Contact:
Barb Schulte, 816-932-1103, bschulte@kauffman.org, Kauffman Foundation

Kauffman Foundation-funded research yields data on high-tech firm development, regional connections

(KANSAS CITY, Mo.) June 20, 2013 – A newly created map of Kansas City's entrepreneurial community points to nearly a dozen firms and institutions that have spawned a majority of the metro region's information technology and life sciences companies. Based upon research funded by the Ewing Marion Kauffman Foundation and conducted by Professor Heike Mayer of the University of Bern in Switzerland, the new data visualization depicts Kansas City's entrepreneurial development over the past 50-plus years.

"Kansas City appears to have followed a markedly different path of economic development than more prominent tech regions like Silicon Valley and Boston," said Mayer, who has studied Kansas City's entrepreneurial culture since 2005. "In contrast to those regions where growth has long been attributed to the presence of large research universities, regions like Kansas City, which are not typically known for high-tech industry, have leveraged large home-grown firms to develop the region's knowledge, labor and entrepreneurship."

The new "Kansas City Tech Galaxy" poster map visualizes data on the entrepreneurial heritage, or genealogy, of nearly 600 firms and institutions in the region. The founders and principals of 214 Kansas City tech companies responded to an online survey Mayer conducted in late 2012 and early 2013. That data was supplemented by secondary research on another 368 area firms. Most respondents can be categorized as small businesses.

Mayer recognizes the initial map may not show the full extent of spinoffs and entrepreneurial development in the Kansas City region and encourages local companies to provide continued input. A form is available to collect responses.

"This research confirms that Kansas City is a vibrant high-technology location," said Dane Stangler, director of research and policy at the Kauffman Foundation. "The development of this vibrancy, however, does not match the way policymakers usually think about it. The companies in these sectors were made locally—not imported from other states as a result of the conventional smokestack chasing that many economic development leaders pursue."

Marion Laboratories, MRI Global, Sprint, the University of Kansas and the University of Missouri-Kansas City—all founded before the 1970s—have yielded the most spinoff tech companies in the region. Another five firms that originated from the 1970s on—Cerner, Innovative Software, Perceptive Software, Proteon Therapeutics and Archer Technologies—have brought about four or more spinoffs each.

An executive summary provides additional data that was captured in the survey, including founders' responses to questions on company financing, sources of news business ideas, relationships with area universities, and advantages and disadvantages to operating a tech business in the Kansas City region. Findings of note include:

  • 70 percent of Kansas City entrepreneurs used personal savings to launch their startups, while just 9.4 percent accessed venture capital.
  • Respondents gave mentors who give advice the highest rating (52.5 percent) as sources of new ideas for Kansas City entrepreneurs; customers and users followed at 43.8 percent.
  • Key advantages of the region include informal local access to innovative people, ideas and technologies, as well as supportive local entrepreneurship organizations and initiatives.
  • On the negative side, respondents cited difficulties in accessing capital locally, as well as local shortages of technology, marketing and sales talent.

Mayer was recently in town to present her research results at the 16th Uddevalla Symposium. She addressed "Entrepreneurship in Second Tier Regions: The Case of Kansas City." 

The Kauffman Foundation and Mayer welcome comments and further input on the Kansas City Tech Galaxy map by completing this response form.