Regionís potential as global economic
by current and future workforce shortage
A Civic Caucus
on Human Capital
Interview January 8, 2016
Steve Anderson, Dave
Broden (vice chair), Pat Davies, Peter Frosch, Randy Johnson,
Sallie Kemper (associate director), Ted Kolderie, Dan Lortiz
(chair), Bill Rudelius, Dana Schroeder (associate director). By
phone: Paul Ostrow.
Just as the economy
of the Twin Cities region, especially in its key sectors, is
positioned to advance to a place of global leadership, the size
of its labor force is expected to stagnate, according to Peter
Frosch of GREATER MSP. Not being able to meet the workforce
needs of the region's businesses could result in lost
opportunity, he warns. His organization has forecast that by
2020, the region could be short 100,000 skilled workers. He
asserts that the shortage is already being felt today in
occupations such as high tech, engineering and financial
management. In those fields, there is already an extremely tight
labor force in the region.
In 2013, GREATER MSP developed, for
the first time in the Twin Cities region, a regional economic
development strategy. Frosch stresses that some 1,000 corporate
leaders, public officials and other leaders were involved in
developing the strategy, which is built on three approaches: (1)
telling our story more effectively; (2) building on our global
sectors of strength; and (3) prioritizing talent. He notes that
human capital is the region's number one competitive advantage
and that not every other region in the country competes on its
people power, as we do.
But Frosch cautions that what the
region and the state have done in the past to create the
workforce we have today is not necessarily what we should be
thinking about doing in the future. He points out that the
workforce and the competitive landscape are both fundamentally
changing. It's a given, he says, that the looming labor-force
shortage means we must ensure that all people in Minnesota are
educated to their full potential, engaged in the economy and
moving up the career ladder.
He also highlights the importance of
migration and says we must work even harder to retain the people
we have, even though we've historically done that quite well.
And it's critical that we significantly improve our somewhat
weak performance in attracting talented people to live and work
in the region and state. He says the case to be made for
attracting talent to the Twin Cities is compelling: here people
seeking opportunities and their partners can both have great
careers and a world-class quality of life that they can afford.
There aren't many other places where all of those goals are as
likely to be met.
Peter Frosch is vice
president of strategic partnerships at GREATER MSP, a Minnesota
nonprofit dedicated to the growth of the economy in the Twin
Cities area. He is responsible for developing and implementing
the organization's economic development strategy for the
Minneapolis-Saint Paul region.
Prior to joining GREATER MSP in
January 2013, Frosch was legislative director for Congresswoman
Betty McCollum in Washington, D.C. In this role, he managed the
legislative staff and directed all aspects of Rep. McCollum's
policy agenda, including her work on the House Appropriations
and Budget Committees.
Frosch has also served as director of
environmental policy at Environmental Initiative, a
Minneapolis-based nonprofit. He is a member of the University of
Minnesota's Center for Transportation Studies Executive
Committee, a participant in Harvard Business School's Young
American Leaders Program and a 2015 winner of the Knight
Foundation Cities Challenge. Frosch earned a bachelor's degree
from Northwestern University and a master's degree in
international relations from Dublin City University in Ireland.
Founded in 2011,
(Minneapolis Saint Paul Regional Economic Development
Partnership) is a private, nonprofit organization dedicated to
providing public-sector and private-sector leadership,
coordination and engagement to ensure economic growth in the
16-county Minneapolis-Saint Paul region. With its economic
development partners throughout the region, GREATER MSP is
advancing a coordinated regional economic development strategy,
a coordinated regional brand, and a coordinated regional
business retention, expansion and recruitment program. Through
these efforts, the organization seeks to promote the region's
assets and to stimulate capital investment and job creation in
the region. GREATER MSP is also promoting a regional talent
strategy to attract and retain talented workers.
The Civic Caucus has released two
statements on human capital:
one in September
laying out the human-capital challenges facing the state today
and in coming years and a follow-up paper in
offering recommendations for maintaining a high-quality
workforce in Minnesota. The Civic Caucus interviewed Peter
Frosch to learn more about GREATER MSP's economic development
strategy for the Twin Cities region and its efforts to attract
and retain talented workers.
GREATER MSP grew out of the Itasca Project.
The Itasca Project,
founded in 2004, is an employer-led civic alliance whose members
are drawn together by an interest in new and better ways to
address regional issues that impact economic competitiveness and
quality of life in the Minneapolis-Saint Paul region. According
to Peter Frosch of GREATER MSP, the Itasca Project's founders
were concerned that job growth in the Twin Cities region was not
tracking ahead of our peer regions, as it previously had. They
found that over the previous 15 years, every other metro region
around the country had created a regional economic development
partnership, usually after a crisis had shaken the community.
But the Twin Cities had not.
These partnerships elsewhere, Frosch
said, usually contained a focus on business investment, one on
marketing communication, and one on initiating and promoting a
regional economic development strategy. Almost immediately after
Itasca had researched these partnerships, the recession hit.
That motivated regional leaders to create GREATER MSP in 2011.
In 2013, GREATER MSP developed, for
the first time in the Twin Cities region, a regional economic
development strategy. That process included 1,000 corporate
leaders, public officials and other leaders, Frosch said. The
strategy prioritized three pillars:
1. Telling our story more
effectively. "We are a great place today on the numbers,
compared to other places," Frosch said. "We are extremely
competitive across a number of areas. If more businesses and
people knew that, they would simply come. That's the most
efficient way to grow."
2. Building on our global
sectors of strength. "One of the secrets to our success is
that we have a very diverse economy," he said. "We have
concentrated clusters of excellence in health and life
science, headquarters and business services, food and water
solutions, advanced manufacturing, and finance and insurance.
We have a higher concentration of those businesses and
employees than the country as a whole. When one of our sectors
contracts, you see other elements of our strength grow. Talent
in this region has moved across those areas, supporting growth
and injecting new ideas that stimulate innovation."
3. Prioritizing talent, a
new initiative started in 2014. Human capital is our number
one competitive advantage here, Frosch said. "That's not
self-evident and it's not uniformly true across the country.
Not every region competes primarily on its people power, as we
do. It has been our advantage in the past and we believe it
will be even more so going forward. Minnesota is well
positioned in that this is not a new topic for us. We've been
investing in people disproportionately for a long time."
We're at a unique fulcrum in our
human-capital history. Minnesota has developed a successful
formula over the past generation to build the highly competitive
and productive labor force we have today, Frosch said. "We have
the highest labor-force participation rate and the lowest
unemployment rate of any major metro area in the country. To
date, that workforce has been well matched with the industries
we have, so we're supporting the growth and innovation of our
"But things are changing quickly," he
said, "and there are a number of trends that are converging in
space and time, some of which are beyond our control and some of
which aren't. They all are blinking red lights. The things we've
done in the past to create the workforce we have today are not
the things we necessarily should be thinking about doing in the
"We're going to have to do some
different things, because the workforce is fundamentally
changing and the competitive landscape is fundamentally
changing," Frosch continued. The most significant trend is the
crashing labor force growth. At the same time, our economy is
positioned to advance to a place of global leadership,
especially in our key sectors. To do that, we must meet the
human capital needs of our businesses.
"In this moment when we have
opportunity accelerating, the size of our labor force is
expected to stagnate," he said. This threatens to cause lost
opportunity. "We're doing what we can to get out there in front
of a crisis. In a short period of time, a lot of people and
institutions are going to be challenged to evolve quickly to
adapt to this new environment."
GREATER MSP has forecast that by 2020,
the Twin Cities area could be short 100,000 skilled workers.
That shortage is already being felt today in occupations such as
high tech, engineering and financial management, Frosch said. In
those fields, there is already an extremely tight labor force in
An interviewer asked about the
situation in the health care field. Frosch responded that a lot
of positions are projected to open in the field of home health
care. That's a significant opportunity to pull in residents not
currently in the labor force or residents not employed in
In response to an interviewer's
question about what types of jobs are included in the
100,000-worker shortage, Frosch said GREATER MSP is using its
economic modeling software to break that down into occupations
and skill levels. He clarified that his organization uses the
Census Bureau's definition of the Twin Cities region as a
16-county Standard Metropolitan Statistical Area (SMSA), which
includes two counties in Wisconsin.
Many of the businesses exploring
locating in the Twin Cities are looking for engineers. An
interviewer commented that 20 years ago, Minnesota had a very
rigorous engineering base, but said many of the companies that
employed lots of engineers are gone. He asked what is replacing
those companies. Frosch responded that there are small and
medium companies and GREATER MSP is trying to help companies
here to expand. "A lot of those projects have had engineering at
their core," he said.
Because of the number of projects
requiring engineers, GREATER MSP commissioned its own
looking at questions such as what programs are producing
engineers, what kinds of engineers they're producing and what
engineers are looking for in terms of places to live and work.
Business recruiters at GREATER MSP have seen potential projects
that would produce 200, 300 or 400 jobs. The employers insist
that recruiters can only compete for a project to be located
here if GREATER MSP can show that a company could find the 30 or
40 engineers it needs in the Twin Cities region. "There's a lot
of demand and there's a lot of opportunity," he said.
GREATER MSP is prioritizing talent
because it's our strength today and we're planning for it to be
our base of competition going forward. Frosch said talent
would be even more important as the economy becomes based on
knowledge competition. "How do we re-engineer our formula for
developing the workforce we need so we can get the people we
need and that five-year gap in workers never opens?" he asked.
He said State Demographer Susan Brower
has told state policymakers that the looming labor-force
shortage means we must have everyone educated to their full
potential, engaged in the economy and moving up the career
ladder. "That is a given," Frosch said. "It's difficult to do.
Thankfully, dozens of institutions are working to strengthen the
human capital pipeline, including pre-K, K through 12, higher
education, and worker training and retraining."
However, he highlighted Brower's
conclusion that migration matters more now than ever before. "We
need to start watching the inflow and outflow more than we have
before," he said. "We need to be prepared to work harder to
retain the people we have and to significantly improve our
performance in attracting talented people to live and work in
the region and state."
A recent GREATER MSP study, Frosch
said, showed that we were one of few major metro areas with no
retention and attraction initiative focused specifically on
young professionals. "We've built that initiative over the last
two years and it's called
The case for attracting talent to the
Twin Cities is that here, you and your partner can both have a
great career and a world-class quality of life that you can
afford. "There aren't that many places in the country, or in
the world, where those three things are true," Frosch said.
Atlantic magazine had an article last year, he pointed out,
concluding that people looking for opportunity and affordability
should move to Minneapolis-Saint Paul.
Talent attraction and retention is a
strategic issue that is the aggregation of a lot of personal
decisions. It must be people-centric, Frosch said. We need
to know what different people are looking for. He said GREATER
MSP created a social media survey in February 2014. In 14 days,
the survey got 1,100 responses from 18-to-39-year-olds living in
this region about what's important to them. It showed that 78
percent of the respondents in that age range said they plan to
be here over the next three to five years. Half of those survey
respondents were native Minnesotans and half were transplants,
Among the survey sample, jobs and
careers ranked by far as the most important factor in making the
decision about where to live. He said that countered some
rhetoric that young people decide where they want to be and then
find a job. The second most important factor turned out to be
outdoor recreation opportunities. Frosch said the Twin Cities
did better on this than other regions. Weather showed up as one
of the least important things in the survey, he said. Our
amenities overcome our weather.
An analysis for GREATER MSP by Myles
Shaver of the University of Minnesota showed that the Twin
Cities region ranks first among the 25 largest metro areas in
retaining professionals and 19th out of 25 in attracting them
here. Frosch said for decades, the region and state have relied
on attraction to meet some of the most specialized skill needs
in the economy.
"The fact that we have a
knowledge-intensive economy demanding unique skills and that
we've been able to attract individuals here to do this kind of
work, is a good thing," Frosch said. "Attraction isn't a
substitute for talent development or retention, but it is a
critical part of the mix. Great cities and regions rely on
attraction as part of their strategy for supporting growth and
innovation. We are a global hub and we need to think of
ourselves in that way."
Automation is a trend that's going to
impact the need for 100,000 more people in the labor force.
Frosch said automation would complicate efforts to make this a
place where prosperity is widely shared. It is a global
phenomenon and we're starting to see blips on the radar
suggesting automation may reduce the size of job creation
Community is a competitive advantage
here. Frosch asserted that there is something special about
the community we have in the Twin Cities region. We have a state
of cohesion that doesn't exist everywhere. There is a tradition
of collaboration and social cohesion that has differentiated us
from other states and regions around the country. He said the
premise of the regional strategy at GREATER MSP is to leverage
"It's not GREATER MSP staff members
alone who are doing the work of the regional strategy," he said.
"The region is coming together in new ways to do the region's
work. For example, there are over 100 companies and
organizations deeply involved with the retention/attraction
initiative Make It MSP. The depth and breadth of this
collaboration stands apart from what we're seeing across the
country. We have the potential do more and do it faster than
other places, because we have so many great companies, so many
rich cultural assets and motivated young professional groups,
and so many universities. If we can figure out how to get all
those elements working together, we could be even greater than
we are today."
However, Frosch said there's room to
grow in how connected and aligned we are as a community. For
instance, newcomers have a hard time breaking into the community
and we need to be more effective at bringing them in. He said
GREATER MSP has been doing focus groups with newcomers and will
be doing a major survey to understand what collective strategies
we should get behind. "A region will not succeed over time in
increasing talent attraction if it is known as a difficult place
to get connected, Frosch said."
Growing up in a post-9/11 world,
millennials have had a sense of uncertainty and risk that has
resulted in many of them postponing life decisions.
Acknowledging it's problematic to generalize about a generation,
Frosch said we can observe that many millennials are delaying
decisions like buying a house, getting married and having
He said GREATER MSP doesn't want to
invite people only to find a job in Minneapolis-Saint Paul, but
to have a career and build a life. "We tell young people that if
you get into this economy and this community, you're going to
develop a career."
Formation of ideas at GREATER MSP is
done by and with others. In response to an interviewer's
question about surveying leaders to determine their support for
various proposals, Frosch said GREATER MSP does more than survey
leaders. It looks to them directly to form ideas and proposals.
There was no report published on the
regional strategy that leaders developed through GREATER MSP, he
said. The executives who had worked on the strategy said the
region didn't need another report. "That's not ultimately what
motivates action and gets things done," he asserted. "It's the
translation of that good data into persuasive arguments and
stories and clear points of action that connect with people's
"We found the data, created a
direction, and activated the strategy by creating initiatives
that are connected with the three pillars," Frosch continued.
Creating the new
The dashboard includes about 35
indicators in the areas of the economy, business vitality,
talent, education, infrastructure, environment, livability and
other vital statistics. It ranks how the Minneapolis-Saint Paul
region is doing compared to 11 other peer regions: Atlanta,
Austin, Boston, Chicago, Dallas-Fort Worth, Denver, Phoenix,
Pittsburgh, Portland, San Francisco and Seattle. Those regions
were selected based on demographic and economic characteristics,
location, positive economic trajectory, and evidence of
competition with the Twin Cities region for business or talent.
There are many organizations compiling
relevant data on the Twin Cities area, Frosch said. "The problem
is we don't measure together. If not, we can't get to shared
conclusions, shared priorities and shared action." There are
lots of organizations co-owning the dashboard project, he
explained. They and GREATER MSP will use the data to discover
the issues we need to be addressing, who's working on those
issues, what's working and what's not.
The regional dashboard is intended to
be a management tool for regional leaders, showing both the
upsides and the downsides. In response to a question about
possible downside risks facing the region, Frosch said the 2015
data suggest the areas of innovation capital, business startups
and shared prosperity deserve close attention. Racial
disparities in labor force participation and poverty amount to a
downside risk, he said. "The numbers clearly show shared
prosperity is not on the right track."
He noted also that the region's
population and workforce are not growing as fast as in some of
our competing regions. He asserted that in the current war for
talent, the region wouldn't have as many jobs if there were a
perception that there are not enough skilled people available
The Civic Caucus
is a non-partisan,
tax-exempt educational organization. The Interview Group
includes persons of varying political persuasions,
reflecting years of leadership in politics and
business. Click here
to see a short personal background of each.
S. Adams, David Broden, Audrey Clay, Janis Clay, Pat Davies, Bill
Frenzel, Paul Gilje (executive director), Dwight Johnson, Randy Johnson, Sallie
Kemper, Ted Kolderie,
Dan Loritz (chair), Tim McDonald, Bruce Mooty, Jim Olson, Paul Ostrow, Wayne
Popham, Dana Schroeder, Clarence Shallbetter, and Fred Zimmermany,