For Wichita's Economy, Diversifying Is Key To Growth
Wichita’s economy is still struggling to rebound from the Great Recession. An earlier story, "Wichita Faces Brain Drain Problem," presented evidence of young people moving to larger cities to advance their careers.
However, there was a silver lining: Many local young people would like to stick around. That is, if there’s a good reason to. KMUW’s Sean Sandefur reports on what Wichita can do to grow its economy and provide opportunity.
At PWI, Inc. in west Wichita, a worker is winding a copper coil, creating a magnetometer, an instrument that detects magnetic fields. The electronics manufacturer has been building these for decades.
"We’ve been in business for 53 years," says Robi Lorik, president of the company. "We’ve supported a wide range of markets, from general aviation to agriculture, automotive and even motorcycles.”
Robi is a first-generation American. His father, Miki, fought in the 1956 Hungarian Revolution before escaping to the U.S. Miki was a trained radar technician and had a knack for electronics. He soon found a job in Wichita’s booming aircraft industry and developed his own copper coiling technique. He built a business around that innovation. When his father retired, Robi took over at PWI and now runs the day-to-day operations.
Each production room at PWI is devoted to different types of technology. Employees wear blue shirts and hover over workbenches filled with copper coils, circuit boards and LED lighting units. While the business was born out of the aircraft industry, its ability to be flexible is what has kept it in business over the years.
“That’s what our focus is on our growth plan, is take what we do well, what we’re able to do, and find that market and go after it," Lorik says.
The Great Recession is still fresh in Lorik’s memory. It’s estimated that about 14,000 jobs were lost in Wichita in the general aviation industry alone. But Lorik’s business survived because the company’s product line is diverse.
“Well, it was a struggle, and it was interesting. Some of our other products carried us through," he says. "We have the ability to manufacture a product called a tape-wound bob and core. It’s a magnetic product for specialized transformers. And we were able to use that on some pretty nice government contracts.”
Diversification helped PWI weather the storm. But Lorik wants to use that same mentality to help his business reach new heights. After working with the federal government’s Small Business Administration program, Lorik recently developed a comprehensive three-year plan. It’s heavily tied to the LED lighting systems they’ve starting producing. The lighting is designed for the cabins of small aircraft, but Lorik says it’s just another product with a wide range of markets, including cars, motorcycles and household items.
“So what we’re doing is focusing on what we do well and plugging that into the right market," he says.
PWI is small company, employing about 40 people. Lorik doesn’t envision it getting much bigger, and he’s OK with that. He says he likes the family aspect of it all. But this model of diversifying products and reaching new markets is what many believe is the answer to Wichita’s economic woes.
“We can’t turn from what we do: skilled labor and manufacturing," says Jeremy Hill, who leads the Center for Economic Development and Business Research at Wichita State University. "When we look at our resources, that’s number one.”
Hill says counting on aviation to completely rebound is farfetched, but the city’s manufacturing core can retool and become more diverse.
“It is taking our existing skill sets, which is machinery manufacturing, plastics and resins, some of these other sectors in aerospace, and finding how to use those skill sets slightly differently," he says.
For many local companies, this is already happening. But Hill says it needs to be far more common. When local leaders talk about diversification, he says they’re usually discussing the wrong kind.
“We’re not going to be the next hub for accountants, that’s not a really likely scenario, although that sector continues to grow. The opportunity of being a destination place for leisure and hospitality is not likely, either" he says. "When we look at diversification, it has to be different from the context of the conversation that we’re having now.”
Hill says Wichita, and Kansas as a whole, needs to take a long look in the mirror and capitalize on the things that are already here. He says aviation is a part of that, but it can’t be the only thing. Even agriculture can be diversified.
“We shouldn’t’ discount the value of farms in western Kansas and adding value in the cities like Wichita and Hays where we can be manufacturing a new product of beef, or new product from wheat," Hill says. "That is a great opportunity for Kansas to think about our commodities and to [create] niche products that have more value added.”
Another important commodity that Wichita could take advantage of is its urban core. While efforts to redevelop areas like Old Town and the Douglas corridor have transformed the look of downtown, the city continues to expand east and west.
“There’s a lot of money out there in Maize, Goddard and Andover," says Russell Fox, a political science professor at Friends University in Wichita. "If efforts are not made to actually draw that money into the city, the urban engine that used to be powered by the aircraft industry is going to really struggle.”
Fox thinks that if Wichita wants to be a robust, mid-sized city that breeds new business and attracts companies from out of state, it has to eliminate two competing ideas, which he says can both be found locally.
“We can’t pretend that we’re a small, little town out on the prairie, even though the folks in New York or the folks in L.A. might make us think we are," Fox says. "We surely can’t pretend that we actually are the place that has all the dining options in the world and all the cultural options in the world and all the investment opportunities in the world. Because we don’t. It’s hard to be in the middle, but that’s what we have to embrace.”
There’s a happy medium in there somewhere. Much like economist Jeremy Hill, Fox believes it’s time for Wichita to reevaluate itself. He says it's tough to imagine a major industry uprooting and relocating here. But, he says, Wichita can still be successful.
“Maybe there’s something good about a city that kind of hold its own," Fox says. "Not a city that’s growing in leaps and bounds. Not a city that’s declining. It’s kind of got this middle course. Well, there’s something to be said for the middle course.”
Fox says the city needs to invest in what it already has: educational institutions, the manufacturing industry and further redevelopment within the downtown core. And if city leaders can focus on those big points, Wichita can be competitive with other cities of its size.
Follow Sean Sandefur on Twitter @SeanSandefur.
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