US Cities Series: Innovation, growth, and ambition in Kansas City

US Cities Series: Innovation, growth, and ambition in Kansas City

Usually, the Midwest is not known for technological innovation. Kansas City is rapidly changing that.

Those residing outside of the Kansas City metropolitan area could be forgiven for associating the “City of Fountains” with railroads, BBQ, jazz, and not much else. But they would be wrong.

Kansas City, Missouri is quietly but decisively transforming into a premier technology hub, something its stockyards of a century ago and factories of a decade ago could have scarcely predicted.

Being near the geographical center of a massive country of established seaports sometimes means being forgotten. (Much of the Midwest would concur.)

But in Kansas City’s case, its position at the convergence of the Kansas and Missouri Rivers assured it became a hub for transport, livestock, telecoms, and other industries.

This explains why this metropolitan area of just over two million people can boast the headquarters of Sprint, Hallmark, H&R Block, YRC Worldwide, Cerner, and other large corporations.

Yet this doesn’t adequately explain KC’s growth into an innovation hub, a place where both the planned tech infrastructure as well as the “serendipitous collisions” of startups beget positive externalities. A number of other factors do.

Why KC is becoming an innovation hub

For one, Kansas City has one of the best educated workforces in the region, partly due to the number of tertiary institutions in the area, including the University of Missouri-Kansas City, Kansas City University of Medicine and Biosciences, and an urban campus of the University of Kansas.

What is perhaps equally important is the presence of the Ewing Marion Kauffman Foundation, the nation’s premier foundation working to foster entrepreneurship.

In addition to researching entrepreneurship promotion and assisting local entrepreneurs with grants and other resources, the Kauffman Foundation puts on a number of local events which aim to bring entrepreneurs together for creativity and learning.

Most well-known is its One Million Cups program, a once-a-week meeting where local startups gain feedback and seek assistance from community members, now duplicated in over 70 cities across the US.

One cannot discount KC’s remarkably low cost of living, undoubtedly a huge attraction for the business community.

One can neither overlook the city’s strong incentives for entrepreneurs to relocate there, epitomized by Launch KC’s increasingly popular grant competition (where 10 winners receive $50,000 each, access to mentors, and one year of free office space downtown).

In fact, the metropolitan area’s location on two sides of a state border has given rise to a “border war” of competing start-up tax incentives between Missouri and Kansas.

But Kansas City would not live up to its growing reputation as the heart of the Silicon Prairie were it not for Google.

The Impact of Google

In 2012, the Internet behemoth chose the KC metro area as the first location in the world for the rollout of Google Fiber, its ambitious new high-speed broadband internet and cable TV service. With download and upload speeds of near 1,000 megabits per second and affordable prices, Kansas City suddenly became the envy of entrepreneurs nationwide.

Although it only has a modest 27,000 video subscribers thus far, Google’s estimated half billion dollar investment has convinced thousands more to sign on for its cheaper, internet-only option – an estimated 42% of residents according to a survey last year.

And its impact goes far past these numbers.

For example, AT&T and Time Warner have already begun to reduce prices and quite often raise connectivity speeds in a bid to compete. According to some estimates, this has resulted in the cheapest and most robust broadband in the country.

In addition, this has lured companies who want to take advantage of the speeds to beta their products, like Shinra Technology’s decision to test its highly lauded server side technology for cloud gaming.

But more importantly, this has attracted scores of entrepreneurs. Fittingly, Hanover Heights, a leafy neighborhood right on the Kansas side of the border and the very first recipient of Google Fiber, is now home to KC Startup Village, a small but dense pocket of startup cohabitation and collaboration.

All is not rosy in KC

Of course, none of this is to diminish the very real problems that Kansas City faces. The “Paris of the Plains” is a far cry from its French namesake when it comes to public transportation.

Of the 30 largest US municipalities, Kansas City is the only one without any form of rail transit (although a 2.2 mile downtown streetcar line is currently under construction).

Moreover, KC has laid 1.2 miles of road for every thousand residents, the most in the country for metro areas of over one million inhabitants.

This urban sprawl has pushed development out into the suburbs, contributed to often-poor city infrastructure, and resulted in massive urban decay in many of its interior neighborhoods, a trend exemplified by the more than 18,000 lots currently vacant in Kansas City.

Economic stagnation and inequality in KC may prove resistant to change, but they make the city’s recent tech boom (and its top 5 up-and-coming entrepreneurship ranking) even more surprising, especially given the area’s dearth of venture capital firms and deals.

Strong Companies and Strong Support

Yet in the place of high-profile start-up exits are a multitude of innovative and well-performing companies.

C2FO is one of the country’s fastest-growing business-to-business online marketplaces. MindMixer is the premier supplier of public engagement software to local governments. FarmLink is harnessing Big Data to make farmers more productive.

Keyzio has the potential to directly link home-buyers and sellers without realtor middlemen. And is the biggest name in civic crowd-funding.

These firms are buttressed by a solid support network. Kansas City itself has set a strong example by opening up much of its data to civic-minded entrepreneurs as part of its Innovation Partnership Program.

Even more impactful Big Data efforts are in the works as a result of a partnership with Cisco (its largest such initiative in North America), which aims to turn downtown KC into an open wi-fi and sensor-filled hub for application developers.

KC can also lay claim to a host of startup-oriented coworking spaces, incubators, accelerators, and mentorship programs.

Notable among them are BetaBlox, which boasts that startups completing its program are twice as likely to succeed as those who don’t, as well as the first mobile health accelerator in the world, the result of a joint Sprint-Techstars project.

Silicon Valley? Not quite. But Kansas City is quietly and quickly becoming an innovation hub attracting entrepreneurs from around the country (and the world) to the center of America.

Categories: Economics, North America

About Author

Kevin Amirehsani

Kevin is a Denver-based policy and public engagement consultant. He was previously the head of operations for a solar energy startup in Lagos, researcher for the US Commercial Service in Cape Town and the Institute for Democratic Governance in Accra, and Peace Corps volunteer in Cameroon. He holds an MSc. in International Political Economy from LSE along with a B.S. and B.A. in Industrial Engineering and Political Science from UC Berkeley.