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In the North Central Kansas region, industry employment in the region increased by 24.

02% from 1990


to 2007. Average pay (after adjusting for inflation) has grown by 11.41%, and establishments in the
same period increased by 7.44%. Management of Companies and Enterprises is the highest paying
sector in the region with average annual wages of $62,863. Other high paying sectors are Utilities
(annual average wages of $48,233) and Transportation and Warehousing (annual average wages of
$37,708). In terms of employment, Manufacturing is the largest sector with 18,459 employees. Other
large employers are the Retail Trade (16,454 employees) and Health Care & Social Assistance (12,239
employees) sectors. Retail Trade, with 1,269 establishments, is the largest sector in the North Central
Region in terms of number of establishments, followed by Construction (1,056 establishments) and
Health Care & Social Assistance (845 establishments).
Three set criteria was used to identify key industries in the region - location quotient (LQ) of at least
1.25, average wages greater than national wages and a growth rate of 5% or more for employment.
Three sectors in North Central Kansas met all the three criteria - Motor Vehicle Towing (NAICS
488410), Fertilizer (Mixing Only) Manufacturing (NAICS 325314) and Motor Vehicle Body
Manufacturing (NAICS 336211).
The highest growth rate of all businesses is in Advertising Agencies (85.02%) and Business Support
Services (81.71%). The Residential Electric Lighting Fixture
Manufacturing sector (NAICS 335121) has the highest LQ
in the North Central Region (LQ of 62.38). This sector is Highest Paying Sector – Management of
part of the Electrical Equipment and Appliance and Companies and Enterprises
Component Manufacturing cluster. The sector with the Largest Employer Sector – Manufacturing
second highest LQ in the region, Storage Battery
Sector with Maximum Establishments –
Manufacturing (NAICS 335911), is also part of the same Retail Trade
cluster.
There are four other industries with LQs in the top ten that
are part of the Agribusiness, Food Processing and Technology cluster. The industries are:
Frozen Specialty Food Manufacturing (NAICS 311412)
Dog and Cat Food Manufacturing (NAICS 311111),
Confectionery Manufacturing from Purchased Chocolate (NAICS 311330)
Grain and Field Bean Merchant Wholesalers (NAICS 424510).
Offices of Physicians have the highest local share of growth in the region. Nursing Care Facilities is
another sector with a high local share of employment growth.
The Agribusiness, Food Processing and Technology cluster
has an LQ of 3.99 in the region. The Electrical Equipment,
Appliance and Component Manufacturing cluster has an Highest Paying Sector – Management of
LQ of 4.91. Fabricated Metal Product Manufacturing has an Companies and Enterprises
LQ of 1.54. Glass and Ceramics has an LQ of 1.25 and the Largest Employer Sector – Manufacturing
Machinery Manufacturing cluster has an LQ of 2.5.
Sector with Maximum Establishments –
The North Central Kansas Region has high LQs for two Retail Trade
local clusters – Local Community & Civic Organizations
and Local Financial Services. The Local Education & Training, Local Health Services and Local
Household Goods & Services clusters have growth rates of more than 5%. The only local cluster with
wages higher than the national average is the Local Industrial Products & Services cluster.

Clusters in the region

Traded Clusters Traded Clusters Local Clusters Local Clusters Local Clusters
with Location with growth with Location with growth with wages
Quotient higher rates more than Quotient higher rates more than higher than
than 1.25 5% than 1.25 5% national wages

Agribusiness, Education and Local Local Education Local Industrial


Food Processing Knowledge Community and and Training Products and
and Technology Cluster Civic Services
Local Health
Organizations
Electrical Fabricated Metal Services
Equipment, Product Local Financial
Local
Appliance and Manufacturing Services
Household
Component
Glass and Goods and
Manufacturing
Ceramics Services
Fabricated Metal
Machinery
Product
Manufacturing
Manufacturing
Primary Metal
Glass and
Manufacturing
Ceramics
R
Regional Characteriz
C zation
To unnderstand th he regional ccharacteristiccs in more ddetail a
regional innovatiion assessmeent survey w was conducteed in the
region. The surveey consisted d of four secttions. Section
nI
The survey y was sent out
o to three
descrribed the reggional enviro onment of th he study areaa,
different groups
g – the economic
sectio
on II describ ed the innov vation netwo orks presentt in the
development agents, businesses
b
region, section IIII described tthe regional norms and
and regionnal banks.
attitu
udes, section
n IV briefly ddescribed thee role of sociial
netwo orks in the rregion and th he last sectio
on (V) outlin
ned a
demo ographic pro ofile of the reespondents.
TThe respond dents were assked what th hey considerred to be theeir region in terms of pro oducts or serrvices
bbeing providded. The conntrast in the responses
r off the three grroups was ssurprising. T The economic
ddevelopmen nt community y considered d county linees as a
bboundary for their servicces with 50% % of the resp
pondents in
tthis group reeporting cou
unty lines as the cut-off point
p of the Most Heelpful Regionall Assets Accord ding to
differentt groups are as follows
rregion they serve.
s This was
w in sharp contrast to only 3% of
tthe businessees considerin
ng county lines as bordeer. On the Businesss Owners

ccontrary, bussinesses con


nsidered theiir region to be
b broader, Banks
wwith 24% rep porting multtiple states, 23%
2 nation and
a anotherr Regional Customers

223% reportinng multiple counties


c as their
t region. A majority Econom mic Developmen nt Community
oof the region
nal banks (59
9%) reported d multiple coounties as Business Assiistance Centerss
ttheir service region. Banks
Other Businesss in Region
R
Regional Environmen
E nt
Banks
TThe regionall environmen nt of a region plays an immportant Professional S
Service Firms
rrole in the ecconomic growth of the reegion. This section
s Banks
looks at the cost
c of living
g in the regio
on, cost of doing
bbusiness in the region, quality of lifee, quality of educational
e
institutes, avvailability of trained worrkforce, avaiilability of caapital, and th
he state and d local government
ppolicies. All of the respondents exprressed positiv ve views abo out the overrall environm ment of the rregion.

IInnovation
n Networks
s
TThe interactiion of the bu
usiness with each of the regional
r insttitutions affeects the busiiness’s capaccity to
innovate. Geenerally, the respondents had a positive view ab bout the rolee of various iinstitutes, enntities
aand support organizations in helpin ng the regionn to innovatee.
Most positive factors in the regional environment Most negative factors in the regional environment
Business Owners - Region’s overall quality of life and Business Owners – Level of taxation affecting
overall quality of higher education institutes. businesses and region’s cost of living for employees.
Economic Development Community – Region’s Economic Development Community – Availability of
overall quality of life and quality of technical required number of workers and availability of
assistance offered by regional colleges and workers in the region with the skills required.
universities to businesses. Banks – Level of taxation affecting business, State and
Banks – Overall quality of higher institutes and local governmental regulations and permitted
quality of technical assistance offered by regional procedures affecting businesses.
colleges and universities to businesses.

Regional Norms and Attitudes


Regional norms and attitudes are important determining factors for the innovation readiness and
capability of a region. Openness to diversity and cultural awareness are also important factors affecting
regional innovation. According to the majority of economic development agents and banks, new
residents can easily integrate into the regional business
community.
Presence of some kind of
Social Networks social networks reported by
The majority of the respondents reported the presence of social 85% of Businesses, 91% banks
networks in the region. Most of the social networks in the region and 100% economic
are organized networks, according to the respondents. 82% of the development community.
businesses and 82% of the economic development agents reported
the social network groups to be organized compared to 62% of the banks.
The formal social network group members meet at different places, from an office of a member to the
office of a government organization to formal conventions and conferences. Formal social network
groups have regular meetings according to majority of the respondents in each group. About 58% of
the business and bank respondents and 70% of economic development agents reported that the formal
social network groups have regular meetings in their region. Another 38% of the business respondents,
32% of the bank respondents and 25% of the economic development agents reported that the formal
social network groups meet only for special circumstances.
Several respondents reported that the formal social network
groups have helped the region to develop. 38% of the business
Formal Social network group
members meet at these
respondents, 50% of the economic development agents and
locations 45% of the banking respondents reported that the formal social
network groups have helped the region somewhat to develop.
 Office of government
organizations Social Network Mapping
 Formal conventions and
One of the objectives of the project was to map the social
conferences
 Chamber offices networks that exist in the North Central region within the
 Technical college campus economic development community. The objective of this
 Social Clubs project element is to understand who is connected to whom
 Coffee shops and and how. A social network map provides an image of the
restaurants
cconnections at a point in
n time, but siince these neetworks are dynamic, th hey change oover time. Th
hese
mmaps can be used to streengthen the network
n by providing p possible conn nections within the com
mmunity.
EEveryone cannnot be direectly connectted to everyb body else. H
However, by using this m map they cann find a
wway to reach
h someone by y going throough their ex xisting, availlable connecctions.
MMost Positive in
i region
BBusiness Own ners - People from Ecconomic Dev velopment Baanks - Leaderrs in the regio
on are
ddifferent indu
ustry and econ nomic Community
C - The
T region ressponsive to th
he needs of alll the
ssectors frequeently interact in the ceelebrates the growth
g of reggional residen
nts, irrespectiive of
rregion coompanies, not just the abso
olute eth
hnicity, cultural heritage, g
gender,
siize of compannies an
nd lifestyle

F
Figure 1 Partiial Agent Soccial Network

Major Chhallenges Facced by Rural


Regions
- Out-Miigration and Aging
A This map
m gives an n overview o of the locatio
ons that are part of
- Lower Education
E Atttainment the so
ocial network
k map for N North Centrall Region of KKansas.
The map
m shows in nteraction beetween nodees on quarteerly,
- Lower Labor
L Producctivity
month hly, weekly aand daily baases. This map shows w where the
- Low Leevels of Publicc Service hubs and
a spokes o of information lie withinn the region.
- Entreprreneurship Def
efined in
Local Coontext Learn
ning

- Shortsig
ghtedness This la
ast part of th
he report briiefly describ
bes the majorr
learninng’s from thhe quantitatiive part of th
he project. A total of
- Recruittment, Retentiion or
nineteeen interviewws were con nducted for tthis project. T
The
Outsourccing
sectionns highlightt the main finndings fromm the discusssions
- Infrastrructure Barrieer-Housing
with the
t interview wees.
Thought Leaders Barrriers Faced
Accorrding to the O Organization for Econom mic Co-operration
by a Regiion
and Development
D t (OECD), am mong the OE ECD membeer
-Co-operration Awaren
ness but No
countiies, rural reg
gions face a number of ccommon chaallenges
Initiativee
that co
ontribute to weaker econ nomic perfoormance. Theese
- Differen
nce in the way
y economic includ
de: 1) out-miigration and d aging, 2) lo
ower educatiional
developmment agents, businesses
b
attainment, 3) lowwer average labor produ uctivity, and 4)
and bank ks approach economic
e
overalll low levelss of public seervice (OECD D, 2006). Ru
ural
developmment in region
n.
Kansa as shares theese concerns with nearly y any other rrural
rregion. Theree are no direect incentivees to create partnerships
p with busineesses in neigghboring cou unties.
SShortsighteddness from agents and lo ocal leaders when
w makin ng policies fo
or the region
n is another major
issue, as it grreatly affectss the ability of the busin
ness to predicctably expan nd, grow or even start inna
rregion. Businness recruitmment strategies fail to geenerate the expected success, as a company that is
aattracted witth economic incentives will w tend to move
m out th
he moment th hey find a beetter, cheapeer place
aand second, attracting a large emplo oyer in a smaall communiity increasess its dependeence on one single
eemployer.
AAppropriate housing is a big issue faaced by the communitie
c es. Some of th
he communnities have seeen
rrecruitment opportunitiees fail becau
use they coulld not find h
housing for b
business emp
ployees.
TThe various economic deevelopment organizations in the reg gion do undeerstand the iimportance of co-
ooperating wiith each otheer but also exxpress a reluuctance to leead the collab
borative activities. A strrong
ssense of regionalism is not
n evident anda few ties exist betweeen a county and its comm munities. Ann
eeconomic deevelopment agents’
a task is to create a positive
ccommunity forf businesses that could d help them grow and
C
Connectednesss Barriers
tthrive. But more
m often th
han not, the decisions
d an
nd policies off the
aagents are lim
mited by theeir view of thhe communiity, which P
People Barrierrs
eessentially has a cut off point
p at the county
c line. -L
Lack of succeession plannin
ng
CConnectedneess is highly y fragmented d in rural reg
gions due to A
Assets of the R
Region
ffactors of geo
ography, eco onomics, political bound daries, cultu
ure -B
Banks are im
mportant players
aand history. People and agents may know each other but th hey
-LLearning new
w ways to pro
omote
rrarely collaborate with each
e other orr work together in the
reegion
rregion. Lack of trust, lack
k of understtanding of thhe benefit an
nd
vvalue of netwworks, cultural norms, and
a ways of doing thing gs -R
Realizing neeed of network
king
aare some of the
t reasons forf this disco onnect. -R
Realizing com
mplexity of
p
problem
O
One common n problem fa aced by all thhe counties in the North h
C
Central regio
on is the incrrease in out--migration, resulting
r in a -Y
Youth interessted in moving
ng
b
back to the reggion
d
dearth of you
ung people in i the regionn. This makees succession n
planning g for retiring
g
businessses in the reg gion
Other Learning’s difficult..
-A region
n as defined iss not a Banks arre very impo ommunities. They
ortant playerrs in rural co
region are the first
f starting point for a n
new businesss who wantts to
-Regions can no longeer compete locate in
n the region.
being cheeap
Some coommunities aare learning g new ways tto bring people into
-Clusterss need to be reedefined the regio
on and to atttract new peeople to the rregion.
-Social networking
n ca
an reveal
Any region should v value the im
mportance of networking g and
deeper co
onnections in region
collaborating with o
one another aand understtanding the
-Rural deevelopment qualifies as connectiions and reso
ources that ccan be accesssed through
h
a wicked
d problem
networking. In using these resources, regions can bring in new opportunities.
The challenge in defining the problem is nearly as big as the problem itself. Regions realize the
complexity of the problem and realizing this is important in defining the issue and working on finding
a solution for the issue.
Many former residents who left the region to go to school or work are now willing to return to their
community because they either want to raise their families in a familiar environment or they have older
parents in need of care. This can be a big opportunity for the region if it is capitalized on in a timely
manner and addressed in the right way.
Most of the time a region is defined by geographical or political boundary lines that mark it. The
combination of a city, county, and state creates an administrative region but not an economic region.
Economic regions are defined by the way transactions and money flow takes place within a region. A
region is not a standalone entity that can survive on its own.
The regions can no longer compete based on cost of living and attracting new companies into the
region by offering them tax incentives, tax breaks, existing property and other facilities.
There may be other ways to cluster rural businesses instead of categorizing by the output going out the
door (traditional NAICS code approach) or through the skill sets of those employed (Occupational
Clusters). Other characteristics such as the business life stage, local vs. traded commerce, behaviors,
etc., are more meaningful in rural regions where the shared experiences and issues are the critical mass
rather than the specific economic activity in the region.
The social maps of a region can identify the relationships within the region including those between
organizations. Social maps can also pinpoint the holes that exist. Smaller communities are typically
marked by closely tied social networks because issues of trust and information usage arise when small
communities are asked for direct names of social contacts.
The issues raised in the following study attest that rural development issues can be complex,
incomplete, contradictory, and have changing requirements. Solutions to these issues are often difficult
to recognize because of complex social and technical interdependencies. Policy development, with
respect to distressed communities and/or rural communities, clearly qualifies as a “wicked problem”.
Many of the underpinnings that most rural communities were founded on have fundamentally
changed. These foundations will not be retrievable no matter how hard a community works to bring
back a simpler, more prosaic time
Project Introduction
Many Kansas businesses have not fully realized the flatness of the global economy and are ill prepared
to contend with global competitors. Professor Hargadon [1] states that successful innovators are not
necessarily any smarter, more courageous, tenacious or rebellious than the rest of us…they are simply
better connected. Unfortunately, many Kansas manufacturers, particularly those in rural communities,
are isolated from networks of collaborators and consultants and often unable to attract innovation talent
to their community that could help them compete for business in a global marketplace.
A 2004 study entitled, “Strategies for Sustainable Entrepreneurship [2],” cited investment in innovation
as one of its key policy recommendations. This study suggests most organizations and individuals are
deeply embedded in their own small worlds where the people, ideas, and objects with which they
interact are tightly connected. While these small worlds provide structure and stability, they also have
great gravitational pull in terms of tradition, market pressure and “not invented here” perspectives that
prevent inhabitants from gaining sufficient altitude to see new horizons. This limited world-view is an
innovation barrier.
The Progressive Policy Institute’s Report, 2002 State New Economy Index, found that Kansas’
innovation capacity was ranked in the bottom quartile of all states [3]. Some of this dismal national
innovation ranking is due to lack of in-house technical expertise. Though Kansas ranks third in the
nation in BS degrees granted/1,000 individuals, it only ranks 31st in the number of high-technology
establishments in the state [Kansas Inc.]. Consequently, many young Kansas engineers and scientists must
leave the state to seek employment.

Innovation Fuels the Global Economy


Business leaders clearly recognize that innovation is the fuel of the new global economy. According to a
2004 survey of almost 200 CEOs of international companies, almost 50% of their current sales are
accounted for by products that are less than three years old [4]. A similar 2005 survey [5] reported that of
the 940 international executives surveyed, 90% stated that generating organic growth through innovation
has become essential for success in their industry.
Even without the influence of global pressures, Cooper [6] cites mounting evidence that an inordinate
number of companies have 1) inadequate innovation/new venture/product planning abilities that
prevents sound investments in early-stage technology opportunities, and 2) a greater than expected
number of product failures that reduces future market opportunities, stunts corporate growth or worse,
results in premature corporate death.
Kansas communities must create businesses that can compete in the world based on innovative ideas and
technologies, rather than low-wage service labor if they want their citizens to have stable, competitive,
high-wage jobs. Mark Drabenstott [7], Director of the Federal Reserve’s Center for the Study of Rural
America, makes this point by stating that a new rural economy should be built in which entrepreneurship
is encouraged and higher education is engaged. Furthermore, the U.S. Department of Commerce report,
Strengthening America’s Communities [8], finds that higher education assets are key to developing the

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