Filling in the Pieces to Build the High-Tech Economy in Kansas City

The Kansas City region is obtaining funding for high-tech research in the life sciences, but entrepreneurship is stifled because of fragmented efforts to improve the innovation environment and the region’s lack of an overall strategy for its various stakeholders. This finding and others were identified in Completing the Puzzle: Creating a High-Tech and Life Sciences Economy in Kansas City, a recent report prepared for the Brookings Institution Metropolitan Policy Program. The report offers suggestions on how a “second-tier” region like Kansas City can build upon its existing industrial capacity to emerge as a viable location for knowledge-based industries.

 

While labeled as a relatively diverse and stable economy, the report cites the underperformance of the Kansas City region compared to other metropolitan areas using several innovation metrics: a patent registration rate below the national average; lower rankings in the amount of funds received for R&D; a relatively smaller number of advanced degrees awarded in the region; and the inability for local entrepreneurs to obtain SBIR and STTR grants and venture capital. For example, where the total amount of research expenditures doubled at Kansas City life science institutions from $122 million in 2000 to $243 million in 2004, the amount of venture capital investments in the region fell from $55 million to $6.5 million in the same period.

 

The report explores the perceived necessity of metropolitan areas to contain a top-tier research university. In this case, the Kansas City region does not contain a traditional top-tier research university, so other institutions in the region, such as private R&D intuitions like Marion Laboratories, Cerner Corporation and Sprint, have created the effects of a research university over the years, the report contends. These institutions – labeled “surrogate universities” – produce a substitution effect by their ability to attract and retain a skilled labor pool, produce innovative products and develop spin-off companies.

 

The report offers suggestions on how to improve the commercialization and networking functions in the Kansas City region. They include:

• Extend the focus of local nonprofit networking organizations, such as the Kansas City Area Life Sciences Institute (KCLSI), to include other entities in the life sciences industry in addition to only research institutes;
• Build a higher education research infrastructure that matches the research efforts created by local private research companies;
• Create research centers that combine not only organizations such as universities and research laboratories, but also entities such as hospitals and the life sciences industry; and,
• Strengthen the entrepreneurial pipeline by incorporating incubator and wet lab space into future research centers and include venture capitalists and locally-based angel investors into these research centers.

The report can be found at the Brookings Institution’s website: http://www.brookings.edu/metro/pubs/20061101_kansasmayer.pdf