Tech jobs: where moving forward is just catching up

When it comes to high-tech research and development and jobs, Minnesota is both leading the pack and lagging behind, signaling wasted potential to grow companies and advance our state's technology industry.

Research from the Milken Institute, National Science Foundation, and The Information Technology and Innovation Foundation compared states on performance and investment in technology innovation and development.

This research notes conflicting numbers for our state:

  • Minnesota ranks seventh nationally in industry research and development, but only 42nd in entrepreneurial activity in starting new businesses;
  • Minnesota ranks eighth in workforce education, but only 21st in fast growing firms;
  • Minnesota ranks eighth in number of scientists and engineers, but 23rd in bringing in federal R&D support for that talented workforce;
  • Minnesota ranks 9th in inventor patents; but only 24th in exports of manufacturing and services.

There's a little-known business, academic and public coalition aiming to close these gaps so that Minnesota can capitalize on its technological advantages and well-trained workforce to create jobs and grow an industry.

Last year, the state legislature authorized the coalition, called the Minnesota Science and Technology Authority. Members include executives from Mayo Clinic, Seagate Technology, Cargill, and Thomson Reuters; University of Minnesota researchers; and public policy directors. Seeing this coalition's potential, legislators are calling for ongoing state funding.

"It won't be easy. We recognize that," said Rep. Tim Mahoney (DFL-St. Paul), a co-sponsor of the Authority's funding legislation and sponsor of the bill that formed the Science and Technology Authority.

Bipartisan leaders such as Reps. Greg Davis (R-Preston), Bob Gunther (R-Fairmont), and Carol McFarlane (R-White Bear Lake) are also sponsoring this year's proposed funding legislation for the Authority. A key to the current approach is to use future increased tax revenues from high tech business development to pay for program costs.

That still leaves startup costs for the authority, similar to business startup costs for any new ventures the authority might help launch. Now, action to fund the program and conservative budget cut rhetoric are on a collision course.

Minnesota House Republicans last week issued a budget blueprint that envisions across the board cuts for the next biennium. From FY 2010-2011 to FY 2012-2013, conservatives want to cut 58 percent of DEED's funding, from $195.4 million to less than $81 million. Agriculture spending would be cut 11.4 percent, from $86.7 million to $76.8 million. Higher education would see a 15 percent slash and transportation would get cut 28 percent.

That isn't a recipe to cook up a batch of new jobs or to help start new companies. For cuts-only conservatives, there's a real case for public investment in science and technology to help grow long-term jobs. It's what helped establish Minnesota as a technology leader. Look at our number eight workforce ranking as an example.

It is generally recognized that communities and states are wise to build on existing strengths rather than create new business ventures where there is little past experience or where there isn't a standby, qualified workforce. That is supported by growth in the life sciences in Minnesota, which does build up from state business, public research and resident talent strengths.

In a February 7th Star Tribune report, for instance, the BioBusiness Alliance of Minnesota cited a 20 percent growth in biobusiness jobs between 2002 and 2007. The group said that trend continued in 2008 and 2009 although there weren't numbers available to quantify the gains.

Biobusiness is one subset of the science and technology sector, however. It builds on strengths from the University of Minnesota, the Mayo Clinic and existing Minnesota-based companies. Biobusiness is a collaborative partner in the Minnesota Science and Technology Authority, said Betsy Lulfs, executive director of the authority.

Still, the comparative data mentioned above show Minnesota is falling behind other states despite our head start in several fields. Specifically, the Science and Technology Authority is an attempt for collaborating public and private institutions and agencies to catch up to programs in about 30 other states.

The Authority's strategic plan cited Ohio dedicating $1.6 billion since 2002 for its "Third Frontier Program," Massachusetts allocating $1 billion over 10 years for its "nation-leading" life sciences sector, Kansas allocating $580 million since 2004 for biosciences, similar programs in Pennsylvania, and $20 million a year for research in Oregon.

A Minnesota Daily article recently highlighted how the legislation to fund the Science and Technology Authority would help university researchers and students.The legislation now under study would make about $10 million available annually for "technology commercialization, securing federal grants, helping entrepreneurs and funding internships" - primarily for graduate students.

The Authority's research component would reach into supporting scientists and engineers working in private labs, as well, and especially at the state's successful Agricultural Utilization and Research Institute (AURI) labs.

Just how serious lawmakers are about job creation is an open question, given how special interests are dictating tax policy above most other business elements at the Legislature. But Representative Mahoney is convinced the key is getting the new state Authority funded and operating.

"Ten years from now, we'll have at least three more Fortune 500 companies headquartered here if we act now," he said. "If we don't, well, then it's a question of how many more jobs will we lose."