Missouri: Real Opportunity for Business
Missouri was recently given an "A" grade and a top ranking in the nation for manufacturing and logistics.
Area Development Research Desk (Oct/Nov 08)

On a south facing hillside a half mile from the Mississippi's west bank, in a little southeastern Missouri town called, fortuitously, Commerce, former Navy fighter pilot and air traffic controller Jerry Smith discovered his life's passion. With the meticulous care he once employed piloting high performance airplanes, Smith now crafts fine wines at his RiverRidge Winery. A few hours northwest of Smith's vineyard, in Montgomery City, French chef Philippe Rispoli found the capital and the facility he needs to produce the exquisite cuisine he sells to fine restaurants and cruise lines. He, too, is living his life's passion in Missouri. Rispoli and Smith are only two of thousands of Missourians, native or transplanted, who have discovered the friendly business climate and the can-do spirit inherent in this diverse and stunningly beautiful state.

Missourians have been known for their lack of gullibility - their insistence on candor. To tame this frontier, those who came here couldn't afford to be duped. Theirs was the "show-me" spirit that helped them prosper in the Missouri territory.

Today that spirit is translated into a no-nonsense work ethic and a state that's serious about setting the table for new investment. In fact, Missouri was recently given an "A" grade and a top ranking in the nation for manufacturing and logistics in an independent study by Ball State University's Bureau of Business Research. Based in Muncie, Indiana, Ball State's National Manufacturing and Logistics Report Card ranked all fifty states on nineteen factors that are important to manufacturers and the transportation and logistics industries. The categories include property taxes, sales taxes, unemployment insurance rates, corporate taxes, crime rates and the percentage of the population with college degrees.

Michael Hicks, an associate economics professor at Ball State and the director of the Bureau said the common thread among the top states is government leadership that takes a comprehensive approach toward developing policies to attract and retain industries. "It really comes down to basic good governance at the state and local levels."

Historically, Missouri has been one of the country's low tax states. Missouri ranks 42nd (or 8th lowest) in per capita state and local tax collections for 2008 according to the Tax Foundation. For corporate tax rates, Missouri is in the lowest 30% among all states. And, because of low fuel taxes, Missouri's average price for gasoline and diesel is typically ten to twenty cents per gallon below the national average according to the Triple-A's Daily Fuel Gauge Report. These factors and others combine to give Missouri the fifth lowest cost of living in the United States (Missouri Economic Research and Information Center).

Despite these intrinsic advantages, in recent years Missouri has taken additional steps (the "good governance" to which professor Hicks alludes) to improve its attractiveness for new business development. Among them:

Workers' compensation reform Because of reforms enacted in 2005, Missouri employers will see a nearly eight percent reduction in their workers' compensation rates in 2009. In September of 2008, the National Council on Compensation Insurance recommended a 7.7 percent reduction in Missouri's rates, ranking the state first among 11 Midwestern states for the largest reduction in workers' comp rates. In 2005, Governor Matt Blunt signed legislation stipulating that employers are only liable for injuries for which they are directly responsible. The reform bill also limits benefits significantly if employees are found to be under the influence of drugs or alcohol at the time of the accident. It raises penalties for fraud and institutes performance audits for administrative law judges to promote neutrality in workers' compensation awards.

Litigation reform In 2005, Missouri adopted tort reform that, among other things, limits the venue in which cases can be heard to the location in which the injury occurred and limits punitive damages to $500,000 or less.

Enhanced Enterprise Zones Implemented in 2004, the EEZ program allows new companies creating as few as two jobs with $100,000 investment to receive tax credits against their corporate income tax that are both refundable and salable, effectively giving companies real dollars they can use for equipment, land or building investments.

Missouri Quality Jobs This popular program allows either new or existing employers to retain a portion of the state taxes withheld from new or retained employees' paychecks if the employer pays at or above the average county wage and provides health insurance. The Quality Jobs program is a performance-based incentive that encourages the creation and retention of sustainable jobs in Missouri communities.

Fiscal responsibility Through spending restraint and the creation of over 72,000 jobs in the last four years, Missouri will enter 2009 with a healthy budget surplus, giving the state government more stability, even in tough economic times nationally, and allowing Missouri to be even more proactive in economic development.

Missouri is in the middle of the country. That location gives Missouri companies an advantage in shipping costs and the ability to reach North American markets. It's no surprise that both St. Louis and Kansas City host large multi-modal hubs. With 10 interstates serving Missouri, 15 river ports, 131 airports and five Class I railroads, you can get there from here - economically. And, because of its geology, Missouri sports more underground industrial and storage space than any other state. At least 20 million square feet are available in former limestone mines offering secure, temperature-controlled space housing data, paper records and even tons of American cheese. Once the limestone's been removed and a floor poured, these cavities become some of the most stable and affordable industrial spaces in the country.

Culture and Lifestyle
Missouri's central geography gives the state a unique blend of culture. The southern Bootheel region is as southern as shoofly pie. Here you'll find friendly folks and gracious hospitality. The Bootheel is the northernmost part of the country where cotton and rice are grown. Go north, toward the Iowa border, and you'll find an entirely different culture - equally friendly and accommodating, but with a decidedly northern flavor.

 It is often said that Kansas City is the easternmost western city and St. Louis is the westernmost eastern city. In between are dozens of smaller communities - places that are timeless, with town squares, interesting characters, and, more often than not, a revitalization effort fueled by Missouri's DREAM City initiative. These are the places that have fostered the imaginations and creativity of people like Mark Twain (Hannibal), Sheryl Crow (Kennett), Rush Limbaugh (Cape Girardeau), Walt Disney (Marceline) and Harry Truman (Lamar and Independence). Mid-size communities like Columbia, Jefferson City, Springfield and Joplin have developed into strong regional metro areas with major league amenities. Columbia, home to the main campus of the University of Missouri, features regular cultural, musical, and athletic events, not the least of which is Mizzou football on fall Saturdays. With its university influence, Columbia consistently rates as one of America's "best places to live" by Money Magazine, MSN.com and Men's Journal among others.

Just 30 minutes south of Columbia is the bustling metropolis of Jefferson City, the seat of Missouri state government. Both cities, in the center of the state, feature growing industrial and research parks with a well-educated population to support many kinds of companies. In Columbia, for example, State Farm Insurance recently made the decision to consolidate several service centers spread around the country into one campus. Largely on the strength of the K-12 educational system and a steady supply of college students from the University of Missouri, they chose Columbia.

Springfield in southwestern Missouri is located in one of the fastest growing parts of the state. Since 1990, the Springfield MSA (metropolitan statistical area) has grown at a 2.3 percent annual rate. Home of Bass Pro Shops and Tracker Marine, the Springfield MSA is 400,000 and growing. Inc. Magazine recently rated Springfield one of the top 15 cities in the country in which to do business.

Joplin, born of mining, is today a robust industrial, logistics and service economy. Branson, on the shore of Lake Taneycomo, is an entertainment mecca, hosting over eight million visitors each year. But now, with the addition of Branson Landing, the city is also a shopping and convention destination. The nearby "Mountain" underground facility offers some of the most secure data storage in the country.

In northeast Missouri, Hannibal is as quaint now as it was in the days when young Samuel Clemens watched steamboats and dreamed of piloting one up and down his beloved Mississippi. Sedalia in west central Missouri hosts the Missouri State Fair each year and is home to the faithfully remodeled Hotel Bothwell across from the courthouse in a historic downtown. The list goes on, county by county, throughout the Missouri countryside. For those stressed by the frenetic pace of this digital age, Missouri's small and mid-size communities offer a quality of life that is refreshing and, one could argue, therapeutic.

Yet, this is not to say that life is slow. For the last two years, Missouri has hosted one of the premier events in world cycling. The Tour of Missouri winds through seven stages across lush countryside, similar to the Tour de France. It attracts the world's top riders, thousands of spectators, and millions following international media coverage.

In St. Louis and Kansas City, visitors and residents find world class sports and entertainment ranging from Major League Baseball, football and hockey to jazz and blues in the two cities' entertainment districts. Symphonies in both cities and unique concerts such as those in the St. Louis Cathedral and the Kansas City Power and Light District are extraordinary.

Asked when they think Kansas City's Country Club Plaza, south of downtown, was developed, most visitors guess no more than a decade ago. They are astonished to learn that this beautiful urban landscape with its Spanish motif, Italian sculpture and numerous fountains was conceived in 1922 by real estate developer J. C. Nichols. Nichols' love of European culture led him to develop the first American shopping plaza - one that is studied and replicated in today's "lifestyle" malls.

Hikers and bikers thrive in Missouri. The Katy Trail (bikekatytrail.com) follows the former Missouri Kansas Texas Railroad right-of-way for 225 miles. Starting in historic St. Charles, the Katy winds along the Missouri River through spectacular scenery and small towns replete with bed-and-breakfasts, wineries, and unique shops.

Water recreation is abundant on Missouri's many lakes including Lake of the Ozarks, Lake Taneycomo, Table Rock Lake and Mark Twain Lake.

Missouri prides itself on its park systems. Kansas City, for example, is known as the City of Fountains, second only to Rome in the number of fountains within its borders. The St. Joseph Park system, with 48 separate parks, 1500 acres and 26 miles of parkways, is so unique it has been listed on the National Register of Historic Places. Forest Park in St. Louis, larger than Central Park in New York, was the site of the 1904 World's Fair and today is home to art and history museums, the St. Louis Zoo, two golf courses, outdoor theater, a world-class tennis facility, and over 7 miles of jogging and bike trails.

Regional Business Clusters
Missouri is, perhaps more than most states, distinguished by its diversity. It is northern and southern, eastern and western in culture. It is river bottoms and hill country, urban and rural, modern and timeless - all at the same time. Most of all, Missouri is genuine and real in all of its manifestations.

Perhaps it is, at least in part, the geographic diversity that shapes Missouri's economic diversity. In the case of plant sciences, Missouri's geography plays more than a passing role. The rich alluvial soils and warm climate of southeast Missouri allow a wide range of crops - and experimentation with plants such as tobacco as a natural pharmaceutical incubator. Researchers at the University of Missouri's Delta Agricultural Research Center in Portageville (one of a dozen ag research centers in the state) in cooperation with scientists at Monsanto and the Danforth Plant Science Center in St. Louis are developing new breeds of oil seeds and sorghum that may soon provide non-food raw materials for biodiesel and ethanol. Missouri's hills and valleys provide bio-isolation allowing for the production of experimental crop varieties without the fear of cross pollination - an important attribute in the development of new hybrids.

As strong as the eastern half of the state is in the plant sciences, so is the western half in animal science. Kansas City and the surrounding areas are known as the Animal Science Corridor for good reason. At least a third of the country's animal science industry is clustered within a hundred mile radius of Kansas City.

While life sciences and biotechnology make headlines in Missouri, this sector is only one of eight the state has designated as target industry clusters. See the table below for all of Missouri's target clusters.

While Missouri is home to many successful companies, nine of them made it onto Fortune Magazine's "Fortune 500" list in 2008. Missouri ranked 19th in the country for the number of company headquarters on the list. Many of Missouri's top companies are household names. Emerson Electric, for example, with headquarters in St. Louis and compressor plants in Lebanon and Ava, produces most of the compressors found in home and commercial air conditioning. At over $22.5 billion, Emerson is the state's leading company in terms of revenue.

Anheuser-Busch, under contract for purchase by Belgium's InBev, produces the world's leading beer brands. St. Louis will remain the headquarters for the combined company's North American region and the global home of the flagship Budweiser brand. On a pro-forma basis, the combined company would have had 2007 revenues of $36.4 billion.

Express Scripts delivers prescription pharmaceuticals to patients around the country, while helping companies manage prescription drug costs. The company employs 11,500 with 2007 revenues of $18.3 billion.

Monsanto, located on a 500-acre campus in western St. Louis County has undergone a metamorphosis in recent years. Founded in 1901 by John F. Queeny, the company's original product was saccharine. Instead of calling it the Queeny Saccharin Company, he chose, no doubt wisely, a company name that would honor his wife, the former Olga Monsanto.

Over the next century, Monsanto diversified into chemicals, fibers and consumer products such as carpet. By 1945, the company was producing and marketing agricultural chemicals. In the 1960s Monsanto formed its Agricultural Division and began selling a series of western-themed herbicides including Ramrod, Lasso and, eventually Roundup, which allowed farmers to begin experimenting with reduced-tillage farming.

In 1975, Monsanto opened a cell biology research program and six years later, scientists there became the first to genetically modify a plant cell. In 2000, Monsanto was bought by a pharmaceutical company, then, in 2002, spun off as a separate enterprise, specializing only in agriculture. Today's Monsanto, at $8.6 billion in annual revenues is number 305 on the Fortune 500 and focuses on applying innovation and technology to help the world's farmers produce more and healthier food, feed and fiber. Monsanto is tightly woven into the fabric of plant science research found along the I-70 corridor between St. Louis and Columbia, the home of the University of Missouri.

With both the geographic and population centers of the country within 250 miles, Kansas City benefits from its central location in the United States. That logistics advantage is one reason the tax forms from millions of American funnel into Kansas City for processing. Three thousand KC residents (and as many as 8,300 at tax season) make sure those 1040s are handled quickly and accurately. Another 6,900 KC folks find just the right words and pictures for America to express itself on special occasions. Hallmark Cards was founded in Kansas City in 1910 and remains one of the region's largest employers today.

Over 2,300 Missouri companies contribute in some way to the nation's defense and homeland security agenda led by Boeing's Integrated Defense Systems facilities near Lambert Airport in St. Louis. Here, Boeing produces some of the most advanced aircraft in the world, including the F/A 18 Super Hornet and the F-15E Strike Eagle. Sixteen thousand talented Missouri engineers and craftsmen make sure American military pilots have the safest and best performing aircraft in the world wrapped around them when they strap into the cockpit.

Companies like Boeing, Brewer Science, Monsanto, Sprint, MasterCard, Procter & Gamble, GKN Aerospace, State Farm, Edward Jones, Emerson Electric, Leggett & Platt, Enterprise Rent-A-Car, Pf izer and hundreds of others demand a high caliber work force. And that's where Missouri shines. At any given time, over 400,000 students are enrolled in Missouri's public and private colleges and universities. Many of them are pursuing degrees in science and engineering. With nearly 200 college campuses across the state, students from Missouri and around the world can find the perfect mix of programs and affordability.

 The University of Missouri, as the state's land grant institution, is by far the largest with over 64,000 students spread across four campuses. Founded in 1839, "Mizzou" as it's affectionately called, was the first public university west of the Mississippi. Today, MU offers 265 degree programs, including medicine, veterinary medicine and law all on the main campus in Columbia.

Among the private colleges and universities, Washington University in St. Louis stands out with its #12 U.S. News & World Report ranking among national universities. The Washington University medical school is ranked third in the country. With just over 11,000 full-time students, Washington University is among the most selective in the country. This past year, 1,338 freshmen were chosen out of 22,428 applicants. Since the Nobel Prize's inception, Washington University has produced 23 recipients.

The University of Missouri and Washington University are only two of dozens of public and private four year and two year institutions in Missouri. It would be hard to find any location in the state that is more than a half hour from a postsecondary educational institution. And the State of Missouri is making sure those institutions - at least the publicly funded ones - remain state-of-the-art. The Lewis and Clark Discovery Initiative, passed in 2007, is providing millions of dollars for state university capital projects over the next several years.

Missouri's mixed economy has weathered the nation's recent economic storms with remarkable resilience. The state's diversity and central location position Missouri for growth in the new economy. As the nation emerges from its economic migraine, Missouri's mix of strong companies, robust educational assets, low costs and genuine, real people provide just the right ingredients for a dose of real opportunity.

For more information:
The Missouri Partnership
120 South Central Avenue
St. Louis, Missouri 63105
toll-free 1.877.725.0949

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