The Minnesota economy has been surging since the end of the Great Recession, with employers adding nearly 230,000 jobs. Companies are expanding and others are moving operations into the state, attracted by Minnesota’s positive business climate and strong workforce.
State programs that encourage business expansion are making a difference, too. When Andersen Corp., a window and door maker that has been operating in Minnesota for more than a century, announced a $45 million expansion last year, CEO Jay Lund said state support was crucial in making the project happen.
The company tapped Minnesota’s new Job Creation Fund, which awards grants for corporate expansion projects in exchange for job and investment commitments.
“While we had many options on where to locate this production facility, there were compelling business reasons to expand in our home state of Minnesota,” Lund said. “The support we received from the state made a difference and is greatly appreciated.”
Minnesota’s thriving business climate is starting to gain appreciation outside the state as well. The national business channel CNBC named Minnesota America’s Top State for Business 2015 after looking at 60 measures of competitiveness. In particular, Minnesota was strong in education, quality of life, economy, and technology and innovation.
Minnesota also shines when it comes to major corporations, with 17 Fortune 500 companies headquartered in the state, including powerhouses like 3M, General Mills, Target and U.S. Bancorp.
A major factor in keeping those companies in Minnesota – and attracting others to expand here – is the quality of the workforce. From skilled high-tech and scientific professionals to well-trained workers in the trades and production, Minnesota has a large, talented pool of workers.
Minnesota is justifiably proud of having one of the most educated workforces in the nation. The state ranks fourth for the percent of the population with a high school diploma or higher (92.4 percent) and ranks 11th for the percent of the population with a bachelor’s degree or higher (33.5 percent), according to the U.S. Bureau of Labor Statistics.
Maybe more importantly, those newly-minted college graduates are staying in the state. Eighty percent of students who graduate from one of the 31 institutions in the Minnesota State Colleges and Universities system stay in Minnesota to work or continue their educations.
The list of companies that are expanding in the state continued to grow in 2015. Projects in the past year include the following:
- Takeda Pharmaceutical Corp., the largest pharmaceutical company in Japan and among the largest in the world, said early in 2016 that it will open a drug-manufacturing facility in Brooklyn Park. The facility is expected to have a workforce of about 200 employees earning salaries of between $90,000 and $220,000 a year.
- Biomaterials manufacturing firm Lifecore Biomedical announced plans in August to invest $18 million and create 68 jobs in an expansion of its facilities in Chaska.
- Arctic Cat Inc., which makes snowmobiles and other off-road vehicles, said it planned to create 50 jobs and invest nearly $27 million to expand manufacturing facilities in Thief River Falls and St. Cloud.
The Minnesota Job Creation Fund – one of the state’s newest economic development programs – was a factor in the latter two projects. This innovative pay-for performance program has approved $29 million in funding for 58 business expansion projects since it was launched in January 2014. In exchange, those companies have committed to creating nearly 3,800 jobs in Minnesota and investing just under $600 million in private funding.
Another initiative that is having a major impact in the state is the Angel Tax Credit Program. The Minnesota Legislature created the program in 2010 to provide an incentive for making equity capital investments in startup businesses.
Under the program, qualified investors receive a state tax credit of 25 percent for investing at least $10,000 in qualified businesses. Every $1 in tax credits awarded to private investors generates $4 in investments for startup businesses.
Since the program began, nearly 350 startup businesses in the state have attracted $318 million in investments.
A new focus of the program in the past year has been getting more investment funding into the hands of businesses based in Greater Minnesota or launched by women or members of minority groups. Half of the program’s tax credits last year ($7.5 million) were targeted at investments in businesses owned by those groups.
Thanks to that strategy, 13 startup businesses that were minority-owned, 10 that were women-owned and 13 that were headquartered in Greater Minnesota received investment funding from participating in the Angel Tax Credit Program in 2015.
They include 75F, a minority-owned Mankato business that attracted $680,000 in Angel Tax Credit Program-related investments last year. The startup developed a wireless monitoring system to reduce heating and cooling costs in small commercial buildings.
The state’s broadband initiative is also driving economic growth, particularly in pockets of rural Minnesota that don’t have adequate high-speed internet connections. Without those connections, communities often have a difficult time attracting new businesses and residents.
The Minnesota Legislature created the Office of Broadband Development in 2013 to promote broadband expansion statewide. Since then, the state’s Border-to-Border Broadband Development Grant Program has awarded about $30 million for 32 projects in rural Minnesota. Thanks to those projects, nearly 10,000 households, not to mention hundreds of businesses and community institutions, will have access to high-speed internet for the first time.
Other initiatives like the state’s Contamination Cleanup Program, Small Cities Development Program, Transportation and Economic Development Program, and STEP grants are also encouraging economic development and job growth in Minnesota.
The state is taking a proactive approach to shifting demographics in the labor market, as a new generation of workers is positioned to replace retiring baby boomers. The next decade will be crucial in making sure under-skilled and underemployed workers are ready to fill positions that enable companies to expand and grow in Minnesota.
Minnesota’s Pathways to Prosperity Program is one effort that is helping to prepare the workforce. The program helps low-wage and low-skill adults receive training in high-demand fields, such as health care and manufacturing.
Another program, the Minnesota Job Skills Partnership, provides funding that enables companies to upgrade the skills of existing workers and to train new workers. Local colleges work with the companies to develop customized training programs. Nearly 12,000 workers in Minnesota benefited from the program last year.
Minnesota’s deep and talented pool of workers is a key economic advantage. Over and over, corporate executives say the No. 1 factor in their decisions to expand in the state is the quality of its workforce. Programs like Pathways to Prosperity and the Minnesota Job Skills Partnership will help keep Minnesota thriving in the north.
Visit http://www.expansionsolutionsmagazine.com/minnesota_edo for local economic development office directory listings.
