The Search for Economic Diversity in Eastern Kentucky

The economies of the 17 counties in the Appalachian region of Kentucky have relied on coal mining since the early 20th century. The coal industry has been the region’s major employer and largest source of public revenues. The region’s connection with coal extends deep into its social, cultural and political life. However, this situation has contributed to creating an economy that lacks diversity, resulting in an unhealthy reliance upon a single resource with the consequence that local communities are highly vulnerable to the ebb and flow of coal’s value in the market. Local governments have also been affected. The coal industry’s political clout has dominated the public sector thus diminishing the effectiveness of any efforts by local government to expand economic opportunity. Today, these local governments are faced with the challenge of reinventing their economies, not only as a result of the coal industry’s diminishing national prominence as an energy resource, but as a consequence of the industry’s increasing mechanization.

Using Floyd County, Kentucky, as a case study, this research presents both a longitudinal examination of the economic and social consequences of being dependent upon a single resource and an exploration of what potential the county has to diversify its economic environment. Data sources for this study include the U. S. Census, the Kentucky Department of Local Government, Floyd County budgets and interviews with both public and administrative officials in the county. The future potential for Floyd County to escape single resource dependency rests firmly upon its taking a collaborative and entrepreneurial approach to its challenges. This is envisioned in discussing the potential for developing a more sustainable economic and social environment through investments in renewable resources and local power generation, ecological and cultural tourism, and developing a more highly educated workforce.