A ‘crisis of competitiveness?’

Minnesota faces a “crisis of competitiveness” in attracting high-tech industries, and needs a comprehensive science and technology initiative to remedy the problem.

That was the message from members of an advisory group at a hearing of the House Bioscience and Workforce Development Policy and Oversight Division on Feb. 16. No action was taken.

“Minnesota once led, but by now we are losing our prominence in science and technology innovation,” said Dan Mallin, co-chair of the Minnesota Science and Technology Economic Development Project.

Mallin said Minnesota is “far behind” other states in establishing policies and programs that promote growth in high-tech business. He recommends the state establish and fund a permanent organization to facilitate that growth, and provide incentives like tax credits for angel investment, research and development and similar activities.

“Minnesota must have a plan and a strategy, and to do this requires a permanent structure to guide the effort,” Mallin said.

Some division members questioned the feasibility of funding a new economic development initiative at a time when the state is struggling to fund its current programs. Rep. Bill Hilty (DFL-Finlayson) commented that Mallin’s message amounted to asking the state to reduce its revenues and increase spending at the same time.

Rep. Ryan Winkler (DFL-Golden Valley) questioned whether there is enough evidence that programs like angel investment tax credits actually work to justify the cost.

“Before we engage in this effort of creating a new institution, of investing in tax credits, I think more evidence needs to be brought to the table to support that,” he said.

The Minnesota Science and Technology Economic Development Project was a joint public-private effort commissioned by the Legislature in 2009. It released a report Jan. 15 on how to boost science and technology-based business growth in the state. The report is available on the Department of Employment and Economic Development Web site.