1988: Ronald Reagan was wrapping up the final year of his second term as the President of the United States. Bobby McFerrin’s “Don’t Worry Be Happy” was playing on our AM radios. Roseanne premiered on our television sets. Rain Man dominated movie box office receipts, and the Chicago Cubs played their first-ever night game.
And the Minnesota Vikings used the league’s stingiest defense that year to compile the second-best win-loss record in the entire NFL. They then went on to get embarrassed 34-9 by the San Francisco 49ers in the divisional playoffs. Just sayin’.
In 1988, Rudy Perpich was in the middle of his third and final term as Minnesota’s governor. That year, the legislature enacted one of his pet projects by creating the Greater Minnesota Corporation, which eventually became Enterprise Minnesota. Perpich recognized that a vigorous, competitive manufacturing sector would provide the economic bedrock for every community in Minnesota. He understood that small and medium-sized manufacturers were entering an era of increased globalization, which would bring opportunities and challenges. He wanted the Greater Minnesota Corporation, in part, to give them access to tools and expertise that would help them thrive in that environment.
Our consultant teams at Enterprise Minnesota continue to do just that to this day. We’ve come a long way from the early days of merely using the concepts of lean enterprise to bring efficiencies to the work floors of Minnesota’s manufacturers. I could not be prouder of the high level of expertise and broad array of services that we provide to Minnesota’s manufacturers.
And we’ve done some other things to identify and strengthen the common interests of manufacturers. We call it our “nexus” strategy. We have consciously tried to make Enterprise Minnesota the organization that strategically connects all the players in Minnesota’s manufacturing ecosystem. In addition to manufacturers themselves, that includes suppliers, advisers, community leaders, educators and policymakers.
The most conspicuous element in our nexus strategy has been the State of Manufacturing® survey, which is celebrating its 10th year.
Each year our pollster interviews some 500 manufacturers to determine what they view as opportunities and challenges in the coming year. I think it has been a spectacular success.
To this day, I think the first year’s data taught me the most about the character of the modern manufacturing executive. We went into the field only months after the economy unexpectedly fell off a cliff, leaving almost all manufacturers stunned and flat-footed. Markets were in chaos, order sheets were drying up, and vendors were scrambling. And many bankers were re-examining even their safest lines of credit.
Despite it all, 79 percent of the executives we interviewed were confident about their futures.
At first, we thought this was a little weird, and maybe even wrong. But the result was confirmed when we got to the focus groups. Every year we augment the objective data with between 12 and 20 focus groups. Instead of hand-wringing and finger-pointing, manufacturers in that first year talked about finding opportunities in the downturn. Do we retrain? Do we retool? Do we look for new markets or new products? Do we use the time to reinforce our personal sales relationships?
Don’t get me wrong. There was a good measure of anguish as executives shared the personal pain involved in cutbacks and layoffs. Small-and medium-sized manufacturing companies are mostly highly personal places in which everybody knows everybody else. Employees are people, not statistics.
But the takeaway was that manufacturers are unflappable. They were—and are—long-haul thinkers and planners. Yet it was evident that these executives had been through previous downturns and would be through them again.
The same has been true of the skills gap. I think the State of Manufacturing poll is the first place we heard about the ongoing challenges of recruiting and keeping employees with skills necessary to operate machinery within the increasing sophistication of modern manufacturing.
In all, the State of Manufacturing survey today provides manufacturers and policymakers with hard data that helps guide their decision-making. Our statewide poll is the only one of its kind in the nation. And we’re proud to be behind it.
Bob Kill addresses the audience at the organization’s 30th-anniversary celebration
Another priority for us has been to facilitate meetings between manufacturers and their communities, especially legislators. Over the years we’ve organized well over 250 plant tours. These visits typically include some combination of legislators, local officials, local business advocates and, frequently, members of Congress and their staffs.
I really enjoy watching the reactions of first-timers as they discover the creativity, innovation and sophistication within modern manufacturing plants.
And one of the real takeaways is when they realize that manufacturing goes way beyond Fortune 500 name-brand companies like 3M or Toro or Medtronic. You know, there are 8,000 manufacturers in Minnesota, but only 22 of them employ more than 1,000 employees. More than half of these manufacturers employ fewer than 20 people; only 44 percent of them are located within the seven counties in the Twin Cities metro area.
I don’t want to bore you with statistics, but these tell a compelling story.
Manufacturing is growing in Minnesota. The number of people employed by manufacturers has grown nine percent since 2010, today comprising 13 percent of all our private sector jobs.
Manufacturers are responsible for 16 percent of Minnesota’s total GDP.
Each manufacturing job supports 1.9 jobs in other sectors of the economy. That means that fully one-third of Minnesota jobs are in, or supported by, manufacturing.
And manufacturing jobs pay well. The average annual wage for a manufacturing job is more than $63,000—15 percent higher than the average wage for all industries.
Rudy Perpich’s vision was spot on. Today’s manufacturers are the job-creating engines that support and sustain our state and each of their communities.
I’m especially proud that the legislature has created grants to help make our consulting services available to even the smallest manufacturers in the tiniest towns. The success of GAP—the Growth Acceleration Program—has been nothing short of extraordinary.
GAP is an eight-year-old program whereby the state invests in manufacturers and manufacturers match these investments to receive consulting services that increase operational efficiencies and promote growth.
It’s easy to see why the legislature views GAP as a government investment that works. Since 2008, 245 Minnesota manufacturing companies have taken advantage of GAP. These manufacturers have:
- Created and retained 2,146 Minnesota jobs.
- Boosted company sales by $148 million.
- Saved $29.9 million in business costs.
Part of our agreement with the legislature is that we determine the value of these services. Our clients report that on average, GAP generates a $30 return for every dollar invested in the program. I know. We regularly recompute these results to make sure they are accurate.
To conclude, it has been our honor for 30 years to work with and for manufacturers as they bring quality jobs and overall prosperity to the people of Minnesota.
Editor’s Note: This column is adapted from remarks Bob Kill made at the reception commemorating Enterprise Minnesota’s 30th anniversary.
Bob Kill is president and CEO of Enterprise Minnesota