Minnesota Department of Employment and Economic Development and Greater MSP - Bright North Star
When the US came out of recession, Minnesota was better placed than most states to ride the wave of national recovery. Laurence Reszetar (far right) of the Minnesota Department of Employment and Economic Development and Greater MSP's David Griggs reveal how the North Star State is forging new relationships with foreign investors to encourage growth in the years ahead.
Laurence Reszetar and David Griggs are a long way from St Paul. About a thousand miles, in fact, in Washington, DC, representing the great state of Minnesota at the SelectUSA Conference amid a gaggle of Fortune 500 CEOs, ambassadors and cabinet members.
"Although we're only one of 50 states, we have a great message to share," says Reszetar, Minnesota's director of foreign direct investment. He's just returned a friendly hello to the US secretary of commerce.
"We are the home to 18 Fortune 500 companies, and two of America's largest private companies. Our companies are known around the world. When we travel abroad and talk about Minnesota, and we talk about the Minneapolis-St Paul area, people might not know us directly, but they do know our companies."
Minnesota - from the Dakota word for 'sky-tinted waters' - is found on the western shores of Lake Superior. A landscape scoured by glaciers and blanketed by vast stretches of forest, the North Star State is home to about 5.5 million people and a host of multinational corporations. They've joined together to help make Minnesota one of the US economy's great success stories
"Broadly speaking, we have close to 800 locations of foreign-owned employers that employ close to 100,000 people across the state," says Reszetar.
"What we've seen from our own research and data is that these jobs generally pay more, they're more stable, and they're in the advanced industries where we want to be. In fact, one of the big reasons that Minnesota recovered so quickly from the recession is because we have those international ties."
"At the moment, we're really in an entrepreneurial phase," he adds. "We can afford to take some risks and find ways to reach the audiences that we need to let them know just how much of an advantage Minnesota presents and how we want them to come here."
It's an approach that Minnesota can embark upon with some confidence. Tellingly, much of Reszetar's job involves getting international audiences to recognise that many of the brands they know and love first flourished in Minnesota. "They already know about the products we offer," he says. "They know Cargill. They know 3M. They know this incredible wealth of talent that we have in the innovative products that reach across the world. And that makes it great for us because then we can say, 'You know this product. We're the home of that. We're where that began'."
It's an advantage that begins with location. "Minnesota is not just a US destination, but a North American destination," Reszetar explains.
"We have an inland port where you can put cargo on a ship on Monday, have it sail up the St Lawrence Seaway and be in Rotterdam within two weeks. That way, you don't have to truck or train all the way across the country to get your product to stores."
It's also home to a highly educated workforce, served by a globally connected university system and a vibrant service economy. Additionally, for decades the state government has actively nurtured the growth of its computing, agricultural and retail sectors, spawning dozens of companies that have long since expanded beyond Minnesota across the wider US, and even overseas.
"Foreign investors can come in and access this incredible innovative talent that has led to the spectacular growth of these companies," says Reszetar. "Ultimately, they're coming in to a place where it is very easy to do business."
Meeting in St Paul
If anyone knows just how much of an effect this approach to foreign investment has had on the Minnesotan economy, it's David Griggs of Greater MSP, a private nonprofit group that promotes the opportunities for businesses considering moving to the Minneapolis-St Paul area. As vice-president of business investment and research, Griggs has been working with the Brookings Institution to map sources of direct foreign investment into the region. "We've looked at almost every company where foreign investment has been directed and how it came to be, from merger-acquisitions and greenfield operations, to historic companies that have been operating in the state for 30 years or more."
"Unsurprisingly, Canada is our largest trading partner," says Griggs. "However, when we look at our region and the industries where our investment is coming from, you start to discern a great many connections between Minnesota and Europe, particularly with the UK, the Netherlands and Germany. Collectively, we see a great deal of business from these three in terms of medical device and technology development and wealth management. By contrast, our investment from the Nordics underperforms compared with the rest of the US, even though we have long historic ties to the Scandinavian countries."
The study has proven to be a valuable guide on the attraction Minnesota holds for different countries, and is a useful reference point for investment strategy in the years ahead. "A lot of good work has come out of the Brookings study," says Griggs. "We've now developed an action plan to implement some of the recommendations that have come out of the work. Greater MSP now has an office in Munich that concentrates mainly on soliciting new investors in the med-tech sector."
This targeted approach to finding new markets has sent Minnesota trade representatives prospecting as far afield as Germany, South Korea and Brazil. The choice of location for the new field offices was carefully made.
"Our office in Düsseldorf allows us to enhance our relationship with stakeholders in the Scandinavian economies and deepen our links with investors in the Benelux countries, France and northern Germany," explains Reszetar, "while our presence in Sao Paulo is a natural outgrowth of the large number of Brazilian companies operating in Minnesota.
"Our office in Seoul, meanwhile, builds on the deep historical relationship our state university has had with the South Korean intellectual community since the end of the Korean War.
"Thanks to the exchange programmes of the 1950s, and the training that Minnesotans helped provide, former Korean students are now in executive positions across the country. Now we want to be there for the next generation."
A long-term economic plan
It's this approach to aftercare - sometimes years, even decades after foreign businesses have set foot in the state - that has paid off for Minnesota, especially in the wake of the largest economic troubles the country has seen since the Great Depression. "Now we're starting to see this increase in commitments and reinvestment throughout the state, and especially in the Minneapolis-St Paul region, which we're thrilled about," says Reszetar.
Ultimately, Griggs and Reszetar see the state's record in attracting a permanent multinational business presence in Minnesota as the key to the state's long-term growth. "We don't want to be prescriptive in working with foreign-owned enterprises," says Reszetar.
"We plan on being partners, working with them not just to get them to locate to Minnesota, but throughout the entirety of their operation there.
"We very much value aftercare. Saying that, we're not just there to cut the ribbon, do the photo op and just walk away and leave the business to it. We want to be there for investors throughout their time in our state, because we value capital investment and want all our companies to continue to expand into the future."