Kansas and the World Economy

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Coming up in just a moment we have another one of our speakers from the Docking Institute of Public Affairs, and then at five o'clock central time it's All Things Considered from National Public Radio. [Music] [Male Presenter] It's 4:30 central time 3:30 mountain time. On High Plains Public Radio. [Silence] [Music begins] [Byron "Kaylows"] High Plains Public Radio connections, I'm Byron "Kaylows". On today's program, Kansas and the world economy the world economy in Kansas, will address how Kansas fits into international finance, through world trade. Our guest is the dean of the College of Arts and Sciences and a professor of

political science and international relations at Forty Hays State University, Larry Gould. He comes you, courtesy of the options program, through the international security speakers' bureau. Sponsered by the Docking Institute of Public Affairs at Fort Hays State University. During this half hour program, you can participate with your comments and questions. Call it any time (316)-335-5120. That number again (316)-335-5120. At the end of this program, there will be more information about how your organization can hold presentations, discussions, or workshops on war and peace issues, courtesy of a Docking Institute. But now today's topic, Kansans and the world economy, the world economy in Kansas with Larry Gould. [Byron "Kaylows"] well Larry first of all I wanted to ask you Kansas and the world economy, the world economy in Kansas, it sounds like a two way type thing we're talking about, and I'm wondering how really is a part of

Kansas in the world economy? Is it just wheat which we hear about all the time, or is it more than that? [Larry Gould] Well there's really two answers to that question there is what I would call that the traditional answer, and then an answer which we would call- I think the modern answer to that question, which most people don't pay very much attention to and it's one of the things that perhaps we can be blamed for an education field for not really bringing out this kind of information. More so as the past. The traditional answer as you've alluded too already, would focus on such things as wheat, agriculture just generally speaking in the state of Kansas. Aviation is extremely important. Two thirds of the general aviation aircraft in the world are made wichita and are distributed obviously throughout the world. There is some foreign direct investment in Kansas in Hays, were Forty Hays State University is located, "Ullassa X" Site is one of the largest concentrations of foreign direct investment in state, and "Ullassa X" Site makes batteries. International tourism is a very important variable in the kansas economy now. You know

the number we are the number one state at this point time, in terms of increase to international tourists. And it's hard to believe but many asian people, and africans, and from other parts of the world really enjoy standing outside an interstate- excuse me. On highway fifty and on the interstate, and to look at cattle and feed lots and such things. They just don't see thoughs things in other parts of the world and we often miss it. So there's a lot of different ways Kansas is connected to the world economy in the world economy is in Kansas as well. But one of the things I would like to emphasize, and I think is extremely important, and this is the second part of the answer to your question is that as we think about international relations, as we think about the initial political economy, and the global economy now, really national jurisdictions, state jurisdictions are becoming extremely unimportant. What really counts now are people and ideas, not places and things. And by that I mean, the information age and the revolutions are taking place in technology, are really diminishing the importance of national jurisdictions or political jurisdictions of

any type, and that's as true in Kansas between counties, as is between kansas and the national government, and united states in the world, and kansas in the world. It a real image and picture, that we're not doing very well and transmitting to the general public as a whole. But what I'm suggesting to you is is that Kansas whether it likes or not, is not just in a national economy, it's in a global economy. Western Kansas is not in a Kansas economy, it's a world economy that world economies here as well and one the most important things that has created all this has been the the revolutions in technology have taken place. [Byron "Kaylows"] Well give me an example of how Kansas, particularly western Kansas, is connected with what's going on in the worldwide economy. You hear about various things such as interest rates being influence, and all that sort of thing, but is there a more direct connection that Joe Shmoe sitting at the local cafe can really identify with? [Larry Gould] Sure. You know there's a lot of small businesses in western

Kansas that are getting into the exporting outfield itself. We talk about Rrands Corporation for example and Hays. We talk about flame engineering in La Crosse Kansas, and we can go on and on and on. Those industries- well one of them is exporting a weed killer, to other parts of the world. Rand's Manufacturing is manufacturing and exporting ultra light airplanes to the Japanese. But there's some things that people don't see. They're not very transparent. For example, I'm engaged in strategic planning throughout western Kansas. I work with counties, and communities, and the private sector as well, and we had one gentleman stand up in a Larned Kansas and he said: "You know it's wrong with Kansans? They just think too small." He's in charge of a number of feedlots, and has to put together large amounts of money, in order to make those feedlot operations work. This is a worldwide feedlot operation even though hes in charge of just a few in Kansas itself, and he had to come up with a four hundred million dollars loan and that required him to go overseas and pull four million dollars together and run it through

Pawnee County at one time. None of the Kansas banks would engage in any of this. They just didn't want to take a risk and we're talking about four hundred million dollars. Think what four hundred million dollars with interest could do for western kansas, in just a week sitting in some kansas bank some place. That's a very close, right to home example, of the possibilities if we began to understand what's going on all right behind our back and right infront of our eyes, in many cases. And you can go on and on and on with examples like. [Byron "Kaylows"] You mentioned the erosion of political boundaries, in terms of the world economy. Recently we've been hearing about the general agreement on tariffs, and trade stocks, and recently Pat Roberts and Dan Glickman said: "we shouldn't be relying on that to solve any of our problems because it doesn't appear that we're ever going to get an agreement that the united states will like so we are to increase subsidies." Well whether or not that's- What it sounds like to me though, the fact they can't agree on all these things, means that

there's- it's difficult to use political boundaries as a way of saying you know we are not going to trade, or we need a certain amount of trade, the Japanese situation, maybe, is another. [Larry Gould] Sure, we're still- we're really caught up in two worlds. Were still caught up in that old world, and i'm saying is, moving behind us and that is a world of national political jurisdictions, and to get a general agreement on tariffs and trade is an important actor and important variable, in terms of knocking down some of those old barriers that we're talking about, whether they be tariffs, or export quotas, or non tariff barriers of various types, and I mean safety and health kinds of regulations. But despite the fact that's going on, there are people in kansas that believe that these countries and industries that are very close to us, and we call this trans border diplomacy, are extremely important. You may have heard Sam Brownback, our secretary of agriculture, say just a few weeks ago how important mexico could be to us, if the general agreement on tariffs and trade came to some kind of positive conclusion, for the united states, and for kansas generally

speaking. The opportunity to sell agricultural products, and to add value to some of those agricultural products and sell them to mexico is absolutely tremendous. Now that I would consider to be a part of that first definition, when you asked me the very beginning what I meant by Kansas in the world economy the world economy in Kansas. On the other hand, if we talk about telecommunications for example, there is a tremendous world out there with regard to the opportunity for Kansas to add value to the state, to the region, to our small rural communities by bringing in an even self starting some of these businesses that are part of the information age. For example, it's hard to believe but New York Life Insurance was very interested in Colby Kansas a while back. It didn't work because we didn't have the telecommunications infrastructure in place that was attractive enough for New York Life Insurance, but the rents are high in Manhattan, and I'm not talking about Manhattan, Kansas I'm talking about Manhattan, New York. The rents are high in Chicago, and L.A., and elsewhere and there's a big move to small town america. In fact that's a title of a book now. Recently a fellow just did an extended study on this, but many of these large

corporations, many small corporations as well, are looking for an attractive workforce. They're looking for a place with a quality of life is excellent. They're looking for low rents, as I just mentioned, and now since much of the work is done and by a fiber optic cable, and via satellite, done by a new technology- micro-computers, and other kinds of things, satellite dishes you name it. You don't have to be in New York City to be involved in the world of international finance, or the world of international life insurance. You can be in Colby Kansas, and that's what a lot of industries are looking in, and that's what what I mean by the political jurisdictions are not as important any longer. Everything flows back and forth throughout that world economy, and it doesn't say well I got Kansas here I gotta stop at the border and go around it or I've gotta get a permit to come in. It just flies right through Kansas and many cases were not paying very much attention to that trade that is going one. [Byron "Kaylows"] Well you bring up two points that I was going to ask you about. One is this whole concept of value added, and maybe not everyone

understands what that is, but right now in Kansas a good amount of our agricultural products just go out in raw form. We don't do anything with them before they leave here they go somewhere else, and then they manufacture things from that.r Value added then is to do something in Kansas and then send that product out so we get- employ more people and we add value to the product. Is that- what's the progress of creating more value added products in Kansas? Theres a what they call a value added center or something, Pittsburg State University is doing some things, Kansas State University, I'm not sure if Fort Hays is involved in some of that, but what's the progress of creating more value added products in Kansas? [Larry Gould] We're making progress, but it is rather slow. Kansans for whatever reason still believe that a strong back and a good work ethic is all you need. That's ok, you've gotta have that and its one of the attractive features about our workforce, and attractive features about the state, but you gotta work

smarter. You can't just work harder you gotta work smarter, and thats where value added is going. It's trying to get us, as we work hard were also, as you're suggesting, adding more value to our products than we ever have in the past, and there are a number of institutions, and a number of individuals, in state government, and out of state government in the private sector, that are really pushing to move this notion of value added. Instead of just taking the wheat and shipping it different places in the whorld, let's make crackers out of it, let's make bread out of it. Lets do a variety of things with it, that we have not done before, and as you indicate, that means another new industry starting, the bread making industry in the state of Kansas, or the cracker making industry, or whatever the case may be. We just don't see however, I think, the value in that at this particular point in time. As they say, it's part of our state plan, its part of economic development. Sam Brownback has been pushing that real hard, but for whatever reasons Kansans have been reluctant to pick up on it. [Byron "Kaylows"] You know it aws really interesting when he pushed that at the last board of agriculture meeting, they had a dinner, and he demonstrated that after you finish eating your salad the bowl

is made out of edible maternal to, but the problem was this value added product, this bowl, wasn't made in Kansas was made in Japan. [Larry Gould] You got it. There was a study done by the Kansas department of commerce in small and medium sized communities, and that they found in a study that's still only about eighteen percent of what we produce in the state goes outside the borders of the state of Kansas itself. We simply consume it ourselves right here, and we don't add any value to it. Unfortunately that means that were were cutting off about eighty percent of the market that we possibly could have with some of these goods, and that's what sam was getting at. You know, you could do some import substitution, you could go ahead make a bowl and-- [Uninteligible] consume here, but send it other places in the world as well and were just not putting enough emphasis on that and I hope the audience out there that's listening- Some people will pick up on that, and some businessmen are, and there are some but it's just not enough we really need to get onboard with our act with reguard to value added. [Byron "Kaylows"] Well what- somebody who hears this as

"oh well sounds like a good idea, but then what do you do." I mean what can an individual or business person do to start looking at the raw products in this area, and putting together some sort of manufacturing concern that uses that product. Where does that person go for help, or ideas, or if you have an idea where do you go from there? [Larry Gould] Sure, and that's that's another problem and I'll go ahead and use another example, after answer your question specifically. You need to go to various state agencies, and some of them have coordinated their act, and some of them have not. You certainly need to pick up the phone call the Kansas Department of Commerce, because those people are interested in helping you, and they are interested in trying to point Kansas in the right direction with regard to where the resources, might be the capitol for example, to get a value added industry going. And Kansas State University has a number of experts who can

help you in terms of the business plan that you might wanna put together. The kind of product that you want to sell, and where you might wanna market, in the world. The Wichita World Trade Center can tie you in with the trade leads, all over the place, in terms of going out and selling- finding people in other places that want to buy your product. The small business administration in Kansas City can help you out. So there's a variety of places and the Kansas Department of Commerce can point you in the right direction, in terms of making all those connections, and getting things rolling, and then the private sector can be brought in. Along with the education, and the expertise, of our university and the system. On the other hand, with regard to this other image that I'm projecting about the world economy, in terms of new technology and telecommunications all the rest, we're not set up very well to deal with that. If you want to get help, for example, you might wanna start a telemarketing firm, for example. You might want market products all over the world, and you can do that with a telemarketing firm out of Kansas. One of the problems is our state agencies aren't really set up to help you with that kind of thing as yet. We need to do some restructuring of state agencies

to help that entrepreneur out. To get that person pointed in the right direction and we really need to start thinking about that very carefully if we're going to help the entrepreneur that wants to do the things that you're suggesting, and also get into this new world economy that I'm Talking about. [Byron "Kaylows"] Do you know any examples of someone, who's come up with some sort of crazy idea that no one else was dealing with, and then they made it happen into something- a going concern? [Lary Gould] I think one of the most outstanding ones is one I just mentioned a few moments ago, and that's Rand's Engineering, Randy- god I can't think of his last name now- whatever. Randy in Hays had this ultra light airplane idea, which people said "well you can't just take fabric like that and lay it over a steel frame and expect the darn thing the fly", and he worked for years trying to put this thing together and making it go and had to consult, as I said the Department of Commerce, and he had to consult a variety of aviation

experts, and people from all over the world as a matter fact, contributed to this whole thing, and that there were a lot of people very skeptical, and he finally put enough money together, and finally got enough backers, and low and behold the Japanese looked at this and said "wow this is really neet. We don't have a lot of room for airports in Japan. We need to do some things in Southeast Asia, maybe this thing could work", and so he had a group of about twenty five or so Japanese businessmen come over here, they looked at it, and everybody was still skeptical about the possibility of ever selling to Japan. Low and behold they looked at this crazy contraption said I think we can make it work, and he's selling them like crazy now to Japanese, and other asian countries as well. Right out in the middle of Kansas. [Byron "Kaylows"] You know there is a town, you may be familiar with this town Overland Kansas. A couple of years back got some money from someone who had died for a community center, and the city look at it and said "gee can we use this is a good thing" and they decide, yeah, we want to become the small town with fiber optic

connections and everything and this community center will be the way for us to begin on that kind of project. And they did get the money from the taxpayers to fund their part of, it in addition to it, so they're going to be able to build that center. I don't know where they are at this point in that development but, first of all if you know anything about it, but second of all, is this the kind of thing that small towns can start doing? Connecting into the world economy? [Larry Gould] That's a super example and yes I do know something about it because I worked with Jerry "Feer" the city administrator up there for the last couple years now, trying to move that project forward. That project that they're working out is modeled on what is called a telecottage. Denmark, and Norway, and Sweden and a number of the Scandinavian countries had developed this concept over a decade ago. Which points- What I was trying to say earlier, that we need to keep going in terms of this this new world economy- and Kansas needs to keep moving, because people are out there and they're ahead of us and we need to, if not catch up, we need to certainly keep moving in that

direction. But that telecottage concept was basically derived from what was going on in Scandinavia, and Overland saw an opportunity to go ahead and provide over, and here we go with jurisdictions again, over a multi county area. The opportunity for small businessmen, and small businesses, to come in and use this new information age technology, satellite uplink, and downlink, and microwave, and fiberoptic technology, that you mentioned, two way interactive video, and just a whole assortment of things that other businesses are using around the world. If it was only one county and it was only one city the size of Overland it probably wouldn't be an economical thing to do, but if you can go ahead and spread the value, here were spreading value now instead adding value, spread the value of that telecottage out over six or seven counties, and provide this opportunity for small businessmen to access information age technology, they can get involved in the world economy in terms of export, and import, and transmiting information back and forth, and nternational finance, and all the rest. That operation I think it's going to be

replicated time and time again, throughout rural America, and Kansas really needs to push that kind of concept, in order to get involved in the world economy. I also believe that it's one of the answers to the problems that rural Kansas is facing. If you have a telecommunications infrastructure and a world class workforce, they're gonna beat a path to your door, you don't have to give up tax abatements, you don't have to give anything away, they're gonna beat a path to your door. [Byron "Kaylows"] You know it sounds like a lot of the problems of connecting Kansas into world economy can't be, [repeats himself] can't be gotten rid of until you start thinking in the world economy sense. You have to think of, for instance in Overland, you have to think well ok Nebraska just north of us, but there's this border, so we can't deal in Nebraska, and we can't deal with and counties around us, because of all the political things that we have to go through. It sounds to me like maybe there needs to be a little

less thinking of "this is my political boundary and you can't cross it and you can't do anything with it" and more of "lets see how we can all work together to make this thing work." [Larry Gould] That is precisely the message. Ya know Kansas in the world economy the world economy in Kansas, is kind of a neat little play on words to get people to start thinking about where Kansas is imbedded, but you have to go beyond that, and as you're suggesting, the world economy is right next door. All of our politics is local, but we have to think globally. No doubt about it. And the opportunities that world economy provides are just absolutely tremendous. Getting out of this old mold of thinking this is mine and this is yours, and we can't cross it, is really something that has to be overcome. That the new word, its not a new word, the fancy word people throwing around is a new paradigm we have to think differently, we have to think in a different paradigm. I'm not sure that people haven't thought in this way for some time, but that they've been in the minority, and that's thing that we've got to do we've gotta enlarge that minority so that they begin to understand that no matter what happens

this is going to occur. Now what I'm saying here is that we don't have a choice. Very important message. We dont have a choice, the information age technology is going to be with us, whether we like it or not. Tthis new world economy based upon fiber optic cable, and based upon satellite transmission and all the rest with us now. In fact we're about halfway through it, and maybe moving out the other end, cause we're moving into the age of biotechnology and so what I'm suggesting is that Kansas has to begin looking at these political boundaries, these 105 counties that we, that boundry surrounding the state of Kansas, as if it was transparent. it's there we don't have to get rid of it. Tradition and a lot of things will stay with us, and people don't want to consolidate their counties, that's fine, but like it or not information is moving back and forth, goods are moving back and forth, over those boundaries. What we need to do is take advantage of the opportunity, Instead considering these things have problems let's consider them as opportunities. If you spend all your time working on problems your gonna miss a lot of the opportunities that are available right out there in front of you. [Byron "Kaylows"] Let's talk about the US-Japan situation for just a moment because so many

people are caught up with this problem of trade deficit, and that Japan seems to be taking over everything in the United States', yo know thats the way people look at it. Really if for instance I was going to start a business and I was looking for investors from overseas should I say no I'm not gonna look at Japan because they've got too much of the US economy. Or should I say, you know, they got the money let's get some of that money here to bring jobs here. I mean how- there's this fear a lot of people have of Japan encroaching on the United States, but is that a realistic fear in a world economy? [Larry Gould] It's a realistic fear if you think in terms of the old paradigm, the old world economy, that I mentioned first. That you know we've got so much foreign direct investment Kansas. We are involved in so much trade, in the way of imports and exports, but what I'm suggesting is that we live in a world where smaller and more efficient are the keywords. Smaller, more efficient. That has to

do with a microchip, that has to do with that the kinds of businesses and the kinds of industries that are developing. Big isn't necessarily better and the Japanese, the West Germans' European Community, generally speaking, all these people have to have began to recognize that message, quicker than we have. We've done a tremendous job in terms of new discoveries, new inventions, patents and all the rest of it, but we don't get it off the drawing board onto the shelf, and into the marketplace fast enough, and as a result were getting behind. I say knockdown those borders, interact with everybody we possibly can, because people and ideas are the important thing, not places and things. [Byron "Kaylows"] [Distracted] Um- The uh- We're talking- A lot of the situation- Ok I think we have to call. So we're going to take this call here. Hell, you're live on the air. [Caller] Hi. Thanks for the program, and thank you Mr. Gould for comming I have read a number of

environmentally active magazines, that under the new agreement on tariffs and trade, that local control of environmental concerns could be overshadowed actually be made illegal by international agreements, which are generally based on, and run by international- multinational corporations so that if for instance we wanted in Kansas to restrict a certain pesticide, Mexico, using that pesticide, could sue us for erecting a barrier to fruits and vegetables, from Mexico, which were used- on which that kind of pesticide were used. Would you address that please? [Larry Gould] Yes. You raise a larger point also, and the larger point is rural people, localities, are very dependent upon the some of these

actors, that are talking about, such as multinational corporations, and large governments, and global managers around the world. And your fear is well founded. The possibility of, are damaging our environment even further in rural America, and the quality of life is very real. Which brings me back to my point about banding together. You really have to forget about political jurisdictions, you really have to examine the interests that you have, in your particular locality, and make sure that you understand what's gonna to happen to you, if you allow certain things to occur. If our environment is going to be damaged then I think rural people need to get together, I think Kansans need to get together and make sure that that message is heard loud and clear in Washington, and also with regard to the people are negotiating, and being diplomats for the State of Kansas from the department commerce. If we feel that a particular industry, or a particular product or whatever the case may be is going to be damaging to our environment, then we need to recognize that interest and band together. Organization confers power, so your your comment is very

good and very valid, hits right to the point, and people have to understand that part of the situation in the world economy as well. [Caller; muffled] Thank you very much. [Byron "Kaylows"] Thank you. We only have a couple of- We only have about a minute left here. I'm wondering if we can sort of tie this thing together and say, you know, what- where is Kansas in terms of connecting into the world economy, are we on the way there yet, and what we need to get us closer to a more realistic world trade situation? [Larry Gould] Yeah I'm really excited about the prospects for Kansas. My vision for Kansas is to be the telecommunication to crossroads in North America. At least get us out into North America and moving with the Canadians, and the Mexicans, and the rest of the Latin Americans as well, in terms of tying ourselves together, but it will take two things, and I'll come back to those two things I mentioned earlier, it will take a world class workforce and we need to spend a lot of time and effort on improving education and workforce training, and number two it'll take a world class telecommunications infrastructure, which I hope our legislature, and

governor, and those people the private sector that can call a kind of thing will be will be helping us out. [Byron "Kaylows"] OK. Thank you very much. [Larry Gould] You're very welcome. [Music begins] [Music][Male Presenter] You've been listening to High Plains Public Radio Connections. The topic: Kansas in a world economy the world economy in Kansas, with Larry Gould. The program was courtesy of the options program through the International Security Speakers' bureau, sponsored by the Docking Institute of Public Affairs at Fort Hays State University. Bureau offers knowledgeable faculty speakers on a wide range of international security issues. Faculty come from several disciplines are qualified to discuss national policy from several perspectives. These faculty members are available free of charge to community groups, or presentations and workshops. For more information about the Speaker's Bureau contacted Kurt "Grunharth" at the Docking

Institute of Public Affairs- [Audio cuts out]