Minnesota Gov. Tim Pawlenty and the state’s top research university are not exactly close allies.
At The Collaborative’s annual venture capital conference last year, Pawlenty criticized the University of Minnesota for being unfriendly to business just minutes before university spin-outs were to pitch investors. University sources say Dan McElroy, commissioner for the Department of Employment and Economic Development (DEED), threatened to wage “budget jihad” on the school if Miromatrix Inc., founded by biomedical researcher Doris Taylor, left the state. (McElroy denied this.)
So I found it a bit ironic (and a little surprising) that Matt Kramer left his job running Pawlenty’s administration last summer to join the school as its chief liaison to Minnesota business. Kramer also preceded McElroy at DEED.
Read whatever you want into this but don’t expect Kramer to bad-mouth his former boss. He’s too smart for that. The simpler explanation is that Kramer just wants to do what he’s best at doing: selling stuff. He is a former vice president of marketing at Arden Hills, Minn.-based Syntegra (a subsidiary of British Telecom), and Des Moines, Iowa-based CE Software.
As director of the U’s Office of Business Relations, Kramer’s job is to sell the school’s talent, training and technology (the 3Ts he calls it) to Minnesota companies, especially high tech start-ups who don’t necessarily see the school as a resource.
With passage of the angel investment tax credit looming and a rash of major economic development projects in full swing (Elk Run, university’s Biomedical Discovery District), I thought it would be prudent to grab some thoughts from the man whose career sits at the intersection of government, business and academia.
On the angel investment tax credit: About time, Kramer says. He claims Pawlenty has requested such a credit from lawmakers for seven years, though I wonder how hard the governor tried.
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“The legislature has never prioritized economic development,” choosing instead to focus on social services, Kramer said.
Case in point: the woefully funded DEED. The Minnesota Investment Fund, the agency’s primary economic development tool, receives only $2.5 million every two years, not enough to do much of anything, Kramer said.
‘There is no money,” he said.
By contrast, the Wisconsin Department of Commerce, which administers the state’s generous economic development funds, including its much lauded angel credits, doled out $231 million alone in 2008. Ask any entrepreneur in town about DEED and they will tell you the agency is good at telling you where to get money, not so much being the source of the money.
Kramer says he is pleased the university, including President Robert Bruininks and Vice President of Research Tim Mulcahy, has taken a much more active role in lobbying for the credit and other economic development funding.
“I don’t understand why this state is incapable of recognizing venture capital formation is not an equal playing field,” said Kramer, referring to the 28 other states that offer angel credits.
On Minnesota’s lack of economic coordination: Nature abhors a vacuum so when there is no strong central economic development authority, the result is a hodgepodge of groups (LifeScience Alley, BioBusiness Alliance of Minnesota, The Collaborative, the Minnesota High Tech Association, the Initiative Foundation to name a few) that often duplicate efforts and even compete with each other for resources and attention, Kramer said.
“Minnesota is known as the land of 10,000 organizations,” he said. “There’s too many people telling the same story. There is a lot of noise. Everybody tries to do a little bit of everything.”
He praises a current effort by the Itasca Group (yes, another economic development think tank group) to find ways to pare down these organizations and develop a coordinated pitch to investors and companies.
On the university’s role as an economic development engine: University officials have complained that politicians, including Pawlenty, often unfairly criticize the school for not doing enough to stimulate the economy. From revamping the Office for Technology Commercialization to developing the Biomedical Discovery District, the school has done its part and it is time for state leaders to step up.
“When the U is expected to promote economic development, it’s a great question,” Kramer said. “It’s a legitimate question. But another legitimate question is where is the rest of the picture that is not the U?”
The angel credit is a good first step, he said. “A little more risk on tax and regulatory policies, and we’ll have the pieces together.”
