Hard times call for rationalizing resources and state policies

Announcements from Minnesota education officials and state agencies this fall show that the state isn’t just circling the wagons or going into full retreat from economic development efforts despite the weak state, national and now global economies.

If anything, Minnesota is showing that it is marching on with development goals, especially by making better use of its intellectual resources and existing facilities. This should keep us plugging along even as we face a $1 billion or more state budget shortfall in the coming year.

Let’s review institutional developments:

On Nov. 5, the Minnesota State Colleges and Universities (MnSCU) system announced that the system’s 32 institutions have launched a program to learn how it can better serve Minnesota’s business and industry needs through higher education and training.

Two quotes from MnSCU officials explain the importance of this effort.

“The current economic uncertainty makes it imperative that our colleges and universities work harder and smarter to meet the needs of employers so Minnesota remains competitive,” said David Olson, chair of MnSCU’s board of trustees and president of the Minnesota Chamber of Commerce.

And MnSCU Chancellor James H. McCormick added, “Though Minnesota currently has a well-educated workforce, we know training and education will become more important than ever. Baby boomers are beginning to retire, and groups that traditionally haven’t gone on to higher education are growing in numbers. And as Tom Stinson, the state economist, said recently, developing a strong workforce should be the state’s number one concern in the next decade.”

That’s the background. MnSCU campus presidents and other officials are now meeting with 300 employers across the state to better understand business needs, raise awareness of MnSCU programs and services, and improve customer service for these employers. MnSCU currently produces 41 percent of new business graduates each year and provides training for 6,000 employers and 151,000 employees.

Those numbers should reassure Minnesotans that the new initiative isn’t just a political attempt to make the appearance of action substitute for action. Furthermore, it comes after MnSCU, the University of Minnesota, the Minnesota Department of Employment and Economic Development (DEED) and local officials announced Oct. 20 that a collaborative biotechnology research laboratory and business development center was being formed at Willmar.

The Mid-Central Biosciences Center will be housed at Willmar’s MinnWest Technology Campus. The latter is privately operated on the campus of the former Willmar State Hospital, giving that scenic location and its college-like buildings a productive new lease on life.

Here’s how the collaboration works: DEED has made a $1.25 million grant to the city of Willmar to own and equip the research lab and center, and MinnWest Technology Campus will match that amount. The University of Minnesota will provide faculty and graduate students to oversee research, and St. Cloud State University will be MnSCU’s lead institution for education, research and training at the center. The latter programs will draw students from Ridgewater College, MnSCU’s community and technical college that has campuses at Willmar and Hutchinson.

The feasibility of such collaboration is already established. First, the city of Willmar, its large turkey industry and area businesses have already successfully converted the former state hospital grounds to a technology business center. MinnWest Technology Campus currently has 18 tenant companies with more than 200 employees on campus. Second, the new biosciences research project strikes a resemblance to an existing research and development model Minnesota started 20 years ago.

The Agricultural Utilization and Research Institute (AURI), approved by the Minnesota Legislature in 1987 and founded in 1989, helps entrepreneurs develop new products, enhance distribution and marketing, and apply technology to add value to Minnesota agricultural commodities and products. This research and development arm of the state has led to hundreds of new products, unknown but large numbers of new jobs, and improved methods of production for entrepreneurs in the food and agricultural industries.

Some of the best work in AURI labs is proving that an idea may have merit, but is not economically feasible; thus, entrepreneurs had better hold off on their idea and not risk the family finances on something that won’t work, said AURI spokesman Dan Lemke. At the same time, AURI has a long list of clients who brought products to market without the personal capability of research and development.

While AURI was established as a separate entity outside both the University of Minnesota and MnSCU systems, it has morphed into collaboration with both. For instance, it draws scientific intellectual support from both systems, and some AURI activities are housed at the University of Minnesota at Crookston and some at Southwest Minnesota State University at Marshall.

Going forward, state and community leaders and Minnesota lawmakers should review ways to leverage such collaboration and use existing resources to keep building the economy and human resources for the future. There should also be a careful review of ways in which Minnesota encourages development.

While MinnWest shows promise, it is also a JOBZ tax avoidance site. The public investment from DEED, MnSCU, and the U of M will not be paid back. JOBZ tax exemptions undermine MinnWest’s school-leveraged resources, trading short-term gain for long-term pain. Minnesotans and our public education institutions are inadequately rewarded relative to the risk we assume.

Minnesota is investing in human resources and product development. Unfortunately, failed tax avoidance schemes like JOBZ hamper those investment efforts. State policymakers should take another hard look at what is necessary for development, in current economic conditions, and what is simply counterproductive.