Letter from the Commissioner

October 2008

PDF of article

Welcome to our second annual state of the state’s economy issue. In this issue of Trends we focus on some of Minnesota’s important regional industry clusters. As Kyle Uphoff spells out in his article “The Sum of Their Parts: Defining Regional Industry Clusters,” the definition of a cluster is a geographic concentration of interconnected firms and supporting organizations with a shared interest in a line of business and the relationships that exist among those businesses. Such industry clusters represent areas of strength, or potential strength, in an economy. We decided that during this period of economic uncertainty and national vulnerability to global economic competition it made sense to focus our annual report on Minnesota’s strengths and areas of potential.

The research that led up to these articles came out of a course called “The Microeconomics of Competitiveness: Firms, Clusters and Economic Development” based on the work of Professor Michael Porter, at the Institute for Strategy and Competitiveness, Harvard Business School. The course focused on identifying and analyzing state and regional industry clusters and how to best use this work to integrate education, workforce and economic development in Minnesota. Over 110 DEED staff and external stakeholders participated in trainings held during Fall 2006 and Fall 2007, producing studies on 16 industry clusters.

Participants have found that this training has helped them better understand business, economic and workforce development needs in the context of key industry clusters. Many Business Services Specialists have been able to utilize the analytical lessons learned in the course to better interview and communicate with businesses. This approach supports workforce development efforts to respond to current industry needs and collaborate with Adult Basic Education (ABE) and Minnesota State Colleges and Universities (MNSCU) to develop customized training that supports the specific and often parallel needs across industries. The applied nature of the training and cluster studies have effectively enabled many participants to utilize new skills, knowledge and relationships to apply for and win local, state and federal competitive grants.

In this issue you will find articles based on work completed during 2007 on the following clusters: financial services, the wood products, medical devices, and information technology. All of these articles come out of longer reports that include more detailed information on the region, the industry cluster and recommendations for next steps. Future issues of Trends will feature other industry cluster articles so please stay tuned.

Although the articles in this issue of Trends do not provide recommendations for action, much work is being done at DEED to move this research from the realm of thought to the realm of action and implementation. The center fold in this issue provides a snapshot of the initiatives that are building on a better understanding of Minnesota’s regional and industry strengths by utilizing cluster and sector approaches. Irene Connor’s article on manufacturing oriented workforce development programs provides more information about the types of action that result from speaking with and, more importantly, listening to what businesses need to succeed.

We hope that you enjoy this issue. Whether yes or no, please tell us what you think. 

Thanks!
 
Dan McElroy