A few weeks back I asked Bruce Katz, head of the metropolitan policy program at the Brookings Institution, for a brief evaluation of Minneapolis-St. Paul’s competitive place in the world.
From the standpoint of metro planning, Katz said that MSP must move beyond setting the table for new business growth — necessary tasks like building light rail lines and designing attractive communities — to actually going out and knocking on doors to attract the prosperity it wants. That means higher visibility on the national stage and greater focus and energy on retaining and attracting high-quality jobs, all with an eye toward finding a new niche in a changing economy.
“The economy that got us into the recession isn’t the same one that will get us out of it,” Katz said. MSP and other competing metros will have to bolster their strengths, shore up their weaknesses and pick some targets. (Exports, green technology and medical devices seem likely bets.) “Metros should know what they do best,” Katz said, adding, “It’s not about what the public or private sector does; it’s about a partnership of both.”
That pretty much describes the recipe that MSP has begun to follow. Next month, business and civic leaders, including the mayors of Minneapolis and St. Paul, expect to hire a CEO to lead a marketing and business recruitment campaign aimed at restoring job growth to a region that had started to slip against its competition even before the current recession took hold in 2007.
Strengthening brand, expanding, attracting
“We’re going to put Greater Minneapolis-St. Paul back on the map of the national and global business economy,” said Kathy Schmidlkofer, transition CEO for the regional partnership. “We’ve got a great story to tell.” The focus will be on strengthening the metro region’s brand, expanding local companies and attracting newcomers.
The back story on all this should be familiar. For decades MSP had rested on glowing press clippings from the 1970s, and, indeed, continued to hold onto many of its advantages — an educated work force, a highly rated quality of life, a solid base for research and a remarkable concentration of Fortune 500 companies.
But it had also fallen behind on other important fronts — the pace of job growth and wage growth, the cost of doing business, work force supply, the achievement of minorities, the ability to attract top talent and the conversion of ideas into commercial products.
Also lacking was a unified marketing effort and a clear identity. It has been hard to attract jobs to a metro region that has fallen off the radar screen and doesn’t quite know what to call itself. Increasingly, media reports referred to “Minnesota” — a confusing term in an economic competition waged almost entirely among metro areas.
Shortcomings seen in late ’90s
Mark Yudof, the former University of Minnesota president, and David Kidwell, the U’s former business dean, sounded an alarm on these shortcomings in the late 1990s. The Star Tribune chimed in with a series that asked a provocative question: “Compete or Retreat?” Former Met Council Chairman Curt Johnson best described MSP’s ambivalence. “We love to admire our problems,” he said, referring to the 20 or so task forces and study groups assembled to think and talk, but not necessarily to act.
Now, at a critical moment in the recovery, MSP seems poised to act. A private/public organization geared toward recruiting business and marketing the metro region fills an obvious void. Local and statewide chambers of commerce and other business groups haven’t coalesced to do the job. The economic development agencies of Minneapolis, St. Paul and other metro cities tend to compete more than cooperate. The state, meanwhile, spends almost nothing on marketing and — aside from taxes and regulations — is nearly irrelevant to the economic competition at hand.
It’s really about metro areas, many of which have marketing entities that push the virtues of metro Atlanta, Denver, Chicago, etc. The nation’s largest 100 metro areas drive the national economy. Together they attract nearly 95 percent of the nation’s venture capital, more than 90 percent of its airline boardings, nearly 80 percent of its air freight and patents, more than 75 percent of its graduate degrees and green jobs and almost two-thirds of its population.
Itasca Project the driving force
Brookings is helping to guide the MSP effort, while working with Cleveland and Seattle on similar ventures. Locally, the Itasca Project, led by top corporate CEOs, has been the driving force. Extraordinary cooperation from the mayors of Minneapolis and St. Paul have set a collaborative tone among metro governments. Minneapolis’ R.T. Rybak and St. Paul’s Chris Coleman gave a joint presentation last month to an international audience in Chicago that described a new metro business initiative.
Days later, they briefed the Regional Council of Mayors. “For decades in this region we were at war with one another; now we’re working together, and we probably do that better than any region in the country,” Rybak said.
Coleman stressed the all efforts will be driven by hard data rather than ideology. Reaching out to a new governor and new Legislature will be important, he said, because they may not fully understand the importance of MSP as the driving force behind the state’s economy.
He and Rybak offered this outline of the initiative:
• The regional economic development partnership mentioned above, which will concentrate on marketing the region and retaining and expanding jobs.
• An “entrepreneurship accelerator” that will focus on helping start-up companies turn ideas into commercial value.
• A cluster project to determine specific industries to target.
• A green manufacturing initiative.
• And an effort to increase spatial efficiency by locating new jobs along transportation corridors.
One curiosity in all this is how MSP might have lost its edge, especially in entrepreneurship, despite enduring tales about the homegrown development of Scotch Tape and heart pacemakers. Some point to a risk-averse culture in which entrepreneurs aren’t given the financing or opportunity to fail and try again. Some blame the dominance of large corporations, some of which may not encourage small-scale innovation. Some say that the University of Minnesota discourages its researchers from turning discovery into commercial value. Still others say that venture capital inevitably entices commercial applications to relocate to the more concentrated east or west-coast markets.
“It’s probably a combination of all those factors and more,” said Jon Commers, an economic consultant who’s helping on the initiative.
The question of identity
I think there’s another problem, too, one that’s so basic that it gets skipped over: identity, or lack of it. If this region doesn’t know what to call itself, how can we compete on the national stage? Over the past several decades, it has been increasingly called “Minnesota.” Sports teams, the Minnesota Orchestra, and metro media outlets and advertising campaigns have branded the metro area as a whole state. But in a competition among cities and their environs, “Minnesota” is a name that’s neither accurate nor helpful.
Here’s more on the business initiative:
Itasca Project: Charting a New Course — Restoring Job Growth in the Minneapolis-St. Paul Region [PDF]
Brookings Institution: Metropolitan Business Plan Initiative
“Accelerate MSP” and other presentations can be found on the ULI Minnesota/Regional Council of Mayors website.