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 Response Page - Clark Sieben  Interview -      
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These comments are responses to the statements listed below,
which were generated in regard to the
Katie Clark Sieben  Interview of
01-17-2014.
 

Minnesota's economic incentives are modest, but necessary for attracting new investment

OVERVIEW

According to Department of Economic Development (DEED) Commissioner Katie Clark Sieben, Minnesota must offer economic incentives when trying to recruit new businesses to move to the state or to convince businesses that are already here to stay and expand here. She maintains that the business incentives Minnesota can offer are "very modest" compared to what other states, particularly Texas and many southern states, are offering. Loans from the Minnesota Investment Fund are capped at $1 million per company, as are rebates from the newly created Minnesota Job Creation Fund.

Clark Sieben points out that Minnesota will have a worker shortage of 86,000 people by 2020, due to the retirement of the baby boomers and strong job creation in the state. She says Minnesota must grow its own workers, as well as recruit new people. Minnesota has one of the most productive workforces in the country, she reports, which is part of the reason for a number of recent business expansions in the state, with more companies working with DEED on possible moves to Minnesota. Another strength is the diversity of the state's economy.

Clark Sieben discusses DEED's work with K-12 and higher education on workforce development, its joint program with the Minnesota Department of Transportation to upgrade trunk highways that are tied to economic development expansions and its new Made in Minnesota database, which includes information about 600 manufacturers in the state.  

For the complete interview summary see: Sieben interview

Response Summary: Average response ratings shown below are simply the mean of all readers’ zero-to-ten responses to the ideas proposed and should not be considered an accurate reflection of a scientifically structured poll.

To assist the Civic Caucus in planning upcoming interviews, readers rated these statements about the topic on a scale of 0 (strongly disagree) to 5 (neutral) to 10 (strongly agree): 

1. Topic is of value. (7.4 average response) The interview summarized today provides valuable information or insight.

2. Further study warranted. (7.1 average response) It would be helpful to schedule additional interviews on this topic.

Readers rated the following points discussed during the meeting on a scale of 0 (strongly disagree) to 5 (neutral) to 10 (strongly agree): 

3. Address coming labor shortage. (8.5 average response) Minnesota needs more specific strategies to avoid a projected shortage of some 86,000 workers by 2020, a product of strong job growth and more people retiring than entering the job market.

4. Shortage may deter investment. (7.5 average response) Even though the state's work force is very productive, a shortage of workers could lead to businesses investing elsewhere.

5. Jobs data needed. (7.6 average response) To help avoid a worker shortage, businesses need to provide more information on the specific types of jobs that will be in demand.

6. MN must offer incentives. (7.4 average response) With other states offering financial incentives to attract businesses, Minnesota can't escape offering financial incentives of its own.

7. Private sector experience key. (8.7 average response) The state's economic development agency (DEED) should give more emphasis to hiring people with strong experience in private business.

8. DEED dependent on other agencies. (8.5 average response) To assure that Minnesota's economy remains strong, DEED needs the fullest commitment from other state agencies, including transportation, preK-12, and higher education.

Response Distribution:

Strongly disagree

Moderately disagree

Neutral

Moderately agree

Strongly agree

Total Responses

1. Topic is of value.

0%

14%

7%

57%

21%

14

2. Further study warranted.

0%

14%

14%

57%

14%

14

3. Address coming labor shortage.

7%

0%

0%

36%

57%

14

4. Shortage may deter investment.

7%

7%

0%

57%

29%

14

5. Jobs data needed.

7%

0%

0%

71%

21%

14

6. MN must offer incentives.

7%

0%

14%

57%

21%

14

7. Private sector experience key.

0%

0%

15%

38%

46%

13

8. DEED dependent on other agencies.

8%

0%

8%

23%

62%

13

Individual Responses:

Michael Martens (7.5) (7.5) (10) (7.5) (7.5) (10) (10) (10)

1. Topic is of value. Minnesota is competitive in attracting some industries and very unattractive for other industries. Minnesota can attract small manufacturing /niche industries but not large scale manufacturing, unattractive auto manufacturing and all large scale manufacturing, supply chain and distribution, high tech Fortune 500 companies. More of Minnesota's Fortune 500 were started before 1900 than after 1950. All but 1 or 2 of Minnesota Fortune 500 companies are in old, slow-growth industries and industries that were created/started in the industrial revolution. Minnesota does not have large companies based on the information or computer revolution, that is, companies like Google, Facebook, Intel, Microsoft. Minnesota [did] have computer companies in the first generation of computer companies but they moved or when out of business [, e.g.,] companies like Sperry Univac, Honeywell, Control Data, Cray. What about the business climate in Minnesota caused them to leave/go out of business?

3. Address coming labor shortage. Future questions: What industries are growing jobs? What types of skills are needed for jobs in growing industries? How workforce-ready are high school graduates? And what types of jobs are high school graduates qualified for? Are the majors of new college graduates [going to] qualify them for the jobs in demand? How good… a job are high school and college guidance [counselors] and teachers [doing] in telling students where the jobs are? Are college teachers and guidance [counselors] clear [and] up front with college freshmen about the demand for various college majors like literature, music, northern European foreign languages, art, etc.? Has the "dot-com" recession and the financial recession changed baby boomers’ plans for when they will retire?

4. Shortage may deter investment. Currently there is a shortage of people for some manufacturing [positions].

6. MN must offer incentives. An educated [and] productive workforce.

8. DEED dependent on other agencies. Sieben talked about improving Minnesota highways but did not talk about improving access to major [rail] or river transportation. Depending on trucks (highways) to move goods in and out of Minnesota puts Minnesota at a great disadvantage. For distribution of goods by national and international firms not based in Minnesota, Minnesota is literally at the end of the road. For distribution of goods by national and international firms not based in Minnesota, Minnesota, South Dakota and North Dakota are treated the same.

Ray Ayotte (7.5) (2.5) (10) (7.5) (10) (7.5) (10) (10)

John Adams (7.5) (7.5) (10) (10) (7.5) (7.5) (7.5) (10)

4. Shortage may deter investment. A shortage of well-educated, well-trained workers . . .

5. Jobs data needed. It is not clear how MnSCU and U of M interact with the industries that operate in Minnesota. When we created MnSCU and severed the links between (1) Minnesota's regional economies and (2) the technical colleges and community colleges, we diminished the flow of useful information between what the economy needs and what the schools were supplying.

6. MN must offer incentives. But bribing companies is a tactic--it's not an economic development strategy.

7. Private sector experience key. It certainly would help.

Anonymous 1 (7.5) (7.5) (7.5) (7.5) (10) (0) (5) (7.5)

Dave Broden (7.5) (7.5) (10) (2.5) (7.5) (5) (10) (10)

1. Topic is of value. There has been a question regarding the vision and approach of DEED in Minnesota economic development and support. This interview began the process of expanding our understanding.

2. Further study warranted. The role and approach that DEED takes and its relationship to other organizations, public and private, remains unclear, and the fact that DEED manages some federal funds as well as addresses development seems a bit of mismatch

3. Address coming labor shortage. The strategy may be not much more [than] moving to establish a better and effective communication program that ties economic development to education, jobs, and the opportunities for all citizens.

4. Shortage may deter investment. While the simple answer may be to say a worker shortage will cause businesses to look elsewhere, the projected shortage in Minnesota will be projected in most other states and nationally as well. For Minnesota to complete we need to lead in building the future workforce in way that distinguishes Minnesota from other states. This should include education innovation, support for immigration reform, establishing programs that facilitate immigrant integration into Minnesota society, working to keep U of M, etc., foreign students in Minnesota after graduation etc.

5. Jobs data needed. Business must have a vision of future job skills. But in addition the state and other organizations must become aware of the types of jobs that are evolving … and what is disappearing. The lack of technical or business expertise in state government must be fixed either by adding that capability or by better use of business and industry personnel. Also the state must establish [and maintain] a current and projected workforce skills inventory. Let’s use the tax system as a check-off of job categories to build the skill base inventory and vision for future skills.

6. MN must offer incentives. Minnesota should lead in seeking to find alternatives to the types of incentives that are offered today and seek to build incentives related to job training, education, quality of life, etc.

7. Private sector experience key. DEED definitely needs to evolve a workforce with business experience or increase the use of business expertise as shared workforce or on-going task force activity. The link does not have to be state hiring but can be use of business personnel in other ways.

8. DEED dependent on other agencies. This is the fundamental question: Is the structure, organization, and role of DEED in 2014 what is needed to address the economic development goals of Minnesota or should a redesign of DEED and other related state functions seek to form a new vision organization with clearly defined links to other functions? This is a clear step to a collaboration type organization. Let’s push for a design with a collaboration focus.

Don Anderson (7.5) (5) (10) (7.5) (7.5) (7.5) (5) (10)

4. Shortage may deter investment. This shortage of workers is not limited to Minnesota; other states will also have a shortage.

David Dillon (10) (10) (0) (0) (0) (10) (10) (0)

7. Private sector experience key. Price collusion in business would be highly profitable but is illegal. Such collusion is not only legal, but encouraged in the public sector. Minnesota should lead the way to formulate a pact with other states to end this form of state vs. state competition.

Tom Spitznagle (4) (3) (6) (7) (6) (5) (10) (5)

Not confident that entrusting an agency like DEED with the responsibility for developing and implementing a statewide, coordinated strategy for growing Minnesota’s economy will be a good use of taxpayer funds. DEED has suffered from a lack of credibility with many key business people, the very people DEED endeavors to assist. DEED is perceived by many as just another low-level state bureaucracy.

Wayne Jennings (10) (7) (10) (9) (9) (9) (9) (10)

Trixie Girtz Golberg (5) (9) (9) (9) (9) (9) (9) (9)

More focus and appreciation [is] needed for Minnesota grown businesses and entrepreneurs. Need more focus on real workforce programs for low-skill, low-income adults and programs that are effective in advancing their value to employers.

Chuck Lutz (9) (9) (10) (10) (9) (9) (9) (10)

Bright Dornblaser (10) (10) (10) (10) (10) (10) (8) (10)

Fred Zimmerman (2) (5) (9) (10) (6) (7) (10) (9)

Although the commissioner seems enthusiastic, which was welcomed, I was generally disappointed in the interview because the Department does not seem to display a thorough understanding of the status of Minnesota’s industrial economy. The much lauded state "Made in Minnesota" website, which I reviewed later, displays only very limited information on 600 of Minnesota’s 7,000 manufacturers and appears to be specifically lacking in the technical capabilities of Minnesota’s industrial companies.

Economic development is one of Minnesota’s weak spots. Money is spent, at state, county, and local levels, but staffing is not commensurate with state needs in that it is insufficiently industrial and technical. Other states are better. The St. Paul Port Authority is more "with it" and probably more useful than DEED.

The employment analysis part of DEED, Steve Hine and his group, is pretty good.

Paul and Ruth Hauge (8) (9) (7) (8) (7) (7) (na) (na)

    

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.

  John S. Adams, David Broden, Audrey Clay, Janis Clay, Pat Davies, Bill Frenzel, Paul Gilje (coordinator), Randy Johnson, Sallie Kemper, Ted Kolderie, Dan Loritz (chair),
Tim McDonald, Bruce Mooty, John Mooty, Jim Olson, Paul Ostrow, Wayne Popham, Dana Schroeder, Clarence Shallbetter, and Fred Zimmerman


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The Civic Caucus, 01-01-2008
2104 Girard Avenue South, Minneapolis, MN 55405.  civiccaucus@comcast.net
Dan Loritz, chair, 612-791-1919   ~   Paul A. Gilje, coordinator, 952-890-5220.

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