Economic Competitiveness:
Summary and Implications
We've measured Economic Competitiveness in four areas — cost, employment change, economic innovation and product innovation. Each chart or graph on these pages was assigned a rating based on how the Kansas City region compared to its peers or, in the case of indicators only available for the Kansas City area, on how favorably they reflected on the region. The ratings are shown in the chart below:
Average Rating: 1.81
While the Kansas City region remains a low-cost place to live, its wage rates are average, not low, compared to its peers. And, while the workforce remains highly productive, some of its peers have caught up. As a result, some of the advantages traditionally cited for businesses to locate here appear to be eroding.
Low costs don't assure a path to economic success, at least among American cities. Denver, Minneapolis and Austin all had higher wage costs but significantly faster employment growth than the Kansas City area.
The region's employment growth rate was near the bottom of its peers during the 1990s, which is something of a surprise, given the growth of Sprint and others during the decade. This is a result of our traditional industries, the industries in which we have an above average concentration of employees — Information, Transportation and Utilities, and Financial Activity — doing worse than average.
If traditional industries are doing relatively poorly, this puts more pressure on the Kansas City area to create new firms in new industries to take their place. Unfortunately, the region also appears to be performing somewhat poorly with respect to measures of its capacity to start new firms.
While its job creation rate and job churn rate are average among its peers, this average is substantially below the leaders. In terms of business formation and generation of entrepreneurs, the region ranks near the bottom.
On the positive side, the region's life sciences initiative appears to be off to a good start. But the regional economy's ability to generate new products, as measured by its patent rate, is near the bottom of its peers and sharply lower than the leaders.
Given their relative growth rates to date, it is clear that the economies of all peer metros will grow decidedly more slowly in the 2000s than in the 1990s. This makes the achievement of better than average economic performance imperative if standards of living are to improve. So far, the Kansas City economy is still under-performing the field.
What can we do to improve as a region? Read our policy recommendations, and let us know what you think.
Next set of indicators: Efficient Use of Resources
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