The Minnesota Chamber Foundation's Center for Economic Research has produced a comprehensive blueprint look at growing this state's economy over the next decade. State and local leaders would be wise to heed its advice.
"Minnesota 2030: A framework for economic growth" displays an impressive breadth of research, with the type of private-sector analysis missing for too long in this state. It provides an unflinching analysis that demonstrates how the state's many strengths have lulled some into a false sense of security, masking serious weaknesses.
For instance, despite its many advantages, when comparing growth "Minnesota's economy has been trailing its peers and the U.S. economy the past two decades. GDP and job growth ranked 36th and 45th nationally in 2019," the report said. That reality has been creeping up on Minnesota for years: Since 2000, the state has trailed U.S. job growth in 14 out of 20 years, including every year since 2012.
Those who reflexively blame tax rates should look far deeper and wider. An aging population, lack of in-migration from other states, a brain drain of students who go outside of Minnesota for colleges elsewhere and too often don't come back, and underutilized populations in both rural areas and communities of color have all combined to take a toll. The worker shortage, the report found, is now a primary constraint on Minnesota's economy.
The state also ranks 49th in entrepreneurship and small-business startups. The ease of finding a job in a low-unemployment economy is partly to blame, but so is access to capital and other obstacles, said Doug Loon, president of the Minnesota Chamber of Commerce. Ranking that low is another red flag. Some of Minnesota's biggest corporations began as homegrown startups. Are we creating the right conditions to grow the next generation of Medtronics and 3Ms?
The remedies recommended by the foundation are too numerous to list here, but they center around a strategy of wasting no one: not the 40-something miner who needs new skills to switch careers; not the immigrant who needs affordable housing and a reliable car before taking that new job; not the single mom who can't go back to work without affordable child care, and not those disadvantaged by some of the worst educational achievement gaps in the country.
The recommendations focus on a few key principles: building on existing strengths, including key growth areas such as technology and health care; leveraging our best asset — Minnesotans themselves — and equipping them with needed skills, and finally, strengthening communities so they become places where all thrive.
"We need to make inclusivity our strength," said Jon Campbell, chairman of the Minnesota Chamber Foundation Board, noting that immigrant populations are growing 32 times faster than those born here.
At its heart, Campbell said, the report is built around the premise that creating the conditions for every Minnesotan to succeed is not only the just thing to do, it makes good economic sense.
"I'm optimistic that when the state sees inclusion as more than a social good but as an actual driver of economic growth, we will convert some people's way of thinking," Campbell said. It creates a more pragmatic, less polarizing framework, he said, "that we think people will be able to sign on to."
