Entrepreneurial Community in Kansas City: From Fragmented to Collaborative?

The region’s potential as a center of innovation is the topic of a new paper “Entrepreneurial Community in Kansas City: From Fragmented to Collaborative?” released today by the Kauffman Foundation.

Author Heike Mayer, professor of economic geography at the University of Bern, Switzerland, has studied the Kansas City region’s entrepreneurial culture for more than seven years, beginning with extensive interviewing of Kansas City-area entrepreneurs, policymakers and industry experts in 2005–7.

The paper presents findings from 20 new interviews conducted in summer 2012 with entrepreneurs, venture capitalists and entrepreneurial support organization representatives to understand what has – or hasn’t – changed over time.

Her findings show great opportunity for Kansas City to emerge as a prominent “second-tier region” specialized in technology, life sciences research and animal health – and that the region has made strides during the past seven years toward this end.

However, it also points to challenges the region must overcome to attract and encourage innovators and potential investors.

Most top entrepreneurial centers like Silicon Valley, Boston or the North Carolina Research Triangle have benefitted from the presence of large firms, government or state “anchors” such as military bases, or high-powered universities that serve as incubators for innovative startups and create pools of talent and funding that allow entrepreneurship to flourish.

Kansas City, by contrast, has been unable to capitalize on some of its own strengths, including specialized industry concentrations in life sciences, animal health, technology and engineering.

In her Kansas City study, Mayer identifies issues including the lack of a strong network connecting entrepreneurs with each other and with large firms; low awareness among entrepreneurs of potential funding sources; and the stability and success of large local firms, which makes employees less likely to leave and start their own ventures.

On a positive note, the region has made significant progress since Mayer’s initial research in developing networking opportunities for entrepreneurs, such as the Pipeline entrepreneurial leadership program and the Kauffman Foundation-supported Startup Weekend.

Mayer also notes the increasing number of venture capital firms and angel investor networks that have formed or opened offices in Kansas City in recent years.