Friday, March 23 2018
Investments and programs have positioned Minnesota as one of the top places in the country to do business.
By Kevin McKinnon, Deputy Commissioner of Economic Development
Bold North, the tagline for Super Bowl-LII in Minneapolis on February 4, was a nod to Minnesota’s fierce embrace of all things winter. Minnesotans love their cold-weather sports, winter festivals and ice castles. Cold is cool in Minnesota.
But the theme also spotlights the Minnesota ethos of risk-taking, innovation and resolve. Nowhere is that bold approach more evident than in the economy. State and business leaders are making investments and creating programs that have positioned Minnesota as one of the top places in the country to do business.
Don’t just take our word for it. Financial news and commentary website 24/7 Wall St. last year named Minnesota the Best-Run State in the Nation, citing the state’s low unemployment rate, high credit rating strong household income and low poverty rates.
Meanwhile, politics and policy website Politico recently rated Minnesota the Second-Strongest State, behind only New Hampshire. Politico examined 14 key categories, including per capita income, unemployment rate, homeownership rates, life expectancy, high school graduation rates and violent crime levels.
The accolades didn’t stop there either, with CNBC last July naming Minnesota the Third-Best State for Business. The business news channel looked at 10 categories of competitiveness and ranked Minnesota especially high for education (second), quality of life (third), technology and innovation (fifth), economy (sixth) and infrastructure (tenth). Minnesota was first in the study in 2015 and fourth in 2016.
Other studies last year rated Minnesota the best state to retire in, the best state for women, the happiest and least stressed state, the second-best state for families and the sixth-best state for health. And that’s just for starters.
“The credit for our state’s continued economic success belongs to the people of Minnesota,” says Governor Mark Dayton. “I thank the hardworking Minnesotans and business owners who have made Minnesota home to their families, innovative companies and a great quality of life.”
One of the keys to Minnesota’s success is the diversity of its businesses and industries. This state of 5.5 million people has 18 Fortune 500 companies. Major Fortune 500 businesses in Minnesota include General Mills, 3M, Target, Best Buy, U.S. Bancorp and Land O’ Lakes.
Global agribusiness giant Cargill Inc. in Wayzata is the largest privately-held corporation in the country, while Mayo Clinic in Rochester is the centerpiece of the state’s renowned health care sector.
Along with health care and agribusiness, the state’s industry sweet spots include bioscience, advanced manufacturing, financial services, clean energy and data centers.
One standout is the medical device sector, led by such companies as Medtronic, Boston Scientific and St. Jude Medical. More than 29,000 people work in the industry – second behind California. Thanks to this cluster of creativity, Minnesota typically ranks among the top states for patents, particularly medical device patents.
Creativity and innovation have been a part of the state’s DNA going back decades. Minnesota, after all, is the birthplace of the pop-up toaster, snowmobile, waterskiing, flight data recorder, Rollerblades, supercomputer, and Spam. Minnesota surgeons Walter Lillehei and F. John Lewis performed the world’s first successful open-heart surgery in 1952, followed by medical device pioneer Earl Bakken’s invention of the implantable pacemaker in 1957.
Photo Caption: Minnesota has 18 Fortune 500 companies – most of them in the Twin Cities. They include General Mills, 3M, Target, Best Buy, U.S. Bancorp and Land O’ Lakes.
Entrepreneurs and up-and-coming companies don’t have to look far to find support in Minnesota. MN Cup, the largest statewide startup competition in the country, supports emerging entrepreneurs through events, educational programming and annual startup competition. New businesses are given tools, resources and support to launch and accelerate the development of their ventures.
Since MN Cup began in 2005, more than 12,000 participants have entered the contest. Many have gone on to successfully open businesses, raise capital and create jobs.
The state also plays a role in encouraging new business development. The Minnesota Department of Employment and Economic Development this past winter launched a program called Minnesota Innovation Loans for Entrepreneurs (MILE). The initiative provides interest-free, non-dilutive loans ranging from $20,000 to $50,000 to early-stage businesses that are developing high-tech products or services in Minnesota.
The state also plays a role in encouraging new business development. The Minnesota Department of Employment and Economic Development’s Angel Tax Credit Program has attracted more than $400 million in private investments for hundreds of Minnesota startups since 2010. Other state initiatives that are helping small businesses include the Angel Loan Fund, Business Development Competitive Grant Awards, the Minnesota Emerging Entrepreneur Loan Program and Small Business Development Centers, a network of nine regional centers and 19 satellite centers located throughout the state.
All that support is paying off. The Bureau of Labor Statistics said Minnesota ranked No. 1 in the country last year for the Five-Year Survival Rate of New Businesses. Meanwhile, figures from the National Venture Capital Association show that 321 Minnesota startups raised $2.5 billion in venture funding from 2012 to 2016. The state ranks third nationally for venture funding raised by medical device firms.
Established companies are finding support in Minnesota as well. In 2013, Governor Dayton proposed the Job Creation Fund, a pay-for-performance program that provides funding to businesses after they meet certain criteria, including minimum requirements for job creation and private investments. Since the program began in January 2014, more than $36 million has been awarded for 78 business expansion projects around the state. Companies have committed to creating nearly 4,900 full-time jobs and investing $978.3 million to expand.
Another program, the Minnesota Investment Fund, awards low-interest loans that businesses can use for improving their operations and hiring additional workers. The program has attracted more than $2.3 billion in in private investments and generated nearly 6,000 new jobs in the state in the past five years.
Among major expansion projects in the past year:
Another piece of the state’s business strategy is broadband development, particularly in rural parts of Minnesota that don’t have high-speed internet services. State policymakers say rural Minnesota faces a major competitive disadvantage without internet connections comparable to urban areas.
In response, the Minnesota Legislature created the Border-to-Border Broadband Development Grant Program, which has awarded $85 million in grants since 2014 to bring high-speed internet to thousands of homes and businesses in the state.
The state’s deep pool of high-skilled and educated workers also helps drive economic growth. Minnesota ranks third in the number of residents with high school diplomas (92.9 percent) and 12th in percentage with a bachelor’s degree (34.8 percent). The labor force participation rate is second in the country at 70.6 percent.
Stitch everything together and it adds up to a unique business ecosystem that encourages entrepreneurs to start businesses and established companies to expand in new and exciting directions. It’s a dynamic approach that explains why Minnesota and its economy are thriving in the Bold North.
Visit http://www.expansionsolutionsmagazine.com/minnesota_edo for local economic development office directory listings.
Photo Caption: The medical device sector, led by such companies as Medtronic, is a major industry in Minnesota. More than 29,000 people work in the industry – second behind California.
Kevin McKinnon is deputy commissioner of economic development at the Minnesota Department of Employment and Economic Development.