Tuesday, April 02 2019
By Kevin McKinnon Deputy Commissioner of Economic Development
Minnesota grew its economy and invested in its communities throughout 2018. The state saw over 225 business expansions, made key investments in the future of its startup ecosystem and consistently ranked in the top 10 across multiple metrics of success and economic health. State and business leaders are making the investments necessary to continue and expand this growth for years to come.
Per capita, the Twin Cities ranks first in Fortune 500 companies and Minnesota ranks third (2018). The state also ranks third best in the nation in its five-year business survival rate.
Meanwhile, Minnesota continues to grow its educated workforce. The state is first in the nation for percentage of population with high school diploma or higher, with 93.1 percent having a diploma. Minnesota is also tenth in the nation for the percentage of the population with a bachelor’s degree or higher, with 36.1 percent having a college degree.
Minnesota collected accolades and recognition for its strong business climate in 2018. CNBC ranked Minnesota as America’s 6th top state for business, and it has been among the top 10 states for business 10 times between 2007 and 2018 – including first and third in the past five years.
When it comes to quality of life, Minnesota consistently ranks among the top five, including being named the best state to raise a family and the best state for women by WalletHub.
Minnesota’s diverse economy is one of its keys to success. In the state, there were 19 Fortune 500 companies in 2018. Major businesses include UnitedHealth Group, Target, Best Buy, 3M, U.S. Bancorp, General Mills and Land O’Lakes. There is also global agribusiness giant Cargill Inc. in Wayzata, which is the largest privately-held corporation in the country, according to Forbes, and the Mayo Clinic in Rochester, Minnesota, which is the nation’s top-ranked hospital and an international leader in health care.
In addition to standout established industries – including medical devices, financial services, advanced manufacturing and clean energy – Minnesota has a burgeoning startup community.
Twin Cities Startup Week nearly doubled its attendance in 2018. Minnesota also became home to the OnRamp Insurance Accelerator located in the Twin Cities. Each year the accelerator will invest in five insurance tech startups who will receive a cash investment of $100,000 and participate in a three-month program.
The accelerator is sponsored by Allianz Life Ventures, Securian Financial and generator. It comes as a welcome addition to the Techstars Farm to Fork Accelerator and the Target + METRO Retail Accelerator with Techstars, that are already operating here.
These are part of an already impressive network of startup accelerator programs that exist in the state. Minne Inno reported in July 2018 that there were 14 such startup accelerators and incubators operating in Minnesota.
In total, Minnesota received $642 million in venture capital in 2018, ranking second in the Midwest.
This growth is supported by state programs that encourage both new and existing business development. The Angel Tax Credit has attracted more than $421.5 million in private investment and awarded than $101.4 million to investors since 2010. Its funding is a priority for Governor Tim Walz.
Other state programs helping new businesses include the Minnesota Innovation Loans for Entrepreneurs (MILE), which provides interest-free loans to early stage businesses developing or producing high-tech products or services in Minnesota; the Minnesota Emerging Entrepreneur Loan Program, which offers startups forgivable interest free loans; and the Angel Loan Fund which provides additional funding options for businesses certified to participate in the Angel Tax Credit Program.
In 2018, about $2 billion was invested in business expansions in Minnesota. That investment created over 8,600 new jobs and was the result of more than 225 new projects.
The Minnesota Investment Fund (MIF) and the Job Creation Fund (JCF) are key to fueling business expansion in the state. In 2018, the JCF awarded more than $9.5 million and leveraged a projected $149.1 million in eligible capital investment. This investment is expected to result in the creation of more than 1,300 new jobs in the state. MIF had similar results, with the program awarding $8.1 million, leveraging nearly $265 million and helping to create 850 jobs.
Among the major expansion projects in the past year:
Another growth area in Minnesota has been access to the internet. Minnesota’s nationally-recognized Border-to-Border Broadband Development Grant program was created to help connect unserved and underserved areas of the state to broadband infrastructure. It has awarded $85 million in grants matched by over $110.6 million in private funding and has expanded broadband to more than 33,000 households and more than 5,000 businesses in Greater Minnesota.
All this has combined to an incredible and unique ecosystem that encourages existing businesses to stay in Minnesota but also gives a space for new startups and companies to move in. This statewide collaboration between public and private sectors shows why Minnesota is Thriving in the North.
Visit https://www.expansionsolutionsmagazine.com/minnesota_edo for local economic development office directory listings.
Kevin McKinnon is deputy commissioner of economic development at the Minnesota Department of Employment and Economic Development.