Economic Competitiveness: Employment Change
Percent Change in Employment, 1990-2005
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It is clear that the 2000s have not been nearly as strong a decade economically as the 1990s. Halfway through the current decade, employment growth has been, at best, only one-quarter of that of the 1990s in any of the peer metros.
Even in the relatively strong 1990s, the Kansas City region's economic performance was substantially weaker than its peers, with total employment growth of less than 20 percent over the decade. Only St. Louis grew more slowly.
Employment Growth By Traded Cluster, 1990-2003
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Research by Michael Porter at Harvard Business School suggests that each region is defined by its clusters of economic activity. These clusters are essentially businesses that are synergistically tied together in producer/supplier relationships.
Traded clusters are especially important as they are the ones built upon a region's comparative advantages to produce things in demand by the rest of the world.
Using published data from a variety of federal sources, Porter developed the Cluster Mapping Project to identify each region's clusters and evaluate their performance. The data here show employment growth for the aggregate of traded clusters in each peer metro. The story is very similar to that of total employment, with Kansas City ranking second to last overall in traded cluster employment growth.
One way to define traded sectors more clearly is to examine relative employment concentrations. Those industries which have substantially greater proportions of employment in the region than for the nation as a whole are considered "export" industries. The local employment share for each industry divided by the national share for that industry gives us that industry's Location Quotient.
Information Sector
Information Sector Employment, 1990-2005
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In Kansas City, the Information industry has the highest Location Quotient,1.84, meaning that the local share of emplyment in this industry is nearly twice that of the nation. This reflects the impact of Sprint, Embarq, and regional operations of AT&T. As a result, the Kansas City region has the second highest employment in the information sector among its peers.
Employment Growth in Information Sector, 1990-2005
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Despite the region's specialization in information, it has performed relatively poorly compared to its peers, especially since 2000. In fact it is the only metropolitan area to have fewer employees in the Information sector in 2005 than it did in 1990.
Denver gained the most in the 1990s and has been the biggest loser so far in the 2000s, but still leads overall with job growth near 20,000 over the entire period in this sector.
Transportation Sector
Transportation and Utilities Sector Employment, 1990-2005
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Historically, transportation has been one of the region's key sectors due to our centrality. With a Location Quotient of 1.24, the Kansas City area's concentration in the industry is 24 percent greater than the U.S. average.
The size of the region's transportation and utilities sector is about average among its peers, but employment trends have been relatively flat.
Transportation and Utilities Sector Employment Growth, 1990-2005
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The region's transportation and utilities sector grew second slowest among its peers between 1990 and 2005, adding a net of 2,000 jobs. This ranking is primarily due to a retrenchment since 2000, when the sector lost nearly 5,000 jobs.
By contrast, during the 1990s the sector added nearly 7,000 jobs, which placed the region's performance in the middle of its peers. Indianapolis leads the peer groups in terms of transportation job creation. At over 20,000 jobs, its growth in this sector is ten times that of metropolitan Kansas City.
Financial Sector
Financial Activity Employment, 1990-2005
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The story is similar for the financial sector, for which the Kansas City region's Location Quotient is 1.25. Because it is a service industry, it is likely that it actually exports less than the transportation sector.
Financial Activity Employment Growth, 1990-2005
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Like transportation, the Kansas City area's employment level puts it in the middle of its peers. However, while most peers experienced relatively strong growth in this sector between 1990 and 2005, St. Louis and Kansas City did not.
As a result, the Kansas City region again turns in the second weakest performance among its peers, though the sector added nearly 7,500 financial jobs between 1990 and 2005. Minneapolis, on the other hand, added more than five times that amount and Denver more than four.
Professional, Scientific and Technical Services Sector
Professional, Science, Technical Services Employment, 1990-2005
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One bright spot for the Kansas City regional economy is the professional, scientific and technical services sector. The region only has a mild specialization in this sector, with a location quotient of 1.1. However, it is a key sector for the innovation-based economy.
Not only is the Kansas City region in the middle of its peers in terms of the level of professional and scientific employment, its upward trend is also in the middle of its peers.
Professional, Science, Technical Services Employment Growth, 1990-2005
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The Kansas City region added 20,000 professional, technical and scientific jobs between 1990 and 2000. This is half the amount of Denver but twice the amount St. Louis.
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