While Silicon Valley, and to a lesser extent New York, is still the nation’s undisputed high-tech center, it appears that there is a quiet revolution starting to happen in Missouri.
According to the US Bureau of Labor Statistics, Missouri surpassed both California and New York for technology job growth in the first half of 2013, showing a 3.8% increase compared to the same period the previous year. That translated into 1200 well-paying jobs in the state, part of an overall trend toward higher employment levels there.
This may be the culmination of a strategy that the state embarked on during the dark days of the financial meltdown in 2008. For example, St. Louis made a conscious decision to try to recruit high-tech companies to the area, leveraging its state-of-the-art IT infrastructure, and especially its advanced fiber network. This has made it an attractive location to set up data centers, as has the relatively low cost of electricity in the city. In fact, IT jobs in St. Louis experienced 25% growth last year, and salaries in the IT sector have also increased significantly.
St. Louis also benefits from strong research and education institutions in the area, such as Washington University. This commitment to developing skills has been strongly supported by the business community – for example, the St. Louis regional Chamber of Commerce has been campaigning to get more adults into tertiary education, with the goal of having St. Louis among the top 10 metropolitan areas in the country when it comes to the number of adults with college degrees.
Some examples of recent successes highlight how St. Louis is winning the battle for technology business – and not just IT. Boeing, which already has its defense unit there, recently decided to make St. Louis one of its three national centers of excellence as part of a multi year project to transform its IT operations – this will result in 400 new high-tech jobs in the area. Moving to biotechnology, Monsanto has also announced that it is going to hire an additional 675 people and invest $400 million in growing its research facilities in Chesterfield, Missouri. These are the type of high paying, high skilled jobs that can transform an economy, and the trend looks set to continue.
The influx of educated workers is also having a significant impact on the broader economy, especially when you consider that the relatively low cost of living in the area results in high levels of disposable income. For example, according to St. Louis Mayor Francis Slay, over 130 new retail outlets and restaurants have opened in the city, leading to a rejuvenation of the downtown area. This trend is different from what is being seen in many cities throughout America, and in fact there appears to be a correlation between economic outperformance and downtown revitalization.
The economic renaissance has not been limited to high-tech ventures. Perryville is a case in point, where manufacturing is booming. The small town – its population is slightly more than 8000 – is home to premiere manufacturing companies including Japan’s Toyoda Gosei, which makes plastic automobile parts there, and Saberliner, whose facility located near to the airport manufactures aviation components and provides helicopter and airplane refurbishment services.
Overall, unemployment in Perryville is running at around 5%, well below the national average. Remarkably, one in three workers there is involved in manufacturing. At the heart of its success seems to be a combination of good location – it is near to a major crossing on the Mississippi River and is also located on Interstate 55 – as well as a local government that has a long-established tradition of being extremely business friendly. And, Perryville is not alone – for example, manufacturing activity in the region appears to be rebounding, with the Federal Reserve Bank of Kansas City reporting that the monthly manufacturing index rose to 8 in August, 2013 – values above 0 indicate growth. It appears that Kansas City manufacturing jobs, and more broadly manufacturing jobs across the state are making a strong comeback.
Perhaps one symbol of the turnaround in Missouri since the dark days of 2008 is the Urban Chestnut Brewing Co. Located in Midtown Alley, a new nightlife area close to St. Louis University, the company offers premium beers in a brewpub atmosphere. Last April, it announced that they had been so successful that they were going to open a second brewery double the size of the original location. The growth of businesses such as this shows how high technology has given the area new life, allowing it to reclaim its status as an economic dynamo.