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Minnesota
World Class Competitor
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In the challenging global market, the North Star State is
leading the way.
In good times or bad, Minnesota counts its economic blessings.
In the superheated 1990s, the North Star State's red-hot economy grew 23 percent faster than that of the U.S. When the ensuing recession hit, Minnesota's economy slowed but didn't stop percolating. As recently as April of this year, the unemployment rate stood at 4.3 percent, significantly lower than the national rate of 6 percent.
Its robust growth and resiliency have earned Minnesota top ratings on the economic scorecards of organizations that keep track of such things. Most recently, in a global survey of 300 cities done by a United Kingdom think tank, the Twin Cities region was ranked as the most competitive "knowledge economy" in the world.
Such recognition reflects the state's growing reputation as a major player in the national and global economic arenas. "I have no doubt that Minnesotans can compete with anybody in the world," says Governor Jesse Ventura. As if to prove his point, the governor recently led a business development mission to China. And there are ample statistics to support his assertion that Minnesota is a world-class competitor.
Consider just a few of them. Between 1990 and 2000, Minnesota's manufactured exports increased by 31 percent, adjusted for inflation. They rose to almost $10 billion in products exported to 187 countries in 2001. The Asia-Pacific region and Europe accounted for nearly 67 percent of that total, and they are expected to expand by almost $2 billion over the next five years.
Minnesota refutes conventional "Sunbelt" wisdom, which equates warm weather with hot business climates. Ranked fifth in area and 21st in population among the 50 states, Minnesota regularly sets nationwide lows on the country's weather map. In its towns and cities, hockey skates are de rigueur for boys and girls, and a good freeze means it's time to tow the fish house down to the lake.
Minnesota is the source of the mighty Mississippi River. It begins as a small creek trickling from Lake Itasca in the northwest quadrant of the state, and becomes the third largest river in the world. On its 2,350-mile journey to the Gulf of Mexico, the Mississippi divides the Twin Cities of Minneapolis and St. Paul, a metropolitan area of 3 million people. Eighty miles south of the Twin cities is Rochester, home to the Mayo Clinic, where a half million patients are treated annually.
When it comes to marketing products worldwide, Minnesota-based companies have created such universally recognized brands and symbols as Pillsbury's Jolly Green Giant and Little Doughboy, General Mills' Betty Crocker, and 3M Company's Scotch brand.
For every long-established company, there are many fledgling companies poised for growth, especially in the area of technology. Minnesota has been called the "Silicon Valley of the Midwest." Some 2,300 computer companies have facilities in the state. It is in fact the birthplace of much technological innovation. One example: The first supercomputer was developed here by Seymour Cray, a graduate of the University of Minnesota.
Like technology companies everywhere, however, Minnesota's have bucked severe economic headwinds during the past two years. Many have repositioned themselves. A good example is ADC, a worldwide provider of broadband systems. With annual sales of $2.4 billion, ADC is headquartered in a gleaming new facility in the Minneapolis suburb of Eden Prairie, where it has prepared for the future. "It has been a rough year for telecommunications companies of all kinds, and that includes technology companies like ADC," says Richard R. Roscitt, chairman and CEO. "Going forward, we have placed our bets on broadband solutions for telephone, wireless and cable service providers, and we're poised to grow when the market resumes some degree of health. We believe that will happen in 2003."
But Minnesota needn't stake its future on the health of any single industry, for its economic base is diverse. It is home to a broad spectrum that includes the manufacture of medical products, production of scientific and technical instruments, advertising, legal and accounting services, health care, forest products, computers, printing, publishing and food processing. Increasingly important to the mix is tourism, which the state says returns $9 for every $1 invested. And, as a major agricultural producer, Minnesota ranks sixth in the nation in cash receipts from field crops and eighth in receipts from livestock.
Many of the agricultural areas are served by Great River Energy, which is Minnesota's second-largest electric utility based on generating capacity. It was formed in January 1999 with the consolidation of Cooperative Power and United Power Association, and is now the fourth-largest generation and transmission cooperative in the country, in terms of assets. "We're serving a region with a growing appetite for energy," says Jim Van Epps, company CEO. "Our service area stretches from the farming communities in southern Minnesota through the lake country to the logging industry at the northern tip of the state."
According to Van Epps, Great River Energy expects even greater demands for its service. "We serve many of the Minneapolis-St. Paul outer-ring suburbs, an area that consistently has been one of the nation's leaders in job growth and energy usage. That growth is expected to continue well into the future."
Successful cooperatives such as Great River Energy come as no surprise in Minnesota, which has a reputation as a progressive state. It's known for generously funding many programs with tax dollars. Much of that tax money, says Governor Ventura, supports a superlative education system. Taxes also provide the financial underpinnings for a lifestyle Minnesotans jealously preserve. "You get a good bang for your buck," says the governor. "Your quality of life is high, so that's the trade-off."
The Minnesota lifestyle has plenty of appeal even for those not born to it. "Minnesota is a great place to live, a great place to raise a family," says Jay Coughlan, CEO of Lawson. Coughlan came to Lawson, a provider of collaborative, industry-tailored enterprise software solutions for the needs of service industries, from Philadelphia. Privately held when Coughlan arrived 15 years ago, Lawson is now a publicly held company with more than $400 million in annual sales. For the fiscal third quarter that ended in February, the St. Paul-based company reported the second best quarter in its history for revenue and net income performance.
Important as lifestyle is to its economic vitality, Minnesota has not ignored the importance of the bottom line. To that end, it whittled away more than $1 billion of state-imposed taxes on businesses in the last decade, including a reduction in workers' compensation taxes, as well as decreases in business property taxes.
Lacking Sunbelt seasons, Minnesota has nurtured education, workforce training, high-tech industries and the other essential ingredients to find a formula for keeping and attracting successful businesses. Judged by the results, it's a formula that works, to the benefit of companies inside and outside Minnesota's borders.
As an example, U.S. Bancorp was acquired by Firstar Corporation early last year, which led to its becoming the 8th largest financial-services holding company in the United States. One of its subsidiaries, U.S. Bancorp Piper Jaffray, provides a full range of investment products and services to businesses, institutions, and individuals. Its three major business lines include private advisory services, equity capital markets and fixed income capital markets.
With 2,900 employees, U.S. Bancorp Piper Jaffray has 120 offices in 23 states, so its financial reach goes far beyond Minnesota. Coming off 2001, the results were impressive at every level. The division had more than 550,000 client accounts, representing $50 billion in client assets; the equity capital markets unit had been named "Middle Market Mergers and Acquisitions (M&A) Bank of the Year" by Mergers and Acquisitions magazine; and the fixed income capital markets included $6.29 billion in municipal underwriting and $11.5 billion in total agency underwriting.
When its new headquarters was built at 800 Nicollet Mall in downtown Minneapolis, U.S. Bancorp Piper Jaffray accommodated its growth and future by creating two clean-line-of-sight, state-of-the-art trading floors, one for equity capital markets and another for fixed income capital markets. The floors so impressed CNBC that the cable network sent a reporter to do a story about the sophistication of such operations located in Minnesota. What else would one expect to find in a state that's a world-class competitor?
In good times or bad, Minnesota counts its economic blessings.
In the superheated 1990s, the North Star State's red-hot economy grew 23 percent faster than that of the U.S. When the ensuing recession hit, Minnesota's economy slowed but didn't stop percolating. As recently as April of this year, the unemployment rate stood at 4.3 percent, significantly lower than the national rate of 6 percent.
Its robust growth and resiliency have earned Minnesota top ratings on the economic scorecards of organizations that keep track of such things. Most recently, in a global survey of 300 cities done by a United Kingdom think tank, the Twin Cities region was ranked as the most competitive "knowledge economy" in the world.
Such recognition reflects the state's growing reputation as a major player in the national and global economic arenas. "I have no doubt that Minnesotans can compete with anybody in the world," says Governor Jesse Ventura. As if to prove his point, the governor recently led a business development mission to China. And there are ample statistics to support his assertion that Minnesota is a world-class competitor.
Consider just a few of them. Between 1990 and 2000, Minnesota's manufactured exports increased by 31 percent, adjusted for inflation. They rose to almost $10 billion in products exported to 187 countries in 2001. The Asia-Pacific region and Europe accounted for nearly 67 percent of that total, and they are expected to expand by almost $2 billion over the next five years.
Minnesota refutes conventional "Sunbelt" wisdom, which equates warm weather with hot business climates. Ranked fifth in area and 21st in population among the 50 states, Minnesota regularly sets nationwide lows on the country's weather map. In its towns and cities, hockey skates are de rigueur for boys and girls, and a good freeze means it's time to tow the fish house down to the lake.
Minnesota is the source of the mighty Mississippi River. It begins as a small creek trickling from Lake Itasca in the northwest quadrant of the state, and becomes the third largest river in the world. On its 2,350-mile journey to the Gulf of Mexico, the Mississippi divides the Twin Cities of Minneapolis and St. Paul, a metropolitan area of 3 million people. Eighty miles south of the Twin cities is Rochester, home to the Mayo Clinic, where a half million patients are treated annually.
When it comes to marketing products worldwide, Minnesota-based companies have created such universally recognized brands and symbols as Pillsbury's Jolly Green Giant and Little Doughboy, General Mills' Betty Crocker, and 3M Company's Scotch brand.
For every long-established company, there are many fledgling companies poised for growth, especially in the area of technology. Minnesota has been called the "Silicon Valley of the Midwest." Some 2,300 computer companies have facilities in the state. It is in fact the birthplace of much technological innovation. One example: The first supercomputer was developed here by Seymour Cray, a graduate of the University of Minnesota.
Like technology companies everywhere, however, Minnesota's have bucked severe economic headwinds during the past two years. Many have repositioned themselves. A good example is ADC, a worldwide provider of broadband systems. With annual sales of $2.4 billion, ADC is headquartered in a gleaming new facility in the Minneapolis suburb of Eden Prairie, where it has prepared for the future. "It has been a rough year for telecommunications companies of all kinds, and that includes technology companies like ADC," says Richard R. Roscitt, chairman and CEO. "Going forward, we have placed our bets on broadband solutions for telephone, wireless and cable service providers, and we're poised to grow when the market resumes some degree of health. We believe that will happen in 2003."
But Minnesota needn't stake its future on the health of any single industry, for its economic base is diverse. It is home to a broad spectrum that includes the manufacture of medical products, production of scientific and technical instruments, advertising, legal and accounting services, health care, forest products, computers, printing, publishing and food processing. Increasingly important to the mix is tourism, which the state says returns $9 for every $1 invested. And, as a major agricultural producer, Minnesota ranks sixth in the nation in cash receipts from field crops and eighth in receipts from livestock.
Many of the agricultural areas are served by Great River Energy, which is Minnesota's second-largest electric utility based on generating capacity. It was formed in January 1999 with the consolidation of Cooperative Power and United Power Association, and is now the fourth-largest generation and transmission cooperative in the country, in terms of assets. "We're serving a region with a growing appetite for energy," says Jim Van Epps, company CEO. "Our service area stretches from the farming communities in southern Minnesota through the lake country to the logging industry at the northern tip of the state."
According to Van Epps, Great River Energy expects even greater demands for its service. "We serve many of the Minneapolis-St. Paul outer-ring suburbs, an area that consistently has been one of the nation's leaders in job growth and energy usage. That growth is expected to continue well into the future."
Successful cooperatives such as Great River Energy come as no surprise in Minnesota, which has a reputation as a progressive state. It's known for generously funding many programs with tax dollars. Much of that tax money, says Governor Ventura, supports a superlative education system. Taxes also provide the financial underpinnings for a lifestyle Minnesotans jealously preserve. "You get a good bang for your buck," says the governor. "Your quality of life is high, so that's the trade-off."
The Minnesota lifestyle has plenty of appeal even for those not born to it. "Minnesota is a great place to live, a great place to raise a family," says Jay Coughlan, CEO of Lawson. Coughlan came to Lawson, a provider of collaborative, industry-tailored enterprise software solutions for the needs of service industries, from Philadelphia. Privately held when Coughlan arrived 15 years ago, Lawson is now a publicly held company with more than $400 million in annual sales. For the fiscal third quarter that ended in February, the St. Paul-based company reported the second best quarter in its history for revenue and net income performance.
Important as lifestyle is to its economic vitality, Minnesota has not ignored the importance of the bottom line. To that end, it whittled away more than $1 billion of state-imposed taxes on businesses in the last decade, including a reduction in workers' compensation taxes, as well as decreases in business property taxes.
Lacking Sunbelt seasons, Minnesota has nurtured education, workforce training, high-tech industries and the other essential ingredients to find a formula for keeping and attracting successful businesses. Judged by the results, it's a formula that works, to the benefit of companies inside and outside Minnesota's borders.
As an example, U.S. Bancorp was acquired by Firstar Corporation early last year, which led to its becoming the 8th largest financial-services holding company in the United States. One of its subsidiaries, U.S. Bancorp Piper Jaffray, provides a full range of investment products and services to businesses, institutions, and individuals. Its three major business lines include private advisory services, equity capital markets and fixed income capital markets.
With 2,900 employees, U.S. Bancorp Piper Jaffray has 120 offices in 23 states, so its financial reach goes far beyond Minnesota. Coming off 2001, the results were impressive at every level. The division had more than 550,000 client accounts, representing $50 billion in client assets; the equity capital markets unit had been named "Middle Market Mergers and Acquisitions (M&A) Bank of the Year" by Mergers and Acquisitions magazine; and the fixed income capital markets included $6.29 billion in municipal underwriting and $11.5 billion in total agency underwriting.
When its new headquarters was built at 800 Nicollet Mall in downtown Minneapolis, U.S. Bancorp Piper Jaffray accommodated its growth and future by creating two clean-line-of-sight, state-of-the-art trading floors, one for equity capital markets and another for fixed income capital markets. The floors so impressed CNBC that the cable network sent a reporter to do a story about the sophistication of such operations located in Minnesota. What else would one expect to find in a state that's a world-class competitor?
| 10 reasons why Minnesota is a
world-class competitor 1. Proven Performance Minnesota ranked ninth in major corporate expansions in 2001, according to Site Selection magazine, and made the top five list for development capacity and business vitality in a report by the Corporation for Enterprise Development. 2. High-Tech Industries One of the top 10 states for creating high-tech jobs, Minnesota's high-tech employment grew 28.5 percent in the 1990s. More than 8,000 high-tech firms employ nearly 200,000 skilled workers, and countless businesses using high-tech processes employ thousands more. 3. Robust and Diverse Economy Minnesota's economy grew 43.3 percent in the 1990s, while the nation's economy grew just 34.7 percent. 4. Skilled and Educated Workforce Nearly 91 percent of Minnesotans have a high school diploma (third in the nation) and 31 percent have earned bachelor's degrees (seventh). Minnesota has the nation's highest proportion of people in the workforce (75.1 percent) and the eighth lowest rate of absenteeism. 5. Excellence in Education Ranking fourth in the number of companies spun off from its discoveries, the University of Minnesota not only provides skilled workers, but also contributes to the state's economy. 6. Reliability and Affordability Electricity and gas prices are lower in Minnesota than the national average for most customer classes, and Twin Cities rental rates and availability (with more than 11 million square feet of new industrial and office space in the last two years) are competitive with those of other major cities. 7. Transportation Links Minneapolis-St. Paul International Airport (MSP) offers non-stop flights to 130 U.S. cities and 23 in Canada, Mexico, the Caribbean, Latin America, Europe and Asia. The airport served 37 million passengers in 2000, ninth in the U.S. 8. Technology The 1999 State New Economy Index shows Minnesotans enjoying the ninth best digital economy penetration. And the 2001 Metropolitan New Economy Index placed the Twin Cities third in developing and attracting knowledge workers. 9. Venture Capital A 2001 study by the National Venture Capital Association ranked Minnesota 11th in jobs created by companies originally backed by venture capital, and the second fastest-growing state for venture capital investment between 1996 and 2001. 10. Quality of Life Minnesota's cultural attractions, outdoor recreation and scenic landscape appeal to both residents and visitors. And for the sixth straight year, Minnesota tops Morgan Quitno's "Most Livable State" rankings, based on indicators such as affordable housing, safe streets, a strong education system and excellent health care. Department of Trade and Economic Development |
This special section was written by Edward J. Walsh and designed by John Browning for ROP, Ltd.
Produced by James O. Armstrong, president of James Armstrong & Associates, Inc.
jim@jamesarmstrongassoc.com.