fences, etc)
Transportation
Farm Related
Services
Equine Health
Services
Professional Associations
Dr. Lori Garkovich, University of Kentucky
Presented by: Kimberly Brown, MBA
Related Businesses
Tack shops
Leather makers
Dry Cleaning – Blankets
Horse Farm Tours
Horse gifts – Jewelry,
art, clothing
Horse care products
(Shampoos, Coat
conditioners, mane/tail)
Transportation
Van Services
Trailer Sales/Repair
Farm Related Services
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
Tourism
Copyright © Kimberly Brown 2007
Professional
www.KimberlyBrown.com
Horse Farm Tours
Equine experience
Horse rentals
Services
Horse Farms
Commercial
Private
Breeding
Sales
Training
Show Facilities
Rental
Therapeutic
Boarding
Lay up
Long Term
Pleasure
Mixed use
Personal
Professional Associations
Breed-based (ie. NCAHA)
Performance-based (ie. FETA, NCHJA)
Sector-based (ie. KEEP)
Service-based (ie. AAEP)
National Associations (I.e. USEF)
Insurance
Sales/Marketing
Advertising
Publications
Accounting
Tax services
Education
Development
Financial Services
Real Estate
Equine Health
Services
Veterinary
Equine Dentists
Equine Podiatry
Farriers
Horse Hearse
Labs
Vet Supply
Equine Therapy
Sports Medicine
Lori Garkovich, Ph.D.
Presented by:
Kimberly Brown, MBA
3
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
“A traditional cluster such as agriculture
should not be abandoned;
it should be upgraded.” - Michael Porter, Harvard University
4
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?
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4
Examples
• Grassroots Efforts
– KEEP
• Horse-friendly Community
– Norco, CA
• Land Development Study
– Lexington, KY
• Economic Impact Study
– Montgomery County, MD
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4
Montgomery County, MD
Source: Montgomery County Horse Study
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www.KimberlyBrown.com
4
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
Source: Montgomery County Horse Study and Montgomery County Government Offices
Copyright © Kimberly Brown 2007
www.KimberlyBrown.com
4
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.
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 is
involved in ground breaking equine research in the fields of animal welfare economics,
the economics of breeding, and economic clusters.