Building Communities Free Enterprise Staff  | July 7, 2016

Why some Silicon Valley entrepreneurs are flocking to Kansas City

Bright-eyed, highly skilled entrepreneurs have long migrated from America’s heartland to the tech utopias in Silicon Valley and other parts of the West Coast. But lately, that migration sometimes flows in the opposite direction—and one Midwestern city is capitalizing on that reversal.

“Kansas City attracts people from Seattle, San Francisco, and all over who want to live in a connected city,” said Sarah Fustine, the director of co-working and strategic partnerships at Think Big Partners, which provides mentorship, partnerships and co-working spaces to Kansas City entrepreneurs. “I get applications from people across the country that have worked for big-name [companies] and want to move here to work.”

The trend is showing up in census data. Between 2000 and 2010, the number of 18- to 25-year-olds in Kansas City rose 13 percent, while the percentage of 25- to 29-year-olds surged 8 percent, according to a U.S. Census report. The increase came even as many other Midwestern cities saw the number of young people drop during the recession—and younger populations often mean more technology talent

In recent years, Kansas City has earned a reputation as the heart of the so-called “Silicon Prairie” tech scene thanks to the city’s influential institutions (including the Ewing Marion Kauffman Foundation and the University of Kansas City), improved public amenities, relatively low cost of living, and series of public-private partnerships reviving the downtown scene.

One of the city’s most popular initiatives is its smart grid, which encompasses more than 50 downtown blocks and Kansas City officials claim make it the “World’s Most Connected Smart City.” This grid provides free public Wi-Fi, 125 smart streetlights that can turn on and off depending on how many people are nearby, approximately 25 smart kiosks that can help residents and visitors find amenities such as local restaurants, and a host of other “smart city” applications.

In 2016, the city also completed its 2.2-mile-long streetcar line, which is free to ride, and runs through the downtown core connecting both areas of Kansas City’s central business district. Some city households were also the first in the country to test out Google Fiber, a high-speed broadband service. The Google service, launched in 2012, uses fiber optic cables that offer internet service 100 times faster than the national average and speeds of up to 1,000 mbps. The service helps the city’s smart grid, and other local Internet service run quickly and efficiently, and is a boon for startups that need fast connectivity.

“We’ve been working for a while to help entrepreneurs who move here succeed,” said Rick Usher, assistant city manager for small business and entrepreneurship. “They see really low-cost housing, smart connectivity and financial potential, and we get people that launch new businesses and bring in more investment. ”

Last year, Kansas City was ranked the second-best city for jobs in the country by CNN. It was also named one of the top three “starter cities” for college graduates by Trulia and LinkedIn, thanks to the city’s high availability of jobs and high affordability rankings. At 4.1 percent, the city’s unemployment rate is also slightly below the 4.5 percent national average for metropolitan areas.

Additionally, Kansas City saw the largest increase in high-tech startup density for large metropolitan areas between 1990 and 2010, according to a report by the Kauffman Foundation.

The report noted: “This not only confirms much of the buzz building in Kansas City about its growing startup movement but also illustrates, again, that much of the recent talk is built on strong prior technology-sector growth and that much credit goes to that growth.”

While Kansas City is heavily focused on attracting and supporting startups and up-and-coming entrepreneurs, its growth hasn’t gone unnoticed by larger businesses. San Francisco Bay company Pramata announced in February 2016 that it was launching an office in Kansas City. The software solutions startup plans to hire 15 local workers.

Sprint and a startup accelerator called TechStars have also joined the growing list of companies in the city. The duo co-launched a local entrepreneurship program in 2014 that helps local startups build mobile technology.

“To me, Kansas City is an obvious place that has an up-and-coming tech community to rival other top geographies,” David Cohen, founder and CEO of Techstars said about the launch in a press release.

The recent accolades are great news for officials such as Usher, who are committed to helping entrepreneurs. But they’re just the beginning of a longer journey to ensure lasting success. The city’s rise is predicated on keeping its newfound influx of talent content, while also continuing to attract new skilled workers, he said.

“People are always watching for new funding opportunities or partnerships that can come to the city,” Usher said. “Continuing to engage the community, adapt, and watch what’s happening nationally and internationally are our next steps in order to stay relevant. We want to create a place where young people come and want to stay, so we’re not stopping any time soon.”