State and local governments are crucial stakeholders when it comes to shaping the environment for foreign investment in the United States. The federal system of the US means that states have significant regulatory autonomy when it comes to issues such as tax, labour policy, and education – issues that businesses need to understand when making investment decisions.
States can also do their own part to influence trade flows, as issues like the mutual recognition of professional services qualifications, workforce skill development, and procurement rules are determined not in Washington but in state capitols.
CBI Washington has targeted 7-8 of these specific markets in the US that CBI members should be considering for export and investment, and this trip to the Twin Cities represented a closer look at Minnesota’s potential. This trip also was an opportunity to build off Minnesota Governor Tim Walz’s visit to the CBI in London this past November, where he spoke to members about the opportunities for investment in a state with an economy larger than both Malaysia and Singapore. The team spent time building relationships with local stakeholders and surveying the business environment for CBI members.
Workforce Development
Skills and workforce development were a major theme of this visit. The Minnesota Chamber noted that one of Minnesota’s largest assets is their 68% labour force participation rate, ranked 7th in the US. This means that businesses seeking to grow in the state can easily find talent, promoting economic stability and steady growth numbers.
During a bipartisan roundtable with members of the Minnesota Senate and House of Representatives, officials remarked how they are seeking to strengthen this by changing rules to help students entering jobs in manufacturing build up training hours at earlier ages. They also remarked that major Minnesota employers like Cargill were successful in developing training pipelines with local high schools and community technical colleges and wanted to see this replicated throughout the state.
Additionally, stakeholders emphasised community involvement as the biggest way for foreign investors to get local support and buy in for their ventures. Groups that sponsor local football teams or fundraise for charities and non-profits, for example, tend to be more successful than businesses who do not.
Officials in the state capitol were also open to working with the UK on the mutual recognition of professional qualifications, as state legislatures have to approve any deals that get struck between US and UK trade associations in areas like architecture and engineering
Logistics
Minnesota’s geographic location and reputation for innovation were two other major assets gleaned from the trip. The Minnesotan economy is anchored by the Twin Cities of Minneapolis and St. Paul, an area that experienced a higher population growth rate over the last decade than both Boston and San Francisco. The Twin Cities have established itself as a logistics hub in the middle of the country thanks to major international airport hub with direct flights to Asia and Europe and easy access to both US coasts. Its highly educated population and skill force can be attributed in part to a series of legacy American brands headquartered in the area.
Business bodies told the CBI that companies like Target, 3M, Cargill, General Mills, Medtronic, and Fastenal create an underlying skills ecosystem that link the top companies together and promote the idea that Minnesota is a “headquarters economy.”
Sustainable Agriculture
Minnesota, a historic agricultural hub in the US, is also uniquely positioned as the Midwest’s most climate conscious economy.
The Minnesota Governor’s office told the CBI that the state understands UK expertise in the green space and wants British firms investing in new sustainable agricultural technologies being developed in the state. GreaterMSP, the economic development office for the Twin Cities, met with the CBI team to discuss its venture capital accelerator and investment fund, designed to link sustainable entrepreneurs to large financiers. For more info on “Forge North,” click here.
Human Health
Arguably Minnesota’s most striking economic feature is its medical innovation industry. The state boasts America’s top ranked hospital, The Mayo Clinic, as well as the world’s largest private healthcare insurance company (United Healthcare).
The global medical device industry also has its roots in Minneapolis-St Paul thanks to Medtronic’s and 3M’s trailblazing leadership in this sector. Stakeholders and officials noted to the CBI that their close-knit medical innovation supply chain was receiving serious European interest, as well as from other investors like Israel. For example, in 2019, German-based Sick Inc. announced a $100 million investment in Bloomington to build a manufacturing plant for health sensors.
Speak to John for more information about the CBI’s work on US state government engagement, or if your business would like introductions to the State of Minnesota, Minnesota Chamber, or GreaterMSP.