Commissioner Katie Clark Sieben was appointed commissioner of Minnesota’s Department of Employment and Economic Development (DEED) in October 2012, after a turn as executive director of the Minnesota Trade Office (MTO). MTO promotes the creation and retention of jobs and economic prosperity of the state by assisting Minnesota companies to export manufactured goods and services and attract foreign direct investment. As executive director, Clark Sieben was responsible for managing the overall strategic direction of the MTO, which includes promoting the State of Minnesota and its companies in the global marketplace, introducing Minnesota companies to foreign buyers and investors, building diplomatic relationships with international delegations and managing a staff of international trade representatives.
Bob Kill: Tell us just a little bit about your training to get over from the private sector, and your time as director of the Minnesota Trade Office.
Commissioner Clark Sieben: I worked in the private sector for Target Corporation in human resources and in marketing/community relations. After working for Target for about five years, I was interested in working for a startup and joined a company called National Wind, a wind-energy developer. But I was asked to join Governor Dayton’s campaign as his finance director. Once the governor was elected, he appointed me to be the executive director of the Minnesota Trade Office, which is a department within DEED that focuses on how we can increase exports from the state and how we can attract foreign direct investment inward.
During my time in the Trade Office,I identified that the office was solely focused on exports and helping small and midsized companies reach new markets where there is great demand for Minnesota products. I determined there was an opportunity to also start talking about foreign direct investment.
Minnesota had a few foreign business expansions occurring in the state. The recent expansion of Geringhoff in St. Cloud is a great example of foreign direct investment. But we only had one office in a foreign market, in Shanghai, China, while other states had many offices. The state of Pennsylvania has over 20 offices around the world. So Governor Dayton and our legislative leaders provided additional funding to set up three new offices in Germany, Korea and Brazil to help small and midsized companies increase exports and to be our FDI representatives on the ground in those markets.
That program has launched, and we officially hired a foreign direct investment director just a few weeks ago. It’s a fantastic opportunity to promote Minnesota in the global environment and identify foreign companies looking to relocate or expand in Minnesota.
Bob Kill: You’ve really brought a lot of visibility to DEED, which I think reflects, in part, an understanding of the power of public-private relationships.
Commissioner Clark Sieben: We are a very diverse department. DEED is focused on recruiting and attracting businesses to the state, increasing exports and attracting foreign direct investment. We house the new Office of Broadband, so we’re now getting into broadband development across the state. We have 47 WorkForce Centers across Minnesota focused on serving unemployed or underemployed Minnesotans looking for new career opportunities. We oversee State Services for the Blind, Vocational Rehabilitation Services and Workforce Development.
DEED’s role is to strengthen Minnesota’s economic competitiveness, whether it’s recruiting new jobs to Minnesota or building a highly-skilled, productive workforce. We couldn’t do it alone. We work with many local partners across the state to do that work: nonprofits, private sector, cities and counties.
Bob Kill: I like to tell people that manufacturers led us out of the recession …
Commissioner Clark Sieben: Manufacturing is essential to Minnesota’s future economic growth. Our projections show that jobs in manufacturing in Minnesota are expected to grow by 5 percent by 2020, and that doesn’t include positions that will need to be filled when baby boomers retire. If you look across the state of Minnesota, there are industry clusters that exist in different pockets in the state. Manufacturing is one that is spread across the state.
Minnesota is known for having one of the most productive workforces in the country, and that is why we’re seeing manufacturers and businesses and other industries look at Minnesota as a potential location for their business.
Bob Kill: The Wall Street Journal recently reported how employment is lagging behind economic recovery. At the same time, many manufacturers are increasingly frustrated at their inability to recruit employees with the kinds of training they need. What are your thoughts about that?
Commissioner Clark Sieben: DEED tracks that information on behalf of the state and reports and shares that information widely. We know the state as a whole has fully regained all the jobs lost during the recession and added another 33,000 jobs. We also know that the manufacturing sector lost about 51,000 jobs during the recession, and our data show that we’ve gained about 25,000 of those back. So it’s significant growth, but we need to remain focused on gaining the full amount back.
We also know that during the recession, manufacturers focused on more efficient processes and new technology to make sure that their businesses were able to survive the recession. So, as you mentioned, there is a great need for training on that new technology and to ensure our productive workers across the state have access to training programs, higher-education programs, and on-the-job training that will enhance their skill set and allow them to work with the new technology that’s in that workplace.
Bob Kill: Which is why I think the Minnesota Job Skills Partnership is an important program. It’s a great public-private collaboration that helps address workforce development, which leads to company development, which leads to job growth, etc. A lot of my fellow board members are impressed that MJSB is so results based. What’s your take?
Commissioner Clark Sieben: It’s a fantastic program. It operates such that a business and a higher education institution co-apply for a grant to the board. The community technical college or private institution provides customized training for that particular business. So it’s fitting the needs of that specific business, and it’s also creating new curriculum that the community technical college can potentially use for other businesses in the future.
Over the lifetime of this program, about 65 percent of the Minnesota Job Skills Partnership grants have gone to manufacturers. The grants are up to
$400,000 per training round. As a board member, you know that we get visited by the companies and education institutions applying for the MJSP grants during our board meetings. We hear directly from them on why they have that specific training need and what outcome that training will produce for their workforce.
So I believe it’s providing a niche that fills an absolute need in the economy. As baby boomers retire, we’re expecting an 86,000-worker shortage by 2020. We need to ensure the next generations to come are being trained on those processes, learning new technology in the workplace and are ready to take on those jobs.
Bob Kill: Speaking of great jobs, Alexandria, Brainerd and Mankato sometimes are held up as communities that collaborate really closely with manufacturers. It is no accident that each of those communities has a dynamic local technical college partner. Is there a role for DEED to spread those kinds of collaborations on a statewide basis?
Commissioner Clark Sieben: It’s an interesting question. Absolutely, our role with all of our programs is to provide effective outreach, to make sure that organizations are aware of the resources that exist here on behalf of the state. So it’s a good idea, and one that we should explore or discuss at future board meetings on how we might make that happen.
We are regularly promoting the Minnesota Job Skills Partnership program. Every time we do a grant signing, we go on site to the manufacturer and bring in the training partner, not only to give the business recognition but also to shed some light on the importance of this program in our state and the difference it’s making. We’re hoping that helps get the word out about this necessary training resource. Both the Minnesota Job Skills Partnership and the Growth
Acceleration Program receives a lot of good attention from our elected officials because they tie public-private dollars to creating results, hopefully leading to job building. Are there similar programs that are kind of undiscovered that people just don’t know about? Some companies are more aware of DEED’s programs and resources than others. We have a constant focus on communication and outreach, making sure that the general public is aware of the resources that exist here. For example, the Minnesota Trade Office regularly provides training for small to midsized companies to support new-to-export or new-to-market strategies. In addition, our Business and Community Development division houses economic development incentive programs such as the Minnesota Investment Fund and the newly launched Minnesota Job Creation Fund, which are key economic development tools to recruit and attract new jobs to the state. Our Competitive Adult Workforce Program and Competitive Youth Workforce Program are helping to provide funding to organizations targeting populations with barriers to employment. Our Business Development Competitive Grant Program provides funds to organizations that offer technical assistance, primarily for small companies, to spur additional growth.
We always encourage anyone interested to go to the DEED website, which was newly launched last year. The website has a full list of all resources and programs here at the agency.
Bob Kill: Does DEED feel like manufacturing is getting the right attention? Is there something that they could or are doing that just isn’t recognized by the public?
Commissioner Clark Sieben: When it comes to recruiting workers in manufacturing, I hear from manufacturers that it’s a challenge. We’ve heard that nearly two-thirds of jobs across the state have been hard-to-fill positions, and that’s presenting a real challenge. Fortunately, 68 percent of those hard-to-fill positions were filled within four months of the posting date. DEED’s partnerships with MnSCU and other educational institutions are key relationships because we need to develop a pipeline of talent with the necessary skills. We need to begin the conversation with students in K-12 and talk with their parents about the value of manufacturing and the opportunity it presents to create a high quality of life. These are well-paying jobs. Helping to educate students and unemployed or underemployed Minnesotans that these are good job opportunities is an important part of our work.
We know that the northeastern part of our state has had great success in recruiting workers in manufacturing. You might think that some of the areas of our state that are more rural have a harder time recruiting talent, but it’s actually the central Minnesota region, where there is such a strong manufacturing sector, that has had more difficulty finding talent. We think that it’s probably because it’s closer to the Twin Cities metropolitan region, and they are competing for talent. So the northeast and northwest regions have actually had a better time finding that talent than what we’re seeing in central Minnesota.
Bob Kill: Minnesota’s rate of unemployment is substantially lower than some of our neighboring states. Why is that?
Commissioner Clark Sieben: You’re right that our unemployment rate is much lower than many other states. It’s currently at 4.8 percent, and nationally it’s at 6.7 percent. We have a strong, positive economic story to tell at the moment. One of the reasons we’ve weathered the recession far better than many other states is because of our diverse economy.
We are not a state that is focused on just one or two industries. We have a diverse array of industries across the state, and that’s benefiting our economy overall. If one industry is not doing as well, there is another industry typically that is doing a little bit better. That helps ensure that we have consistent job growth and jobs for Minnesotans across the state.
When it comes to manufacturing, we know that food manufacturing is huge across our state and an economic strength, as are electrical, machinery and computer manufacturing. Another strong area is transportation equipment. We’re not just manufacturing one product, and that is why Minnesota’s economy is so strong.
Bob Kill: As you plan ahead, how big is the role for public-private collaboration?
Commissioner Clark Sieben: Public-private partnership is essential in today’s economy. If we’re going to think about how we drive Minnesota’s future economy, we need to be talking to the private sector to understand their challenges, any barriers that exist. What is their future projected growth? What skill set are they looking for in a worker? What type of talent will they need for their future workforce?
That information needs to be shared with the Department of Employment and Economic Development so that we can work with the Office of Higher Education and the Minnesota Department of Education to help produce the pipeline of talent that is needed for the jobs of the future. It starts with the Department of Education and our K-12 schools and thinking about how we influence curriculum and how we educate students about the jobs that will be available when they graduate from high school. That will help guide their decision making and what sort of training or post-secondary education that they go on to achieve.
It ultimately helps guide them toward a job that has a ladder for success. It’s happening all across the state, public-private partnerships with organizations like the Itasca Project, Greater MSP, Greater St. Cloud Economic Development, Greater Mankato Growth and Rochester Area Economic Development Inc. These are public-private organizations where that conversation is happening. There are also great examples on state boards and commissions. The MJSP board is a great example of public and private working together, with a mix of voices at the table.
Bob Kill: On top of that how do you think the role of DEED will evolve?
Commissioner Clark Sieben: I think DEED is playing an essential role for the state of Minnesota and will continue to in the future, for multiple reasons. It has evolved and changed over the years, depending upon the needs of the economy. So even in my short time here as commissioner, over the past year and a half, I’ve seen some adjustments that we’ve made based on a shifting economy.
When I first took this role as commissioner, I realized the Minnesota Investment Fund didn’t have a dollar left in the fund, and JOBZ was scheduled to sunset in 2015. We needed to quickly take action and develop sustainable economic development funding for those programs, to make sure we can compete for business expansions with other states that have much more robust economic development budgets.
Governor Dayton served as the past commissioner of DEED and understood this need very well. He supported $30 million in ongoing funding for MIF and $24 million for a new Minnesota Job Creation Fund. So now we have that economic development funding in place, and the team is up and running and busier than they’ve been in a decade. The conversation is already shifting to workforce shortage. With baby boomers retiring, what are we going to do about the projected gap, and how do we ensure that Minnesotans have the training that they need for the jobs of the future?
And while the unemployment rate for the state is 4.8 percent, it’s 4.3 percent if you’re a white male, and it’s 15 percent if you’re an African American male, up from 13.8 percent the previous year. So not every community in Minnesota is doing as well as that 4.8 percent unemployment rate. We need to remain focused on populations with some barriers to employment, and ensuring all Minnesotans are prepared for job opportunities.
That’s the really exciting part of my job and for everyone here at DEED. We’re never short on work. We’re never short on challenges and new opportunities for the state. It’s a constantly evolving landscape. As the economy shapes and changes, we need to be nimble enough to respond.