december 5, 2013 mn dept. employment & economic development deed jobs and business, fostering...

December 5, 2013

MN Dept. Employment & Economic Development

DEED Jobs and Business, Fostering Job Creation and Business Development for a

Thriving Tomorrow

Human Rights and Economic Development

2013 HUMAN RIGHTS SYMPOSIUM 2

UN Declaration of Human Rights

• Political rights

• Civil rights

• Social rights

• Economic rights


Economic Rights

• The right to acquire wealth and property;

• The right to dispose of that wealth or property as one wishes: to hold it or invest it for return;

• The right to be mobile with one’s capital and person;


Economic Rights

• The right to engage in any business subject only to entry restrictions on safety, health, welfare;

• The right to employment and adequate wages.


Economic Development vs Economic Growth

Economic Development

vs

Economic Growth

Infrastructure

vs

Outcomes


Costs

Costs as Barriers to

Economic Growth and

Economic Rights


Costs

• Information costs

• Capital costs

• Regulatory costs


State Efforts

State efforts are at the microeconomic level – the level of the firm.


Programs to Reduce Information Costs for Business Decision Making

• Small Business Assistance Office

▪ A point of first and continuing contact for questions about the start-up, operation, or expansion of a business in Minnesota.

▪ Short term transactional inquiries on most topics. Longer term counsel and assistance on tax and regulatory matters.



• Small Business Assistance Office

▪ Comprehensive publications on a range of small business topics provided free and in hard copy, CD, and digital download form. Beginning in 2013 also in mobile device compatible formats. Work underway on an online portal.



• Small Business Development Center

▪ Nine regional centers in Minnesota at higher education institutions.

▪ Free, one-to-one business counseling averaging ten hours per client.

▪ Operates under a $3.2 million grant from the U.S. SBA with matching funds from the state and participating institutions.



• Competitive Grant Program

▪ $2.8 million in grants to partner organizations to provide

business development technical assistance


Competitive Grantees

• Metropolitan Economic Development Association

• African Development Center

• Neighborhood Development Center

• Women Venture

• Central Lakes College (Brainerd) SBDC

• Mankato State University SBDC

• Southwest State (Marshall) SBDC

• Minnesota Inventors Congress

• Northside Economic Opportunity Network

• Biobusiness Alliance of Minnesota

• Metropolitan Consortium of Community Developers


Examples of New Minnesota Fiscal and Tax Programs to Reduce the Cost of Capital

• State Small Business Credit Initiative$15 million from the U.S. Treasury Department which will be used to fund four new initiatives:

▪ Capital Access Program to provide portfolio insurance to participating banks to incentivize them to make loans to small and medium size businesses ($500,000)



• State Small Business Credit Initiative:

▪ Emerging Entrepreneur Fund to provide debt financing primarily to small businesses with an emphasis on minority-owned businesses and firms in low and moderate communities ($6.0 million)



• State Small Business Credit Initiative

▪ Small Business Loan Guarantee Program to provide loan guarantees to participating non-profit lenders ($2.0 million)

▪ Angel Loan fund to provide loans to early-stage firms that have been approved to participate in Angel Tax Credit Program ($6.7 million)



• Angel Tax Credit Program$12 million in tax credits available annually for 2011 through 2014:

▪ A 25 percent tax credit for investments in small, emerging business defined as:

- those using proprietary technology in a high tech field



• Angel Tax Credit Program - those researching or developing products, process, or service in a high tech field - those researching, developing or producing new proprietary technology in agriculture, tourism, forestry, mining, manufacturing or transportation by natural person or persons participating in an investment fund.



• Minnesota Investment Fund Program$15 million in low-interest loans available annually

▪ Focused on creation of high-wage jobs and increase in tax base

▪ Targeted Focused on creation of high-wage jobs and increase in tax base



• Minnesota Investment Fund Program

▪ Projects must meet minimum criteria for private investment, financing, job creation/retention and wages; sometimes used to aid disaster recovery



• Job Creation Fund Program$12 million in performance-based grants available annually (will launch in 2014)

Eligible projects must invest a minimumof $500,000 in real property improvements and add 10 full-time jobs before any payments



• Job Creation Fund Program

▪ Firms can receive up to $500,00 in job creation awards depending on salary levels of new employees

▪ Firms can also receive up to $500,000 in capital investment grants on a 5% rebate basis (7.5% in Greater Minnesota)



• Other Significant Programs

▪ Urban Initiative Program provides up to $150,000 loans to firms located in low-to-moderate income areas in the Twin Cities

▪ Indian Business Loan Program offers loan to Indian-owned and operated businesses




▪ Military Reservist and Veteran Loan Program provides up to $20,000 in loans to businesses with employees called into active service and to start-up businesses owned by recently separated veterans




▪Border Cities Program offers tax credits to businesses located in specific zones in five communities located on the western edge of Minnesota

• 21st Century Fund provides or makes equity investments in innovative mineral processing facilities




▪ Small Business Development Loan provides low-interest loans for business expansions that result in the creation of new jobs. Funds sometimes provided through issuance of bonds.


Programs to Reduce the Costs of Regulation

• “License Minnesota” website providesinformation on all state required business, occupational, and environmental licenses and permits. Work underway to allow for interactive application, fee payment, license issuance.


Programs to Reduce the Costs of Regulation

• Minnesota Business First Stop (new 2012) provides businesses with facilitation and coordination of federal, state, and local environmental permit applications using regular permitting processes.


Programs to Facilitate Access to Services for Employment

• Business Service Specialists

• Career Fairs

• Service Locations

• Eliminating Language Barriers

• State Monitors for Migrant and Seasonal Farm Workers and Inclusivity


Removing or Mitigating Systemic Barriers

Removing or mitigating systemic barriers:

An example from DEED’s 2013 Metro Area Business Study



Barriers for access to government contracting opportunities:

▪ Complicated multiple certification requirement.



Proposed work to remove barriers:

▪ Establishment of a working group to develop a standard Targeted Business Certification for contracts with the state, city of Minneapolis, city of St. Paul, Hennepin and Ramsey counties.


“Freedoms are not only the primary endsof development, they are also among itsprincipal means.”

Amartya Sen

Development as Freedom

december 5, 2013 mn dept. employment & economic development deed jobs and business, fostering...

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