MN in Line to Win Overseas Med-Tech Jobs, The Boyd Co. Inc. Reports
Published: May 25, 2011
That may be good news for the Twin Cities, which is “the epicenter of the U.S. medical devices and supplies industry,” according to the report by consulting firm The Boyd Co. Inc.
Boyd forecasts that thousands of assembly and control jobs within the medical device and supplies industry will return from places like China, India and the Caribbean Basin due to security issues, greater scrutiny by the Food & Drug Administration, heightened patent, counterfeiting and privacy concerns and other reasons.
It would be a natural for many of those jobs to come to the Twin Cities, which Boyd said employs about 28,000 workers in med tech. The Twin Cities area is home to med-tech giants such as Medtronic Inc. (NYSE: MDT), St. Jude Medical Inc. (NYSE: STJ), and 3M Healthcare (NYSE: MMM), among others.
“From a site-selection viewpoint, the Twin Cities benefit from its large life-sciences workforce, mid-continent logistics, geographic neutrality, access to I-35 — “the NAFTA Superhighway” — hub operations of Delta Air Lines and excellent life science institutions like the University of Minnesota,” according to the report from the Princeton, N.J.-based consulting company.
But the report also had a warning for the Twin Cities: Costs.
While the report said the Twin Cities area is moderately priced when it comes to the cost of operating a medical device company, there are other regions in the Midwest that are cheaper while also providing competitive life science centers.
According to the report, those areas include:
Rochester, Minn., home of the Mayo ClinicMadison, Wis., home of the University of Wisconsin and a cadre of medical-device startups
Kalamazoo, Mich., home of Stryker MedicalSioux Falls, S.D., home of Sanford and Avera Medical Research Centers. “Top U.S.-ranked Sioux Falls is distinguished by its lack of a state corporate and personal income tax and South Dakota’s Right-to-Work labor climate,” the report said.
The report said it costs $26.2 million annually to operate a med-tech facility in the Twin Cities. That ranked 17th in the group’s study of 55 life-science centers worldwide.
San Jose, Calif., ranked most expensive at $30.7 million. Rochester’s cost was $25.3 million, Kalamzaoo $25.1 million, Madison $24.7 million, and Sioux Falls $22.6 million.
Cheapest was Maquiladora, Mexico, at $16.9 million.
The study used a hypothetical 175,000-square-foot production plant employing 325 workers.
“Where these medical devices jobs wash back on U.S. shores will largely be led by labor issues, i.e., costs, local skill sets and labor-management relations as well as state tax climates,” the report said.
The report also noted that the 2.3 percent tax on medical devices that helps pay for President Obama’s health care overall is another hurdle that U.S. cities have when competing for medical device jobs.
Read more: Report: MN in line to win overseas med-tech jobs | Minneapolis / St. Paul Business Journal