What Happened?
Kansas City, Missouri, has created an innovative “Launch KC” program that includes free Wi-Fi, data storage, a “proof of concepts” center, mentoring, financing, cheap office space, and more.
Who Cares?
Many studies have been conducted that show startup companies are critical to reducing unemployment and creating net job growth. But new data show startups also have a lasting impact on the economy, which is why President Obama recently backed a “JumpStart Startups” Act. Many cities have taken note of the impact of startups on regional economies—backed by data everywhere from Utah to Sweden—and are doing their best to lure innovation to their neighborhood. The moves of Kansas City, not exactly considered “Silicon Prairie,” may be interesting for other cities to consider.
The Backstory
Kansas City was recently selected as a trial city for Google Fiber, a high-speed Internet and TV service. Considering the cache brought by Google, Mike Burke—who chairs the mayor’s bi-state innovation team—predicted that many businesses might be interested in relocating to Kansas City. To test the city’s preparedness for the onslaught, he called the local Economic Development Corporation, and pretended to be a business that was interested in relocating. According to reports, when asked what the city could offer relocating businesses like his, the answer was basically, “Uh…”
The Plan
Burke began reaching out to local entrepreneurs and IT companies, seeking ideas and soliciting input. What resulted was a multi-faceted “benefits” program called “Launch KC.” Supported by local businesses like Hallmark and DST Systems, benefits include:
- Office Space—According to reports, five companies have lined up with offers of free or affordable office space.
- Free Wi-Fi—The Economic Development Corporation is talking to Internet providers about setting up high-speed Wi-Fi in the area.
- Data Storage—The EDC is also trying to contract with a large data storage supplier, so that younger companies don’t have to invest in expensive equipment.
- Proof of Concepts Center—The most interesting component here is a “proof of concepts” center, where startups can test products with mature, established regional companies that might become customers.
- Mentoring—This would also leverage larger, more established companies in the region.
- Financing—A proposal is apparently being considered by the city council to offer a subsidy on IT-related business equipment.
A particular district was slated for Launch KC called “Crossroads,” which has a nice urban feel: coffee shops, “quirky” hangouts (according to one article), and cheap office space.
Next Steps
Launch KC is a form of an “innovation district,” in which startups are offered benefits for locating within a specific area. As Gov1 has covered extensively, these innovation districts or “clusters” are in place in Boston, Research Triangle, and elsewhere. Every city has a unique approach to its cluster, with some pursuing physical venues—like Detroit’s TechStop hacker space—and others pursuing a committee-like approach to recruiting startups—like Los Angeles’ Mayors Council.
Choosing the approach that is right for your city takes time. Examples and lessons are available from Gov1, and several decent studies have been conducted that may be helpful, including one on the effect of innovation districts. New York City published its own best practices review of high-tech clusters, focusing on Buenos Aires.
As Gov1 has written about in the past, Harvard University hosts an entire resource center on cluster development, and the Brookings Institute recently published a large (59 page) paper on regional innovation clusters. The Small Business Association has made available development tools regarding clusters, and consulting firm McKinsey hosts an interactive map that tracks innovation clusters.