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Michael Porter was in the Twin Cities on Monday talking about regional clusters, American stagnation and the country's failed economic development efforts.

He was helping roll out Cluster Mapping, which he, the U.S. Department of Commerce and many others hope will be a tool for better economic development policy. I wrote a story for the print edition, and here's the U of M's Lee Munnich's op-ed.

For the purposes of this blog, here are five takeaways from Porter's presentation, and from the data:

1. Most Americans are struggling in the economy and it's not because of the recession.

Porter, in his speech earlier today at the Humphrey School, said this:

What we all know is that well before the recession that hit in 2008, we were on the wrong path in America. It wasn’t the recession. The recession was an extreme event that was triggered by a variety of circumstances, but actually we were on a very disturbing path.

The problem is that wages are drying up for middle-skill jobs. Very high-skill jobs are doing better, but wages for jobs that require a college degree or less are either stagnant or sinking in the past 12 years. Porter showed this slide:

2. It's a knotty problem, causing the rise of inequality and driven by a lot of forces, but Washington is not helping.


It’s being cast as fair or unfair, but it’s really all about the fundamental underlying drivers of competitiveness and prosperity that we really haven’t been able to address in any systematic way in America for the last 20 or 30 years. We used to be the innovator. First universal public educaiton, first widespread university system accessible to all. First interstate highway system. Best infrastructure…Now we’re not. We’re just not getting any of it done. We can’t even agree to allow people who get a Ph.D in America to stay in America. We can’t even agree on that, despite the fact that we’re just dying for high skills in this economy.

3. Porter believes the key to higher-wage jobs is for regions in the U.S. to build clusters of companies that sell in the global marketplace and win there.

These clusters are in what he calls the "traded" economy -- that is, the global economy. The "local" economy provides all the jobs that pretty much every community has no matter what -- jobs at restaurants, doctor's offices, gas stations, etc. For now, the U.S. is not doing well in the traded economy, Porter said:

All the jobs we’ve created over the last 15 or 20 years were in the local economy, not in the traded economy. We have zero net traded job creation over the last couple decades in the American economy. If we’re exposed to international competition, no new jobs. If we’re sort of guaranteed the jobs because it’s local work, ok yeah, we can grow jobs there -- health care, government, construction. This all started a long time before 2008.

4. Minnesota has a big medical device concentration, but it also has clusters in marketing, IT, financial services and insurance.

This is from the mapping tool, which I highly recommend, and refers to the Minneapolis economic area, which includes St. Cloud, much of southern Minnesota and parts of Wisconsin and even South Dakota:

5. Minnesota ranks well in labor productivity and business creation, and really well in patent generation, but is lagging in exports.

We talked last week about how the U.S. is getting whipped by China in Africa, and I had a story about Minnesota exports to Africa, which are growing fast but from a small base. It looks like exports as a percent of GDP are relatively low for this region.

From the data tool:

Lots more data where that came from. The tool is easy to use and allows you to download the data on any report you create.