Minnesota FDI prospects are high despite pandemic
24 Feb 2021
economic development, News
Minnesota has enjoyed considerable success in attracting foreign direct investment (FDI) opportunities. Nearly 720 foreign companies operate in Minnesota and those companies employ well over 100,000 people. The 15% of all foreign-owned companies that chose Minnesota as a business location have invested $337 million in 31 projects and created 1,670 jobs in the past two years alone. (MNED) While the pandemic has slowed FDI temporarily, its future in Minnesota looks bright.
FDI is often confused with portfolio investments where an investor purchases equity of foreign-based companies. FDI is actually a direct investment made by an individual or company based in one country into business interests located in another country. Typically, FDI goes hand in hand with an investor establishing foreign business operations or acquiring business assets, and it is considered a long-term investment in the country's economy.
The importance of FDI for economic development
FDIs are mutually beneficial economic growth tools for both countries involved. They can provide developing countries with jobs and the funds needed for infrastructure and community improvements. FDIs can also benefit multinational companies by providing them with a space to expand even further into other international markets. On a more local scale, FDI benefits individual states by spurring economic growth, creating new jobs, driving exports and stimulating innovation.
Advantages of investing in Minnesota
Minnesota’s Gross State Product (GSP) shines at $289 billion, ranking it 17th in the United States and 18th in the world for GSP. The per capita GSP is an impressive $53,340, the 14th in the United States. (MNED)
Minnesota’s workforce is highly educated and motivated to succeed as evidenced by 35% of the population holding a bachelor’s degree or higher, ranking the state 11th nationwide for an educated workforce. Minnesota also offers an abundance of workforce training programs for adults who wish to further their careers.
Minnesota’s fine educational system and nationally recognized universities with research programs like those offered at the University of Minnesota present a competitive advantage for investors.
In addition to a well-trained and educated workforce, Minnesota’s infrastructure provides ideal access to other markets nationwide. Prominent port networks provide access to the Atlantic Ocean, four Class I railroads run into Canada all the way to the Pacific Ocean and the Minneapolis-St. Paul International airport offers nonstop flights to 155 destinations. These are only a few examples of the excellent accessibility here.
Minnesota has experienced immense success in the national and international marketplace. Seventeen companies on the Fortune 500 list of the nation’s largest publicly traded firms call Minnesota home while several Minnesota companies can be found on the Forbes list of the nation’s largest privately held firms.
Minnesota boasts its connections to many companies recognized worldwide like Cargill, UnitedHealth Group, 3M, Ecolab, General Mills and Medtronic, among others. With manufacturing, biosciences and clean technology and renewable energy as major Minnesota industries, the prospects for FDI success are only growing.
Potential for FDI growth in 2021
While the United States is experiencing an influx of companies onshoring in the wake of COVID-19, it. is also gaining strength as an investment destination and a platform for global growth for foreign investors.
The Minnesota Office of FDI is actively working to assist foreign companies as they research the advantages of investing, expanding or relocating in Minnesota. The office also assists Minnesota-based companies as they branch out into markets in Europe, Asia, South America and beyond.
FDI through SelectUSA and Minnesota Office of FDI
Great River Energy participates with the Minnesota Trade Office and our economic development partners in a variety of SelectUSA events hosted by the U.S. Department of Commerce. SelectUSA works with the U.S. and Foreign Commercial Service and entities across government platforms to facilitate FDI into the United States that creates jobs and boosts the economy. SelectUSA events raise awareness of the important role that FDI plays in the economic development of the United States and internationally.
Contact us to learn more about our efforts to spur FDI growth and opportunities in Minnesota.