Pioneer Cold Warriors planted the telecommunications seeds that sprouted one of the Omaha area’s trademark economic sectors. Decades of careful local cultivation have kept it healthy and growing.
Omaha’s importance as a national telecom hub was no more inevitable than was its choice 150 years ago as a launching point for the first U.S. transcontinental railroad. But just as they have long nurtured their status as a transportation nexus, metro-area leaders have kept building on their good fortune in information resources and convincing local and national employers to exploit it.
The U.S. military’s ongoing need for state-of-the-art telecommunications capability has been vital to that success, local experts say. But so has a two-decade-long effort to ensure that Omaha and nearby cities can supply workers with high-tech training to complement their generally dogged work ethic.
Though it’s true that Omaha “started with a leg up with this robust infrastructure, nothing stays static in technology,” said Kathleen Berg, director of corporate communications for Omaha’s Applied Information Management (AIM) Institute. But community leaders realized “we need to exploit that (infrastructure) because we need to see how we can become a leader in information technology.”
The results can be seen in the 1999 opening of Omaha’s Peter Kiewit Institute and the expansion of Omaha’s list of established information-reliant employers — firms such as First Data Resources, West Corp. and the Marriott and Hyatt hotel chains — to include the Gallup Organization and Internet mainstays such as PayPal, Google, Yahoo and LinkedIn.
And it isn’t only self-evident data-driven firms who have tapped Omaha’s telecom potential. Cabela’s Inc., ConAgra Foods, Union Pacific Railroad and Fidelity Investments are among other firms to invest in local data centers, encouraged in part by state tax incentives but also by the growing importance of information technology to employers of all types.
On top of that, “we’ve got good, cheap power, we’ve got a lot of water, we have good communications and good land. And we have our labor market,” said Kenneth Dick, who works at the Kiewit Institute as a research fellow in telecommunications in the University of Nebraska at Omaha’s Department of Information Science and Technology.
Historians rightly credit Air Force Lt. Gen. Curtis LeMay, who relocated the infant Strategic Air Command to Bellevue-based Offutt Air Force Base in 1948, for the area’s telecom bounty. But the area’s initial stroke of luck can be traced to the 1941 decision to build the Martin Bomber Plant, which counted the Enola Gay — delivery vehicle for the atomic bomb dropped on Hiroshima, Japan — among its hundreds of completed World War II U.S. aircraft.
When LeMay moved SAC from Andrews Air Force Base in Maryland, the Martin site already boasted the necessary runways and infrastructure. But SAC also needed redundant telephone calling capacity so it could stay in operation if the area’s primary switches failed or were destroyed, Dick said.
So “Ma Bell” — the once-mighty Bell System operated by American Telephone & Telegraph Co. — installed a second set of switches. One set was dedicated to SAC’s needs, but the redundant set was available for local needs, said Dick, who spent 10 years at Northwestern Bell Telephone Co. and its successor, US West Communications. His tenure covered the court-ordered breakup of the Bell System in 1984.
During the 1960s and 1970s, Dick said, businesses relying on high call volumes began to take advantage of Omaha’s plentiful capacity, its central location and a local workforce that typically lacked a distinctive speaking accent and were easier to understand on the phone.
By the 1980s, Omaha was known as the “800 capital of the world,” a reference to the toll-free phone lines used extensively by telemarketers, “as seen on TV” retailers and other local employers. The metro area’s attractiveness to telecom-based firms has endured through the Western victory in the Cold War, the evolution of Internet-linked computing and the ongoing transition from copper-based phone systems to fiber-optic and cellular-based voice and data transmission.
Though SAC evolved into StratCom following the 1991 collapse of the Soviet Union, Dick said, the federal government has continued to require redundant telecommunications capacity to support its operations at Offutt. The Scott Technology Center, spun off from the Kiewit Institute in 2006, also has bolstered Omaha’s data-handling capabilities through its Scott Data Center.
But a pair of 1995 studies by the AIM Institute — founded jointly in 1992 by Omaha business, educational and government leaders — warned that data-reliant businesses were having trouble supplying employees with the technological training they would need.
State and Omaha-area leaders responded, Berg and Dick said, by pushing local higher-education institutions toward greater efforts to prepare young people and retrain older workers. One fruit of their efforts was the Kiewit Institute, which houses several University of Nebraska-Lincoln engineering programs as well as UNO’s College of Information Science and Technology.
Other two- and four-year colleges in the Omaha area also stepped up their efforts, said Berg and Brad McPeak, director of AIM’s Midwest Center for Information Technology. By 2009, AIM found that three of every five information-technology employees at surveyed local employers held bachelor’s degrees, up from two of five in 1995.
AIM offered more encouraging news in October 2013, issuing a report that local employers had given “good” or “excellent” ratings to 88 percent of their recently hired Omaha-area employees in information technology and 83 percent of new local employees in engineering.
Nonetheless, McPeak said, the Omaha area can never afford to take its prime position as a telecommunications leader for granted.
“There’s no operating system (for computers) out there that we can say is good for five to 10 years, no less 30 to 40 years,” he said.