Sunday, May 11, 2014

“Help Wanted” for an Upper Midwest Economic Development Strategy

by Bill Glahn and Georgie Hilker

Last month, the Star Tribune reported on efforts by the State of North Dakota (targeted toward Minnesota) to attract workers for some 25,000 unfilled jobs in their booming state (April 13th, “N.D. hopes to lure workers with promises of the 'Good Life'”).

The reaction on this side of the Red River must involve more than merely shipping our workers west.  Our state’s political and business elites should seize this opportunity to do something more.  Minnesota is perfectly positioned—both geographically and economically—to  play a larger role in shaping our region’s economy and the time is now
Minnesota’s present mix of highly progressive tax and crippling regulatory policies are not compatible with becoming the region’s economic hub.  To gain a leadership position, we will need to rethink a range of policies—from taxes, to economic development, to our relationship with neighboring states, and beyond.  The formula for success involves a lot of  hands-on work getting the nuts and bolts of government right, and makes for horribly boring press conferences, but here’s a start:

Build on What We Have
Minnesota, and more specifically the Minneapolis-St. Paul metro area, serves as the regional hub for a vast inland empire stretching from western Wisconsin and northern Iowa to eastern Montana and Manitoba, Canada.  [To get a visual feel for the size of the region, study the map of the Minnesota Twins radio network.]

For example, Minnesota has 7 times the population of North Dakota.  All those oil field developers and related industries have a need for a wide array of business services—banking, accounting, consulting, engineering, insurance, legal, public relations—not necessarily available in Bismarck and Fargo.  Why not cater to this market and steal a march on Denver and Seattle?
Likewise, the major-league sports, shopping, and entertainment venues offered in Minneapolis-St. Paul; the world-class health services available in Rochester; and the Ports of Duluth and St. Paul and the MSP airport with their worldwide trade access, should make Minnesota the linchpin of the entire region. 

Embrace the Energy Revolution
Just like Houston in Texas or Calgary in Alberta, Minnesota could serve as the hub of a North Central energy empire:  oil, natural gas, and coal in the west, hydropower to the north, pipelines, refineries, and, yes, wind power at home.

North Dakota is not the only state in the Midwest with abundant natural resources; it is simply the state most willing to develop them. 
Minnesota, too, has resources—iron ore, copper and nickel, and sand—all available for development, in an environmentally-sound manner, of course.  Again, the skilled, blue collar (and likely union) mining jobs up north and down south will create demand for  “knowledge-worker” services offered in the Twin Cities and regional centers, including Duluth and Rochester.

Create a Silicon Prairie
California’s Silicon Valley benefits from its close proximity to world-class universities.  Rather than perpetuate rivalries with neighboring universities in North Dakota and Iowa, why not join forces and seed a Silicon Prairie in the Upper Midwest?  It would merely require abandoning the partisan view of Minnesota as a progressive island in a sea of conservatism and, instead, seeing Minnesota as the vital core of a larger, regional economy.

Be the Convener
We must stop thinking of bordering states as competitors and start considering them as our collaborators.  We should start hosting regular business summits with our regional partners and build upon the strengths each one of them brings to the marketplace.

In considering the North Dakota job openings, we need to think creatively about how to supply their needs for goods and services with the well-educated and skilled workforce available here.  In doing so, we can  begin to build the kind of regional economic framework that will ensure the Upper Midwest will no longer be considered "flyover land".

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