Writer: Joshua Andino
3 min read August 2023 — Minnesota was ranked as the fifth best state to do business in the country, beating out some well-known Sunbelt competitors. What is the North Star state doing differently?
“Minnesota is making the types of investments in our future that make this a great place to build for the long haul. You see that show up in the CNBC report’s grades on infrastructure, research & development, workforce and quality of life. Our region is still an affordable place to rent or own a home, which helps to attract and retain talent,” explained Peter Frosch, president and CEO of Greater MSP, when asked for comment.
Minnesota placed fifth in the country, and while North Carolina secured the top spot, Minnesota nevertheless beat out some booming Sunbelt competitors such as Florida and Texas, which have received a healthy dose of media attention over the last few years as great places for business.
Minnesota, despite its winters, boasts a number of assets it continues to leverage, including a number of Fortune 500 headquarters, the world-famous Mayo Clinic in Rochester, a robust arsenal of economic development tools that local and state officials have proactively deployed to further grow the region’s economy. These economic assets, alongside the state’s strong quality of life, aim to help re-establish Minnesota as a premier business hub.
The rankings show Minnesota received a total score of 1,483 out of a possible 2,500, and saw the greatest improvements over the last year when it came to cost of living, workforce and infrastructure. The state’s efforts to codify women’s reproductive rights also played a role, factoring into CNBC’s life, health and inclusion metric. The state scored 269 in the metric, ranking fourth in the nation and handily beating out Florida and Texas’ 41st and 50th ranking, respectively.
Housing will continue to play a key factor, as Frosch noted. According to real estate and data analytics firm Redfin, the median sales price for a home in Minneapolis hovers at around $340,000, while Miami stands at $587,000. Similarly, Dallas, Texas stands at about $454,525. When comparing rents between the three metropolitan areas, Minneapolis runs in the middle of the pack, with a typical apartment costing $1,660 a month compared to Dallas’ $1,577 and Miami’s $2,396.
Further cementing the state’s high quality of life, local legislators aggressively leveraged Minnesota’s budget surplus to pass the largest state-wide infrastructure bill in its history, expand worker protections to include paid sick and family leave, legalize marijuana and provide tax rebate for low and middle income families.
“Businesses are at the heart of our communities, our workforce, and our state’s economy. They drive our economic growth, culture, and innovation,”said Governor Walz in an earlier statement. “From investing in broadband and our highway system to child care and job training, we will continue working hard to make Minnesota the best state to own a business.”
Where Minnesota lags behind its competitors is in its access to capital. State and local officials aim to correct this, with many offering a number of grants and economic accelerator programs that provide small and medium sized businesses with the funds and resources needed to scale and include the Minnesota Department of Employment and Economic Development’s (DEED) Launch Minnesota, which provides millions of dollars in grants as well as information and networking opportunities to connect businesses to capital. Similarly, the Groundbreak Coalition provides another example of private and public stakeholder collaboration, with Frosch telling Invest: that the coalition “is a transformational effort to bring billions in new capital to community development efforts that will address our region’s racial wealth gap.”
Per the CNBC rankings, Georgia, Tennessee, Virgina, and the aforementioned North Carolina were the remaining top 4 states, alongside Minnesota.
While other states each provide their own unique ecosystems for business, Frosch nevertheless was bullish on Minnesota’s future and that of the Twin Cities, saying, “This is a place where innovators want to solve real problems, where they’re supported, and where they decide to stay and share their expertise. That formula helped make the Greater MSP region a headquarters economy in the 20th century, and it continues to pay long-term dividends today with some of the nation’s highest business survival rates.”
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