the state of entrepreneurship and innovation in minnesota

The State of Entrepreneurship and

Innovation in Minnesota

April 22, 2014

What do the

Grow Minnesota! visits tell us?

STATE OF ENTREPRENEURSHIP AND INNOVATION

50%

55%

60%

65%

70%

75%

80%

85%

2005 2006 2007 2008 2009 2010 2011 2012 2013

Metro Area Greater MN

CREATING NEW PRODUCTS/SERVICES IN THE LAST 2 YEARS

BUSINESSES REPORTING INCREASING PROFITABILITY

20%

30%

40%

50%

60%

70%

80%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Metro Area Greater MN

What are other sources

telling us?


Where MN falls in national rankings #8 – Forbes’ Best States for Business (2013)

#10 – Bloomberg’s Top 20 Most Innovative States (2012)

#18 – Milken Institute’s Risk Capital and Entrepreneurial

Infrastructure Composite Index (2012)

#45 – SBE’s Policy Environments for Small Business &

Entrepreneurship (2013)

#46 – Fast Company’s List of Top States for Innovation (2012)

#49 – SBE’s Best to Worst State Tax Systems for Entrepreneurship &

Small Business (2014)

#50 – Kauffman Institute’s Entrepreneurship Index (2012)

Kauffman Entrepreneurship Index

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

0.40%

Minnesota

Rank of Risk Capital and Entrepreneurial Infrastructure

11 9

13 13

18

02468

101214161820

2002 2004 2008 2010 2012

Minnesota

*Milken Institute: State Technology and Science Index

Comments from the field

“Minnesota used to be a hotbed of entrepreneurship, but that's no longer the case.” - Star Tribune, 2011

“Minnesota’s entrepreneurial ecosystem is average at best, poor in key areas, and significantly underperforming its potential.” - Pam York, AccelerateMN, 2014

Comments from the field

“I’m not as excited as I was 10 years ago about the climate for entrepreneurism in Minnesota.” - Gary Smaby, Quatris Fund, 2011

“The solution will likely require the same type of revolutionary thinking that helped make Minnesota one of, if the not the best, places to fund startups years ago.” - Dale Kurschner, Twin Cities Business, 2014

National trends

• Less Venture Capital going to early stage investments • Fewer IPO’s, more mergers and acquisitions • New business starts and business churn declining

since 2000 • Brain drain towards the coasts

How innovative is Minnesota?


0.000.100.200.300.400.500.600.700.800.901.00

1963 1968 1973 1978 1988 1993 1998 2003 2008 2013

Minnesota California Washington US Average Massachusetts

Yearly Patents Per Capita

*US Patent and Trademark Office

Minnesota Patent Holders 2008-2012

46%

2% 6%

46%

Top 10 (includes fiveF500)

Research Institutes

Individuals

Other

*US Patent and Trademark Office

How well are we turning

our great ideas into new businesses?


New Business Filings in Minnesota

*According to the Secretary of State's Office

0

10000

20000

30000

40000

50000

60000

70000

LLC

SP's

Corps

Partnerships

Are new ideas staying

in Minnesota?


25

12

4

Minnesota-based US-based Foreign-based

STARTUPS LAUNCHED THROUGH UMN INVENTIONS, 2007-14

*UMN Office of Technology Commercialization and Grow MN’s own research

How are Minnesota’s new

businesses doing?


Private Sector Survival Rates

25%

35%

45%

55%

65%

75%

85%

MN 2 year survival US 2 year survivalMN 5 year survival US 5 year survival

*By year of follow-up

CONCLUDING THOUGHTS

• The climate for businesses creation and growth is not like it used to be

• Adjust, adapt, or lose • Develop and support better

entrepreneurial infrastructure • Revive MN’s strength in home-grown

companies