Not Even One Minnesota Business Makes Fortune’s 100 Fastest-Growing Companies List
Fortune just published the 30th edition of their Fastest-Growing Companies list, the annual who’s who of hot publicly-traded companies and industries across the nation and world.
In their review of the list, the magazine offered a few highlights. First, the “roster now reflects the rise of small banks and other financial institutions.” Second, not only does finance represent the most companies, but these companies are geographical dispersed across the country. Florida, Georgia, and Arkansas are each home to more fast-growing finance companies than New York. Third, more of fastest growing businesses in California—the state with the largest number of businesses on the list—are located in the southern part of the state versus the Silicon Valley area.
Bringing a Minnesota perspective to the list delivers a few lowlights. In their article, Fortune produced a bubble map with the locations of all the financial enterprises on the list. Notably, the map below reveals Minnesota is not home to any of the 29-fastest growing financial companies.
Disappointing, but what about the rest of list? Where are the other 71 companies located? Fortune didn’t make a map for all 100 companies and so I developed the map below that shows the number of companies located in each state on the full Fortune list.
As the map shows, not even one Minnesota company broke into Fortune’s 100 Fastest-Growing Companies in 2016. California boasts the most companies at nineteen and, outside of California, the Southeast region from Florida to North Carolina held the largest number of companies. Notably, fifteen companies (not on the map) are international companies, nine of which are located in China.
What does Minnesota’s absence from the list say about Minnesota’s economy? It’s hard to draw any direct conclusions. This is just one of many lists; the list only touches 100 companies; and it is limited to publicly traded companies. Maybe Minnesota has more fast-growing private companies for some reason. Nonetheless, Minnesota’s absence without question adds to the weight of evidence showing the state’s future economic performance will likely lag the nation.
Much of this evidence was documented in a recent Center of the American Experiment report on Minnesota’s economy. The report shows Minnesota ‘s economic performance has been average, at best, over the past fifteen years and, worse, leading indicators are nearly all pointing downward.
One problem area exposed by the report is that Minnesota suffers from a lack of new business creation and declining entrepreneurship. Minnesota’s future job growth depends on these new businesses, but the lack of fast-growing Minnesota companies on the Fortune list adds to the evidence that the state lacks the new and growing businesses necessary to support robust economic growth in the future.
The fact is, this is only the second year a Minnesota company has not made the list going back to 1992. The figure below shows the number of companies and their ranks by year. Fortune has lists going back a bit further, but these are the years I could easily pull together from online sources.
As the figure shows, Minnesota regularly reported four to five of the fastest growing companies in the nation during the 1990s. This also happens to be a time when Minnesota’s economy and personal income grew at a faster pace than the nation. So, there seems to be some correlation between presence on the Fortune list and the strength of the economy.
The figure includes at least one more troubling piece of information for Minnesota’s future. Minnesota’s biotech industry is one of the state’s strongest and yet, the last biotech company to make the Fortune list was Possis Medical in 2004.
Beyond biotech, it would be good to see more high-tech companies in general show up on the list. These are companies that provide jobs that pay nearly double the average job. But only three high-tech companies show up between 2005 and today.
Unfortunately, this lack of high-tech companies on the Fortune list is consistent with recent weakness in high-tech jobs identified in the Center’s report on the economy referenced above. That report shows Minnesota lost high-tech jobs at the turn of the century and did not gain any back.
The report concluded that Minnesota’s economy can do better if the state implements better public policies. And when it comes to the Fortune 100 Fastest-Growing Companies list, Minnesota can only do better. The state certainly can’t do any worse than zero.