What’s Happened to Minnesota’s Entrepreneurial Spirit?
In the Minneapolis Star Tribune, Dileep Rao, a professor of finance, bemoans the fact that Minnesota is no longer producing the cutting-edge, rapidly growing companies that once fueled the state’s economy:
Glen Taylor built Taylor Corp. into the country’s largest wedding-invitation printer. Earl Bakken built Medtronic into the world’s largest electronic medical-device company and founded the medical electronics industry. Bob Kierlin built Fastenal into the country’s largest fastener company and one of the best stocks on U.S. stock exchanges. Dick Schulze built Best Buy into the world’s largest electronics retailer. And Richard Burke built UnitedHealth Group into the world’s largest health care management company.
What do they all have in common?
They are all among Minnesota’s billion-dollar entrepreneurs who built billion-dollar companies from scratch. …
But where is our next generation of billion-dollar entrepreneurs?
When I wrote my book “Bootstrap to Billions” (2009) about these billion-dollar entrepreneurs and Minnesota’s hundred-million-dollar entrepreneurs, Minnesota was an economic leader with one of the highest numbers of Fortune 500 companies per capita in the country. But these entrepreneurs are now in their 70s and 80s. Nearly all of them built their businesses in the 1960s and 1970s, and were already in the billion-dollar category by the 1980s. That is about 30 years ago. The last Minnesota firm to reach the Fortune 500 list was UnitedHealth, which started in 1977. We have not built a single billion-dollar company from scratch since then.
Rao’s diagnosis of the problem is correct, but he doesn’t offer much that is concrete by way of solutions. He fails to consider the likelihood that being one of the highest-tax, heavy-regulation states in the country, with a state government that is largely hostile to business, is no way to encourage entrepreneurship, nor does it provide an incentive to growing businesses to stay in Minnesota.
It may be true, as Rao suggests, that Minnesota’s economic glory days are in the past. But they can be brought back with policies that make the state competitive again.