Sunday’s Super Bowl presents a stark contrast.
San Francisco is part of the planet’s biggest technological ecosystem —Silicon Valley.
Kansas City didn’t even make the cut of Amazon’s 20 finalists for HQ2.
We’re talking regional economies here, not football. As is our custom, we use the occasion of a major sports championship to examine the economies of the two cities represented to see what lessons they might hold for our own. On Friday, we examined San Francisco and underscored the role of a major research university in building a new economy. Would Silicon Valley be Silicon Valley without Stanford University? We don’t know but we have Virginia Tech and we need to make the most of that. Today, we look at Kansas City, a classic flyover city. Some recent headlines there sum up the state of its economy:
“Why Kansas City is falling behind even as its economy grows.” – KCUR radio.
“Kansas City economy has lagged the country since recession. Is that about to change?” – The Kansas City Star.
“KC’s economy is growing, just not as fast as many other American cities.” – KMBZ radio.
We can’t tell you whether to root for the 49ers or the Chiefs, but we can tell you that of the two cities, Kansas City comes closest to looking like Roanoke, at least in terms of its economic challenges. Much like Roanoke, Kansas City was a boomtown of the 1880s – its population swelled 137% during that decade, driven by the city’s rail connections. It just moved a lot of cattle, not coal. Kansas City remains a transportation city and an agri-business city. It’s also evolved in lots of ways that Roanoke has not. However, it has not evolved enough to keep pace with the national economy — which gives rise to the headlines above, and to the lessons below.
A 2018 report by the Greater Kansas City Chamber of Commerce found the city ranked 26th out of 31 metro areas for economic growth. A study by the federal Bureau of Economic Analysis found that between 2014 and 2018 Kansas City’s economy grew more slowly than all but two other major cities in the Midwest — only St. Louis and Chicago ranked lower. Slow economic growth, of course, is something we in the Roanoke Valley have long been accustomed to. Kansas City used to have better economic growth. “Some metros that 20 years ago our economy was much larger than have passed us by,” an economist with the Mid-America Regional Council told The Kansas City Star in November. “And we should wonder why.”
Conveniently, he and others went on to offer some reasons why — many of which have relevance to us. For instance, economic Jeff Pinkerton pointed out that “cities like Nashville and Columbus tout marquee universities and each have built a dominance in a specific industry — Columbus in insurance and Nashville in health care.” Here’s where Kansas City’s shortcomings help highlight some of our strengths. We have a marquee university. And while we may not be nationally dominant in a specific industry, we do have some undeniable assets. The Virginia Tech Carilion Academic Health Center — the medical school and its research institute — is putting Roanoke on a national, even international, map. It’s not fantastical to imagine that the spin-offs coming out of the research there constitute the beginnings of Roanoke’s version of the Research Triangle. Meanwhile, the New River Valley has become a national center for research into autonomous vehicles. It’s not the only one, of course, but Daimlar’s acquisition of Torc Robotics in Blacksburg underscores that something special is happening there.
But back to Kansas City: For years, The Kansas City Star says, “the trajectory of the local economy was closely linked to the success or failure of Sprint Corp.,” the telecommunications giant located there. However, Sprint has shed 15,000 workers system-wide in less than a decade. You can argue that Kansas City relied too much on a single company, just as Roanoke did for decades with the railroad. That’s a lesson lots of communities often learn the hard way: Don’t rely on a single company, even one you think is a sure bet because it’s in a growth field. Things have a way of changing, often not for the better. The Kansas City Star also reports that business leaders there are worried about the same thing many in this part of Virginia are: Not enough skilled workers for some positions. The head of the Greater Kansas City Chamber of Commerce says the region has plenty of workers, they just don’t have the skills necessary for the new economy. Yes, even Kansas City is talking about “workforce development” — one of those phrases that rarely makes it onto a campaign bumper sticker but drives (or stalls) an economy in powerful ways. Chamber president Joe Reardon also makes a point that we hear being made over and over: “The jobs that are available today require higher levels of learning than the jobs that had been available in the past in Kansas City that have fueled our economy.” That’s just a fact of economic life, which means the onus is on workers to improve their own skills but also means that state and local governments need to figure out how to help them do so. In some cases, that means improving schools; in others, it means getting more adults into community college programs to upgrade their skills.
Interestingly, the paper quotes the Kansas Secretary of Commerce talking about an issue that we talk a lot about here — the economic health of rural Kansas. We write a lot about rural Virginia because we’d like to see an end to the population decline that has drained away so many people. Secretary David Toland frames the issue differently there. He seems to accept that people will move from rural Kansas to Kansas City in search of work — which means that Kansas City has a stake in their education. “The urban and rural economies in our state are inextricably linked,” he told The Kansas City Star. “When you look at the Kansas City metro, that talent bench in many cases is filled by many people coming out of rural Kansas.” Or at least he’d like to see that happen – as opposed to Kansas City having to rely on recruiting newcomers to fill its talent pool. If you apply that measure here, then the Roanoke and New River valleys should be more concerned about unequal schools in rural Virginia — because that’s where many of our future workers are going to come from. In Sunday’s game, cheer for whoever you want. But economically, we should be cheering for Kansas City—because if a city that size can beat its economic challenges, then maybe we can, too.