10/25/2023 1:08:39 PM
Deputy Commissioner Kevin McKinnon
It's Manufacturing Month in Minnesota, a time to raise awareness about how important this industry is to our state's economy – and share information about the many employment opportunities in this dynamic field. You may have heard that 13% of the state's gross domestic product comes from the manufacturing sector and that manufacturing jobs in Minnesota pay on average $76,950 a year, which is 10% higher than the state's overall average private sector wage. But did you know that Minnesota is a hub for the use of robotics and other automation in manufacturing and that our state's reputation as a hot spot for automation will likely only grow over the coming years?
One of the reasons there is such a concentration of manufacturers who utilize robotics and other automation in Minnesota is because we have a very strong and diverse manufacturing industry presence in the state. Nearly half of Minnesota's Fortune 500 companies are involved in manufacturing, including 3M, CHS, Ecolab, General Mills, Hormel Foods, Land O'Lakes and Polaris.
When many manufacturing entities in an area leverage automation – other manufacturers in the area are more likely to do the same. A working paper published earlier this year by the National Bureau Of Economic Research (NBER) shows that manufacturing establishments are more likely to utilize robotics if other establishments in the same Core Based Statistical Area (CBSA) – Like the Twin Cities Metro area — also report using robotics. As more local manufacturers adopt automation, that critical mass grows – so automation adoption is in some ways self-perpetuating. As other manufacturers see the benefits, they also adopt automation.
Another reason Minnesota is a hub for automation: We have multiple firms in Minnesota that make and in many cases help other companies integrate automation. It's common sense – but it's also documented in that NBER research: the presence of one or more firms that specialize in helping manufacturers install robotics or other automation tools is a key factor in a geographic area becoming an automation hub.
We have multiple firms in Minnesota that make and/or help companies integrate automation into production. Some of these many firms include:
At DEED we are working to promote automation adoption through programs that help manufacturers across the state take this step. Last year, DEED staff joined Central McGowan, one of those automation integrators, to announce the rollout of DEED's State Small Business Credit Initiative (SSBCI) Automation Loan Participation Program – one of the programs DEED's Economic Development division has launched to help more Minnesota companies embrace automation. The SSBCI Automation Loan Participation Program fills gap financing needs up to $500,000 for eligible Minnesota businesses so they can purchase machinery, other equipment, or software to increase productivity and automation. In addition, DEED and the Minnesota Job Skills Partnership (MJSP) offer training grants to help train incumbent or new workers on new automation technology. One of those programs I'd like to highlight is the Automation Training Incentive Program, which offers $35,000 grants to eligible small manufacturing businesses to help train incumbent workers as quickly and effectively as possible on new automation technology.
Embracing automation in manufacturing isn't about replacing people. Instead, automation often reduces the need for entry level positions focused on doing repetitive work – so it helps manufacturers facing a tight labor market fill hard-to-fill positions. And automation creates more highly skilled positions – like programming, operating and maintaining machines that make automation possible. Those are high quality jobs that pay well. Minnesota's status as a manufacturing automation hub is a win-win: greater productivity for employers; higher quality jobs for workers.
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