By Kyle Peschler
From the July / August 2025 Issue
Enacted in 2023, the Minnesota Forward Fund provides resources that the state can leverage to increase business retention, expansion, and the attraction of projects in new and existing industries. The program is Minnesota’s premier finance program for major business expansions. The program also provides funding to meet the state match requirements of federal funding programs, such as the CHIPS Act.
The Minnesota Forward Fund helps create and retain permanent private sector jobs to create above-average economic growth consistent. The fund simulates private investment to ensure economic renewal and competitiveness, and increase the local tax base. The fund improves the quality of existing jobs, based on increases in wages or improvements in the job duties, training, or education associated with those jobs. The fund helps improve employment and economic opportunity for residents in the region to create a reasonable standard of living, consistent with federal and state guidelines on low to moderate income persons. The fund helps stimulate productivity growth through improved manufacturing or new technologies and lastly match or leverage private or public funding to increase investment and opportunity in the state.
The Minnesota Forward Fund can also be used to provide grants and loans to businesses that are making large private capital investments in new and existing industries; make grants to communities and higher education institutions to support such capital investments and related activities to support new and existing industries; and lastly address capital needs of businesses for machinery and equipment purchases, building construction and remodeling, land development, infrastructure, and working capital.
During the 2025 legislative session, lawmakers approved a significant change to the Minnesota Forward Fund. The Legislature removed a previous requirement that Minnesota Forward Fund awards be used as matching funds required by federal programs, making it easier for businesses to access state financing when considering expansions in Minnesota, regardless of federal funding.
“The Minnesota Forward Fund has positioned Minnesota to compete for and win large investments that are occurring as the United States works to create resilient domestic production and supply chains for economic security and economic enhancement opportunities,” said Kevin McKinnon, Deputy Commissioner for Economic Development at the Minnesota Department of Employment and Economic Development (DEED). “This revision enhances our state’s position to compete for business expansions and attract projects in response to a changing economic development and federal funding landscape.”
The Minnesota Forward Fund is one of several business expansion and workforce training programs in Minnesota, including DEED’s Minnesota Investment Fund, Job Creation Fund and the Minnesota Job Skills Partnership. Lawmakers approved funding for all of these programs, and more.
The Legislature also passed a $700 million infrastructure investment bill, Minnesota’s first in two years. Notably, lawmakers approved $176 million to build, upgrade and repair municipal water treatment plants, and $80 million for road and bridge repairs. Minnesota has one of the highest-rated transportation and logistics infrastructure systems in the country, something the Legislature’s investments will maintain and improve.
These changes come as Minnesota is increasingly attracting major business expansions that are helping transform the state’s economy.
Minnesota’s history of technological innovation, strong public-private economic development partnerships, and talented and educated workforce have made it an especially desirable location for companies looking to locate and expand.
Minnesota’s Increased Labor Force
In May 2025, Minnesota saw a strong month of job and labor force growth according to new data from the MN DEED. According to the data, Minnesota added 6,600 jobs in May, double the rate of the nation as a whole. Minnesota’s labor force grew by 2,236 people, continuing the labor market’s recent record of strong growth.
“May was another good month for Minnesota’s job market, with unemployment growth much stronger than the nation as a whole,” said DEED Commissioner Matt Varilek. “We’re grateful to the Governor and Legislature for adopting a new budget that will enable us to drive continued progress, with new flexibility for the Minnesota Forward Fund, the continuation of our Drive for 5 campaign to provide workforce training in high-demand fields and new funding to support Minnesota’s public service workforce.”
— Breaking News From Minnesota —
Governor Walz Earmarks $12M For Workforce Development
In August, Governor Tim Walz and the Minnesota DEED announced a $12 million investment in workforce development. The State Drive for 5 program provides competitive grants to provide workforce training and job placement in five high growth industries: caring professions, education, manufacturing, technology and the trades.
“Minnesota depends on a skilled, trained, and educated workforce,” said Gov. Walz. “We’re equipping Minnesotans with the support they need to step into high-demand industries, helping employers fill critical positions, supporting families and communities, and keeping our state competitive.”
DEED launched Drive for 5 in 2023 to expand access to workforce training in occupational groups where there is high demand for employees and a pathway to careers with family-sustaining wages. Drive for 5 addresses two of Minnesota’s most challenging problems: employment disparities faced by Minnesotans and a labor force shortage in key fields.
“Drive for 5 strategically targets occupational categories that are projected to be high-growth in the years ahead and that provide jobs with family-sustaining wages for workers,” said DEED Commissioner Matt Varilek. “We’re building on the program’s initial successes to benefit even more Minnesotans who need training and assistance to join the labor force in high-demand fields and to support Minnesota’s economy by preparing people for in-demand careers and meeting employers’ needs.”
“We are excited about this initiative and encourage training program providers, industry associations, chambers of commerce and other business organizations to apply for this next round of Drive for 5 grant funding,” said DEED Deputy Commissioner for Workforce Development Marc Majors. “The Drive for 5 initiative has been pivotal in transitioning Minnesotans into family-sustaining-wage careers that help lead to generational wealth.”
The latest Drive for 5 grant round is comprised of two programs:
- Industry Sector Training for partners that provide workforce development services, work-based learning opportunities, and job placement and retention. These programs prioritize transitioning participants from credentialed training to paid work-based learning opportunities, with the ultimate goal of securing employment or achieving career advancement within a related company or industry.
- Job Placement Services for partners that ensure Drive for 5 – Industry Sector Training program graduates are connected with employers that are currently hiring or anticipate near future employment opportunities in the program’s five targeted sectors.
DEED awarded nearly $20 million in Drive for 5 grants during the previous biennium. So far, initial grantees have enrolled approximately 800 Minnesotans in training programs.
