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!