This article is from the archive of our partner National Journal

The two mayors came up with the idea at a basketball game, of all places.

As they huddled together, cheering for rival teams, they talked about the possibility of collaborating on a handful of local economic projects. What if—instead of fighting over new jobs, corporate headquarters, or talented workers—the Kentucky cities of Lexington and Louisville worked together to boost both of their financial futures?

That was just the start of a conversation in late 2010 between newly elected mayors and businessmen Greg Fischer of Louisville and Jim Gray of Lexington. That meet-up eventually led to the creation of the Bluegrass Economic Advancement Movement, known as BEAM: an economic initiative meant to connect the two cities (and the 22 counties between them) on a host of issues—from increasing exports to encouraging innovation, to training new, highly-skilled workers for local jobs in advanced manufacturing.

Most importantly, the project was supposed to bind the cities together to create an economic powerhouse for the region's roughly 2 million residents. "Louisville and Lexington traditionally have been rivals in sports and economics," Fischer says. "But in a small- to mid-sized state, players need to work together against competing international competition."

This cooperation speaks to a larger trend across the United States, as cities and towns try to develop economies across geographical areas instead of just focusing on the fortunes of a single zip code. Regional economic development may sound wonky, but in practice, it simply means that regions work together collectively to create jobs, attract companies, or train workers instead of trying to outbid one another with various economic, race-to-the-bottom incentives. (The Brookings Institution's Metropolitan Policy Program, a supporter of this Kentucky experiment, has been a huge advocate of this type of development.)

In Kentucky, regional economic development took on a greater sense of urgency within the last decade. Employment, productivity, and total economic output lagged behind the national average, according to a 2013 Brookings report. Not wanting to be left behind, the mayors joined forces and decided to focus on training a better, smarter workforce.

Lexington and Louisville currently have more than 100,000 residents involved in this type of work, with a strong presence in the area from Toyota, Ford, G.E., and an estimated 1,600 other spin-off businesses. Brookings estimates that manufacturing makes up one-sixth of the region's total economic output.

Part of the economic collaboration between the two cities involves trying to grow this sector and create a pipeline of skilled workers to fill jobs. "Three years ago, we saw this re-emergence of American manufacturing, and we recognized this was a wake-up call," says Gray.

To ensure that the various plants and businesses had enough qualified local workers, BEAM created an apprenticeship-style program modeled after both the German apprenticeship experience as well as an existing program at the Toyota plant near Lexington. Local manufacturers banded together, along with the Kentucky community-college system, to design a curriculum to teach young people the advanced-manufacturing skills that local businesses need.

Now, students accepted into the program spend roughly half of their time in class and the other half, apprenticing at one of the local businesses. They work for the company that sponsors them for five semesters, earning up to $16 per hour. Once they've completed the program, they not only graduate with an associate's degree, but they also leave debt-free. (Local manufacturers, businesses, and workforce grants cover the cost of school and the students' wages.)

For students who complete the program, their base salary after school can clock in as high as $60,000, says Danette Wilder, vice president of the Bluegrass Chapter of KY FAME, the group of local businesses behind the workforce-development curriculum. So far, 47 students in total have graduated.

The mayors acknowledge that there's not enough data yet to rule the program a success, but just adding trained workers can give the region a boost. It also ensures that the area retains a qualified workforce in the long-term. Back 2003, managers at the local Toyota facility realized that a wave of older workers would soon start to retire. The company brought in the local community-college system to help them do training specifically to prepare people to work at the Toyota plant, says Tim Burcham, vice president of the Kentucky Community and Technical College System. This newer workforce-development program extends that existing Toyota model to train workers for businesses throughout Lexington, Louisville, and the areas between them for a broader range of companies.

The goal, Gray says, isn't to build new plants in the 75-mile stretch between the two cities but instead to capitalize on talent. "What we're talking about here in many respects is providing a predictably trained, educated workforce for what we have today," Gray says.

Perhaps, most importantly, the collaboration between Lexington and Louisville demonstrates the benefits of two cities working together. Lexington remains a college town with a university footprint and a concentration on research and development, while Louisville boasts more of a tradition of blue-collar industry, traditional businesses, and wealth that dates back to the industrial age. In other words, the two cities put together make for pretty dynamic region of industry and intellectualism—far better off economically than if either city stood alone.

This article is from the archive of our partner National Journal and part of our Next Economy coverage.

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