As humans become increasingly reliant on computers for everyday tasks, the industries that build and sell technology are growing. While this is true for every region of the world to a greater or lesser extent, several recent developments indicate that the Minnesota tech industry is growing faster than most.
More than a century ago, industrialists recognized that St. Anthony Falls was ideally located for milling and logging. As those industries grew, banking and advertising followed. Then as the Twin Cities rose in stature, they built universities to educate growing populations, and museums and parks to keep talented newcomers from fleeing during harsh winters. Today, the central location and commercial infrastructure of Minneapolis-St. Paul give the cities the potential to be an ideal hub in the global tech industry.
A “Silicon Prairie” may sound like science fiction, but there was a time, now mostly forgotten, when Minnesota was the world-wide leader in computer manufacturing.
Thomas Misa is the director of the Charles Babbage Institute Center for the History of Information Technology at the University of Minnesota. His office is a well-stocked library of historical and technical texts, including a biography of the institute’s namesake and a copy of his own book, Digital State: The Story of Minnesota’s Computer Industry.
Misa explains that by 1960 there were four large computer manufacturers in Minnesota. The first landed in 1946 at the end of World War II when the Twin Cities were chosen as the home of Engineering Research Associates (ERA), a company founded in a close partnership between Twin Cities businessmen, the Navy, and some of the military’s first computer scientists.
In 1957, several ERA employees left to begin Control Data Corporation, which soon established itself as one of the most respected computer manufacturers in the world. By 1960, another Minneapolis corporation, Honeywell, had entered the computer market, and IBM had opened a factory in Rochester. Misa says that those four large companies needed a complex infrastructure to support them, from component manufacturers to suppliers to specialized engineering firms.
“It all made for a very dynamic high tech system,” Misa says. “There’s no place else in the world that I know of at the time where there’s that kind of cluster of computer manufacturing. The fact that [Minnesota] wasn’t labeled Silicon Valley, and wasn’t understood to be a high-tech hotspot, is a mystery to me.”
Some of it was an image problem, Misa admits. Much of the industry in the ’60s existed in the shadows of classified defense contracts, so the men and women who best understood the Minnesota tech industry couldn’t legally discuss it.
Then in the ’70s and ’80s, Minnesota computer manufacturers and the University of Minnesota poured their resources in developing and building massive mainframe computers, refusing to invest in refrigerator-size “minicomputers” and in even smaller, less powerful personal computers. When it came, the home computer revolution nearly killed the Minnesota tech industry.
Same City, New Opportunities
Between March and August of 2015, the Minnesota tech workforce grew by more than eight percent, according to Bureau of Labor statistics. This was the fastest growing technology sector in the nation, at least for those six months.
“Tech jobs are always in demand,” says Brooke Fuchs, a founder of the Minneapolis chapter of Girl Develop It, which sets up web and software development education programs for adult women. “We actually have negative employment, which means there are fewer workers than positions.”
Tech permeates the workplace more and more. “It’s very common to have people with no tech background coming into the class,” says Fuchs. “It’s expected [of many employees] that maybe you don’t know how to code, but you have some understanding of the basics and how to communicate about them.”
This is especially true for global companies. “Info tech follows enterprises, and Minneapolis has disproportionately large and important enterprises,” Williams says. “That’s hugely important because all those companies require huge IT departments to make their companies work.”
Minnesota’s greatest tech assets are the same things that the state’s boosters always talk about: We have a highly educated workforce, an array of non-profits, a major research university, the highest concentration of Fortune 500 companies per capita in the country, and a great location. The Minnesota tech industry today looks a little like the “dynamic high tech system” Misa described from the early days of the industry.
There are other positive indicators, too. Graham Williams is the chief operating officer of the tech firm Cologix. “Internet traffic is moving disproportionately to Minneapolis,” says Williams, citing the changing needs of companies like Netflix. “Because servers have historically lived in the center of the network, big content providers want to put their equipment near the eyeballs. So they put their servers directly in Minneapolis.”
There are a lot of decentralized, rural users in the Great Plains of Nebraska, Iowa, the Dakotas, and Minnesota. “That collection of eyeballs is very attractive to developers,” Williams says—and Minneapolis is perfectly positioned to serve them.
The Shape of the Internet
The physical form of the Internet is made of scores of server “farms” all around the world connected to each other by a network of actual wires. Cologix runs 24 of those data centers in Minnesota, which store the content that composes the Internet we see on our screens at work and at home.
“Today we all think about the Internet as some ethereal cloud in the sky,” says Williams, “But it’s a physical organism.”
“If you can go to a [fiber-optic wire] map, you’ll see that, not unlike the interstate system, there are major routes between cities. That’s how data moves across the world,” Williams says. “There’s a new fiber route to Seattle through Minneapolis. It [used to run from] Minneapolis to Chicago, down to Kansas City, Denver, Salt Lake, then Seattle. This is a more efficient route.”
Silicon Valley may have irreversibly surpassed Minnesota as the Mecca of tech back in the ’70s. Yet, like then, the biggest obstacle between the Twin Cities and their future as a Silicon Prairie may be a question of image: Minnesota’s role in technology and computing is widely overlooked. Consider Watson, the supercomputer that beat Ken Jennings on Jeopardy and starred alongside Bob Dylan in a recent TV commercial: IBM Rochester “manufactured its guts,” according to Misa.
If you didn’t know that, you’re not alone. “You would have had to look very closely at a Rochester newspaper,” Misa says. “IBM Research in Yorktown Heights, New York, got 100 percent of the credit.”
That’s the paradox: we are a vital part of America’s tech infrastructure, but modern tech is appealing because the infrastructure is invisible. “It’s hard for a place like IBM Rochester to get adequate recognition for its contribution when IBM [touts] ‘services’ and ‘the cloud’ and ‘artificial intelligence’” Misa adds. “It’s hard to recognize there’s still physical machines that run AI, and that run the cloud.”
No one is more optimistic about the Minnesota tech industry than Margaret Kelliher, president and CEO of the Minnesota High Tech Association.
“Our historical strengths are health, retail, agriculture, financial services,” says Kelliher, “Startups are springing up to meet their needs . . . When people in a similar industry are clustered together, it leads to more growth”
Kelliher points out that the tech industry is made of more than the Internet. The medical device industry is going through a particularly exciting period. Retail, digital marketing, and agricultural industries offer even more opportunities.
On the other hand, Misa is hesitant to speculate but has some practical advice. “I can’t tell you, and I don’t think anybody can, [what] will be the big thing in five years. I look at the past,” he says, “It’s hard to know the future.”