Supporting

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Supporting strengthening the knowledge economy

• The Next Generation Economy
• 2009 Legislative Policy Conference
• Minneapolis, Minnesota
• January 14, 2009

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The economic context Minnesotas industry
clusters

• Industries thrive when clustered.
• as a geographic concentration of interdependent
  companies and institutions that have sufficient
  scale to generate external economies.

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Minnesota has many leading and growing
clusters

• Including- Medical devices- Alternative
  energy- Wood products/forestry- Recreation and
  related products- Creative enterprises-
  Printing- Health care

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Effects of Globalization on Minnesotas Clusters

1. On organization of clusters
2. On competitive advantage
3. On workforce education
4. On importance of place
5. On environment

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1. Increasing globalization AND localization
Diminishing importance of proximity to supply
chains, information, expertise, research, and
markets. Retaining importance of of proximity to
skills, startups, schools, know how, talent, and
schmoozing.
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2. Shifting competitive advantage
60s-70s Making Things Cheaper
80s-90s Making Things Better
2000s Making Better Things
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When people talked about innovation in the 90s
they invariably meant technology. When people
speak about innovation today, it is more likely
to they mean design. Consumers, who are choking
on choice, look at design as the new
differentiator Business Week , 7-4-05
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3. Changing workforce both supply and demand

• Emerging industries need - more creative
  employees - entrepreneurs - amenities to entice
  and keep talent - educational institutions to
  prepare the workforce entrepreneurs -
  workplace learning opportunities

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Benefiting from a more diverse workforce
Languages in Minnesotas schools
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Immigrant-founded venture-backed U.S. public
companies, 2005
Industry of immigrant-founded firms
Hi-tech manufacturing 42
Information technology 24
Life sciences 21
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4. Place matters more thanever before

• Provides an experience, brings tourists
• Establishes an identity/brand
• Attracts retains talent

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5. The environment a series of great
opportunities disguised as insoluable problems
Minnesotas Green Jobs, 2008-2020
Subcluster Jobs, 2008 Projected, 2020
Renewable energy 9,477 16,000
Green products 9,541 11,500
Green services 22,441 27,000
Environmental conservation 11,367 11,700
Total 52,826 66,200
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Firsts in Minnesota . . .
"We'll also fund additional research in cutting
edge methods of producing ethanol.Not just from
corn, but from wood chips and stalks or switch
grass. Our goal is to make this new kind of
ethanol practical and competitive within six
years."
Farmers plan to build the first U.S. biomass
ethanol plant in Luverne.
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Where can Minnesota invest to prosper in the
global economy?

• In supporting sustainable clusters
• In higher education, particularly its community
  colleges
• In innovation, including user-driven
• In its arts artisan-based enterprises
• In amenities and distinctive places
• In extending global connections

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1. Supporting sustainable clusters

• Minnesota has a number of distinctive clusters in
  its cities and rural areas.
• Minnesota already has more officials and experts
  in cluster analysis (HIPA cluster workshops).
• Minnesotas workforce development in sector (and
  cluster) oriented.

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Minnesota cluster analysesHumphrey
Institute,2007
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Clusters in 21st Century

• Greater importance of talent knowledge
• Emphasis on design- and place-based assets
• Changing definition, structure, functions of
  clusters
• Valuing triple bottom line (economic, equity,
  environmental) outcomes

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Its difficult to find emerging clusters with
conventional data
No NAICS Holistic health Arts
culture Alternative energy Artisanal food Green
building Log homes Motorsports
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Government roles

• Support civic infrastructure
• Fill market gaps in specialized services
• Build more intentional connections to educational
  institutions
• Encourage a balance among economic, social,
  environmental outcomes

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2 The workforce imperative in a knowledge economy

• The mid-skilled work force is least
  portable/importable factor.
• Labor is important and underappreciated source of
  innovation.
• Competencies in existing clusters can be used to
  develop new and competitive clusters
• Postsecondary institutions are critical cluster
  partners.

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North Carolinas Community College Cluster Hub
Strategy

• BioNetwork (5 colleges) 9.5 m
• Hosiery Technology Center
  400,000/yr(Catawba Valley CC)
• Textile Training Center (PCC) 400,000/yr
• Marine Training Center (Carteret CC)
• Aerospace (Haywood CC) 1.5 m
• Advanced Materials (Wilkes CC) 1.5 m
• Digital Interactive Entertainment and Simulation
  Technology (Wake tech)
• Motor Sports (3 colleges) 500,000

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3. Invest in all forms of innovation

• RD to maintain competitive positions of clusters
  and develop new strengths
• Product and environmental design that appeals to
  special tastes
• Incremental improvements that come often come
  from workforce

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It dawns on consumers that your productbe it
jeans, socks, or a high-end gas rangeis a
meaningful symbol of their personal aesthetics,
their inner selves
We all know that no one in their right mind
would ever pay 300 for socks. But having a
right mind is so yesterday.
Fast Company Magazine, Sept 2007
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Design that appeals to differentiated consumer
base
Fashion jeans Novelty shoes Swatches
Artisan breads Barista coffees Microbrewed beers
Green homes Architectural art Handmade goods
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4. Support artisan firmscompete small, grow large

• Recapture the artisan economy
• Recognize lifestyle and sector-style
  entrepreneurs
• Grow by aggregation rather than acquisition

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Creative economies in 5 states
NC Bigger than biotech or IT, earns about 3.2b median income and population grew with proportion of arts and design workers.
AR 3rd largest cluster in state 57 of manufacturers say design important to success
WY 9 of firms, 6 of employment, 21.5M in earnings
CO 122,000 in cluster, bigger than ag, defense, in top 10 states in architects, designers, writers
MT 5 of employment, 11 of self-employed
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Self-employment in selected sectors
Sector Percent self-employed
Multimedia artists and animators 53
Architects 22
Commercial industrial designers 31
Photographers 60
Graphic designers 32
Craft artists 90
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5. Invest in amenities and brand
Intrinsic identity Distinguishing spaces
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Place-based responses in Western NC

• Handcrafted architectural elements
• Craft and Garden Trails
• Small Production Facilities
• Revival of NC Furniture and Textile Industry
• Reusing space and energy

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Portlands Green Label
Green Building Cluster Highest number of LEED
certified buildings in US Direct wages
estimated 350-960M in 2006 821 LEED
accredited professionals 125 projects
underway High growth rate Local demand and
exports Large of supplies local

• Compared to other metro areas
• bike 7x as much
• more hybrids per capita
• drive 16 fewer miles/capita
• buy local campaigns
• -hi consumption organic foods

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6. Invest in global connections

• Joint participation in trade shows
• Study tours
• Collaborative RD
• International student exchanges and international
  internships
• Regional and cluster partnerships

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Imagination is more important than
knowledge. Albert Einstein
Regional Technology Strategies Carrboro, North
Carolina Stuart Rosenfeld 919 933-6699 rosenfeld_at_
rtsinc.org