In January 2004, the Kansas Legislature convened for what would become the state’s most active lawmaking session in years. The session resulted in a number of innovative policy initiatives, including the hallmark Kansas Economic Growth Act, which established incentives to grow emerging industries, serve employers, attract new businesses, and support small businesses and startups.
Three years later, Kansas continues to be a hotbed for progressive economic development policies and has confirmed its spot among the nation’s most business-friendly states. More importantly, the innovative policymaking is already paying dividends in the form of a stronger and more diverse economy, new job creation and increased entrepreneurial activity. Kansas has maintained its historic dominance in industries like aviation manufacturing and agriculture, while further strengthening its status as one of the nation’s fastest-growing biotechnology hubs. Meanwhile, the state has welcomed national and international companies from nearly every major economic sector, along with the jobs and capital investment that come with them. In Fiscal Year 2007, the State’s Department of Commerce helped bring 6,500 jobs to Kansas, resulting in a payroll of $195 million and $500 million in new capital investment. In the past six months alone, Kansas has opened its doors to 15 businesses, creating more than 3,000 new jobs and $155 million in capital investment.
“We’re certainly excited by the success we’ve had,” said Kansas Department of Commerce Secretary David Kerr, who oversees the state’s economic development activities. “The simple truth is that few states can match our economic assets, and that’s why more and more companies are choosing to come here.”
So what is it about Kansas that’s catching the eye of businesses around the world? For starters, Kansas boasts a central location and access to interstate rail, trucking and air corridors that put the state’s businesses within next-day freight service of nearly 70 percent of the United States. Kansas maintains the third-best state-owned road and highway system in the nation and access to Kansas City, the nation’s second-leading rail center. In addition, a new Burlington Northern Santa Fe Railways intermodal facility is currently under construction in the Kansas City suburb of Gardner. This facility is projected to be an enormous asset to the state’s aviation and bioscience clusters – and it may also anchor the development of a new cluster of distribution centers in northeast Kansas.
Kansas also has one of the most skilled labor pools in the nation, a direct result of its having one of the nation’s premier education systems. Kansas ranks in the top third nationally for percent of adults with a college degree, average ACT score, pupil-to-teacher ratio and students per computer. The state commits 37 percent of overall spending to education, which is the 14th-best rate in the country and a significantly higher percentage than that of New York and California. Kansas’ higher education system includes6 Kansas Board of Regents universities, 19 community colleges, 10 technical colleges and schools and 1 municipal college. Moreover, these institutions are remarkably affordable. A study by the Kansas Board of Regents shows tuition and fees at the state’s six regents universities compare favorably with colleges in five neighboring states and fall significantly below the regional average.
Finally, Kansas offers one of the nation’s most generous portfolios of economic incentives to companies considering a move to (or expansion in) Kansas. That portfolio was recently expanded by the2007 Legislature’s passing legislation to phase out the corporation franchise tax over the next five years and reduce unemployment insurance rates for businesses in good standing, measures strongly endorsed by the state’s business community. In addition to these newest incentives, Kansas continues to offer income and premium tax credits for new job creation; sales tax exemptions on the purchase of construction labor and materials and facility machinery and equipment; property tax abatements; industrial revenue bonds; Community Development Block Grants for projects in non-metro areas; and forgivable loans for project-related costs.
The Air Capital of the World
For years, the City of Wichita and the surrounding south-central Kansas region have comprised the most prolific aviation cluster in the world, boasting industry leaders like Boeing IDS, Bombardier Aerospace, Spirit AeroSystems, Cessna Aircraft and Hawker Beechcraft. More than half of all general aviation aircraft produced in the United States are built in south-central Kansas, and the region currently employs nearly 37,000 aviation industry workers, making it the nation’s most concentrated area of aircraft manufacturing employment. After a post-September 11 downturn, the state’s leading industry has rebounded and is again producing record numbers of airplanes and aviation-related parts. The industry has done especially well in overseas sales, with 2006 exports reaching a record $2.56 billion. Often called the “Air Capital of the World,” Wichita is also home to the National Institute for Aviation Research, a state-of-the-art aviation research center that integrates university, government and business entities in cooperative efforts to advance technologies for aviation and other industries.
As a result of its aviation legacy, south-central Kansas has also emerged as a leading producer of advanced materials and polymers, which are increasingly used in general aerospace manufacturing as an alternative to sheet metal and other traditional products. In 2004, a targeted study identified plastics and other advanced materials (such as composites) as industrial sectors in which Wichita already has a significant competitive advantage. Last month, the region was awarded a Workforce Innovation in Regional Economic Development (WIRED) grant from the U.S. Department of Labor to further grow its aviation cluster through workforce development, innovation and the continued development of advanced materials and polymers.
Building in the Biosciences
Kansas has emerged as one of the fastest-growing bioscience clusters in the nation, with particular strengths in pharmaceuticals, plant science, human health, animal science and alternative energy. In recent years, Kansas has welcomed industry giants like Quintiles, Caravan Ingredients, Bayer CropScience, Cargill and MGP Ingredients, as well as early-stage stars like VentriaBioscience, Edenspace, OncImmune and IdentiGEN. Industrial research and development in the biosciences reached $1.67 billion in 2006, marking a $250 million increase from the previous year. At the same time, Kansas State University and the University of Kansas have confirmed their reputations among the nation’s preeminent bioscience research institutions and are establishing themselves as viable producers of commercial spinouts, patentable products and innovation. Kansas’ unique bioscience cluster is a major reason the Department of Homeland Security has named the state as a finalist for the soon-to-be-built National Bio and Agro-Defense Facility. If commissioned to Kansas, the facility would bring as many as 500 new bioscience jobs to the state.
Perhaps the most impressive component of Kansas’ bioscience profile is its presence within the globally recognized Animal Health Corridor, which spans from central Kansas through Kansas City and into Missouri and comprises the largest single concentration of animal health and nutrition interests in the world. The Corridor is home to 37 global or U.S. headquarters and has more than 125 total companies, including Bayer HealthCare and Animal Health, Fort Dodge Animal Health, Boehringer Ingelheim Vetmedica, Intervet and Hill’s Pet Nutrition. This list represents 4 of the 10 largest global animal health interests, 1 of the 5 largest pet food companies and the world’s largest animal health generics manufacturer. In 2006, Kansas and Missouri were jointly awarded a WIRED grant to address the workforce needs of Kansas City’s biotechnology industry, further strengthening the area’s status as a leading bioscience cluster. So far, the WIRED initiative in Kansas City has yielded an asset map for the region, a specific workforce council to address the talent needs of regional clusters and a framework to assist technology transfer in the region.
For more information on doing business in Kansas, visit www.thinkbig.com.