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Is the Grass Really Greener…?

Technology

The public wrangling of the past few months over whether Minnesota’s competitive glass is half full or half empty has left me a little confused. You would think that in the midst of one of the best economies ever we would take time to celebrate the successes of our business community.

Instead, there is a fear that Minnesota has not been keeping pace with many other parts of the country in what is being referred to as the New Economy.

This concern is the result of several recent reports indicating that Minnesota is lagging in venture capital investment and entrepreneurial activity. But it’s important that we keep a sense of perspective.

We need to recognize that for more than a century, Minnesota has maintained its position as a leading center of commerce in the United States because of its diverse, balanced economy—not because of a particular technological edge.

Competitiveness in technology has historically been cyclical in nature and no community or geographic area has held a long-term stranglehold. For instance, a decade ago, the predictions were that Japan’s technological leadership was going to dominate the world.

During the 1990s, both Austin, Texas and San Francisco suffered significant recessions. Today, Japan is still recovering from a long recession while both Austin and San Francisco appear to be flourishing.

We need to remind ourselves that the current e-revolution is still in the beginning stages; it is far too early to start winnowing out the winners and losers. We also need to remember that the business landscape soon will be altered by new waves of technology. 

So, before we throw ourselves into one of those ‘woe is me,’ self-deprecating, the-grass-is-greener-in-the-Silicon-Valley rants, here are some of the things you need to remember when you hear that Minnesota is losing its competitive edge:

We need to recognize that technology is more than just the Internet and dot-coms. From advanced manufacturing to agribusiness and the life sciences, new innovations are creating new companies and helping existing Minnesota firms become more competitive.

This breadth includes industry leaders Medtronic, ADC, 3M, Cargill, and Imation as well as new firms such as Optical Solutions, SurModics, Net Perceptions, DataLink, Redtagbiz, Digital River, and Zomax. This diversity has, in many ways, made us the envy of other parts of the country.

Some of the studies that gave us low marks for entrepreneurial activity rank us high in other areas. For example, the American Electronics Association’s Cyberstates Report ranks us 7th in high-tech manufacturing employment in the nation. The Progressive Policy Institute’s Technology, Innovation and New Economy Project gives us low marks for “job churning” and “gazelle” jobs, but ranks Minnesota in the top 10 states in the nation in knowledge jobs, high-tech jobs and technology in schools. 

Competitiveness is not limited to companies developing new technologies—it also comes about as the result of existing industries exploiting and applying technology that has been developed all over the globe. Moreover, the current wave of innovation in Information Technology is perfect for our business community because they are enabling technologies (i. e., they lend themselves to making existing businesses more productive). 

Minnesota companies excel at using technology as a tool for running their businesses more effectively. Just look at “old economy” firms such as Best Buy and Fingerhut that are touted as leaders in applying Internet-based technologies.

Veritas Software, one of the fastest-growing software companies in the country, plans to add some 400 employees to its Twin Cities operations, making it the company’s third largest hub in the country. In Yahoo!’s Net Life rankings of the most wired cities in the U.S., Minneapolis-St. Paul is in 8th place. These are all indications that Minnesota remains a leader in embracing Internet-based technologies.

There is, of course, concern about the low number of new companies and the lag in venture capital investment coming into Minnesota. While this part of our economy is not as dynamic as other regions, this also needs to be put into context.

Econoym Technology

Knowledge, New Ideas and “Place”

Tech economy

 I ended my last column with a prediction that the real indicator of Minnesota’s future economic health would be how quickly the state’s public and private sector leadership would translate the findings of the recent Summit on Minnesota’s economy into action.

The one immediate outcome of this event was the formation of a 21-person committee to consider ideas from the Summit and develop policy recommendations in the areas of taxes, capital development, workforce development, and higher education. While these are all critical public policy issues, they are essentially the same subjects our state has been grappling with for years.

It’s vital for us to view the issue of Minnesota’s competitiveness in the New Economy in a different context than past public policy discussions. The action needed to address these issues will probably break new ground for our state. We should not forget the original premise that generated this public debate last spring: Minnesota is not positioned to compete in the technology-based New Economy of the future.

My take as I left the Summit was that although the economy is good today, we cannot take the future for granted. Any technology-based economic development strategy will need to place a high priority on the building blocks of the New Economy-knowledge, new ideas and “place.”

So, what are some of the things we as a state can do to deal with these issues?

First, we need to recognize that creating a knowledge-based economy in many respects simply means having as many talented people in our state as we can find.

There are several approaches we can take. We can figure out better ways to keep our college graduates in Minnesota, attract people from other states or open our doors to professionals from other countries. (Iowa is developing strategies along these lines.)

If there was one message that was made loud and clear at the Summit, it is that demographic trends are decidedly not in Minnesota’s favor. There simply are not enough of us. Without people, particularly talented ones, it will be very difficult to continue to grow any kind of prosperous economy, let alone one that is based on knowledge and high-tech skills.

We need to acknowledge that the premier public institution that serves as a magnet for talent in our state is the University of Minnesota. One may disagree over the level of state investment required to support the U, but with no other research university, Federal Laboratories or private research facilities in Minnesota, we need to recognize the U’s critical role in supporting the growth of the New Economy in our state.

Taking action on keeping and attracting talent needs to be job #1.

The second component of this New Economy – new ideas – reflects the fast pace of technological change and the continuous need for companies to bring new products to market and for individuals to create new companies to keep our economy vibrant.

It is around this issue that various public sector initiatives have been proposed to accelerate the pace of new product commercialization and company formation.

These have included providing seed and/or venture capital to start-up companies, the creation of technology incubators, tax credits/incentives, commercialization of U of M technology, and the creation of an R&D Institute. While all of these ideas have potential, it’s important to remember none of these (in isolation) is a magic carpet to New Economy success.

What is important is the creation of an environment that is conducive to helping New Economy companies grow. That means any public initiative undertaken should be adequately financed and sustainable over the long haul. This is no time for pilot projects.

The third building block of this New Economy is “place.”

We used to think that because the Internet would make it possible for us to conduct business from anywhere, it would not matter where we lived. But, in fact, we are discovering that location and good quality of life are very important to workers in the New Economy.

It may come as a surprise to the many Minnesotans who joke about the weather that our quality of life is considered one of the best in the country. It’s hard to recruit people to come work in Minnesota, but once here, they generally stay.

We need to do a better job of promoting our state’s assets. Many of us see Minnesota as a wonderful vacation and tourist location, but we also should be marketing ourselves as a major technology center and as a good place to live and raise a family.

Knowledge, new ideas and place – all three of these building blocks of the New Economy are connected. As we begin reviewing policies to address our competitiveness, we need to remember to develop them within this overall context.

And we need to get moving RIGHT NOW!

Technology Wordpress

WordPress Technology In Greater Minnesota Campaign

Wordpress Website Development

Minnesota Technology conducted an extensive survey of business leaders throughout greater Minnesota, tapping the perspectives of the region’s economic development leaders and general citizenry as well.

Capturing the viewpoints of 704 individuals, the survey components included a fax survey and one-on-one interviews with the management of greater Minnesota growth companies, focus groups of regional business and economic development leadership, and a random telephone survey of greater Minnesota citizens.

The results complement the recommendations gleaned from other feedback initiatives, such as Minnesota Planning’s Listening Posts and DTED’s pre-Rural Summit sessions.

In brief, these conclusions are: Top managers of Minnesota’s rural manufacturing and technology-based companies are strongly committed to keeping their companies in greater Minnesota.

Despite some of the difficulties of doing business in more remote areas of the state, 90% of the survey participants affirmed their intentions to keep their businesses in greater Minnesota. Less than 2% disagreed, while 8 % were neutral. Focus group participants and interviewees affirmed this commitment to greater Minnesota.

Geographical amenities and lifestyle were called out as strong competitive advantages in attracting workers and appeared to play heavily into company leaders’ reasons for locating in greater Minnesota.

This commitment evidences a strong foundation within the industry for the continued diversification of the greater Minnesota economy. 9/11/00 3:10 PM Manufacturing and technology-based companies are recognized as fundamental to the growth of a diversified, greater Minnesota economy.

Business leaders overwhelmingly said manufacturing is the primary driver of economic success in their region. When asked to characterize the companies that lead to growth, respondents most frequently looked to companies that have institutionalized the use of technology.

This finding echoes similar observations made by citizen participants and economic development officials in Minnesota Planning’s Listening Posts and DTED’s preRural Summit. In fact, technology was called out as a top priority at the pre-Rural Summit sessions.

Economic development officials also noted that the fastest-growing companies in their regions were those that had made substantial investments in technology. And when asked in which industries they would like to see more jobs in their town, 81% of phone survey respondents said manufacturing. Seventy percent also hoped to see more jobs in Information Technology, despite the fact that only 21% said their town depends on IT now.

Technology

Laying the foundation for a technology-based regional economy

Tech

On May 1, 2020, Technology Plus Center, a private 501 (c)(3) organization, moved into the 63,000 square-foot office building it purchased in late 1999.

Located in northeast Mankato within the Eastwood Industrial Park, Technology Plus Center is midway through its implementation schedule and is beginning to look and act very much like an epicenter of technological growth and development.

Since May, the project has focused on work related to its first phase —establishing anchor tenants and remodeling for the classroom, business, incubator and community use.

As of November, it is continuing to remodel as well as lay the groundwork for phase two —the establishment of a satellite community access center in downtown Mankato. 

Project staff point with pride to several accomplishments.

Technology Plus Center has secured its own 24,000 square-foot space, nearly completed the building’s telecommunications wiring, renovated and leased 25,000 square feet to the building’s previous owner (a company that was planning to relocate its 100 employees out of the area), secured office space for Minnesota Technology, Inc. and the Institute for Wireless Education, settled three incubator companies within the building, housed two ongoing student projects involving 3M in St. Paul and Brown Printing in Waseca, and is negotiating leases with enough companies to fill the remaining 12,000 square feet set aside for full-paying anchor tenants by early next year.

More Than Just a Building

The project got its formal launch in 1998 when it received a $4.5 million state grant.

An additional $4.5 million in local matching funds brought the budget to $9 million, and the project proceeded to form a nine-member steering committee representing businesses, government agencies, institutions of higher learning, public entities, and secondary and elementary schools.

This committee, in turn, hired Dr. Layne Hopkins, a newly retired Minnesota State University computer science professor, to head up the project.

But the project’s actual history dates back as far as 1989. Dr. Hopkins, who was one of those advocating the idea of a technology center, remembers the early skepticism.

“Back then,” he says, “everyone just laughed.” But during the 1990s, Mankato began to emerge as a center for cutting-edge wireless technology, helping to facilitate partnerships and initiatives linking academic and technical institutions in both Mankato and Finland.

Mankato’s reputation as a region responsive to the high-tech needs of the business community and supportive of creative academic/industry partnerships continued to grow, providing the basis for Technology Plus Center’s present successes.

Dr. Hopkins emphasizes the importance of the center’s synergistic role —its ability to bring technology players together, allow them to explore mutual areas of interest, and spark a variety of new initiatives.