Emerging Life Sciences Markets: Minneapolis-St. Paul, MN

Over 3.3 million people—38% aged 18 to 44—live in the Minneapolis-St. Paul metro, with a projected five-year growth rate of 2.6%. Half of the population are Millennials or Gen Z, who will comprise most of the regional workforce for the foreseeable future.

Figure 1: Minneapolis-St. Paul Population Analysis

Roughly 4% of the Minneapolis-St. Paul metro talent pool works in occupations that could be BioPharma R&D, BioPharma manufacturing, or medtech roles. Minneapolis-St. Paul has a strong medtech focus, with 16% of the nation’s medtech talent residing in the Minneapolis-St. Paul metro. According to the Minnesota Department of Employment and Economic Development, as of 2022, Minnesota had the 2nd-most employees and the 7th-most companies in the medical device industry of any U.S. state.

Figure 2: Minneapolis-St. Paul Life Sciences Related Occupations

According to the U.S. Bureau of Labor Statistics, Minneapolis-St. Paul has a heavy concentration of scientific employment compared to other U.S. metropolitan areas. However, Minneapolis-St. Paul also is above the U.S. average annual median salary, representing a tradeoff between moderately higher labor costs and an abundant life sciences talent pipeline.

Figure 3: Life, Physical & Social Science Occupation Summary

Over the past five years, the Minneapolis-St. Paul metro has seen 19 publicly announced life sciences economic incentive deals averaging $10,900 per new job, as reported by fDi Intelligence. Boston Scientific, JunoPacific, Kindeva, Nextern and Walgreens are some of the companies investing in new and expansion projects in this emerging life sciences market.

According to CBRE’s Location Incentives Group, the Minnesota Job Creation Fund (MJCF) is among the top incentive programs available to companies locating in the Minneapolis-St. Paul metro area. The MJCF provides up to $1 million in a cash grant over a five-year period. In order to qualify, companies must create or retain high-paying jobs and invest at least $500,000 in property improvements. In select cases, companies could receive up to $2 million in funding if at least 250 jobs are created and $75 million in capital is invested.

Another available incentive program is the Minnesota Investment Fund (MIF), which provides financial assistance to businesses focused in the industrial, manufacturing and technology industries. In order to improve economic vitality, the MIF finances loans up to $1 million to companies that add new workers and retain high-quality jobs in Minnesota. Loan forgiveness may occur if the company achieves certain capital expenditure, job and wage requirements.

Figure 4: Minneapolis-St. Paul Top Incentive Programs

R&D plays an integral role in Minnesota’s economy. The state ranks favorably—positioned in the top half of all states—with 2.61% of state GDP comprised of R&D expenditures from businesses, universities, nonprofits and government in 2021, the latest year data is available. That share has remained relatively consistent since 1993, when it was 2.48%.

Figure 5: R&D as a Percentage of Gross Domestic Product

Education

The Twin Cities population is highly educated, with 17% of people aged 25 and over holding a graduate or professional degree in any field, slightly above the national average of 14%. Furthermore, 31% hold a Bachelor’s degree, 8% above the national average. The Minneapolis-St. Paul metro ranked top 20 in the U.S. for degrees issued in the biological and biomedical sciences for the 2021-2022 school year, with 61% being biological and biomedical specialty degrees. Minneapolis is home to the University of Minnesota, which awarded 1,060 Bachelor’s, 197 Master’s and 143 Ph.D.s in the biological and biomedical sciences in 2022, ranking 14th among all U.S. universities for total degrees awarded Bachelor’s level and higher and for number of Ph.D.s awarded.

Figure 6: Degree Completions

Funding

Minnesota-based companies and institutions received nearly $1.9 billion in grants and venture capital funding in 2023, according to GlobalData. While grants, venture funding and private equity peaked In 2021, 2023 saw the highest total deal volume in state history (Figure 7), with 2024 set to exceed 2023. H1 2024 total deal volume has already reached 93% of full-year 2023.

Figure 7: Minnesota Funding Deal Volume

Minneapolis-St. Paul metro in combination with Rochester is referred to as Medical Alley, home to over 1,000 health and science companies (500 of which are medical device), including Medtronic, the world’s largest medical device producer. With the highest number of medtech patents per capita, Medical Alley is a top producer in new innovation. In October 2023, President Biden dubbed Minneapolis-St. Paul as “the country’s center for next-generation medical device technologies.” Rochester is home to the Mayo Clinic, the No. 1 hospital in the world. Minnesota is actively investing in Rochester with Destination Medical Center, a 20-year economic development plan to invest $5.6 billion into infrastructure and projects to grow a robust health and innovation ecosystem.

Figure 8: Top 15 Pharma, Biotech & Medtech Companies