Archive Hosted by the AFL-CIO

Sources of International Revenue in Minnesota

May 14, 2012 By Héctor García, Fellow

Over a long period of time, serious budget and overall economic challenges have been facing the state of Minnesota. Looking for solutions where we have usually found them does not seem to be working and, when it does, provides a limited return on the investment of our time and effort. I would like to suggest ways which can help address those challenges.

In addition to cutting expenses and increasing taxes, there is an option of increasing revenues from enhanced innovation and productivity, from more exports of products and services as well as from foreign tourism, clientele and investment. Opportunities are more abundant in the global context than within the confines of the state and the nation. We should focus our attention in that direction.

According to the Grow Minnesota! 2011 survey and other reports, investment, productivity, innovation and talent attraction to the state have been lagging. For a time, even exports were down; according to DEED, between 2008 and 2009, exports to Mexico, our fifth market at the time, were down 16 percent; exports to the rest of Latin America were down 22 percent and exports to other parts of the world for a total overall decrease of 15.5 percent.

Minnesota once occupied the 20th spot in exports among the states in the nation. Yet, the Grow Minnesota! 2011 survey found that the companies interviewed identified the international markets as representing only seven percent and six percent respectively among their primary and fastest growing market. The potential for improvement is, then, obviously vast.

The Latino and other current immigrant communities can provide small businesses with the needed contacts and help to navigate not only other countries’ regulations but the greater challenges of cultural obstacles. But, these communities are largely untapped resources. Why? Mainly because of the mindset that defines the interaction between these communities and Minnesota’s majority community. Consider this paradox: Although its civic culture and philanthropy are among the best in the country, Minnesota has one of the worst disparities between minority and majority communities in the nation. I believe this is due to a lack of communication and partnership between the mentioned communities.

A paradigm shift is needed…along the lines of the re-imaging of the Twin Cities pursued by Greater MSP (Regional Economic Development Partnership launched on 10/11). Immigrants can either be dead weight or a buoy to the ship of state… it depends on the mindset through which the minorities are perceived and guided to perceive ourselves.

In 2011, New York City Mayor Michael Bloomberg spoke during the Immigration and American Competitiveness Conference, sponsored by the U.S. Department of Commerce and the Partnership for a New American Economy. He said “… we really need an approach that allows business to grow, that expands our markets overseas, that spurs innovation, that increases the number of entrepreneurs who start businesses here, and that creates jobs for Americans on every rung of the economic ladder… what if I were to tell you that there’s a way we could do all of those things at no cost to taxpayers… an open and honest conversation about immigration reform based on economics… As the data clearly show, immigrants don’t take away jobs; they make jobs—and that is especially true for high-skilled immigrants.”

In addition, immigrants with less education are also needed to address the volatile combination of an aging Minnesota population, increase in medical costs and slow growth of the labor force. Minnesota State Economist Tom Stinson and State Demographer Tom Gillaspy emphasize in “The New Normal” that these problems can be solved by immigrants because of their median youth. The Minnesota Chamber of Commerce presentation “Immigrant Contributions to Minnesota Economy” points to the same solutions.

On the down side, present income and educational barriers will damage not only the immigrant communities, but the socioeconomic conditions of the whole state.

This immigrant formula is one that Minnesota and the nation has benefited from historically and can continue to profit from in the future. I believe that the more significant cultural differences in today’s immigrant groups can lead to even greater innovation than in the past if the proper framework is established.

Lack of awareness of existing potential resources obviously stops us from using them. At this time, no resources, especially those not being properly used and which can yield the largest return, should be wasted. A greater connectivity to globalization’s opportunities is made possible by the presence of immigrants; if we acknowledge it, we can address the challenges faced by Minnesota.

Hector García is a, former VP International & Domestic Emerging Markets for Wells Fargo Bank and Executive Director for Minnesotans for NAFTA (North American Free Trade Agreement) 

Thanks for participating! Commenting on this conversation is now closed.