Morphing Southeast Minnesota into a Lean, Green, Job Growth Machine

by Jennifer Ridgeway - jennifer.ridgeway@state.mn.us
May 2009

Morphing Southeast Minnesota into a Lean, Green, Job Growth Machine

Every few years some hot new term creeps into our vernacular. After the 2001 recession the hottest term in workforce and economic development arenas was “biotech.” The past couple of years saw the rise of renewables; first ethanol and then wind energy. These areas are still in the spotlight and are important to Southeast Minnesota. But the newest idiom in town is “green.” The term has graced the front pages of newspapers and is in the American Recovery and Reinvestment Act, but will it grow jobs in Southeast Minnesota?

Green is more than recycling and hybrid cars

The green concept is broad and has the potential to touch a range of industry sectors. Construction, manufacturing and utilities are most often noted as being part of the green economy. In the Southeast region total employment in those three sectors accounts for 22 percent of all jobs, suggesting a strong base of businesses that could participate in the green economy.

But not all jobs in these industries are green, and even at a green business not all workers are involved in green activities. This makes counting green jobs difficult. But analysis of industries with green potential can be a useful exercise in figuring out the region’s potential in the green economy. This article adopts the methodology used in the Minnesota Green Jobs Task Force’s market analysis (completed by GSP Consulting Corp.). Based on this analysis, Southeast Minnesota is home to more than 35,000 jobs in more than 200 industries considered to be green or have green potential.

The Minnesota Green Jobs Task Force analysis placed those 35,000 jobs into four “green sector” categories: Environmental Conservation, Green Products (i.e., firms that produce goods that reduce environmental impacts or reduce waste), Green Services (i.e., firms that provide services that enable the use or production of green technologies and practices), and Renewable Energy. Of course not every firm or every worker in those industries is involved with green activities, so green share formulas were applied to industry employment in order to narrow the 35,000 jobs down to a more reasonable number more likely to be green. Under the assumptions developed by the GSP Consulting Corp. researchers, about 12 percent of these 35,000 jobs might actually be green — about 4,238 green jobs in 2007. That is about 2 percent of total regional employment and 8 percent of statewide green jobs.

Green Products and Green Services have the largest number of green jobs. But the highest share of green jobs, as a percent of total jobs in the green sector, is in Environmental Conservation. In the other green sectors, green jobs account for about 10 percent of total industry employment. Job numbers are as follows:

• Environmental Conservation: 930 jobs, including an estimated 536 green jobs
• Green Products: 14,155 jobs, including an estimated 1,396 green jobs
• Green Services: 14,670 jobs, including an estimated 1,460 green jobs
• Renewable Energy: 5,793 jobs, including an estimated 846 green jobs

Southeast Minnesota has green product potential and ties to other emerging industries

While Minnesota’s largest share of green jobs are in Green Services, the Southeast region enjoys nearly an equal number of jobs in Green Products including glass products, construction equipment, motor vehicle parts and HVAC equipment manufacturing (see Figure 1). Green-potential manufacturing accounts for a higher-than-average share of regional employment. These industries account for 10 percent of the region’s manufacturing base, compared to the statewide average of less than 4 percent. The region also has a slightly higher share of jobs in Renewable Energy. This specialization starts to point out competitive advantages and potentially regional strategies for future growth.

Within these broad sectors are a variety of industries. In Green Products a few big companies manufacture glass products or construction machinery integral to the construction and building trades. There are also several high-tech manufacturing firms whose technological innovation may be as important to the green economy as any product they make, from problem-solving technology to developments in materials science. In all, the region has more than 300 firms in the Green Products classification, and one in every four of those companies has fewer than 200 employees.

In a region like Southeast Minnesota it’s also not hard to see the ties between green-related industries and agriculture and manufacturing, as well as potential in emerging biotech sectors. The role of agriculture and natural resources in the regional economy has come to the forefront with the rise of biofuels and biomass. [1] The wind energy supply chain is providing new opportunities for some firms and attracting new businesses to the region, including a large wind turbine gearbox manufacturer. Synergies between agriculture and bioscience have potential not only to open up new product markets in bio-materials and bio-applications for crop or animal production for example but also to develop green practices that impact environmental sustainability.

Green markets mean more sales for some companies, but green strategies may also help companies reduce their energy use and cut costs. For example, food manufacturing is the largest manufacturing industry in the region and the fifth largest energy consumer in the sector, in part because of the electricity demands of things like refrigeration. This has prompted the industry to look at solar energy and energy conservation methods. [2] According to the results of a recent survey by the Minnesota Department of Employment and Economic Development (DEED) and the Minnesota Department of Commerce, while a smaller share of respondents said they provided some type of green service or product, high levels of businesses were engaged or planned to engage in green practices including waste and energy reduction, social corporate responsibility, and green design for facilities and sites. There are currently 17 Leadership in Energy and Environmental Design (LEED)-registered or LEED-certified projects in the Southeast region listed on the U.S. Green Building Council Web site. [3] The list includes building projects in a variety of industries, from manufacturing to education and local government, demonstrating green’s broad impact.

The future is green

Despite the difficulty of counting green jobs, the Minnesota Green Jobs Task Force report projected that green employment would increase 2,700 to 9,000 jobs by 2020 — a 12 to 35 percent increase. If Southeast Minnesota follows similar trends, employment in 2020 might increase 500 to 1,700 jobs for a total of 4,700 to 6,000 jobs. This is a small but sizable number compared to total job growth over that period, and the spillover effects will likely support other job growth in the region.

Jobs in the green economy will range from energy auditors and solar panel installers to mechanical engineers and power plant operators. They will also include a host of business and information technology occupations. Table 1 includes some of the largest (100 jobs or more) occupations in the region in industries with green potential. [4]

Some green jobs require specific technical skills while other green skills are more general and may be important to many different types of occupations. For example, almost half of the respondents to the survey by DEED and the Department of Commerce indicated that current employees need to know the value and principles of energy conservation. Identification of operational waste, knowledge of environmental policies or regulations, and management skills for implementing or sustaining conservation practices or processes were also cited by businesses. Even with jobs that require specific skills, such as solar panel installation, a worker with an existing set of skills, such as an electrician, can frequently perform the duties with some short-term training. Green demand does not always mean the creation of completely new jobs, but workers with green knowledge or skills have additional tools in their toolbox when it comes to employability.

Conclusion

Various public policies and investments have brought green into a much larger spotlight recently, but green is not new. Regional firms have been engaged in the green economy for years, and many firms have instituted green practices regardless of their type of business. As industries like manufacturing and construction, which were hit hard by the current recession, look to diversify and expand their markets, green has become another option for many. The breadth and depth of green jobs have education providers and workforce partners looking at their own toolbox, and several have developed new programs or are adapting existing programs to meet employer needs. Beyond job creation, green skills and knowledge have the potential of transforming thousands of existing jobs. Luckily there are many partners focusing on green issues, and they are working carefully but quickly to assess regional strengths and gaps in the current green economy in order to be prepared for this transformation. Increasing the number of connections between green industries and workforce development institutions places the region in a great position to gain more green market share for years to come.

 [1]See “Southeast Minnesota’s Agricultural Sector Finds Its Place in the Local, Regional, and Global Economy” at www.PositivelyMinnesota.com/lmi/publications/review/1108/rs.htm .
[2]Food Engineering, “The Greening of Manufacturing.” January 2009.
[3]According to the U.S. Green Building Council, LEED certification provides independent, third-party verification that a building project meets the highest green building and performance measures. For more information, visit www.usgbc.org .
[4]Read more about different green job opportunities in the March 2009 issue of Trends - online at www.PositivelyMinnesota.com/lmi/publications/trends/0309/opportunities.htm