Google Chairman Erik Schmidt joined Minneapolis Mayor R.T. Rybak and several local business leaders on Wednesday at CoCo, a collaborative “co-working” firm that offers alternative office space to freelance professionals, small businesses, and corporate work groups.

Schmidt praised the city's culture of entrepreneurship, saying it's unlike anything else he's witnessed in the United States-and he offered his two cents for how to help expand on the metro area's strengths. The CoCo event followed a speech that Schmidt delivered at the University of Minnesota, where he discussed the future of the high-tech economy.

Schmidt toured CoCo's trading floor in the historic Minneapolis Grain Exchange building and chatted with start-ups like education software maker Naiku, a member of tech accelerator Project Skyway's inaugural class and winner of the high-tech division in this year's Minnesota Cup competition. He spoke with another entrepreneur who met a business partner at CoCo before they launched a business together.

Rybak and Schmidt then sat down for a roundtable discussion, which included Kim Plahn, president of Minneapolis-based coffeehouse franchisor Dunn Bros. Coffee; Nick Lowrey, owner of Minneapolis-based Brand Ink, which specializes in car-wrap advertisements; and Tom Johnson, president of St. Paul-based A. Johnson & Sons Florists.

Rybak asked Schmidt for advice on fostering an environment in which businesses can be incubated, become successful, and still choose to remain in the Twin Cities. Rybak said he'd like to see start-ups at CoCo grow and even take over an entire floor in the building, which offers room for expansion.

Schmidt responded that CoCo is an example of how the Twin Cities is already ahead of the curve, but said that happy workers and quality education are paramount to a successful start-up community.

“In a business, the most important thing you have is people. If they show up happy, they'll be more productive and you'll make more money,” he said, adding that Google offers free food to its employees. “It's not because we're generous,” but because it's a relatively small cost that results in increased productivity, he said.

Rybak discussed the metro area's immigrant and minority populations, which include many entrepreneurs, and asked how to better prepare people for employment in the technology field.

“There's a reason innovation takes place in cities and multicultural areas: There are different cultures, different values,” Schmidt said, adding that additional innovation hubs may benefit the area, especially near the University of Minnesota.

He described the understanding of calculus as the defining barrier for workers looking to enter the technology field, stating that additional math and science education is necessary to help create jobs. Schmidt also recommended that small businesses hire tech-savvy youth for technology consulting, a move that he says would give “disaffected youth” a sense of accomplishment and help propel small businesses.

The three Twin Cities business leaders present discussed how they are utilizing Internet tools to help grow their respective businesses. For example, Johnson detailed how Google search has expanded his florist business' exposure to international clients, and Lowrey said that Google Analytics has helped him identify how to increase Web traffic and maintain visitors' attention.

Plahn described how Dunn Bros. has no internal IT staff, and said that shifting to Google cloud services has helped the company's 20 corporate employees and 84 coffee shops-most of which are owned by franchisees-operate smoothly, as they don't need to oversee tech operations in-house. “It lets our owners do what they do best: coffee,” she said.

CoCo cofounder Kyle Coolbroth discussed how the co-working firm's infrastructure also relies on cloud-based Internet services-as it has no physical servers in-house. Don Ball, CoCo's other cofounder, described how social networking sites like Twitter were crucial in spreading awareness of CoCo. “News spread like wildfire” through those outlets, he said.

When discussing Google's decision to join the Minnesota High Tech Association earlier this year, Schmidt told reporters that Google primarily creates jobs through its services, which help small businesses flourish.

Google has a history of touting its effect on the local economy: It said in May that its search and advertising tools generated $1 billion in economic activity within the state in 2010 through 28,000 Minnesota businesses, Web site publishers, and nonprofits. Google also recently hosted an event to help local businesses build free Web sites.