Innovation may be key to Midwest’s economy

Published 10:34 am Friday, January 25, 2013

Anyone who lives in the Upper Midwest knows that keeping a low profile is just what we like to do. The showy flamboyance of California and the trend-setting stylishness of New York are as foreign to us as Russia and India.

Here in Minnesota we are seldom noted for starting national or worldwide trends. We aren’t often noted for our spectacular successes or for spectacular failures. Risking greatly is just not in our collective nature.

That strategy, so central that few give it a thought, has served Minnesotans well for more than a century. Yet it may not work so well in the years to come, a group of Austin residents was told earlier this week.

Email newsletter signup

At a luncheon sponsored by Vision 2020’s Business Friendly Environment Committee, a Wisconsin economic development expert suggested that encouraging an atmosphere where people dare to innovate may be a key to future economic growth.

Terry Whipple, the executive director of the Juneau County Economic Development Corporation, suggested that fostering an environment which encourages entrepreneurs, people who start businesses, often with entirely new products.

The Midwest, Whipple said, is part of the country where exploring ideas has not generally been encouraged because failure is so poorly accepted – and because a culture of stoicism discourages reaching out for help.

He contrasted the Midwest with California’s Silicon Valley, where high-tech entrepreneurs routinely chase their dreams, sometimes with great results (think of Microsoft and Apple) and more often with flamboyant failures. But beyond accepting some ventures will fail, the culture also rewards people who reach out to friends and colleagues for support that can make the difference between failure and success.

In Juneau County, Whipple said, economic growth has focused around the Inventors and Entrepreneurs Club, a group with almost 2,200 members in a county whose population is only 23,000.

“We bring people together to explore the proper steps … we bring people together so they can be motivated,” Whipple said.

He recounted a long list of ideas, from re-using a power plant’s ash to creating new biological products to marketing unique woolen mittens, that have arisen from the club’s membership.

The relevance to Austin is clear. In a community blessed to have nearly full employment, any future boost to the economy is unlikely to come from the arrival of a new, major industry. There aren’t enough prospective employees in the area to fill hundreds of new jobs.

Nor, of course, is it easy to attract such employers, and recent analyses have shown communities that sink major resources into “chasing smokestacks,” as the process is known, often don’t get a good return on their investment.

Growth from within, entrepreneurs creating their own products and building small businesses one idea at a time, is an attractive alternative. It rewards creative ideas, growth employment slowly and, perhaps, someday creates high-value businesses that will contribute to the local economy in a big way.

“Austin doesn’t need to be looking for people to come in with business ideas,” Whipple said. “They’re here already.”

Creating an entrepreneur-friendly environment is not easy. It means not only building a culture that accepts business risks, but one that supports people who may be creative but not necessarily experienced in business. That means providing resources such as marketing and bookkeeping expertise to start-up operations.

It is a very different economic development model than most communities have followed for the past 30 years. Nor is it one that has to be put in place at the expense of traditional development.

Austin may be a good place to create an entrepreneurial environment. The city is what it is today because of the vision, long ago, of a man named Hormel.

Nothing, at any rate, would be lost by trying. As Whipple said, entrepreneurship is like the lottery because, “You can’t win if you don’t play.”