The Road to Regaining Dominance

“We are the world leader, but of course we know that other states are looking at our success and trying to pull away our companies,” says Morell. “We’re very focused on retention. That’s a big part of our efforts.”

But Wahlstrom says that recruitment efforts need to be intensified. If he had his way, Minnesota would be dispatching ambassadors to other research hubs on a mission to poach ideas and small companies. The state should leverage its strong infrastructure in this area to sell companies on locating here.

Morell says DEED uses that infrastructure as a selling point when trying to retain companies. And Governor Tim Pawlenty supports efforts to make the state a better place for small companies to grow, says Morell, citing his support of a green jobs initiative and angel investment tax credits.

“Growing this key industry is something that we support,” she says.

Seeding a Bio Industry

The long-term success of Minnesota’s medical technology industry will depend, in part, on whether the state develops a new strength: biologics and biopharmaceuticals—using biology-based materials such as cells, genes, and proteins to develop drugs, vaccines, and other therapies.

The industry is growing about 15 percent per year, but “Minnesota is hardly participating in that growth,” the report says. If that doesn’t change, Minnesota “has the potential to lose its dominant role in the device industry.” That’s because biotech and medical devices are increasingly converging. Think drug-coated stents.

The good news is that Minnesota isn’t starting from square one, says Wahlstrom, pointing to two assets: biology-related research at the University of Minnesota and the Mayo Clinic, and the state’s thriving medical diagnostics industry.

In the area of biologics and biopharma, the report observes a situation that’s opposite from that of medical devices. With devices, the state has a dominant industry with a slipping research base. In biotech, the state has world-class research but virtually no industry. As a result, the research is either not being commercialized, or it’s being commercialized in other markets that have a more established industry.

Jay Schrankler, executive director of the university’s Office for Technology Commercialization, compares it to a great baseball pitcher who needs a catcher to complete his work. “I’m not sure there’s many catchers in Minnesota. There are some, but in general, the biotech business is not in Minnesota. It’s on the coasts. So that presents a challenge.”