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BUSINESS FORUM s 7AAbe...<
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<br /> The sheen from Minnesota's synthetic prosperity has worn away, iiORMAfi1®
<br /> N
<br /> exposing worrisome shortcomings.
<br /> INFORMATION manufacturing
<br /> Manufaèturing
<br /> deficit
<br /> deficit!
<br /> By Fred Zimmerman
<br /> innesota's weak
<br /> i utimk' , mos, , \
<br /> Mening economic
<br /> situation has " . ' ,. ?
<br /> prompted some ; ` #
<br /> well-prepared an- �.F
<br /> alysis in recent weeks, in- it
<br /> eluding the Jan. 19 Business " ril - `£` _f x
<br /> Forum by Dave Senf("Has em- '1''' '' S, `'
<br /> i a � i � ;, 111 J10V °�XII 9tti��
<br /> ployment peaked in Minneso- F A i ', , , 4
<br /> to s manufacturing sector? ). _ _ ,
<br /> Several of us have been con-
<br /> •
<br /> cerned about Minnesota's
<br /> gradually shrinking industrial`"`
<br /> prowess for many years.It has $
<br /> not always been a popular cru- r
<br /> sade.
<br /> When the precarious mar- From iant 3M to ti —_ F
<br /> ket position of Minnesota's ' '''''.- 42,4a !`10it ,
<br /> mainframe computer compa- S B Foot Tanning Co. 4` I r ' f 1
<br /> Hies was called to the attention (a supplier to Red #: 1 t 3 '
<br /> of state officials in the early )
<br /> 1980s,we were told"it couldn't Wings Shoe CO.)to .�s�< <3,,, -.:..7-0
<br /> happen to our companies."But Reell Precision Manu- ter: Y,IIt s� ( :
<br /> it did. $:�( r �;
<br /> factoring in Vadnais � -,� � �,� i
<br /> In the mid-1980s, when we -- :
<br /> suggested that Minnesota's Heights, Minnesota x �. �r:• 'k * t,
<br /> herculean effortsoin
<br /> g g into the manufacturers face r �° 1 ,� 4,
<br /> procurement of the Saturn P s a 0
<br /> plant might be better aimed at tough challenges at '" ' `',, 4' ,"',
<br /> securing a replacement for the home and abroad,
<br /> vintage Jeep plant in Toledo, n� ,. fi , i ' ti
<br /> Ohio, which was then sched-
<br /> uled for closing, the reply was I lip 01010
<br /> "Minnesota will get Saturn."
<br /> But the low-priced Saturn •
<br /> car had to be built close to sup- ers take all of the adjustment. upon which investment. The them.They are investing heav-
<br /> pliers. Jeeps were higher-mar- When the British scholar yields vary greatly. Expendi- ily in modern production
<br /> gin vehicles that sold well in Eric Trist was a visiting profes- tures, such as lucrative early equipment.Their quality is im-
<br /> the colder regions of the coun- sor at the University of Minne- retirements for teachers, do proving,We can compete, too,
<br /> try.Ultimately a new Jeep plant sota a few years ago, he sug- not improve the classroom ex- but not If we treat the matter
<br /> went to Canada and the Saturn gested "a systematic view of perience. casually.
<br /> plant to Tennessee, the environment is always a Nearly half of Minnesota's O. The service economy will
<br /> When it was suggested that necessary prelude to improve- science and math majors come ball us out. No way. Some hos-
<br /> Minnesota's manufacturing ment." from the private colleges and pitals, such as Mayo, Abbott-
<br /> employment was holding up , . most of the rest from the Uni- Northwestern and Minneapo-
<br /> numerically because we were Reviewing perceptions varsity of Minnesota— a pre- Ifs Children's, are prominent
<br /> adding jobs inlower-paid in- Minnesota's view of the en- mier land grant university and enough to attract customers
<br /> dustries while we were losing vironment has been proud, of- a great treasure for the state.j" from far away lands.Although and supplier systems in other
<br /> employment in the higher- ten smug, occasionally naive, Some of the technical college medical services typically are parts of the world and then fills
<br /> paid industries, we were told sometimes wrong, but almost programs also seem to have
<br /> that the idea was"ridiculous." never systematic.Even when it � viable on their own,most other the gaps.Sweden has unfolded
<br /> Y pal off well. But just because services companies depend some novel approaches to
<br /> Now Minnesota's economy has been provided,practical we have a publicly supported heavily on industrial compa- handling bankruptcy.
<br /> is clearly weaker—a bit weak- factual analysis has not always institution of higher learning vies for many of their custom- Minnesota does not have to
<br /> er than other Midwestern been appreciated. roughly every 30 miles does not ers.In our study of 232 manu- have the problems that it has.
<br /> states. As others have ob- Some of our commonly mean people are learning the facturing counties over 20 It is a far higher-cost state than
<br /> r served, Minnesota has lost all held perceptions should be re- skills necessary in an ever more years,we found that when the those other states and nations
<br /> Kof the manufacturing jobs viewed,including: competitive world. industrial economy was de- that are gaining employment.
<br /> gained during the synthetically ' Minnesota is a high tech- D► Minnesota's high qualitydining, there was essentially But the state does have many
<br /> prosperous 1990s. The decline nology state.When?We are liv- of life attracts companies.What no growth in the service strengths — some excellent
<br /> started in mid-1998, when ing off the legacy accumulated companies?Industry moves in economy,except for some lint- companies, some dedicated
<br /> poorly negotiated trade agree- when we made the big com- response to economic condi- ited growth in health care. public officials, some enlight-
<br /> ments, lack of enforcement of puters here. Technology is in- tions,mostly related to serving onversely,when manufactur- ened executives, a strong in-
<br /> security and antitrust laws,and creasing throughout the world. customers.Minnesota is a very gwas growing, the service
<br /> burgeoning capricious litiga- From 1990 to 2000, the U.S. long way from international sector grew substantially.
<br /> tion combined to weaken U.S. share of the refereed articles in ports and emerging markets.
<br /> industry. science, engineering and That means we must be more
<br /> Worse, the jobs aren't as mathematics dropped from 40 creative and more efficient to Opportunity knocks The author
<br /> good. The computer coma ,f
<br /> p compa- percent to 30 percent. What overcome our remoteness. Minnesota's current eco- _
<br /> vies are gone. Honeywell's does that sayabout the geogra- The medical device com a- Fred Zimmer-
<br /> P atomic downturn presents.an
<br /> headquarters has left town. phy of technology? g g nies will lead the way.Theyare man is rofes
<br /> Y :opportunity we should not p � �,:
<br /> ADC Telecommunications has ) Minnesota schools are excellent companies and wesor of engineer
<br /> P miss.Purdue . Dan Schendelonic of ingand manage-
<br /> shrunk. The sales of many of outstanding. Baloney!We have are extremely fortunate to have Pude provided convincing
<br /> I the well-equipped supplier some highly dedicated teach- them. However, theyare not ment at the Uni-
<br /> companies are off substantial- ers, but Minnesota has been large enough to carry Min- evidence for a postulate long versity of St.
<br /> g g rY recognized in business.Abrupt Thomas. He and
<br /> ly.Not surprisingly,the shrink- aiming at the wrong targets— nesota economy. g
<br /> Y falloff promotes action.Gradu= Dave Beal are
<br /> age in the number of good in- other states. Many countries The downturn In the econ- al drift does not.
<br /> dustrial jobs has left Minnesota rank far above the United omy Is cyclical. Some of it is, Minnesota has been drifting Warksring
<br /> with astronomical budget deft- States in the proficiency of but much of the weakness is for years, During this current ;The Vital Link between
<br /> cits. their students in math,science, structural. As outsourcingProduction and Prosperity,"Dear-
<br /> Yet we are all in this togeth- readingand languages. This is downturn,we should work to- born Press,2002.His a-mail is
<br /> ggrows,supplier bases are being gather to find creative and fftizlmrnermanastthomas.edu.
<br /> er.Minnesota must improve in not surprising. Most of these strengthened elsewhere. Peo- cost-effective ways to revitalize
<br /> order to compete and we are students spend a lot more time ple in other lands are working the state's economy.There are
<br /> not going to make progress as a in school. hard to achieve the American helpful examples. Indiana's
<br /> community if each segment )- investments in education standard of living they see on economic development pro-
<br /> rigidly protects its own posi- pay off In a stronger economy. television. They are building grams appear to be more cost" dustrial supplier base and
<br /> tion while suggesting that oth- Sometimes, but it depends factories while we are closing effective and more profession- some excellent colleges and
<br /> al than ours in Minnesota.Wis- universities.We should be able
<br /> cousin's higher-education sys= to make things better,
<br /> tem is probably better and Of course, this will involve
<br /> more focused than ours. ' both sacrifices and much
<br /> Tennessee has developed greater efficiency on the part of
<br /> some innovative programs in.' all of us. But unless Minneso
<br /> volving land development, ta's industrial economy can b
<br /> iip III utility coordination and per- restored, we will have budge
<br /> matting. Singapore routinely deficits and a weak economy_:.«
<br /> • benchmarks governmental forever.
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