The Covidien deal expands our mission, but job growth and innovation will continue here.
Medtronic was born in a Twin Cities garage in 1949, and as the company expanded into a worldwide leader, its roots here in the Twin Cities have only grown deeper. We have more than 8,000 employees at our 29 Minnesota facilities. And we’re not going anywhere.
Some people have misinterpreted the recent announcement that we are acquiring an Irish company and declaring our principal executives offices in that country to mean that we are leaving Minnesota. Nothing could be further from the truth. The Medtronic operating headquarters where I go to work every day will stay right where it is in Fridley. The global structure of this planned acquisition will spur greater growth for us here and across the United States. We intend to add new jobs to the Twin Cities community over the next few years.
Purchasing Covidien will help us advance our mission of alleviating pain, restoring health and extending life for patients around the world. It will accelerate our ability to bring new products and solutions to patients and physicians. It offers us a unique opportunity to take our strong legacy of innovation to the next level.
• A $10 billion commitment to technology investments: Should the acquisition be completed, our new structure will enhance our ability to invest in future growth and innovation, which is why we have committed to investing $10 billion in the United States — above and beyond Medtronic and Covidien’s existing plans — on technology innovation over the next decade. The United States is the center of the medical-device sector, and a net exporter of its products, for good reason. The talent pool, entrepreneurial spirit, and an infrastructure that supports and rewards innovation offer great benefits to medical-device companies operating here. Our new investments will help keep that leadership alive.
Why is that important? Because medical technology is the kind of high-skill, high-wage industry that is critical to the future of the American economy. Every $1 billion in advanced medical technology industry revenues in the United States generates an additional $1.69 billion in national economic output, almost 13,000 jobs and $778 million in personal income.
• Adding skilled jobs to the community: Since joining Medtronic three years ago, I have been fortunate enough to experience the impact our company and employees make in this community. Over the past year, Medtronic has donated more than $15 million through employee giving and matching grants, scholarships and sponsorships. Our employees willingly donate their time, including more than 59,000 volunteer hours by more than 2,000 employee volunteers last year alone. And we have supported job growth and medical innovation by investing and acquiring companies such as Corventis, CardioCom, ATS Medical and Restore Medical — not to mention the dozens of companies that have spun out of Medtronic and the more than 80 local vendors and suppliers to whom we paid more than $450 million last year for services.
We have no intentions to change this. Should the transaction be completed, our combined companies will employ 9,300 people in Minnesota throughout 31 facilities as a result of Covidien’s existing business.
The combined company will have a deep footprint here in the Twin Cities, but given our leading edge in technology innovation, I plan to increase that footprint by committing to creating an additional 1,000 jobs here over the next five years.
We have consistently been the leading innovator in the U.S. medtech industry, investing more than $11 billion in research and development, accounting for 84 percent of the industry’s total R&D spending in the U.S. over the last 10 years. And in the process, Medtronic has grown its U.S. head count by 20 percent.
Likewise, Covidien has more than doubled its number of R&D centers in the United States from seven to 15 since 2007, and its R&D spending has grown from $180 million in 2007 to $550 million in 2014, 90 percent of which is spent in the United States. This combination not only will bolster our existing efforts but will allow us to expand them in a more impactful way.
Medtronic remains centered on its commitment to focus heavily on research and development; provide early-stage venture capital to entrepreneurs and start-ups, acquire companies that will benefit from our experience and breadth, and to attract, train and support a workforce of highly skilled, highly motivated engineers and scientists.
This new step in our corporate history will allow us to expand on that commitment to investing in the innovation that drives growth and creates jobs — and, most important, helps people with chronic diseases. And we’ll start it right here where we’ve always had our home — Minnesota.
Omar Ishrak is the CEO of Medtronic.
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