Posts Tagged ‘Economy’

The Big 5 Ideas and Their Champions

September 16, 2011

September 16, 2011

Chamber President and CEO James A. Heeter

Chamber Chair Greg Graves pushed the ‘send’ button on an email seven months ago, and that’s what started the journey to the Big 5. He asked 17 friends to convene a “no bad ideas” meeting to talk about goals for the region. I still have that email, in which Greg writes, “Jim Heeter and I either like you, respect you, fear you, or think you’ll offer a unique perspective. I’ll let you guess on that one.”

We wound up convening two dozen meetings, with still more ideas gathered through The Chamber website, during radio appearances, via email and letters and just being buttonholed on the street.

It took seven months to get to the Big 5 – seven months of meetings and discussion with people from all over the KC region, all of them passionate about improving this place we all call home. Our first list of big ideas numbered 182. Here – in no particular order – are the final Big 5:

1.       The World’s Symposium on Animal Health — Champion:  Gary Forsee

The KC Animal Health Corridor, situated between Columbia, Missouri, and Manhattan, Kansas, already boasts the single largest concentration of animal health interests in the world. In fact, KC area companies account for nearly 32 percent of total sales in the $19 billion global animal health market. Holding a global symposium cements the image of the Corridor as THE center for animal health.

2.       The Urban Core Neighborhood Initiative —Champion:  Terry Dunn, JE Dunn Construction

Spurring economic development, preventing violence, improving education in the urban core were ideas that came up at many of the Big 5 meetings. Dunn and Stewart are already meeting with key leadership, organizations and foundations, and hope to have a strategic plan within the next 90 to 120 days.

3.       The Making of America’s Most Entrepreneurial City — Champion:  Peter deSilva, UMB Bank

We’ve got the assets and the history, and, like the Urban Core initiative, entrepreneurship was another consistent idea in our meetings. As deSilva says, better to grow our own rather than try to woo fickle corporations to locate here. Business growth and job creation aren’t coming from the big guys these days; they’re coming from entrepreneurs and small businesses

4.        The KC Regional Translational Research Institute — Champion:  Dr. Patrick James, Quest Diagnostics

The overarching goal here is to make KC a nationally-recognized center for translational research. The five year goal is to raise $60 million to triple the recent National Institutes of Health (NIH) Clinical and Translational Science Award (CTSA) granted to area researchers. “This could be transformative,” Dr. James says. “It’s a force for further economic collaboration… and an engine for economic growth that will touch all parts of our regional economy.”

5.       The New UMKC Downtown Conservatory — Champion:  Leo Morton, UMKC

This “Big Idea” calls for relocating the renowned UMKC Conservatory of Music and Dance to a new downtown location. Currently the Conservatory is housed on the UMKC campus in three different buildings that require extensive renovation. By moving the campus downtown, it leverages new and existing assets including the Kauffman Performing Arts Center and the Crossroads Arts District, and grows Downtown.

So, that’s the list. It was, I admit, hard to get to the final five. There were a lot of great ideas from which to choose. But we believe these five goals will create jobs and build a greater community for all of us.

It’s up to the Champions to come up with their plans for implementation. Incoming Chamber Chair Frank Ellis promises regular updates as to our progress on each. So stay tuned – and thanks to all of you who shared your ideas with us.

This has been fun. Now the hard work starts.

Check out the Big 5 in the news and the videos from the Big 5 roll out on ChamberTV.


Regional Business Survey: KC Business Activity Growing – Along With Uncertainty

August 30, 2011

August 30, 2011

David Albrecht, Director, International Programs & Business Research

Well, another six months have come and gone, leaving the latest iteration of The Chamber’s Regional Business Survey bobbing in their wake. As always, the results make for interesting reading, assuming you’re someone willing to devote at least a small chunk of your free time to digging into the percentages.

Two trends stand out in the latest report. First is improvement in current business activity reported by survey participants. This growth hasn’t exactly been explosive over the grand total of five surveys since we kicked off the program back in the summer of 2009. It has, however, been quite encouraging. Two years ago, 40.3% of participating businesses characterized their business activity as “Strong” or “Very Strong.” In the most recent survey, over 57% chose one of these two categories, and these combined totals have increased survey over survey for two years now. Clearly, at least for some Kansas City companies, things are looking up.

At the same time, uncertainty hangs over the survey like fog over the Golden Gate Bridge. When asked whether economic growth in the region was heading in the right or wrong direction, a narrow plurality this time around chose Option Three – “Not Sure” – to the tune of 46.1%. The most popular choice among six alternatives for those asked to name the “Most Immediate Problem for Business” was “Unpredictability of Business Conditions.” And nowhere did business uncertainty show up more clearly than in hiring expectations. Just over 25% of those surveyed expect to have more employees in six months than they have now. This is a meaty drop from the 42% expecting more crowded assembly lines or cube farms just one year ago.

What can we make of this contradiction? That’s a tough call. Kansas City businesses haven’t exactly been standing still since things got weird back in 2008. 28.5% percent have indeed cut staff, and nearly 66% have cut spending. At the same time, 41% have expanded products or services, nearly 55% have increased their marketing efforts and nearly three-quarters have spent more time than ever building up relationships and beefing up their networking.

But with jitterbugging stock markets, political food fights filling the cable channels, and plenty of businesses in a tight fight with a short stick for that next customer, it may be that that inherent Midwestern conservatism for which we’re not too-unjustly famed is inspiring companies to wait and see just a little bit longer.

If you’d like to dig into the whole shebang, just click here and have at it!

Structured By Cows

August 17, 2011

August 17, 2011

David Albrecht, Director, International Programs & Business Research

So, what if a ratings agency pulled the fire alarm and the engine company never arrived? What if the only result was a tinkling of broken glass and a momentarily alarming chorus of honking klaxons? And what if the reaction of the world at large was a rush to purchase the very debt that agency had warned was no longer worthy of its highest standards?

Well, now we know. Following Standard & Poor’s downgrade announcement on August 5, the working week of August 8-12 saw the kind of high g-force Coney Island market action that comes along only once in a great while. However, that was the week that was. Ten days post-pronouncement, by the morning of August 15, the market stood slightly above where it was when the downgrade announcement came out.

Whatever the short-term reactions to Standard & Poor’s downgrade, the longer-term backlash is only now getting under way. For starters, who could imagine that Lawrence O’Donnell and Donald Trump would ever agree on anything? The downgrade made it possible, with O’Donnell referring to S&P as a “confederacy of dunces” and Trump calling the firm “losers” and “disgraceful.” A more civilized take on the decision came from Faith Consolo, chairman of the retail leasing and sales division at Prudential Douglas Elliman in New York: “To put it mildly, S&P’s track record hasn’t been the best in recent years, and most sophisticated investors know this.”

Beyond the immediate market shockwave, complications continue to radiate from S&P’s decision – or rather, radiate back to S&P. On August 17 the Wall Street Journal reported that the city of Los Angeles announced that it will no longer use S&P to rate its investment portfolio, citing the U.S. debt downgrade as “irresponsible and just excessive.” And the Securities and Exchange Commission is working on two fronts.  One part of an ongoing investigation is concentrating on just what methodology S&P used to arrive at its conclusion that U.S. debt was now only AA+. A separate probe seeks to discover “whether certain market participants learned of the downgrade before its announcement.”

In the end, what it comes down to is this: after the stock market jello stops jiggling, and after all of the political puffing and blowing dies down, S&P has no credibility left when it comes to rating whether a company or a bond or a nation are a safe bet. Along with its compatriots in the ratings industry, S&P greased the skids for the housing bubble and subsequent financial collapse, handing out AAA ratings right and left for bundled high-risk mortgages as if they were just as credit-worthy as Treasury Bills.

In words that will live in financial infamy, two unnamed S&P executives spelled out exactly how things worked at their rating agency in an instant-message conversation on April 5, 2007.  The topic of discussion was yet another “AAA” bundled-mortgage instrument.

Official #1: Btw (by the way) that deal is ridiculous.

Official #2: I know right…model def (definitely) does not capture half the risk.

Official #1: We should not be rating it.

Official #2: We rate every deal. It could be structured by cows and we would rate it.

So, here we are. We can worry about the credit ratings assigned by the Lords of Bovine Structured Finance and in doing so ignore their record of professional achievement over the last decade. We can stand horrified and immobilized by admittedly nasty short-term market conniptions. Or we can get on with what we do as a business community – digging up information, finding new customers, thinking of new ways to improve a service we provide or a product we create. Given the collective resilience, optimism, and inventiveness of the 300 million+ inhabitants of this amazing country, I know which of the three courses I’d choose.