Professor leads study to measure business competition


Lee Munnich has spent years studying Minnesota’s economic competitiveness, comparing it with other parts of the country and sharing his results with hundreds of University of Minnesota students and state employees.

Now, the senior fellow of the Humphrey Institute of Public Affairs is leading a study that will have him teaching a new audience: mayors.

Thirty-four mayors from Minneapolis, St. Paul, Edina, Apple Valley and other areas will participate in the Regional Competitiveness Project , a two-year study that will be used to develop long-term strategies to stimulate job growth and economic development.

“What’s unique here is that typically mayors have competed with each other for economic development; their effort has been to get businesses in their own communities,” Munnich said. “But I think this group recognizes that that’s not necessarily the most effective thing to do.”

Mayors are in the best position to lead the study because of their close ties to the areas they serve, Edina Mayor Jim Hovland said.

“We’re right there on the front line in our local communities, working with our businesses every day,” he said.

The study will work by focusing on industry clusters – groups of interconnected businesses working in a common industry such as manufacturing or medical devices – as a means of measuring the economic competitiveness of different regions. In October, researchers will present the mayors with data on eight to 12 of the most promising clusters from which they will choose three to analyze in depth.

Understanding why certain industries are stronger and developing strategies of building upon that strength will ultimately benefit all industries in the region, Munnich said.

“If the overall economy of the Twin Cities can be more competitive, some of these other industries that are dependent on good, high-paying jobs will also benefit,” he said.

Beneath the partnership’s optimistic appearance lies a sense of urgency because of the recession’s traumatic effect on the job market, Caren Dewar, executive director of the Urban Land Institute (ULI), said. Unemployment in the state is currently at 7.8 percent.

Although ULI, a sponsor of the project, is engaged in housing, transportation and environmental strategies, “without jobs, none of that matters,” Dewar said.

Industries within the state and nation’s manufacturing sector seem to have taken the recession’s most powerful blows, Munnich said. Construction and other industries that depend on the housing market have been hit particularly hard as well.

Two University graduate students, Alisha Cowell of the Humphrey Institute and Mia Adams of the Carlson School of Management , will serve as research assistants on the project.

Rather than simply writing a paper or doing a study, Cowell said she’s excited to put together a plan that will actually be implemented in the form of legislation and change.

“Action will be taken; it’s not just a study,” she said. “That’s exciting.”

A group of Munnich’s students will contribute to the project through a capstone course in which they will analyze data from key industry clusters.

It’s not yet known exactly what positive changes will result from the project; they could come in a number of forms.

As early as the next legislative session, the mayors may propose changes to legislators who will likely be interested in hearing from a bipartisan group of mayors on regional issues rather than a single mayor on behalf of one city, Munnich said.

The state’s Department of Employment and Economic Development (DEED) is sponsoring the project and could benefit in the form of improved programs in education and work force or economic development.

Mayors can apply certain strategies quicker than would happen at the Legislature, Hovland said, because there things often get bogged down with politics.

Ultimately, the project could serve as a poster child for other metropolitan areas looking to make similar changes, Cowell said.

Partners on the project include DEED, who will provide $250,000 to fund the study, the Humphrey Institute, ULI and the Itasca Group. Each mayor involved is a member of the Regional Council of Mayors , a non-partisan group of mayors representing 34 municipalities in the Twin Cities area.

For the first time, this project demonstrates a collective, proactive effort to support regional economic improvement, Dewar said.

“We can’t assume that by letting it just evolve on its own we’re going to get the best possible outcome,” she said. “We’re going to get a better outcome if we’re intentional about it.”



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