What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz
The folks at LifeScience Alley have embarked on an admirable project, trying to quantify the amount of investment in health and medical device companies Minnesota each quarter.
Their data for the second quarter of 2014 shows that investment in diagnostics, medical device, health IT, pharmaceuticals and other healthcare firms rose 65 percent compared to a year earlier, and 46 percent compared to the first quarter. That includes venture capital, angel funding and investment in small firms by large companies.
More than half of the 34 companies raising money are in non-medical device industries, but medical device firms accounted for the lion’s share of the dollars.
The medical device numbers were driven by major deals at Plymouth-based Holaira, which raised $42 million to pave the way for a European clinical trial of the company’s catheter-based system to treat obstructive lung disease, and Maple Grove-based Inspire Medical, which raised $40 million to commercialize its sleep apnea therapy.
However, 71 percent of the deals in the second quarter were under $1 million, according to LifeScience Alley.
Minnesota is now ready to award money under a new business incentives program that state officials announced Friday.
The $24 million Minnesota Job Creation Fund, proposed by Gov. Mark Dayton and passed by the Minnesota Legislature in 2013, will replace the state’s JOBZ program, which is set to expire in 2015.
The new fund offers up to $1 million -- and in some cases as much as $2 million -- to businesses after they meet certain criteria. Businesses must create at least 10 full-time jobs and invest at least $500,000 in their own developments, among other things, to be eligible.
The state estimates the program will create an estimated 5,000 new jobs and attract another $450 million in private investment.
The details are here, but to be designated a Job Creation Fund business, a business must, at minimum:
• Be engaged in an eligible business activity
• Obtain local government support for their project via council resolution
• Invest at least $500,000 in real property improvements within one year of becoming a designated Job Creation Fund business
• Create at least 10 new full-time permanent jobs within two years of becoming a Job Creation Fund business while maintaining existing employment numbers
• Pay at least $12.45 in wages and benefits adjusted annually based on 110 percent of federal poverty guidelines
• Have other location options outside of Minnesota
• Cause no undue harm to Minnesota business competitors
• Certify that the project would not occur without Job Creation Fund assistance
Projects that begin prior to becoming designated by DEED are not eligible for the Job Creation Fund.
Once a business meets all the criteria listed and gets all the paperwork out of the way it can receive:
• $1000 per year per job created for jobs paying at least $26,000 in cash wages
• $2000 per year per job created for jobs paying at least $35,000 in cash wages
• $3000 per year per job created for jobs paying at least $45,000 in cash wages
• Up to a 5 percent rebate for real property improvements for businesses located in the Twin Cities Metro
• Up to a 7.5 percent rebate for real property improvements for business located in Greater Minnesota
“Over the last three years Minnesota has added more than 122,700 new jobs, regaining all the jobs that were lost during the Great Recession,” Dayton said in a statement. “But we cannot afford to rest on our laurels now. The strength of our economy and the security of middle class Minnesota families depend on the investments we make today to accelerate job growth and get every Minnesotan back to work. Every job matters; and that is why initiatives like the Minnesota Job Creation Fund are so important.”