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State Focus: Minnesota’s Formula For Success

By Robert Tilton
From the March/April 2014 issue

Minnesota’s economy is going strong, thanks to a high-quality workforce, a healthy mix of companies and a favorable business climate. Its economy has shifted into high gear since the end of the recession, generating thousands of jobs and attracting corporate expansion projects statewide. The state’s unemployment rate was tied for the eighth lowest in the country by the end of 2013 and was a healthy 2 percent below the U.S. jobless rate.

Thanks to a robust economy and strong workforce, Minnesota attracted more than 150 corporate expansion projects last year, many of them in the Twin Cities. (Photo: Minnesota Department of Employment and Economic Development.)

Thanks to a robust economy and strong workforce, Minnesota attracted more than 150 corporate expansion projects last year, many of them in the Twin Cities. (Photo: Minnesota Department of Employment and Economic Development.)

Minnesota added nearly 46,000 jobs last year and reached a milestone by officially recovering all the jobs that were lost in the recession. The Twin Cities—the state’s economic engine—had the lowest unemployment rate of any major metropolitan area in the country. Minneapolis alone generated nearly 15,000 new jobs from 2010 to 2012, according to an analysis last year by the Minnesota Department of Employment and Economic Development (DEED).

The state’s world-class mix of companies is one part of the Minnesota formula for success. The state has 18 Fortune 500 companies specializing in areas such as health care, financial services, retail and food production. The list includes Target Corp., General Mills, Medtronic, UnitedHealth Group and 3M. Agricultural commodities giant Cargill Inc., the largest privately held company in the country, is headquartered in Wayzata. Water technology is another strong industry in the state, employing nearly 15,500 people in water and wastewater treatment technology. With its strong lineup of companies and water technology know-how, Minnesota is poised to tap what many experts are predicting will be a $22 trillion industry worldwide by 2030.

Perhaps the state’s biggest advantage is its workforce. Over and over, corporate executives say the No. 1 factor in their decisions to expand in Minnesota was the quality of the state’s labor pool.

Minnesotans, ingrained with a strong Midwestern work ethic, are frequently cited for their high productivity, motivation and low absenteeism. Minnesota ranks second in the country, behind only Montana, with 92 percent of the adult population earning a high school degree. It is 11th in the percent of the population with a bachelor’s degree or higher, with nearly one-third of the state’s workers having earned a college degree. The state also has a network of more than 200 public and private universities, colleges and technical schools, including some of the country’s most admired and respected institutions.

Geringhoff, a German farm-implement manufacturer that began production at its first North American facility in St. Cloud late last summer, is among the companies that cited the quality of the state’s workforce in its decision to expand here. Joseph Jandrisch, CEO and president of Geringhoff North America, described the workforce in the St. Cloud area as “world class.”

“In the end, it was the people from Minnesota and the St. Cloud region that made the difference,” he said.

All told, last year Minnesota attracted nearly 150 expansion projects that will bring 7,700 jobs to the state. Manufacturing led the way with about half the expansion projects.

Among some of the state’s bigger projects:

  • Shutterfly Inc., an Internet-based image publishing service headquartered in Redwood City, Calif., broke ground on a 217,000-square-foot office and manufacturing complex in Shakopee that will create about 329 jobs.
  • Olympus, a Pennsylvania-based maker of precision surgical instruments and related products, announced plans in November to build a $37 million research, development and manufacturing facility in Brooklyn Center. The project will create 100 jobs and retain another 265 positions in the area.
  • Endeavor Airlines, an executive jet line and Delta Air Lines subsidiary, moved its corporate headquarters from Memphis, Tenn., to Bloomington, near the Minneapolis-St. Paul International Airport. The move brought 200 corporate jobs to the Twin Cities.

Meanwhile, tractor manufacturer AGCO in Jackson has nearly doubled its workforce to more than 1,400 employees in the last two years. WFSI, a Sauk Rapids company that does customized welding projects for the energy and defense industries, is adding 32 new jobs in that central Minnesota community. And in another expansion, New Flyer of America, a Canadian bus manufacturer, is adding 136 jobs at its St. Cloud factory.

Along with a strong workforce and friendly business climate, incentives also are helping to attract companies to Minnesota. From tax breaks to worker training grants to infrastructure improvements, a variety of incentives and financial assistance is available to help companies start up, expand and relocate in Minnesota. Programs include:

  • Minnesota Investment Fund—The program awards grants and loans to companies that commit to expanding and creating jobs in Minnesota.
  • Minnesota Job Creation Fund—This new performance-based program pays up to $1 million to businesses that meet certain criteria, including commitments to job creation and private investment.
  • Minnesota Job Skills Partnership Program—The program enables businesses and educational institutions to develop customized training for workers.
  • Redevelopment Grant Program—The program helps communities put blighted industrial, residential and commercial sites back into productive use by contributing funding for redeveloping those sites.
  • Angel Tax Credit Program—Qualified investors can receive a tax credit of 25 percent on investments of at least $10,000 in emerging companies that specialize in high technology or new proprietary technology. The program has attracted $236 million in private investments for small and emerging companies, particularly software, medical device and biotechnology firms, since it was launched in 2010.

GREATER MSP: SOLVING CHALLENGES OF THE FUTURE

The Greater Minneapolis Saint Paul region is solving its most important challenges for the future. Safe and abundant food, clean water and health solutions will drive the global economy in the coming years. The Greater MSP region is the leader in these technologies and industries, and has the R&D, financial and business services infrastructure to support them. Its highly educated and culturally connected workforce will create the business success, and its quality of life and social collaboration will sustain that success.

With a wide assortment of talented workers and a rich history of innovation, research and product development, Minneapolis-Saint Paul is home to the United States’ top corporations and a leader in health and life sciences, food and agriculture, technology and financial services.

Greater MSP has a gross domestic product of $220 billion, making it a significant global economy. Its GDP is growing at nearly twice the rate of the U.S. average. It has a growing and diverse population of over 3.2 million.

Located in the central U.S., companies in Greater MSP are able to maximize access to clients and suppliers throughout the world. The region is a major transportation hub and travelers can reach any market in the country within three hours by air. MSP International Airport offers non-stop flights to 114 U.S. cities and 21 international cities and has been consistently rated a top airport for efficiency and ease of use. The region sits in the middle of major trucking, shipping and railroad systems, allowing goods to flow efficiently throughout the country.

Greater MSP has one of the best educated and productive workforces with:

  • 93 percent of adults having a diploma;
  • 47 percent having an associate’s, bachelor’s or graduate degree; and a
  • 71 percent labor force participation rate.

Key Industries in the region include:

Health and Sciences
Greater MSP boasts a significant health and life sciences community with over 600 companies and the 2nd highest concentration of life science workers in the United States. Its mix of companies includes everything from medical devices to a fast-growing bio-pharma industry. Healthcare IT and service providers are outstanding. Of the major life science markets in the United States, Greater MSP has the second lowest operating costs. The region is home to two of the world’s leading institutions in life science and technology research: the University of Minnesota and the Mayo Clinic which conduct over $1 billion in research each year. Combined with private sector R&D, it is the largest market for health and life science research in the world.

Food and Water Solutions
Whether involved in growing, trading, distributing or processing, food and agriculture companies prosper in Greater MSP. Companies in the region dominate the food production cycle. Minnesota is the 6th largest agricultural exporter in the United States and home to leading corporations such as Cargill and General Mills. State-of-the-art equipment and technology at the University of Minnesota ensure that the region is a driving force in the food and agricultural sector.

The region is also widely regarded as the “Silicon Valley” of water technology. No other region in the world has the breadth and depth of innovative, industry leading water technology companies, such as Ecolab, Pentair, 3M and many more.

Corporate Headquarters and Business Services
With 19 Fortune 500 companies and many of the United States’ largest privately held companies Greater MSP has the highest concentration of corporate headquarters in the country. These companies have defined their industries on a global basis. A network of companies serves these corporations including accounting and finance, marketing services, supply chain, information technology and research and development. This foundation of firms ensures that enterprises thrive in this unique community.

Advanced Manufacturing and Technology
Greater MSP has been ranked the 6th most inventive city in the world by Bloomberg Businessweek. Its strength in Research and Development, Software and IT development, Advanced Manufacturing and Energy and Renewables drives the innovation that is a hallmark of the region. Greater MSP is one of the top locations for key technology talent. The concentration of software engineers is 72 percent higher than the national average while its consumer and electronic product manufacturing is 124 percent above the national average.

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