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Focus on rural Minnesota’s creative class, not chasing smokestacks

 

It’s far past time for Minnesota to leverage one of its strongest economic assets, the great outdoors. When policymakers debate economic development, they tend to focus on tax rates, regulations, and subsidies while ignoring the most fundamental of all development tools, Minnesota’s natural environment.

Historically, we’ve thought of the connection between Minnesota’s natural environment and its economy as a straightforward question of natural resources. Minneapolis grew up around St. Anthony Falls because it provided power, and flour mills used that power to grind grain. Duluth became wealthy from iron, timber, and the ability to ship these resources on the Great Lakes. But in 2013, Minnesota’s most economically powerful resource may be the landscape itself.

This shift has much to do with fundamental changes in our economy that favor websites over smokestacks. In an information-based economy, Minnesota’s success depends on our ability to attract and retain talent. Preserving wilderness and developing access to outdoor recreation are crucial tools in our toolbox of economic development.

It’s not hard to find examples of Twin Cities employers using Minnesota’s natural environment as a recruiting strategy. Fortune 500 companies like Best Buy and United Health Group have touted access to natural resources, including the Boundary Waters Canoe Area Wilderness, on their websites as a recruiting tool. But it’s not just large employers in the Twin Cities that rely on access to the natural environment to attract employees. Increasingly, the economic vitality of cities and rural areas across the state are tied to the landscape and outdoor recreation.

DULUTH TURNS TOWARD THE INFORMATION AGE

The American transition from an agricultural, manufacturing, and resource extraction economy to an information-based economy has not always been smooth, but Minnesota has managed this transition better than most states. However, this was not the case in northern Minnesota in the early 1980’s. Duluth was one of many devastated rust belt cities, with unemployment over 20 percent. Dependent on natural resource extraction and industrial development, Duluth’s economic strengths turned into weaknesses as the economy shifted. The population of Duluth dropped nearly 20% from 1970 to 1990. It was a downward spiral, one that seemed irreversible.

Two decades later, Duluth is an economic success story, though there is plenty of room for improvement. Investments in education, health care, the arts, and tourism have made Duluth an exciting and growing place. The average age of Duluth residents is getting younger for the first time in decades (33.6 in 2010, compared to 35.4 in 2000) and the city’s population has been steady for a decade. Duluth has now set its sights on growing its population to 90,000 by 2020.

What is attracting younger people to Duluth? Access to amenities like parks, trails, and nearby wilderness is a big part of the equation. Duluth has been listed by Outside magazine as the runner-up “Best Adventure Hub” with both in-town trails and access to wilderness nearby. Local officials are making these amenities part of the city’s identity. Talking to Minnesota Public Radio about Duluth’s investment in mountain biking trails, Mayor Don Ness stated “we do have a high quality of life, and now we’re making these investments in the sort of amenities that are particularly attractive and interesting to talented young professionals.”

RURAL MINNESOTA’S CREATIVE CLASS

The lessons of Duluth’s revitalization can be applied more broadly in areas of Greater Minnesota that have suffered from population loss and economic struggles. In northeastern Minnesota, economic development strategies often revolve around “smokestack chasing,” attempting to attract a large industrial employer. But smaller communities have seen the downside of this strategy when a large employer closes, leaving the surrounding area devastated.

Some of the most economically successful rural communities in Minnesota have focused on developing the amenities that attract entrepreneurs, telecommuting workers, retirees, and tourists. A new paradigm for rural economic development is emerging. Minnesota faces crucial decisions about its economic future that turn on the choice between chasing smokestacks or attracting knowledge workers and entrepreneurs. And the bottom line is: we probably can’t have both.

Economist Richard Florida’s concept of the creative class has its problems, but the power of the concept springs from its recognition that our economy has changed. Florida has focused on cities, but researchers have extended his idea to rural economic development with important implications for Minnesota.

In their paper “The Rural Growth Trifecta: Outdoor Amenities, Creative Class and Entrepreneurial Context,” economists David McGranahan, Timothy Wojan and Dayton Lambert lay out a “rural variant” of the creative class theory. They argue that outdoor recreation amenities are crucial in attracting talent to rural areas, and that “high amenity” areas can experience “business formation and economic growth, facilitated in part by the attraction of more creative class members.”

In rural Minnesota, retaining and attracting creatives is one of the most pressing issues for economic development. For too long, leaving for large cities has been the only way for young people in small towns to build careers in the information economy. Unless this brain drain is stopped and reversed, it will be impossible to build vital communities in Greater Minnesota. 

Access to wilderness, natural landscapes, and outdoor recreation cannot attract entrepreneurs alone. The key enabling asset is broadband internet access, which is a prerequisite for telecommuting and essential for information-based businesses. Unfortunately, the alignment between broadband access and outdoor amenities is lacking. According to ConnectMN, wide swaths of the Arrowhead region lack reliable access, and the blufflands of Southeastern Minnesota are underserved by broadband.

Fortunately, an expansion of broadband to Lake County and parts of St. Louis County through a federal stimulus grant will soon bring high-speed fiber to the communities best positioned to use their proximity to outdoor amenities like the Boundary Waters Wilderness to drive economic development. Ely, Winton, Hoyt Lakes and Babbitt are all slated to get broadband access in 2014.  

THE CHOICE THAT LIES AHEAD

We can’t pursue both smokestacks and the outdoor amenities that attract the creative class to rural Minnesota, because one strategy defeats the other. The next few years present Minnesota with a big decision about our future. Large projects proposed for northern Minnesota, such as copper-nickel sulfide mines like PolyMet or Twin Metals, promise jobs in the concrete way that politicians love. But chasing smokestacks threatens the very amenities around which we can build communities that attract mobile knowledge workers, entrepreneurs, retirees, and tourists. These represent fundamentally different visions of economic development.

Doubling down on the same development strategies that have failed us before is a bad deal for Minnesota. We need to embrace a changing economy and attract and retain knowledge workers in Greater Minnesota. The brain drain from rural Minnesota to the Twin Cities metropolitan area is unsustainable. The whole state benefits from strong rural communities that are attractive places to live and work.

If you look across the United States at mining dependent communities, they are not prosperous places. Dr. Tom Power, a professor of economics at the University of Montana, has studied the economic impact of mining for nearly forty years. In a 2005 study, he found that “aggregate earnings in mining-dependent counties grew at only half the rate of other American counties … and per capita income grew about 25 percent slower.” His analysis supports the idea that investing in information-age businesses and outdoor amenities is a better strategy. In a June speech in Ely, he stated “in 21st century America, the attractiveness of an area, its ability to attract people, workers, and businesses is extremely important in a community’s competitive position.”

Too often, media coverage of environmental issues like mining is boiled down to a far too simple “jobs versus the environment” frame. The choices Minnesota faces over the next few years about sulfide mines are fundamentally about different economic visions for the next generation. If we continue to ignore the economic importance of our landscape, our wilderness, our great outdoors, we will pay the price in the form of less prosperous communities. But if we leverage our greatest natural resource, we can build sustainable communities for generations to come.

 

Aaron Klemz is the Communications and Engagement Director at Friends of the Boundary Waters Wilderness, which is part of the Mining Truth coalition.

This article was originally published at BePollen.com.

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