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Minnesota Congressional Dinner, sponsored
by the Chambers of Commerce of M i n nesota
Washington, D. C. April 28, 1959

Let me begin my part in this program by citing a few figures which emphasize
some of the reasons for embarking on this economic survey.

These will give

you little comfort.




1.

In the past 40 years the population of the United States has in­
creased 64 per cent.

The Upper Midwest - the Ninth Federal Reserve

District - has seen its population grow by only 28 per cent, less
than half as much as the nation,

Minnesota's population has

increased by -41 per cent, better than the regional average - but
only two-thirds as much as the nation,
2.

Fifty years ago the Ninth District held almost 6 per cent of the
nation’ people.
s

In population it was larger than the San Francisco

District, almost as big as the Kansas City District and a little
less than half as big as the Chicago District,

Today we have less

than 4 per cent of the nation's people. We are but one-third as
large as the San Francisco District, one-fourth the size of the
Chicago District and two-thirds the Kansas City District,
3.

On & per capita basis, income has grown more in the Upper Midwest
and in Minnesota during the past 30 years than it has in the nation.
But our slower population growth means that total income has not
increased as much.

We hold proportionately less of the nation's

bank deposits than w© did a generation ago.

For contrast, ours

have quadrupled while the San Francisco area's have multiplied nine
times.
4.

Value added by manufacture has grown more in Minnesota but less in
the whole Upper Midwest than in the nation since 1929.

But we

account for less than 2 per cent of the national manufacturing

2
output with 3 per cent of the national population.
Why have these developments occurred and what can we do to change this picture
for the better?

111660 are the baric questions which w® hope the economic survey

will provide some answers for.

These answer® simply are not available now.

A former boss of mine used to observe that people know a lot of things that
just are not so.

We suspect that some of the glib answers that can be given

to account for past developments or to point toward the future Just are not so.
We believe it will take hard digging to get at the real facts, but we hope to
get those facts and then we hope the people of the region can do something
with them.
let me outline briefly what we propose to do.
The emphasis in this program will be on analytical economic research
rather than on the gathering of statistics.

The study will give full

emphasis to the natural resource potential of the region, but in rela­
tion to comprehensive projections of future consumer, producer and
government demands*

From a development point of view, resources do not

have economic value unless a demand exists for the goods that can be
produced from the resources.
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A necessary starting point will be a comprehensive analysis of all
existing economic activities in the region from the standpoint of
employment, production, income and resource utilization.

For each

sector of the regional economy and for sub-areas, it is important to
know ~




a.

whether economic activities depend upon local, regional
or national markets, and

b.

the location of other competing activities in the same
field.

3
It Is also essential to know about the successes and failures of
economic activities that have been or are presently operating in
the area and to identify the influences of local, regional, or
national factors and of private and public policies on regional
activities.
A thorough investigation of the present economy can give a realistic
understanding of the economic strengths and weaknesses of the region.
Phase 2.

What are the growth prospects for PRESENT activities in
the region?

The proposed study program will give first emphasis to an examination
of the expansion possibilities in the many important industries and
other activities now located in the region. Expansion prospects in
these activities will be investigated through extensive field work
inside and outside of the region, in present and potential market
areas for Upper Midwest products.

The field investigation will place

heavy reliance on the expert judgments of farmers, businessmen, and
technically qualified people as to prospects for future expansion.
Phase 3. What NEW activities can be developed in the Upper Midwest?
In surveying the possibilities for attracting new activities to the
region, consideration will be given to
a.

present types of production not now in the area, but which
are likely to be expanding, and

b.

new products and new processes which are developing out of
scientific research.

As a preliminary step, the requirements for these growth industries
will have to be matched with the resources and locational character-




4
^.otics of the Upper Midwest region.

As a second step, detailed

engineering-economic feasibility studies should be undertaken for
some of th® outstanding expansion possibilities.
Phase A.

Special Studies of Regional Growth Factors

A look ahead may indicate that certain location factors will be of
crucial gensral importance in the establishment of new facilities.
Such crucial location factors might be sources of industrial water,
water transportation, low cost electric power or supplies of
technically trained personnel.

Special detailed investigations of

these crucial location factors Bay document the special regional
advantages of the Upper Midwest region or may indicate that certain
development programs must be undertaken in the region in order for
the area to be competitive.
Phase 5. What are the principal barriers to regional growth?
It is important to show either that certain popularly accepted reasons
for failure to achieve economic development are true, false, or in­
adequate, so that the real barriers can be recognized and dealt with.
Where barriers are real rather than imaginary, the research program
should provide basis for corrective action programs.
Phase 6.

Action Recommendations and Implementation

The Upper Midwest Research and Development Council will have only a small
central research staff.

A large share of the actual research, therefore,

will be undertaken on a cooperative or subcontract basis by established
institutions in the region.




In each case, the assignment will be made on

5
the basis of the research competence of the specific individuals who will
be doing the work.
The Executive Director will be a senior economist with substantial experience
in planning and directing research on problems of economic development.

He

will be assisted by one or two other professional economists at the associate
or junior level.