editor’s note-Enough with “Uncertainty”-September 2011
I wrote this month’s column following a few weeks of depressing economic reports (mixed, paradoxically, with a deluge of announcements revealing record-breaking corporate earnings and an ever-increasing hoarding of cash). Standard & Poor’s downgraded our nation’s credit rating, the stock market plunged, unemployment remains high, consumer spending is down. Obviously, it isn’t just the housing market that remains depressed.
It is tough out there, and many of us are feeling the pain. Yet through these past three years, businesses have become smarter, leaner, and in many ways healthier. And this is reflected in how they are dealing with—and at times perhaps ignoring—the recent run of negative headlines.
Economic uncertainty remains the number-one challenge voiced by more than 500 leaders of privately held Minnesota businesses we recently surveyed. Yet nearly half of them said they’re tackling that challenge through growth initiatives. (Conversely, only 8 percent said they’re reducing head count.) These companies are hiring better talent, and better managing the talent they have; or they’re focusing on growth via sales, marketing, and strategic partnerships.
You can read more about our survey results in “Economic Uncertainty Be Damned” beginning on page 36. Through this story—and our related “Smart Solutions” panel discussion the morning of September 15—you’ll also hear firsthand how Minnesota CEOs are facing our nation’s dismal economic and political conditions in ways that are keeping their businesses not only alive, but thriving.
Also persevering through these tough times are individual inventors. Remember those guys? They’re the average-Joe types who conjure up ways to make something that’s new, or better, than what’s out there today.
My grandfather was an inventor, the kind who invented on evenings and weekends while making money through more traditional means to support his family. An electrician by trade and a born-again Baptist, he always had this boyish grin and sparkle of excitement in his eyes when he talked about what he was working on next. There was only one subject that would excite him almost as much as talking about Jesus, and that was his inventions.
Over the years, he invented quite a few “firsts,” including a collapsible workbench, a roller guide one can attach to a paintbrush to help paint window trim, and (something we thought would never become popular) spring-loaded shoes. He also spent years guarding his shed at his Northeast Minneapolis home because inside was something so revolutionary, it had to remain secret. I think it had to do with an engine that would burn hydrogen. To my grandfather, victory wasn’t in inventing something and then building a company around it; it was more purely the obtaining of a patent, something he succeeded at many times.
While he passed away a few years ago, his spirit lives on through the dozens of inventors who pilgrimaged to Redwood Falls this summer for the 53rd annual Minnesota Inventors Congress. (See “Aspiring Edisons,” page 42.) These folks have ideas and prototypes and dreams for all sorts of things—some that might make sense to us, others that don’t but eventually could become big hits, such as the first fish-line weed-whacker, which was introduced at the Inventors Congress. They can help shape our economy as much, if not more so, than the CEOs running companies commercializing what at one time was one person’s idea, brought to life in his basement or garage in his spare time.
Yet attendance at the Inventors Congress has slipped in recent years, and patents have become more expensive to get (on average, at least $3,000 when done correctly with legal help). These trends have led some to question whether our inventive spirit is drying up in a state that brought the world not only the pacemaker, but the motorized golf cart, the Tilt-a-Whirl, the snowmobile, the toaster, and innumerable others.
A state’s overall inventiveness can be gauged in part by its own patent filings and activity as well as those at its largest research university. In the first category, it appears we’re doing well. Patents issued to individuals in Minnesota through the first seven months of 2011 are up an estimated 18 percent over the same period a year earlier, according to attorney Steven Lundberg, founding shareholder at the IP law firm Schwegman, Lundberg & Woessner in Minneapolis. Patents issued are up 22 percent from 2009.
When it comes to inventions from the University of Minnesota—ones that actually make it into the private sector and thus generate licensing revenues for the U—there’s need for improvement. Of the $84 million a year in revenues tied to its inventions, 95 percent comes from one patent that expires within the next few years.
There’s much optimism that under the direction of its new president, Dr. Eric Kaler, inventing and technology transfer may finally flourish at the University of Minnesota. Yet Kaler enters an institution rife with challenges and in need of incorporating some of the aforementioned “Smart Solutions” implemented by the private sector these past three years. In my humble opinion, these should include tying employment and compensation to performance (even if one has tenure or union membership), rewarding schools and departments for innovating and performing better than budgeted, and requiring every university employee to support the inventive spirit—which includes partnering with and licensing to private enterprise.
Lofty ideas, perhaps. And I don’t know if they mesh up with Kaler’s plans. Our cover story, “Testing Dr. Kaler,” was written so early into his term, specific plans hadn’t been drawn up yet. But we should start to hear some details when he delivers his inaugural address on September 22.
While clouds of economic uncertainty continue to blow in, and sometimes darken our days as much as our late-July thunderstorms did this year, there’s a strong economic undercurrent in Minnesota. We have positive and constructive business leaders finding ways to grow their operations, a strong spirit of invention and entrepreneurship, and new leadership—and hope—for our largest research university.
We’re not out of the woods yet, but we sure seem headed in the right direction.