Business Forum: Minnesota's homegrown prosperity
- Article by: FRED ZIMMERMAN
- March 30, 2014 - 11:04 AM
Some books tell stories. Others trigger introspection. Don Hall’s book, “Generation of Wealth,’’ provides not only an informative history of important Minnesota companies but also a needed perspective on how vibrant economies were created in the past, and could be again.
Hall recounts the emergence of Minnesota’s reputable computer industry after World War II and the springboard formation of other industries involving medical devices, precision manufacturing, instruments and special-purpose machinery. For decades, computers designed and produced in Minnesota were prominent in every national laboratory and in prestigious research facilities throughout the world. Other technical industries also gained prominence.
Much prosperity resulted from Minnesota’s emergence as a high-tech industrial powerhouse. Tens of thousands of people were employed. Houses were built. Families were sustained. Other business sectors benefited from the prosperity resulting from Minnesota’s technical prominence. Two Twin Cities-based airlines flew daily flights carrying technical and managerial people to all parts of the world. Banks and financial services firms grew and flourished. Venture capital firms gained national prominence by funding more new technical firms — many of them in Minnesota.
The prosperity was not limited to the private sector. Universities, hospitals, orchestras, theaters and social services enjoyed the vigor of Minnesota’s emerging technology-based prosperity — which also drew major league sports teams. It wasn’t the other way around.
These favorable developments seemed not to result from either diligent corporate planning or organized business strategy. Major product breakthroughs occurred quickly but haphazardly. One observer noted, “Probably 80 percent of the world’s usable software and equipment came together within 24 hours of a trade show.”
Hall also describes financing as different — often handled not by major financial institutions but by smaller and local “bucket shops” or by company principals selling stock to acquaintances — almost door to door.
Even the people part was unexpected. A few people were well educated, but many more were simply energetic locals with excellent “bailing wire skills.” Minnesota’s character as a supplier of resourceful people off the farm continued to show even during the growth years from World War II up through the mid-1970s. When the grass near Control Data’s Bloomington complex appeared anemic, CEO and ex-farmer Bill Norris addressed the matter simply. “Hell! Spread some manure!” It was done, and the grass got greener.
Hall’s well-written story describes a period of immense wealth creation with benefits that were widespread.
Along the way, though, things did change. People elsewhere learned to do what only the energetic Minnesotans had figured out. Some people retired or went on to start other companies. Leaders with high levels of firsthand technical competence gradually gave way to a more bureaucratic group — skilled in meetings, but unfamiliar with technology, products, markets, suppliers or customers. Profits declined, and in some cases, disappeared. With the declines of major industrial employers, Minnesota changed from being stellar to near average.
In his very detailed description of booms and busts, Hall makes the thoughtful observation that even pierced bubbles have silver linings. True, some of the companies most influential in Minnesota’s glory years of technical achievement are no longer with us. Control Data, with its 60,000 employees, is gone, along with Univac, ComTen, Data 100 and a host of others. NCS, Possis, ADC and much of Honeywell have been acquired and in many cases greatly downsized. Even some of the medical device companies find themselves consolidated or no longer alone with leading technologies.
Minnesota’s earlier prosperity unfolded because a cadre of daring forward-looking people attempted the accomplishment of exceedingly difficult tasks — a sound premise for prosperity.
Minnesota now needs new science-based industries to restore the prosperity of earlier periods. There are so many world problems in need of technical accomplishment. Two billion people lack potable water. There are food shortages. Pollution is rampant worldwide.
Fortunately, Minnesota still has some fine companies involved in the solution of major problems: 3M, Pentair, Cargill and others. But shouldn’t we be striving to create such a more robust economy again?
About the author: is professor emeritus of engineering and management at the University of St. Thomas. Starting as an IBM field engineer in 1955, he served in technical and managerial positions with IBM, Control Data and NCS, and he has served on the boards of directors of many companies.
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